FIFA - Decisión disputa Kante Martinez 08062023

REF. FPSD-9147

Decision of the Dispute Resolution Chamber passed on 8 June 2023 regarding an employment-related dispute concerning the player Jose Kante Martinez

COMPOSITION:

Clifford J. HENDEL (USA & France), Deputy Chairperson Khalid AWAD ALTHEBITY (Saudi Arabia), member Alexandra GOMEZ BRUINEWOUD (Uruguay & The Netherlands), member

CLAIMANT:

Jose Kante Martinez, Spain Represented by Salvatore Civale

RESPONDENT:

Cangzhou Mighty Lions FC, China PR Represented by Ruiz-Huerta & Crespo pg. 2

REF. FPSD-9147

I. Facts of the case

1. On 20 August 2022, the Spanish Player Jose Kante Martinez (hereinafter: the Claimant or the Player) and the Chinese club Cangzhou Mighty Lions FC (hereinafter: the Respondent or the Club) concluded an employment contract (hereinafter: the contract) valid as from 1 August 2022 until 31 December 2023.

2. In accordance with clause 1 of the contract: “this Contract shall enter into force upon 01/08/2022 (day/month/year) and shall continue until 31/12/2023 (day/month/year). [The Club] have the sole option to extend the contract for another 12 months with the same financial conditions of season 2023”.

3. According to clause 3.1 of the contract, the Respondent undertook to pay the Claimant the following amounts: - From 1 August 2022 until 31 December 2022: EUR 970,000 before tax and EUR 550,000 after tax (EUR 200,000 after tax to be paid within 15 days after the signature of the contract and EUR 350,000 to be paid monthly, i.e., EUR 70,000 after tax per month). - From 1 January 2023 until December 2023: EUR 1,940,000 before tax and EUR

1,100,000 after tax. - If the contract was extended, from 1 January 2024 until 31 December 2024: EUR 1,940,000 before tax and EUR 1,100,000 after tax.

4. According to clause 3 of the contract, inter alia (quoted verbatim): […] 3.2. The annual salaries shall be paid to [the Player] in equal monthly installments.

[the Club] shall pay the salary (choose one of the following two options) for the x last month/ current month on the 15th of every month. In the event the above-mentioned payment due date falls on a statutory holiday, the payment due date shall be extended to the first working day following holiday. Unless otherwise agreed by the Parties, the method of calculating the average daily salary is as follows: the amount of monthly salary divided by the number of calendar days in the month. […] 3.5. Before-tax amounts under this Contract refer to amounts including all taxes and fees that [the Player] shall pay arising from income obtained from [the Club]. Before [the Club] pays [the Player] each installment of the amounts agreed under this Contract, [the Club] shall be responsible for the withholding and payment of income tax due from [the Player] in Mainland China from the before-tax amount payable to [the Player] in accordance with the relevant laws and regulations pf the People’s Republic of China (hereinafter referred to as “China”). Any taxes, expenses, levies, etc. that might be originated in any country or region outside of Mainland China shall be exclusively declared, paid and borne by [the Player]. pg. 3 REF. FPSD-9147 3.6. The parties understand and agrees that the after-tax amounts under this Contract refer to amounts after deducting the taxes to be pain in Mainland China and such amounts are stipulated just for reference. The after-tax amount that [the Player] actually receives shall be the amount net of taxes to be paid in Mainland China”

5. In accordance with clause 9.6 of the contract: “6. [The Player] has the right to terminate this Contract by notifying [the Club] in writing if any of the following events occurs: 6.1 [The Club] fails to pay salary to [the Player] for two (2) months and fails to remedy such default within 15 (fifteen) days upon receipt of [the Player]’s written notification. 6.2 [The Club] cheats and/or forces [the Player] to participate in any illegal or unfair training or matches, or influences training or matches in an illegal manner or other activities in violation of the law and/or applicable regulations.”

6. By correspondence dated 9 November 2022, the Claimant put the Respondent in default of payment of EUR 310,000 corresponding to the remuneration due in August 2022 (EUR 70,000), September 2022 (EUR 70,000) and October 2022 (EUR 70,000) as well as the balance of the sign on fee bonus (EUR 100,000); setting a 15 days’ time limit in order to remedy the default.

7. On 17 November 2022, the Club paid to the Player EUR 70,000 corresponding to the August 2022 salary.

8. On 13 December 2022, the Claimant, the Respondent, the company EBG Finance Pty LtD and Mr Iván Andrés Cristovinho Kneppers, signed a payment agreement, in which it was stated that, inter alia, that the Claimant entrusts Mr Iván Andrés Cristovinho Kneppers to charge and receive from the Respondent the Signing-on Fee of 200,000 Euros (net) on its behalf, which will be transferred to the player on or before 20 December 2022.

9. By correspondence dated 2 January 2023, the Claimant put the Respondent in default of payment of EUR 210,000 corresponding to September (EUR 70,000), October (EUR 70,000)

and November (EUR 70,000) salaries; setting a 15 days’ time limit to remedy the default.

10. On 6 January 2023, the Respondent paid the September 2022 (EUR 70,000) salary to the

Claimant.

11. On 1 February 2023, the Claimant sent a termination notice to the Respondent as the salaries allegedly remained unpaid.

12. On 7 February 22023, the Respondent paid the October 2022 salary (EUR 70,000) to the Claimant. pg. 4

REF. FPSD-9147

13. On 1 March 2023, the Player signed an employment contract with the Japanese club Urawa Red Diamonds valid from 13 February 2023 until 31 December 2023, including a total salary of EUR 1,200,000 net. Additionally, the Claimant would receive a sign of fee of EUR 170,000.

II. Proceedings before FIFA

14. On 3 February 2023, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. Position of the Claimant

15. On 3 February 2023, the Claimant lodged a claim against the Respondent in front of FIFA for breach of contract.

16. The Claimant lodged a claim for breach of contract and argued that he had just cause to terminate the contract considering that the conditions of art.14bis of the Regulations on the Status and Transfer of Players (RSTP) were fulfilled (i.e., more than 2 salaries were due, a default notice was sent 15 days prior the termination). Additionally, the Claimant stated that the termination also fulfilled the conditions established in clause 6 [sic, 9.6] of the contract.

17. In light of the termination, the Claimant requested payment of the overdue salaries and compensation for breach of contract in accordance with art. 17 RSTP.

18. As to the calculation of the compensation, the Claimant stated that the contract had an extension option and thus the compensation shall be calculated until December 2024.

19. The Claimant requested the following relief: “(a) Order the Respondent to pay the Claimant the overdues in the amount of EUR 301,666 NET calculated as follows: - Salary of October 2022 of EUR 70,000 – NET of TAXES; - Salary of November 2022 of EUR 70,000 – NET of TAXES; - Salary of December 2022 of EUR 70,000 – NET of TAXES; - Salary of January 2023 of EUR 91,666 – NET of TAXES.

(b) Order the Respondent to pay the Claimant the compensation for breach of contract in the amount of EUR 2,108,326 – NET of TAXES equals to the remaining value of the contract (23 months) x the monthly salary due of EUR 91,666; (c) Order the Club to pay an interest of 5% on each of the above amounts due to the Player, calculated as follows: Overdues - starting from 16 November 2022 as for the amount of EUR 70,000; - starting from 16 December 2022 as for the amount of EUR 70,000; - starting from 16 January 2023 as for the amount of EUR 70,000; pg. 5 REF. FPSD-9147 - starting from 16 February 2023 as for the amount of EUR 91,666; Compensation - starting from 1 February 2023 as for the amount of EUR 2,108,326. (d) Apply the measures and sporting sanctions established by the FIFA Regulations on Status and Transfer of Players, namely the ban of 2 transfer windows”. b. Position of the Respondent

20. In its reply, the Respondent acknowledged that it paid the August, September, and October

2022 salaries and that the salaries of November, December 2022, and January 2023 were not paid. Thus, the Club considered that the overdue salaries amount to EUR 231,666.

21. As to the residual value of the contract, the Respondent argued that the term of the contract is until 2023 and the residual value should be EUR 1,008,326 net. As to the extension of 12 months, the Respondent stated that this should not be included in the calculation of the residual value, since: “this extra 12 months will only enter into force if the Club exercises such sole option. However, by terminating the Contract prematurely, the Player made sure this option will no longer be possible”.

22. The Respondent requested to mitigate the compensation considering that the Claimant signed a new contract with the Japanese football club Urawa Red Diamonds.

23. As to the sporting sanctions, the Respondent argued that it should not apply as the Respondent is not a repeat offender. Additionally, according to the Respondent “it was never the Club’s intention to delay the payment, it tried its best to act in good faith, however, the financial situation of the Club couldn’t allow it”.

24. The Respondent requested the following relief: - To reduce the overdue salaries and the residual value of the contract: Overdue salaries: EUR 231,666 net (EUR 70,000 November 2022, EUR 70,000

December 2022 and EUR 91,666 January salary).

Residual value: EUR 1,008,326 net - To reduce the mitigated compensation from EUR 1,008,326 net based on the new contract signed. - To dismiss other requests of the Player.

c. Additional comments of the Claimant pg. 6

REF. FPSD-9147

25. The Claimant confirmed that he received October 2022 salary (EUR 70,000) after the opening of the proceedings and that the remaining overdue salaries are November (EUR 70,000), December (EUR 70,000), and January (EUR 91,666).

26. As to the new employment contract, the Player confirmed that he signed a new contract, however, he requested to add 6 monthly salaries as additional compensation.

III. Considerations of the Dispute Resolution Chamber

a. Competence and applicable legal framework

27. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was presented to FIFA on 3 February 2023 and submitted for decision on 8 June 2023. Taking into account the wording of art. 34 of the March 2023 edition of the Procedural Rules Governing the Football Tribunal (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

28. Subsequently, the Chamber referred to art. 2 par. 1 of the Procedural Rules and observed that in accordance with art. 23 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (May 2023 edition) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from Spain and a club from

China PR.

29. Subsequently, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (May 2023 edition) and considering that the present claim was lodged on 3 February 2023, the October 2022 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

30. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13

par. 5 of the Procedural Rules, according to which a party claiming a right based on an alleged fact shall carry the respective burden of proof. Likewise, the Chamber stressed the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed by the parties, including without limitation the evidence generated by or within the Transfer Matching System (TMS). pg. 7

REF. FPSD-9147

c. Merits of the dispute

31. Its competence and the applicable regulations having been established; the Chamber entered into the merits of the dispute. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments, and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

1. Main legal discussion and considerations

32. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the main dispute is the justice of the early termination of the contract by the Claimant, based on the alleged non-payment of certain financial obligations by the Respondent as per the contract, in accordance with art. 14bis of the

Regulations.

33. In this context, the Chamber acknowledged that its task was to determine, based on the evidence presented by the parties, whether the claimed amounts had in fact remained unpaid by the Respondent and, if so, whether the formal pre-requisites of art. 14bis of the Regulations had in fact been fulfilled.

34. The Chamber then referred to the wording of art. 14bis par. 1 of the Regulations, in accordance with which, if a club unlawfully fails to pay a player at least two monthly salaries on their due dates, the player will be deemed to have a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted a deadline

of at least 15 days for the debtor club to fully comply with its financial obligation(s).

35. The Chamber noted that by the time the default notice was sent more than 2 salaries were due. The Chamber further noted that the Claimant has provided written evidence of having put the Respondent in default on 2 January 2023, i.e., at least 15 days before unilaterally terminating the contract on 1 February 2023.

36. The Chamber also noted that in the case at hand the Respondent bore the burden of proving that it indeed complied with the financial terms of the contract concluded between the parties. However, the Respondent does not dispute that it owed more than 2 salaries to the Claimant.

37. Thus, the Chamber concluded that the Claimant had a just cause to unilaterally terminate the contract, based on art. 14bis of the Regulations. ii. Consequences pg. 8

REF. FPSD-9147

38. Having stated the above, the Chamber turned its attention to the question of the consequences of such unjustified breach of contract committed by the Respondent.

39. The Chamber observed that the outstanding remuneration at the time of termination, coupled with the specific requests for relief of the Player, amounts to EUR 231,666 net (EUR 70,000 + EUR 70,000 + EUR 91,666)

40. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent is liable to pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e., EUR 231,666 net.

41. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Chamber in this regard, the latter decided to award the Claimant interest at the rate of 5% p.a.: - On EUR 70,000 net as from 16 December 2022 until the date of effective payment.

• On EUR 70,000 net as from 16 January 2023 until the date of effective payment. - On EUR 91,666 net as from 16 February 2023 until the date of effective payment.

42. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Player by the Club in the case at stake. In doing so, the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the Player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

43. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

44. As a consequence, the Chamber determined that the amount of compensation payable by the club to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. pg. 9

REF. FPSD-9147

45. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract from the date of its unilateral termination until its end date. Consequently, the Chamber

concluded that the amount of EUR 1,008,333.33 (i.e., 11 times EUR 91,666,67) serves as the basis for the determination of the amount of compensation for breach of contract.

46. The Chamber took note that the Claimant requested as residual value in addition to the value of EUR 1,008,333.33; the salaries (EUR 1,100,000) mentioned in the unilateral extension’s clause of the contract from 1 January 2024 until 31 December 2024. The Chamber stated that said amount (EUR 1,100,000) has not been added considering that it cannot be established that the contract would be indeed renewed, and the calculation has been made on the basis of the original terms of the contract.

47. In continuation, the Chamber verified as to whether the Player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC as well as art. 17 par. 1 lit. ii) of the Regulations, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the Player’s general obligation to mitigate his damages.

48. Indeed, the player found employment with Urawa Red Diamonds. In accordance with the pertinent employment contract, the player was entitled to a salary of EUR 1,200,000 net from 13 February 2023 to 31 December 2023 and a signature bonus of EUR 170,000. The Chamber concluded that the player mitigated his damages in the total amount of EUR 1,370,000. Therefore, the Chamber concluded that the Player mitigated his damages entirely.

49. Subsequently, the Chamber referred to art. 17 par. 1 lit. ii) of the Regulations, according to which a Player is entitled to an amount corresponding to three monthly salaries as additional compensation should the termination of the employment contract at stake be

due to overdue payables. In the case at hand, the Chamber confirmed that the contract termination took place due to said reason i.e., overdue payables by the Club, and therefore decided that the Player shall receive additional compensation.

50. In this respect, the DRC decided to award the amount of additional compensation of EUR 275,000 net, i.e., three times the monthly remuneration of the Player.

51. Consequently, on account of all the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 275,000 net to the Player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter. pg. 10

REF. FPSD-9147

52. Lastly, taking into consideration the player’s request as well as the constant practice of the Chamber in this regard, the latter decided to award the player interest on said compensation at the rate of 5% p.a. as of 1 February 2023 until the date of effective payment. iii. Compliance with monetary decisions

53. Finally, taking into account the applicable Regulations, the Chamber referred to art. 24 par. 1 and 2 of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

54. In this regard, the DRC highlighted that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid. The overall maximum duration of the registration ban shall be of up to three entire and consecutive registration periods.

55. Therefore, bearing in mind the above, the DRC decided that the Respondent must pay the full amount due (including all applicable interest) to the Claimant within 45 days of

notification of the decision, failing which, at the request of the Claimant, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become immediately effective on the Respondent in accordance with art. 24 par. 2, 4, and 7 of the Regulations.

56. The Respondent shall make full payment (including all applicable interest) to the bank account provided by the Claimant in the Bank Account Registration Form, which is attached to the present decision.

57. The DRC recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24 par. 8 of the Regulations.

d. Costs

58. The Chamber referred to art. 25 par. 1 of the Procedural Rules, according to which “Procedures are free of charge where at least one of the parties is a player, coach, football agent, or match agent”. Accordingly, the Chamber decided that no procedural costs were to be imposed on the parties. pg. 11

REF. FPSD-9147

59. Likewise, and for the sake of completeness, the Chamber recalled the contents of art. 25 par. 8 of the Procedural Rules and decided that no procedural compensation shall be awarded in these proceedings.

60. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties. pg. 12

REF. FPSD-9147

IV. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Jose Kante Martinez, is partially accepted.

2. The Respondent, Cangzhou Mighty Lions FC, must pay to the Claimant the following amounts: - EUR 70,000 net as outstanding remuneration plus 5% interest p.a. as from 16

December 2022 until the date of effective payment; - EUR 70,000 net as outstanding remuneration plus 5% interest p.a. as from 16 January

2023 until the date of effective payment; - EUR 91,666 net as outstanding remuneration plus 5% interest p.a. as from 16 February 2023 until the date of effective payment; - EUR 275,000 net as compensation for breach of contract without just cause plus 5% interest p.a. as from 1 February 2023 until the date of effective payment;

3. Any further claims of the Claimant are rejected.

4. Full payment (including all applicable interest) shall be made to the bank account indicated in the enclosed Bank Account Registration Form.

5. Pursuant to art. 24 of the Regulations on the Status and Transfer of Players, if full payment

(including all applicable interest) is not made within 45 days of notification of this decision, the following consequences shall apply:

1. The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid. The maximum duration of the ban shall be of up to three entire and consecutive registration periods.

2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee in the event that full payment (including all applicable interest) is still not made by the end of the three entire and consecutive registration periods.

6. The consequences shall only be enforced at the request of the Claimant in accordance with art. 24 par. 7 and 8 and art. 25 of the Regulations on the Status and Transfer of Players.

7. This decision is rendered without costs.

For the Football Tribunal: Emilio García Silvero Chief Legal & Compliance Officer pg. 13

REF. FPSD-9147

NOTE RELATED TO THE APPEAL PROCEDURE: According to article 57 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION: FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request

of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 17 of the Procedural Rules Governing the Football Tribunal).

CONTACT INFORMATION

Fédération Internationale de Football Association FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777 pg. 14