FIFA - Decisión disputa Leko 17082023

REF. FPSD-9740

Decision of the Dispute Resolution Chamber passed on 17 August 2023 regarding an employment-related dispute concerning the player Nikola Leko

COMPOSITION:

Frans DE WEGER (The Netherlands), Chairperson Dana MOHAMED AL-NOAIMI (Qatar), member Tomislav KASALO (Croatia), member

CLAIMANT:

Nikola Leko, Croatia Represented by Loizos Hadjidemetriou & Associates L.L.C

RESPONDENT:

FC Krasava E.N.Y. Digenis Ipsona, Cyprus Represented by Christoforos Florou pg. 2

REF. FPSD-9740

I. Facts of the case

1. On 23 August 2022, the Croatian player, Nikola Leko (hereinafter: the player or the Claimant) and the Cypriot club, FC Krasava E.N.Υ. Digenis Ipsona (hereinafter: the club or the Respondent) concluded an employment contract (hereinafter: the contract) valid as from the date of signature until 31 May 2024.

2. According to clause 1.3 of the contract, the Respondent undertook to pay the Claimant the following amounts: - From 23 August 2022 until 31 May 2023: 10 monthly instalments of EUR 2,000 net each, payable on the last day of each month as from 31 August 2022 until 31 May

2023. - From 1 June 2023 until 31 May 2024: • If the club was not promoted to the first division of the national league within the Cyprus Football Association (CFA): 10 monthly instalments of EUR 3,000 net each, payable on the last day of each month as from 31 August 2023 until 31 May 2024. • If the club was promoted to the first division of the national league within the

CFA, 10 monthly instalments of EUR 3,500 net each, payable on the last day of each month as from 31 August 2023 until 31 May 2024.

3. According to clause 1.5 of the contract, the Claimant was also entitled to the following

benefits: - Season 2022/2023: • Accommodation allowance: 9 monthly instalments of EUR 1,200, payable on the first day of each month as from 1 August 2022 until 1 May 2023. - Season 2023/2024: • Accommodation allowance: 10 monthly instalments of EUR 1,000, payable on the last day of each month as from 1 August 2023 until 31 May 2024. • Transportation expenses: 10 monthly instalments of EUR 500, payable on the last day of each month from 31 August 2023 until 31 May 2024. - One return flight ticket from Cyprus to Croatia per football season. pg. 3

REF. FPSD-9740

4. On 1 January 2023, the parties allegedly signed an amendment to the contract (hereinafter: the Amendment). It is to be noted that the player disputed the signature of the Amendment.

5. In accordance with the Amendment, the parties agreed upon, inter alia, the following: 1) “The recitals of facts and representations set forth in the preamble above are true and correct and they are incorporated into the body of this Agreement by reference. 2) The Parties hereby irrevocably agree that the clause 1.3 of [the contract] be amended, as of the date hereof: The Club will pay to the Player remuneration by paying the net amount of €700 (SEVEN HUNDRED euro) per month, payable on the last day of every month, beginning on 01/01/2023 to 31/05/2023. 3) This Amendment Agreement does not cancel and/or affect/amend any other terms

and conditions of [the contract] other than in the way and the ones specifically, stated in this Amendment Agreement. 4) This Amendment Agreement shall form an integral part to [the contract] and should be read at all times in conjunction with [the contract]. 5) This Amendment Agreement shall be governed by and construed according to the Laws of the Republic of Cyprus and the parties hereby submit to the jurisdiction of the Cypriot Courts to try and claim any dispute or difference arising out of or in connection with this agreement. 6) All terms and conditions of this Amendment Agreement are of the essence and any party in breach of this agreement shall be liable to the payment of damages to the other innocent party in respect thereof [...]”.

6. On 2 January 2023, the club sent a letter to the player stating as follows (quoted verbatim): “Following the failure in achieving the primary target for this season, in placing the team in the top 8 teams at the end of the First stage of the championship, which gives

[the club] no chance to compete for promotion to the First Division, as management/ owners of the organization had no other way but to revise the budget until the end of the season 2022-2023. By doing this [the club] had no other way but to cut down on expenses part of which are contracts of players who based on the coaches' evaluation didn't not perform to our expectations and who are not in the coaches' plans for the rest of the season. For this reason and because you are one of the players whose contract must be terminated as per the above. We would like to inform you that you are free to enter pg. 4 REF. FPSD-9740 into negotiations with any other club of your choice in finding the next team to continue your career. At the same time [the player] can meet with the General Director of the Club in order to finalize the settlement/termination of your contract with [the club]”.

7. On 4 January 2023, the club’s president issued a personal guarantee stating as follows:

“guarantee and/or assume a personal obligation to pay to the Cyprus Football Association any amounts awarded from any Judicial Body in favour of player NIKOLA LEKO CFA reg. no. 299504, due to the termination of his employment agreement and/or his deregistration from the list of eligible to compete players”.

8. On 8 March 2023, the player put the club in default and stressed the following:

(i) he did not agree with the early termination of their employment relationship on 2 January 2023; (ii) the club adopted an abusive treatment towards him by assigning him to train with the U-19 team since 19 January 2023 and completely excluding him from the team’s activities; and (iii) he was deregistered from the list of eligible players to participate in official competitions.

9. Consequently, by means of his notice the player requested the club to reinstate him to the first team’s training sessions and to register him in the list of eligible players by no later than13 March 2023.

10. On the same date, 8 March 2023, the club replied to the player informing him that he had been deregistered from its “list A” and could no longer be reinstated. The club made reference to its guarantee dated 4 January 2023, a copy of which was shared with the player.

11. On 14 March 2023, the player sent a termination notice to the club, considering, inter alia, that he had been deregistered and was not informed of any attempt by the club to remedy the situation.

12. Following the termination of the contract, the player remained unemployed.

II. Proceedings before FIFA

13. On 27 March 2023, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation. pg. 5

REF. FPSD-9740

a. Claim of the Claimant

14. In his claim, the Claimant stated that he unilaterally terminated the contract with just cause

on 14 March 2023. He made the following remarks in this respect: - In accordance with the Respondent’s correspondence on 2 January 2023, it became evident that the Respondent was no longer interested in his services. - He did not agree to the premature termination of his employment by hand of the club. - The Respondent ordered him to train with the U-19 team, preventing him from participating in matches. - He “was never informed whether this decision for him to be training with the U-19 team was temporary or permanent. Even though he was repeatedly and constantly complaining and requesting to return to the A Team”. - He was informed by his lawyer that he had been removed from the list of eligible players to participate in official competitions. Subsequently, he put the Respondent in default in order to be re-registered, however, was informed that the club was no longer able to fix the issue.

15. The Claimant requested the following relief (quoted verbatim): “i. €903.23 net as the Claimant’s pro rata due payables for March 2023, plus legal interest from 15/03/2023 until full payment. ii. €541.94 net as the Claimant’s pro rata accommodation allowance for March 2023, plus legal interest from 15/03/2023 until full payment. iii. €35,096.77 net corresponding to the residual value of the Claimant’s salaries, plus legal interest from 27/03/2023 until full settlement. iv. €13,058.06 net corresponding to the residual value of the Claimant’s accommodation allowance for both seasons, plus legal interest from 27/03/2023 until full settlement. v. €5,000 net as compensation for the transportation allowance, plus legal interest from 27/03/2023 until full settlement”.

b. Reply of the Respondent

16. On 27 April 2023, the Respondent filed its reply to the claim of the player. In doing so, the

Respondent explained the following: - The Respondent informed the player that it had revised its budget due to the failure to meet its targets for the season 2022/2023. pg. 6 REF. FPSD-9740 - The Claimant expressed his desire to leave the club as he wanted to participate in the first division of the national league within the CFA, which was not possible due to the results of the season 2022/2023. - Both parties agreed that: (i) the Claimant was free to seek a new club; and (ii) in the meanwhile, he would continue to train with the club, but his salary would be reduced to EUR 700 in line with the Amendment. - Consequently, the Respondent also proceeded with the player’s deregistration, about which he was also duly informed. - The Claimant never participated in the training sessions of its second team.

17. In view of the foregoing, the club rejected the player’s argument that he had terminated the contract with just cause and argued that their employment relationship had already been mutually terminated.

18. In conclusion, the Respondent requested FIFA to reject the claim of the player. Alternatively, it added the following (quoted verbatim): “However, in case that the position of the Claimant will be accepted by the FIFA Committee, i.e. that the termination of the employment agreement has been made with just cause by the Claimant, then the Respondent states the followings:

1. The Claimant is not entitled to the remaining value of his employment agreement as compensation since the Parties has been signed the Amendment Agreement dated 0 1/01/2023 with a reduced salary and therefore any awarded compensation shall be calculated on this basis. ii. The Claimant is not entitled to any compensation corresponding to the residual value of the Claimant's accommodation allowance for both seasons but only until the date of the termination of the employment agreement. In accordance to the well known FIFA and CAS jurisprudence the

accommodation allowances and housing benefits are not a salary (…) In this matter at stake, the Claimant failed to prove whether he suffered any damages and whether he has incurred any housing cost and if yes, he failed to prove for which period he has suffered any such cost. iii. The Claimant is not entitled to any compensation corresponding to transportation allowances since are not a salary but cost and therefore he has not proved whether has he incurred such cost.” pg. 7

REF. FPSD-9740

c. Rejoinder of the Claimant

19. On 11 May 2023, the Claimant filed his rejoinder on this matter. Accordingly, the Claimant rejected the arguments issued by the Respondent and argued inter alia the following: - The Claimant has never agreed with the Respondent to terminate his contract or seek another club, nor did he agree to reduce his salary. - “The so called [Amendment], was never ever signed by the Claimant. The Claimant never agreed to sign such an agreement and he had never even seen this agreement existed […] before receiving [the Respondent’s statement of defence]. This agreement is forged and was never signed by the Claimant. For this reason, the Claimant is calling the FIFA PSD to request the original of the agreement to be sent to FIFA and, after this proceeding is concluded, he shall proceed filing a criminal complaint to the Cyprus police for forgery.

The Claimant’s position that this agreement is forged is proven by the fact that it was allegedly singed on 01/012023. If such an agreement had indeed been signed on 01/01/2023, the Respondent would have had no reason at all to prepare and send to the Claimant the letter dated 02/01/2023. Which, amongst others, was calling the Claimant to meet with the general director to finalise the settlement / termination of his contract”. - The Claimant was never informed about his deregistration. - “The fact that the Claimant had been training with the second team is proven by the fact

that the Respondent never replied or challenged the Claimant’s letters of 08/03/2023 and 14/03/2023. Which stated that the Claimant had been forced to train with the second team since 19/01/2023 and he was not allowed back to the First Team, despite his repeated complaints and requests.”. - The Claimant has never agreed to the mutual termination of the contract.

20. Given the above, the Claimant reiterated his requests for relief in line with his statement of claim.

d. Final comments of the Respondent

21. On 17 May 2023, the FIFA general secretariat requested the Respondent to submit its final comments on the present matter by no later than 24 May 2023.

22. On 25 May 2023, the Respondent submitted its comments on this matter.

23. On the same date, 25 May 2023, the FIFA general secretariat: - acknowledged receipt of the late correspondence of the Respondent; pg. 8

REF. FPSD-9740 - referred to art. 11 par. 4 of the Procedural Rules Governing the Football Tribunal (hereinafter: the Procedural Rules) according to which submissions received outside the time lime were not taken into account; - informed that parties that submission-phase in the case at hand was closed, hence they would no longer be able to supplement or amend their submissions or requests for relief or produce new evidence (cf. art. 23, par. 1 of the Procedural Rules); and - requested the Respondent to submit the original copy of the Amendment via courier (cf. art. 23, par. 2 of the Procedural Rules). e. Additional documentation and comments of the parties

24. On 31 May 2023, the Respondent submitted a copy of the Amendment via courier.

25. On 21 July 2023, and once again on the basis of art. 23 par. 2 of the Procedural Rules, the

FIFA secretariat general requested both parties to submit proof of payment and/or receipt of the player's salaries of January and February 2023, by no later than 26 July 2023.

26. On 26 July 2023, the Claimant inter alia acknowledged having received his salary of January 2023 as follows: (i) EUR 750 via wire transfer (cf. banking statement provided by the Claimant); and (ii) EUR 2,450 in cash. As to the salary of February 2023, he denied having received any amount, reason why such concept was now part of his claim before FIFA. The Claimant also provided additional comments as to the forgery of the Amendment, which were however not requested by the FIFA general secretariat.

27. The Respondent failed to submit any additional comment within the time limit granted by the FIFA general secretariat.

28. On 27 July 2023, the Respondent requested FIFA to grant it the right to respond to the additional arguments filed by the player on 26 July 2023.

29. On 2 August 2023, the FIFA general secretariat acknowledged receipt of the parties’ latest submissions and confirmed that (i) the submission-phase of the case at hand was already closed; and (ii) any unsolicited correspondence would be disregarded (cf. art. 23, par. 1 of the Procedural Rules). pg. 9

REF. FPSD-9740

III. Considerations of the Dispute Resolution Chamber

a. Competence and applicable legal framework

30. 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 27 March 2023 and submitted for decision on 17 August 2023. Taking into account the wording of art. 34 of the March 2023 edition of the Procedural Rules, the aforementioned edition of the Procedural Rules

is applicable to the matter at hand.

31. Furthermore, the members of 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 par.1 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 Croatian player and a Cypriot club.

32. 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 27 March 2023, the October 2022 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

33. For the sake of completeness, the Chamber recalled that: (i) parties to the proceedings are not authorised to supplement or amend their submissions or requests for relief or produce new evidence once the submission phase is closed (cf. art. 23, par. 1 of the Procedural Rules); (ii) any supplementary information and/or documentation shall only be accepted if requested by the FIFA general secretary in the course of the proceedings (cf. art. 23, par. 2 of the Procedural Rules); and (iii) submissions received outside the time lime were not taken into account (cf. art. 11, par. 4 of the Procedural Rules. Consequently, the DRC confirmed both that the Respondent’s letter of 25 May 2023, and the Claimant’s unsolicited comments of 26 July 2023 were inadmissible, hence disregarded, and that the club’s right to be heard had been fully respected, in that the club failed to timely comments as instructed by the

FIFA general secretariat on 21 July 2023. b. Burden of proof

34. 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 on the basis of an alleged fact shall carry the respective burden of proof. Likewise, the Chamber stressed pg. 10

REF. FPSD-9740 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). c. Merits of the dispute

35. 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

36. The foregoing having been established, the Chamber moved to the substance of the matter, and noted that the parties strongly dispute: (i) when and by whom the contract was terminated; and (ii) the justice such termination, together with the consequences that follow.

37. In this context, the Chamber took note that the Claimant claimed having terminated the contract with just cause due to the abusive behaviour of the club, in particular, due to his deregistration. On the other hand, the DRC was also observant of the Respondent’s position according to which, via the Amendment and the subsequent correspondences: (i) the player agreed to be deregistered and to reduce his salary; and (ii) the contract was terminated by mutual consent.

38. In view of the foregoing, the Chamber acknowledged that its task was to determine: (i)

whether the Amendment was valid and binding to the parties; (ii) in the negative, the justice of the termination by hand of the player; and (iii) the consequences that follow.

39. The Chamber then moved to the analysis of each topic in turn.

Was the Amendment valid and binding to the parties?

40. As a departure point, the DRC recalled that the parties’ dispute the validity of the Amendment: whereas the club argues that such document was properly concluded in order to address the new constellation of their employment relationship; the player claims that it was never signed, thus forged.

41. In view of this dissent between the parties, the DRC initially turned to the documentation on file and observed the player’s signatures were, inter alia, as follows: pg. 11

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Document Signature Passport retrieved from TMS Contract Power of attorney Amendment

42. While considering the above, the DRC initially established that, under a technical point of view, the player seemed to have used different signatures at different times.

43. Consequently, the Chamber recalled its long-standing jurisprudence according to which, in the absence of a clear confirmation that the signature found in the specimen under analysis pg. 12

REF. FPSD-9740

(i.e., the Amendment) is authentic, it falls on to both parties to further prove their position – for instance, in the case at hand, by filing additional documentation, such as payment receipts for previous salaries and/or communications between the parties corroborating that the player was in agreement to reduce his salary.

44. The DRC stressed that the above is particularly important when considering that FIFA’s deciding bodies are not competent to decide upon matters of criminal law, such as the one of alleged falsified signatures of documents, and that such affairs fall into jurisdiction of the competent national criminal authority. Thus, it is up to the relevant chamber of the Football Tribunal to take a decision vis-à-vis the other elements of the case.

45. Upon assessing the particularities of the case, the Chamber found it decisive that:

• the timeline of the case shed doubt on the club’s narrative because, whereas the Amendment was dated 1 January 2023, on the following day the club informed the player that the contract would be terminated and that he was free to seek new employment. As such, the behaviour of the club was controverted; • despite arguing that the player was aware and in agreement with the premature termination of the contract, the club did not advance any supporting documentation to this extent, in spite of the argumentation raised in its defense (e.g., proof that the player expressed his interest in seeking new employment and/or that he was not indeed interested resuming his services with the club). On the contrary, the club limited itself to file a copy of the Amendment, which did not provide any apparent benefit to the player; and • the club failed to file its position on the player’s rejoinder, despite being invited to do so. Nonetheless, upon being requested by the FIFA general secretariat to provide further evidence as to the payment of the salaries of January and February 2023, it remained undisputed that the player received more than the EUR 700 mentioned in the Amendment, thus suggesting that he was still entitled to the full remuneration per the contract.

46. Against this background and while balancing the position of the parties vis-à-vis the few pieces of evidence on file, the DRC concluded that the club could not establish to a comfortable satisfaction degree that the player had ever agreed to the conditions stipulated in the Amendment (cf. art. 13, par. 5 of the Procedural Rules).

47. Therefore, the Chamber concluded that the Amendment should not be taken into account in the context of the present dispute.

When and by whom was the contract terminated? Was it terminated with just cause?

48. Having stated the above, the Chamber moved to the analysis of the termination. pg. 13

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49. In doing so, the Chamber initially noted that the club claimed having mutually agreed with

the player to terminate the contract so that he could find a new employment. However, the Chamber highlighted that the club failed to advance any supporting evidence in this regard, entailing that it could not identify any type of consent from the player’s side with such premature termination. As such, the Chamber concluded that the club’s argumentation could not be upheld.

50. Subsequently, the DRC observed that the player, for his part, argued that he was the one to terminate the contract on 14 March 2023 due to his deregistration by the club.

51. On this topic, the Chamber recalled that in line with its jurisprudence, the registration procedure is the sole responsibility of a club and upon which a player has in general no influence. As the Club is supposedly interested in acquiring the rights of the Player and in benefiting from his services, it is also expected that it acts accordingly and executes the administrative formalities in view of obtaining, for instance, the registration with the engaging federation.

52. Furthermore, as mentioned in page 114 of the Commentary of the RSTP, “a club – as an employer – has the duty to protect the personality rights of the player – as an employee. The career development of a footballer may be prejudiced as a result of inactivity and thus, the club has a duty to allow its players to engage in the activity for which they have been in principle employed and are qualified for”. Consequently, the non-registration of a player constitutes a serious misconduct of a club.

53. At this point, the Chamber took due consideration that (i) by means of its letters dated 2 and 4 January 2023, the club suggested that it was no longer interested in retaining player’s services; (ii) on 8 March 2023, the club expressly confirmed that the player had been deregistered and he could no longer be reinstated; and (iii) on 14 March 2023, the player notified the termination of the contract claiming just cause, to no avail.

54. Based on the foregoing, the Chamber was sufficiently convinced that the club once again incurred in a controverted towards the player; granting him a just cause to prematurely terminate the contract on 14 March 2023. Thus, the DRC stressed that the club should be liable to the consequences that follow. ii. Consequences

55. Having stated the above, the members of the Chamber turned their attention to the question of the consequences of such unjustified breach of contract committed by the Respondent. pg. 14

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56. 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 2,000 as the salary of March 2023 and EUR 1,200 as accommodation allowance for the same month.

57. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent should be liable to pay to the Claimant the total of EUR 3,200.

58. In addition, taking into consideration the Claimant’s request, the constant practice of the Chamber in this regard, and the principle ne ultra petita, the latter decided to award the Claimant interest at the rate of 5% p.a. on the overdue amounts as follows: - On the amount of EUR 1,445.17 net as from 15 March 2023 until the date of effective payment. - On the amount of EUR 1,754.83 net as from 27 March 2023 until the date of effective payment.

59. 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.

60. 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.

61. As a consequence, the members of 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.

62. 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 pg. 15

REF. FPSD-9740 concluded that the amount of EUR 51,400 net serves as the basis for the determination of the amount of compensation for breach of contract, broken down as follows: • EUR 6,400 as the salaries and accommodation allowance of April and May 2023 salaries; plus • EUR 45,000 as the salaries, accommodation, and transportation allowances for the entire season 2023/2024.

63. In continuation, the Chamber verified as to whether the player