TAS - CAS 3626 de 2014

Tribunal Arbitral du Sport Court of Arbitration for Sport Arbitration CAS 2014/A/3626 Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015

Panel: Prof. Luigi Fumagalli (Italy), President; The Hon. Michael Beloff QC (United Kingdom); Mr

Michele Bernasconi (Switzerland) Football Termination of a contract of employment with just cause “Just cause” under Swiss law Circumstances considered to be “valid reasons” for the termination of an employment contract Provision applicable in a situation where both parties contributed to the breach of the employment contract

1. The existence, or not, of “just cause” to justify the termination of a contract of employment between a player and a club does not detract from a termination letter, as a result of which such contract came to an end. Under Swiss law, the employer, as well as the employee, may for valid reasons (“just cause”) at any time terminate the employment relationship without notice. In addition, a termination without notice generally brings an employment contract to an end with immediate effect even if the termination was in the absence of a valid reason. As a result, the existence of valid reasons (or “just cause”), or their absence, has an impact only on the financial consequences of the termination.

2. According to Swiss law and the RSTP, as confirmed by the CAS jurisprudence, valid reasons (or “just cause”) for the termination of an employment contract between a club and a football player are considered to be, in particular, any circumstances under which, if existing, the terminating party can in good faith not be expected to continue the employment relationship.

3. Article 17 RSTP only provides for some criteria for the quantification of damages in the event a contract is terminated because of (or through) a breach by one of the parties. In a case where both parties equally contributed to the breach, but nevertheless the

termination was with just cause as the terminating party could in good faith and objectively believe that the continuation of the employment relationship was not possible, the provisions of the RSTP, and chiefly Article 17, are not of direct assistance and Article 337b para. 2 of the Swiss Code of Obligation must apply. In accordance with the latter, the CAS panel has to decide in its discretion on the financial consequences of the termination without notice, taking into account all circumstances of the case.

CAS 2014/A/3626 2

Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015

1. BACKGROUND

1.1 The Parties

1. Mr Carmelo Enrique Valencia Chaverra (hereinafter referred to as the “Player” or the “Appellant”) is a professional football player of Colombian nationality born in Tutunendo

(Colombia) on 13 July 1984.

2. Ulsan Hyundai Football Club (hereinafter referred to as “Ulsan”, the “Club” or the “Respondent”) is a football club, with seat in Ulsan, Republic of Korea. Ulsan is affiliated to the Korea Football Association (Daehan Chukgu Hyeophoe), the governing body of football in Republic of Korea (hereinafter referred to as “KFA”). KFA is a member of the Fédération Internationale de Football Association (hereinafter referred to as “FIFA”). 1.2 The Dispute between the Parties

3. The circumstances stated below are a summary of the main relevant facts, as submitted by the parties in their written pleadings or in the evidence given in the course of the proceedings.

Additional facts may be set out, where relevant, in connection with the legal discussion which follows.

4. On 12 January 2010, the Player and the Club signed an employment contract (hereinafter referred to as the “Contract”), under which the former was to provide to the latter his services

as a professional football player for a term starting on 1 January 2010 and ending on 31 December 2012.

5. The Contract contained, inter alia, the following provisions1: Article 3 “Term and Annual Compensation (including taxes)” “…  The annual base compensation (the “Annual Compensation”) shall be a combination of all monies paid in connection with performance of this Contract, as follows:

1. During the Term of this Contract stated above, within the amount of the Annual Compensation calculated during [1st January 2010] to [31st December 2012] shall be the following amounts:

a. Basic Annual Compensation: USD 204,000 (USD 17,000/ Month-Gross b. Playing Based Compensation _________/Game c. Winning Based Compensation _________/Game d. Playing/Winning Based Compensation: if plays equal to or more than 45 minutes USD 1 Reference is made to the English version of the Contract, which was signed by the parties in both English and Korean texts. In light of Article 15 of the Contract (see it at § 5 of this award), the Player filed in these proceedings another English translation of the Contract, which was prepared on the basis of a Portuguese translation of the Korean original. The Panel however remarks that – if not for differences of wording – the two English versions do not materially differ, and that no issue arose between the parties as to the meaning of specific contractual clauses.

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Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 2,000 / less than 45 minutes USD 1,000/Game-Gross

2. Other special benefits: 1. Each one goal or assist USD 1,000-Gross 2. Housing 3. Vehicle 4. two round economy class tickets once a year”.

Article 4 “The Club’s Obligations” “The Club shall agree to perform the following obligations:

 The Club shall comply with the Code of Ethics and the Articles of Incorporation, regulations, decisions etc. and all other rules and regulations of the K-League, the Association, the AFC, and FIFA.  The Club shall immediately provide an appropriate doctor’s examination and treatment regarding the Player’s injuries and/or illness arising out of performance of this Contract and shall cover the expenses incurred from such injuries or illness; provided, however, that if such injuries and/or illness have arisen as a result of a cause attributable to the Player, the Player shall undertake all responsibility and expense therefore. …”. Article 5 “Player’s Obligations” “The Players agrees that the following obligations shall be duly performed:  The Player shall comply with the game rules and Code of Ethics, the Articles of incorporation, and all others rules and regulations, and determination of the Club, the K-League, the Association, the AFC, and FIFA.  The Player shall participate in all games designated by the Club and shall make best efforts to play at his/her best during the games.  The Player shall attend all training, training camps, meetings/sessions, and game preparations. …  The Player shall participate in health examinations, disease prevention, and treatment designated by the Club.  If the Club demands the results of the health examination, the Player shall submit the results of such health examination. …”. Article 7 “Health Maintenance” “ After executing this Contract, the Player shall promptly notify the Club of any changes to his/her body, including any illness or injury, and such body changes shall be properly treated based on advice from the physician in charge of the Club. The Club shall internally report and manage any injuries sustained by the Player (including injuries sustained during national team games) and any information regarding the Player’s injuries shall be kept confidential.  If the Player’s illness or/and injury requires treatment while the Player is participating in the Player Activities or Non-Player Activities, such illness or injury shall be treated at the hospital

specified by the Club. In case there is any difference in the medical expenses incurred by a hospital other than the hospital specified by the Club, the Player shall pay the difference. The Club, however, shall not pay medical expenses arising from any injuries or illness due to reasons attributable to the Player, or any activities other than the Player Activities and Non-Player Activities which are stipulated by the Club.  Upon executing this Contract, the Club shall purchase an insurance policy in order to prepare for CAS 2014/A/3626 4 Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 a situation where the Player may suffer injury or death in connection with the performance of this Contract.  The Club may demand that the Player to submit to regular health checks and treatment, in order to maintain the best physical condition of the Player”. Article 11 “Cancellation of Contract or Termination” “ The Club and the Player may cancel or terminate the whole or a part of this Contract by written notice in the event the other party fails to perform the obligation as prescribed in this Contract.  The Club shall immediately cancel or terminate the whole or a part of this Contract by written notice in the event any of the events stated below occur without first providing reasonable notice; provided, however, that while the Player is participating in the Player Activities or Non-Player Activities, if the Player suffers any illness or injury due to reasons other than those attributable to the Player, and as a result the Contract is cancelled or terminated due to the inability of the Player to continue the Player Activities on a permanent basis, the Club shall pay the expenses required for treatment for such illness or injury up to the amount of the Basic Annual Compensation under Article 3 herein:

1. Where a crime has been committed;

2. Where it is impossible to continue the Player Activities due to illness or injury;

3. Where more than six (6) months’ disciplinary suspension is imposed;

4. Where the Player intentionally refuses to apply sufficient skill and technical ability as a

member of the Club; or

5. Where the bylaws of the Club have been materially violated.  In the event this Contract is terminated due to reasons attributable to the Club, the remainder of the Basic Annual Compensation prescribed in this Contract shall be paid to the Player. In the event the Contract is terminated due to the reasons attributable to the Player, the Club shall pay the Basic Annual Compensation such that for the month the date of termination (the “Month”) the days the Month plus the remaining number of days after the Basic Annual Compensation is paid in the month immediately preceding to the Termination Month shall be calculated basis. (i.e., Annual Compensation payable for the Termination Month and the month immediately preceding to the Termination Month, pro-rated over all the relevant number of days)”.

Article 14 “Dispute Resolution” “In the event any dispute arises between the Club and the Player with respect to interpretation or performance of this Contract, such dispute shall be resolved as follows (provided, however, that an arbitration decision by the K-League, the Association, the AFC, FIFA, and Court of Arbitration for Sport (“CAS”) which has been accepted by the parties to the Contract shall be deemed to be a final decision, which shall not be open for appeal):  Resolution of the dispute between the Club and the Player;  In the event that the dispute is not resolved within ten (10) days after either the Club or the Player is first notified of a request for resolving the dispute, the K-League shall intervene;  If the K-League is unable to resolve the dispute, then the Association shall intervene;  If the Association is unable to resolve the dispute, then FIFA shall intervene; and  If FIFA is unable to resolve the dispute, then the CAS shall intervene”.

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Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 Article 15 “Language and Governing Law”

“This Contract shall be interpreted and governed by Korean law. In case of a foreign player, the English version and Korean version of the Contract shall be executed; provided, however, that the Korean version shall be used for the interpretation thereof”.

6. In September / October 20102, the Player clashed into an opposing player during a training session with the Club. As a result of the incident, the Player indicated to the Club that he was feeling a pain in his right knee.

7. On or about 12 October 2010, the Player underwent magnetic resonance imaging (MRI) at the Ulsan University Hospital under the supervision of the Respondent’s medical staff. According to the Respondent, the MRI result was that “There was no objective physical finding on his right knee and MRI of his right knee showed minor chondral lesion and subchondral cyst on anterior aspect of the medial femoral condyle”. In the Respondent’s opinion, based on that result the pain, which the Player was feeling, was due to a tendinitis in his right knee. The Respondent’s medical staff accordingly recommended that the Player be treated with a “conservative” therapy, consisting in rehabilitation training and exercise to improve muscle strength in the knee region.

8. In the period starting on or about 20 October 2010 and ending on or about 21 November 2010

(end of the Korean football season) the Player took part in the Club’s activities, taking part in training sessions and official matches, although he reports that he was always feeling pain in his right knee.

9. On 3 January 2011, after a vacation period in his home country (Colombia), the Player joined the Club for pre-season training taking place in the territory of Guam.

10. On or about 8 January 2011, the Player indicated that he still had problems with his right knee.

He was therefore allowed not to train with the Respondent’s team.

11. On 14 January 2011, the Respondent’s doctor, Dr Sung-Do Cho, examined the Player. The

Respondent states that its doctor found that the knee pain was recurring because, due to the long period of rest in the vacation’s period, muscle weakness had developed. Therefore, Dr Sung-Do Cho recommended the Player to strengthen the muscles around the knee joint.

12. The Player states that he was dissatisfied with the Respondent’s doctor’s prescription, since the pain was unbearable. He therefore requested to return to South Korea.

13. On 15 January 2011, the Respondent authorized the Player to return to South Korea. The Respondent, however, claims that the Player was also requested to join the team again on 19

January 2011, when also the team was expected to return to South Korea, so that he could be examined again by the Respondent’s doctor.

14. On 17 January 2011, the Player decided to undergo a second MRI examination, which was conducted at the Ulsan University Hospital without involvement of the Respondent’s medical 2 The exact date is controversial: the Club indicated 6 October 2010 to be the date of the injury of the Player; the Player referred to a day in September 2010. The difference is however irrelevant and the point can therefore be left open.

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Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 staff. The Respondent bore the cost of such examination, and transmitted its results to a Colombian doctor, Dr Edgar A. Muñoz.

15. In a mail of 19 January 2011, Dr Edgar A. Muñoz declared the following: “I’ve revised Mr. Carmelo Valencia MRI of his right knee. He presents an important osteochondral lesion on the medial femoral condyle. In this condition he can’t practice soccer and any other sport that involve jogging. It’s necessary to practice under arthroscopic surgery an osteochondral autograft (mosaycoplasty). After surgery he need

a period of rehabilitation and incapacity of about 6 months. (…)”.

16. On 22 January 2011 such email was forwarded by the Player to the email address “mallsun2@hotmail.com”, which is accepted to be the email address of Ms Mal Soon Lee, at the time Manager of the International Department of the Club.

17. On 22 January 2011 the Player sent an email, in the Spanish language, to the address “navalecar@hotmail.com” and “mallsun2@hotmail.com”. Such message reads in English translation as follows: “Messrs. from the Ulsan Hyundai Football Club, I … hereby inform you that I shall not be travelling to the city of Jeju with the delegation that is going to such destination to carry on with the pre-season works, for I have an injury to my right knee, which prevents me from performing my work as a professional soccer player. Furthermore, I have had such issue for 4 months and have been assessed by a doctor from the institution by means of an X-ray and magnetic resonance imaging (MRI), and the doctor informed me that my knee had no injury to prevent any performance in the field. I requested a new magnetic resonance test on January 17, 2011, to be seen by my doctor in Colombia and the club denied it, arguing that if I wanted to get a magnetic resonance imaging (MRI) I would have to pay for it out of my own pocket, when my agreement contains a clause that states that the club is to be liable for all medical tests and treatments that I may need in case of an injury or illness imputable to the club. Notwithstanding that, I went to the university hospital and was told to undergo a new magnetic resonance and to send it to my doctor in Colombia, Dr. Edgar Muñoz. The doctor immediately examined the magnetic resonance imaging (MRI) and informed me that I have a knee injury, and osteochondral injury in the inner condyle of my right knee, and that under such conditions I cannot practice any sport that needs me to jog, run, etc. He also said that it is necessary to perform

an arthroscopic surgery and an osteochondral autograft (mosaicplasty) and after the surgery I need a period of rehabilitation and rest of 6 months. You at the Ulsan Hyundai Football Club were made aware of this by means of a written notice sent by my doctor, Edgar Muñoz, and have ignored all arguments I am giving you to get my treatment. The technical team was also made aware of it and they argued that I had nothing, except for mental problems, and that all I wanted was to leave the club. Due to that, I request that we settle this matter as soon as possible, for me to be able to start my recovery. I have attached the medical report from doctor Edgar Muñoz and the resonances taken from my right knee, and I am willing to let my right knee be examined by any other doctor specialized in this area”.

18. On 25 January 2011, Dr Sung-Do Cho, team physician of the Club, sent to the Player, writing from the email address “mallsun2@hotmail.com”, a message as follows: “I have seen Mr. Carmelo Valencia since he complained of his right knee pain in October 2010. At that time, there was no objective physical finding on his right knee and MRI of his right knee on October 12, 2010 showed minor chondral lesion and subchondral cyst on the anterior aspect of the medial femoral condyle. After a short CAS 2014/A/3626 7

Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 period of rehabilitation, he returned to play soccer games without any problem as far as I know. After the season 2010 he returned to his home country for 1 month’s vacation with no specific complaint on his right knee. The winter training camp started on January 2, 2011, and he complained of some peripatellar pain again without swelling or effusion on his right knee. MRI of his right knee on January 17, 2011 showed similar

small osteochondral lesion less that 5mm in diameter on the anterior aspect of the medial femoral condyle. Conservative treatment with rehabilitation was recommenced since the osteochondral lesion is small (less than 5mm in diameter) and in non-weight bearing portion. In addition, there was neither effusion or mechanical symptom such as catching, crepitus or giving away. So, just doing a surgery for the MRI finding (small osteochondral lesion) may not fully improve his symptoms. Since he had been doing well at the end of the last season, I think rehabilitation will improve his symptom. Close observation of his symptoms and physical findings would be mandatory”.

19. On 25 January 2011 the Club imposed a fine on the Player “for having been absent during pre-season training and behaving in an inappropriate manner, not complying with the instructions from the technical team”.

20. On 27 January 2011, Dr. Raul J. Naranjo, answering a request of the Player, wrote the following message to the Player: “I have examined in detail your resonance and I have observed in it an osteochondral lesion, with a greater impact on the cartilage, in a very small region of the medial femoral condyle, at the patellar sliding area, not in the femorotibial joint support area, which causes the prognostic to be better. I also saw inflammation at the lateral area, around the lateral collateral ligament and the articular capsule, but I do not believe that this will pose a problem, although the clinical examination will determine if there is any change to the lateral stabilizers. The anterior and posterior cruciate ligaments are very well, just as the meniscuses, to which I found no damage.

In summary, I am of the opinion that this is an injury to the cartilage of the medial femoral condyle, which would be in agreement with the mechanism that produced it, a direct trauma to that region. Due to the place where it is

located, the prognostic is better than for other areas, but since there is no improvement with the treatments applied and the pain persists, it merits the conduction of an arthroscopy. This is my opinion. …”.

21. On 1 February 2011, the Player sent to the Club the following letter, containing his termination of the Contract (hereinafter referred to as the “Player’s Termination Letter”) as follows (English translation): “I hereby inform you of my decision to deem the EMPLOYMENT CONTRACT FOR A DEFINITE TERM that binds me to the club to be terminated with cause, which decision shall go into force on the date hereof, which determination is substantiated by Article 4, Item 2, of the binding agreement entered into between the parties for considering that the employer USLAN HYUNDAY FOOTBALL CLUB has committed a serious violation, by virtue of failing to comply with its obligations, which it was legally bound to fulfill.

Such noncompliance has posed a serious risk to my integrity and my family’s livelihood, which violations ULSAN HYUNDAY FOOTBALL CLUB has incurred in since my employment bond with such sports team started, contractual procedures and usage that are in detriment to my rights as a worker/professional soccer player, infringements which are against fundamental rights such as health and life and which I intend to list below.

1. ULSAN HYUNDAY FOOTBALL CLUB, on the date of this notice, has not solved the inconvenienced related to my knee injury that I have had for some time and which has been demonstrated to the CAS 2014/A/3626 8

Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 club, at several opportunities, without them having sent me, by the date of this letter, a reputable expert to assist with my recovery from the injury caused during the exercise of my profession, and they also oddly adduced that there is nothing wrong with me, and that I have mental problems.

2. Furthermore, I requested them to have another test made to my knee (magnetic resonance, MRI), or have it examined by a doctor I trusted, and the answer was that if I wanted to get another test I would have to pay for it with my own money, when there is a clause in my contract that states that the club is to bear all expenses entailed by a lesion or illness, and they also said that there was no engagement for said test, with the result that they did not arrange for my medical test and did not provide me with a translator, knowing that this was a country with a difficult language. I have demonstrated to them with such test that the injury exists and has been acknowledged by other doctors, of which I informed them, but until the date hereof I have not received any reply.

3. I hereby state to you that since the date of my entry into the club I have not been included in any healthcare plan, which caused serious inconveniences for me to enjoy, together with my family, from the benefits to which I am entitled, of basic healthcare, due to which I was forced to cover said medical bills.

4. Since said entry, I have worked with all of my sports and physical conditions, exercising my occupation in said club and got injured during the provision of my services, without the club having taken responsibility, until the date hereof, for the injury caused during the exercise of my occupation, leaving me totally unassisted in relation to my injury, and the institution is, based on Article 4, item 2, of the employment contract, in charge of covering the expenses entailed.

5. I informed them in writing that I could not travel to the island of Jeju to continue with the pre-season work, due to the fact that my knee needed a treatment different from that which they were implementing, which I was advised by my doctor to do, and I let them know by e-mail because they did not want to take my letter, and they intended for me to train with pain in my body and with no social security. On January 29th, I got a letter

by mail in which they informed me that I was being fined at the amount of ten million (10,000,000) Won, due to disobedience to the technical team’s instructions and misbehavior. And, not caring about everything I was going through, they withheld a month of salary from me, equivalent to the month of January, which was due on the 31st day of that same month. Due to the noncompliance listed above, I consider such violations to be serious and imputable to the employer, and constitute a fair cause for the unilateral termination of the employment contract that binds me to the institution and, consequently, for me to retain my player’s license”.

22. On or about 1 February 2011, the Player left South Korea and returned to Colombia.

23. On 7 February 2011 the Player underwent surgery in Medellin (Colombia). The operation description issued by the clinical centre reads inter alia as follows: “Finding: Chondral lesion, grade 4 in the upper anterior region of the medial condyle, medial trochlear area, but in contact with the medial border of the patella, elongate, approximately 1,8 x 0,8 cm and another injury, grade 3, approximately 1,0 x 0,3 cm below the previous one, not together, without compromising support area femorotibial. Meniscus and crossed ligaments healthy. Extensive reactive synovitis, with significant inflammatory changes in the anterior capsular and suprapatellar pouch. Two fragments of loose cartilage in the lateral gutter and in the suprapatellar pouch, one of them elongated of 0,7 cm.

Procedures: Arthroscopic, partial synovectomy, removal of loose bodies and chondroplasy CAS 2014/A/3626 9

Carmelo Enrique Valencia Chaverra v. Ulsan Hyundai Football Club, award of 23 April 2015 by multiple microfractures in the area of injury.

Description: An additional Portal for superior medial parapatellar chondroplasty was

performed”.

24. On 28 February 2011, counsel for the Club addressed to the Player a letter requesting him to return to South Korea: “In our capacity of legal representatives of the Korean club Ulsan Hyundai Football Club (“Ulsan”), we revert to the employment contract entered by and between you and our client on 12 January 2010, according to which the parties agreed to establish a football professional employment relationship entering into force as from 1st January 2010 until 31st December 2012.

In this regard, on 30 January 2011 our client received an e-mail whereby you informed that the employment contract was unilaterally terminated with a supposedly just cause imposed to Ulsan. However, due the fact that Ulsan has complied with the terms and conditions of the employment contract as well as with FIFA Regulations and its principles which guides the employment relationships between clubs and players, Ulsan strongly objects the termination of the employment contract with a just cause unfounded alleged by your side. Therefore, this is to put you on notice and requesting you to return to Korea within 5 (five) days from the receipt of the present notification in order to rejoin the club’s squad since the employment contract is still valid and binding. We take the opportunity to inform you that in case you do not return in Korea within the time limit given the present case will be submitted to the competent FIFA bodies for a decision regarding the breach of the employment contract by you all based and strong legal basis and without any prior notice. Lastly please inform, within 72 (seventy two) hours as from receipt of the present correspondence, flight details that suits you better in order to comply with the above-mentioned request”.

25. In a letter dated 10 March 2011 (hereinafter referred to as the “Club’s Termination Letter”), the Club terminated the Contract as follows: “Reference is made to our previous letter dated 28 February 2011, by means of which we requested you to return

to Korea in order to rejoin club’s squad since the employment contract was still valid and binding between the parties. However, despite the fact the Ulsan Hyundai has complied in full with the terms and conditions of the employment contract as well as with FIFA regulations, also trying by all means to avoid the collapse of the contractual relationship, you insist in the violation of your duties freely assumed with our Client without a just cause. In view of the above and considering the crass breach of the employment contract by your side, this is to TERMINATE any and all contractual relationship existing between the parties, without prejudice to any further legal action to be promptly taken before FIFA competent body”.

26. On 8 March 2011, the Player lodged a claim with FIFA indicating that the Club had breached the Cont