Islj 2009 3-4 - TMC Asser Instituut

cerned, the specificity of sport, and any other objective criteria. These
criteria shall include, 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, the fees and expenses paid or incurred by the Former Club
(amortised over the term of the contract) and whether the contractual
breach falls within a Protected Period.
2. Entitlement to compensation cannot be assigned to a third party. If a
Professional is required to pay compensation, the Professional and his
New Club shall be jointly and severally liable for its payment. The
amount may be stipulated in the contract or agreed between the parties.
3. In addition to the obligation to pay compensation, sporting sanctions
shall also be imposed on any player found to be in breach of contract
during the Protected Period. This sanction shall be a restriction of four
months on his eligibility to play in Official Matches. In the case of
aggravating circumstances, the restriction shall last six months. In all
cases, these sporting sanctions shall take effect from the start of the following
season of the New Club. Unilateral breach without just cause
or sporting just cause after the Protected Period will not result in sporting
sanctions. Disciplinary measures may, however, be imposed outside
of the Protected Period for failure to give notice of termination (i.e.
within fifteen days following the last match of the season). The
Protected Period starts again when, while renewing the contract, the
duration of the previous contract is extended.
4. In addition to the obligation to pay compensation, sporting sanctions
shall be imposed on any club to be found in breach of contract or found
to be inducing a breach of contract during the Protected Period. It shall
be presumed, unless established to the contrary, that any club signing a
Professional who has terminated his contract without just cause has
induced the Professional to commit the breach. The club shall be
bound from registering any new players, either nationally or internationally,
for two Registration Periods.
5. Any person subject to the FIFA Statutes and FIFA regulations (club
officials, players’ agents, players etc) who acts in a manner designed to
induce a breach of contract between a professional and a club on order
to facilitate the transfer of the player shall be sanctioned. 9
Article 17 makes reference to a term called the Protected Period, a
Registration Period and the last match of a Season. Clause 7 of the
Regulations define the Protected Period as
a period of three entire Seasons or three years, whichever comes first,
following the entry into force of a contract, if such contract was concluded
prior to the 28th birthday of the Professional, or to a period of
two entire Seasons or two years, whichever comes first, following the
force into entry of a contract, if such contract was concluded after the
28th birthday of the Professional. 10
These various provisions are omnibus or general rules designed to deal
with the myriad of ways in which contracts can be unilaterally
breached; whether it be by club or player, during or between seasons,
in or out of the protected period and involving complications when
players revolve to a new club, in another country or continent, as a
result of, or prior, to the resolution of a real or imagined contractual
9 Article 17, Regulations for the Status and
Transfer of Players [1 July 2005].
10 Clause 7, Definitions, Regulations for
the Status and Transfer of Players [1 July
2005].
11 The Court of Arbitration for Sport, The
Webster Decision, 30 January 2008.
12 CAS 2008/A/1519 - FC Shakhtar
Donetsk (Ukraine) v/ Mr. Matuzalem
Francelino da Silva (Brazil) & Real
Zaragoza SAD (Spain) & FIFA; CAS
2008/A/1520 - Mr. Matuzalem
Francelino da Silva (Brazil) & Real
Zaragoza SAD (Spain) v/ FC Shakhtar
Donetsk (Ukraine) & FIFA, 19 May
2009. (Hereafter The Court of
Arbitration for Sport, The Matuzalem
Decision, 19 May 2009).
13 The material here draws on Braham
Dabscheck, ‘Developing Uniform
Criteria for the Specificity of Sport: The
Webster Case,’ 2008 (3) The Australian
and New Zealand Sports Law Journal,
103-118.
14 Paragraphs 8 to 36 of the Court of
Arbitration for Sport, the Webster
Decision, 30 January 2008.
15 Article 17 (1), Regulations for the Status
and Transfer of Players [1 July 2005].
16 Paragraph 63 of The Court of
Arbitration for Sport, The Webster
Decision, 30 January 2008.
17 Paragraph 136, The Court of Arbitration
for Sport, The Webster Decision, 30
dispute. Sorting out the issues involved in these latter disputes often
requires the wisdom of Solomon. The rules also countenance what
will be described as sanctioned, or special, unilateral termination of
contracts, which, as with general terminations, require the payment of
compensation. These are situations with players who are over 23, who
have played with their club for three or two seasons - the former for
players over 23 and the latter over 28 - and are outside the protected
period and terminate their contract in a fifteen day window at the end
of the season.
On 30 January 2008, the CAS handed down a decision dealing
with such a sanctioned unilateral termination, when Andrew Webster
unilaterally terminated his contract with the Scottish club Heart of
Midlothian. 11 In doing so it developed a jurisprudence concerning
sanctioned unilateral terminated contracts. On 19 May 2009, in adjudicating
on a second sanctioned unilateral termination, by
Matuzalem Francelino da Silva, of Brazil, with FC Shakhtar Donetsk,
of the Ukraine, the CAS adopted a radically different approach to its
decision in the earlier case. 12
This paper is concerned with examining the difference between the
two cases, or what will be described as the overturning of Webster. re
are fundamental differences in the methodology of the two cases
which will result in confusion on how to proceed in future cases. At a
minimum, there will need to be another or other cases, to provide
clarity concerning future examples of sanctioned unilateral terminations
as occurred in Webster and Matuzalem.
Webster 13
Andrew Webster, who was eighteen at the time, signed a four plus year
contract with Heart of Midlothian of the Scottish League in March
2001. Hearts paid his former club Arbroath, also of the Scottish
League, a transfer fee of 75,000. In 2003, Hearts signed him to another
four year contract. During this period Webster established himself
as a leading player and represented Scotland 22 times. Hearts attempted
to sign Webster to a new contract in the period April 2005 to April
2006. Webster declined. Given that he would be over 23 at the expiry
of his contract, free of a compensation fee he wanted to test the market
and see what he could earn. Hearts responded by not selecting him
for games at the end of 2005/2006 season. Webster decided to unilaterally
terminate his contract, at the end of the season, as he was entitled
to under the FIFA Statutes, and obtained employment with
Wigan Athletic of the English Premier League. Wigan subsequently
loaned him to Glasgow Rangers of the Scottish League. 14 Eventually
the case found its way to the CAS.
In determining the compensation that may result from a unilateral
breach of a contract Article 17(1) is open ended - note the phrase
‘any other objective criteria’ - and the criteria that can be considered
‘shall include, 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, the fees and expenses paid or incurred by the Former Club
(amortised over the term of the contract)’ 15
Hearts based its claim for compensation on five limbs. They were
the opportunity it had lost to transfer him to another club including
the cost of acquiring a replacement player of similar age and ability
and the transfer fee it had paid in obtaining his services; the residual
value of the last year remaining on his contract with Hearts; the profit
Webster obtained from breaking his contract (the difference in
income of the last year of his contact with Hearts and the first year of
his contact with his new club); its costs in prosecuting the case; and
for commercial and sporting losses. 16
In adjudicating on these claims the CAS adopted the principle that
Article 17 (1) should apply equally to clubs and players. It said Article
17 ‘applies to the unilateral termination of contracts both by players
and clubs… [and] must be interpreted and applied in a manner which
avoids favouring clubs over players or vice versa.’ 17 It added, that subject
to contractual obligations,
compensation should not be punitive or lead to enrichment and
should be calculated on the basis of the criteria that tend to ensure
clubs and players are put on equal footing … [and] that the crite-
A RT I C L E S
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