ISLJ 2008-1-2_Def - TMC Asser Instituut

Be that as it may, clearly, if clubs and players wish to claim for morethan the so-called ‘residual value’ of the contract, as defined above,such as the market value of the player, they will need to includeexpress provisions to that effect in their contracts of employment, asarticle 17 of the F1FA Status Regulations expressly provides that thecriteria for assessing compensation for breach of contract by eitherside set out in sub-clause 1 are subject to whatever else may be expresslyincluded in the player’s contract. Likewise, the same principle alsoapplies to the recovery of so-called ‘engagement fees’.ConclusionThe CAS Award in Webster certainly provides a comprehensive andcareful review of the general principles to be followed in interpretingthe provisions in article 17 of the FIFA Status Regulations for determiningthe quantum of compensation to be paid for the unjustifiedbreach of a player’s contract of employment, whether this occurs withinor outside the ‘protected period’. And for that reason may be welcomed.But whether or to what extent this Award will contribute tothe developing lex sportiva of the CAS, irrespective of the fact that, intheory, each CAS Panel is not obliged to follow previous Panel decisionsin similar cases (stare decisis), remains to be seen.The Webster Case: Justified Panic as therewas after Bosman?by Frans de Weger*As we know, the notorious Bosman case had a major impact on theinternational football world and can be regarded as one of the mostimportant sports cases in history. 1 In it the European Court of Justicestressed in 1995 that transfer compensation to be paid by a club for aplayer who had ended his contractual relationship with his former clubwas not permitted, violating the free movement of people within theEuropean Union. This was a serious shock to the international footballworld. Clubs faced particular difficulties after the Bosman case, in thatthey had to prevent players reaching the end of their contracts andthen running off freely. The clubs had to invent legal constructions tomaintain a stronger hold on their players. So they began negotiatingcontracts for longer periods, and were tempted to draft contract clausesallowing them to secure compensation for their losses. 2 Anothermethod the clubs invented after Bosman was to insert clauses wherebythey unilaterally reserved the right to extend the agreement, the socalledunilateral extension option. This unilateral extension option isnow generally a standard feature of player contracts.The Court of Arbitration for Sport (CAS) recently ruled the socalled‘Webster case’. 3 Here the CAS decided that the player was permittedto terminate his employment contract unilaterally after the socalled‘protected period’. 4 The CAS also decided that as a result of histermination after the protected period, player Webster only had to paythe remaining value of his contract to his former club as compensation.The football world again reacted with panic. FIFA was also highlydismayed at the CAS decision, stating that this verdict in the player’sfavour would have far-reaching and damaging effects on the gameas a whole. 5 The important question now is whether it will indeed beanother landmark judgment in the world of sports law. In otherwords, does this mean that every player who terminates his employmentcontract after the protected period only has to pay the remainingvalue of his contract as compensation? Or more importantly, willclubs once more face serious difficulties, given that players might beentitled to terminate their contracts unilaterally after this protectedperiod? Let us begin with the facts of the case.Scottish international Andrew Webster was a player with Heart ofMidlothian. In 2006 he was relegated to the bench after a conflictwith club owner Vladimir Romanov. This motivated Webster to terminatehis contract. He did it outside the protected period, so that nosporting sanctions would be imposed. 6 Then he signed a new contractwith Wigan Athletic. But Heart of Midlothian did not agree to thetermination and refused to cooperate in the transfer to WiganAthletic. Webster thus appealed to FIFA, asking for a provisional registrationfor his new club; this was allowed by the PSC’s Single Judge.Now the dispute was only about the amount of compensation. Heartof Midlothian claimed a market value of GBP 5,000,000. The DRCbelieved that the player had terminated his contract outside the protectedperiod - a highly important element in establishing the compensationamount. 7 The DRC decided it was undeniable that the unilateraltermination had occurred after three seasons, i.e., after the protectedperiod and within 15 days of the season’s last match. It referredto the maintenance of contractual stability, which represents the backboneof the agreement between FIFA/UEFA and the EuropeanCommission signed in March 2001. In this decision, the DRCreferred to Article 17 Paragraph 1 of the Regulations for the Status andTransfer for Players (RSPT), edition 2005, which provides the key toassessing the amount of compensation due by a player to a club. 8 Hereit states that compensation for breach shall be calculated with dueconsideration for the law of the country concerned, the specificity ofthe sport and other objective criteria such as the remuneration andother benefits due to the player under the existing contract and/or thenew contract, the time remaining on the existing contract up to amaximum of five years, the fees and expenses paid or incurred by theformer club and whether the breach falls within the protected period.In this case the remaining value of the player’s employment contractwas EUR 199,976. But the DRC again emphasised that he could notterminate his contract by simply paying his club the remaining valueof his contract, citing article 17 mentioned above. Besides his basicsalary, the player also received a number of appearance bonuses andthe former transfer compensation of EUR 75,000 also had to be takeninto consideration, as well as the five seasons the player had spentwith his club, the DRC stated. It noted another crucial factor to betaken into account: the way in which his club had contributed to the* De Vos & Partners attorneys at law,Amsterdam.1 Case C-415/93, Union royale belge dessociétés de football association ASBL v.Jean-Marc Bosman Royal Club liègois SAv. Jean-Marc Bosman. SA d’EconomicMixte Sportive de l’Union Sportive duLittoral de Dunkerque, Union RoyaleBelge des Sociétés de Football AssociationASBL, Union des AssociationsEuropéennes de Football Union desAssociation Européennes de Football v.Jean-Marc Bosman, judgment of 15December 1995, [1991] ECR I-4837. SeeAaron Wise and Bruce S. Meyer,International Sports Law and Business,Vol. 2, The Hague, Kluwer LawInternational 1997) p. 1104/1105. See alsoLars Halgreen, ‘The European Regulationof Sport’, 3/4 ISLJ (2005) p. 47.According to Halgreen there was anunmistakable feeling among sports associationsthat they were beyond legal control.2 Stephen Weatherill, European Sports Law,p. 67.3 CAS 2007/A/1298 “Wigan Athletic FC v/ Heart of Midlothian”. CAS2007/A/1299 “Heart of Midlothian v/Webster & Wigan Athletic FC”. CAS2007/A/1300 “Webster v/Heart ofMidlothian”.4 A club and a player entering into anagreement should in principle respect andhonour the contractual obligations duringthe term of the contract, also known asthe principle of pacta sunt servanda. FIFAtherefore introduced the so-called ‘protectedperiod’, which was meant to safeguardthe maintenance of contractual stability.The protected period is the periodof three entire seasons or three years,whichever comes first, following the entryinto force, if such contract was concludedprior to the professional’s 28th birthday. Ifthe professional’s contract was concludedafter his 28th birthday, the protected periodis two seasons or two years. FIFAintended to protect a certain period of thecontract by discouraging players and clubsfrom terminating the contract during theprotected period. FIFA believed that unilateraltermination of a contract without ajustified reason, especially during the protectedperiod, had to be vehemently discouraged.See FIFA Commentary, explanationArt. 13, p. 38.5 See FIFA website:http://www.fifa.com/aboutfifa/federation/releases/newsid=682195.html.6 For example, if a 24-year-old player signshis first contract and unilaterally terminatesit two years later, one can speak ofa termination within the protected period.He will then not only be subjected tosporting sanctions, but the amount ofcompensation will also be relatively high.If the player unilaterally terminated hiscontract four years after signing the contract,he will not be subjected to sportingsanctions and the amount of compensa-20 2008/1-2ARTICLES