Webster, Matuzalem, De Sanctis. ... and the future.

• Author: de Weger, Frans M.

1. Introduction

   On 30 January 2008, the Court of Arbitration for Sport ("CAS") ruled that player Andrew Webster was entitled to unilaterally terminate his employment contract with Heart of Midlothian after the so-called protected period of his contract. The CAS decided that as result of the unilateral termination, player Webster only had to pay the remaining value of his contract as compensation to his former club Heart of Midlothian. This was the first case in which the CAS had to decide with regards to the amount of compensation in case of a unilateral termination of a player after the protected period. On the one hand, the international football world was pleasantly surprised after the decision (the players), but on the other also seriously shocked (the clubs). The question now was whether the Webster-case was another land mark judgment in the international football world, such as the famous Bosman-case. (1)

   After Webster, the main issue was, is every player free to unilaterally terminate his employment contract after the protected period by only paying the remaining value of his contract as compensation? In an earlier edition of the International Sports Law Journal, I wrote an article regarding the Webster-case and its consequences for the future. In that article I analyzed whether the clubs would indeed face more difficulties after the decision, given that the players might be entitled to terminate their contracts unilaterally after the protected period. In that article it was concluded that it should not be presumed beyond doubt after the Webster-case that the remaining value in future cases had to considered as the only criterion in order to establish the amount of compensation. After Webster we were left with many unanswered questions that gave rise to the suspicion that the remaining value should not be the only decisive criterion in determining the amount of compensation. For example, in future cases aggravating circumstances, more specifically the status and behavior of the parties, could play an important role and could have effect on the amount of compensation to be paid. And, more importantly, does not each request for compensation has to be assessed on a case-by-case basis? (2) Many questions were still unanswered.

   On 19 May 2009, the CAS came with a follow up. In the so-called Matuzalem-case, the CAS decided that the remaining value was not the only criterion in order to establish the amount of compensation after a unilateral termination of a player outside the protected period. In this case, the CAS ruled that the award of damages had to be based upon the principle of "positive interest", i.e. putting the injured party in the position it would have been in, had there been no breach of contract. The Matuzalem-case provided clubs and players with judicial handholds to claim extra damages on the party breaching the contract. The CAS was not willing to follow the CAS panel in the Webster-case since it was of the opinion that extra damages could be claimed. Now the CAS panel in the Matuzalem-case ruled differently, it was interesting to see what CAS panels would decide in future with regards to the amount of compensation in case of a unilateral termination after the protected period. It was interesting to see what the future would bring and how this jurisprudence was going to develop. Would the Webster-doctrine be followed or was Matuzalem leading?

   In the recent De Sanctis-case, the CAS now seems to clarify things up. In this case, in which was also adjudicated with regards to a termination after the protected period, the Italian player Morgan de Sanctis played with the Italian club Udinese and terminated his contract after the protected period, such as Webster and Matuzalem did previously. Udinese claimed that the player and his new club Sevilla were not entitled to (only) pay the remaining value of the contract and claimed that the award of damages had to be based upon the principle of "positive interest", such as the CAS did in Matuzalem. The player (obviously) referred to the Webster-case and claimed that he only had to pay the remaining value. The FIFA Dispute Resolution Chamber ("DRC") as well as the CAS (in appeal) had to decide in this matter. Both instances, the latter in its award of 2010, decided that extra damages could be claimed. As result thereof, it was clear that the remaining value was not the only element in order to establish the amount of compensation. The CAS now seemed to follow the line of the Matuzalem-case. However, it was interesting in this case that CAS did use a different calculation method regarding the amount of compensation.

   In this article, the De Sanctis-case will play a central role. However, in order to place the De Sanctis-case in the right perspective, the Webster-as well as the Matuzalem-case will be discussed first, also as an introduction to the De Sanctis-case. The facts and the most important considerations of the DRC and the CAS will be brought to the attention. As said before, the De Sanctis-case will play a central role in this article since this case of 2010 now seems to give us a more definitive answer with respect to the question how the amount of compensation should be calculated in case a player unilaterally terminates his contract after the protected period. In that respect, article 17 para. 1 of the Regulations on the Status and Transfer of Player ("RSPT") provides us with the key to assessing the amount of compensation. In the commentaries of this article, first parallel starting points of the deciding bodies in Webster, Matuzalem and De Sanctis will be outlined. Furthermore, in this article will be anticipated on how the CAS will decide in future cases after De Sanctis and what criteria as listed in article 17 and derived from the jurisprudence can and will most likely be taken into consideration by future CAS panels in order to establish the amount of compensation in case of a unilateral termination after the protected period. All relevant criteria will thus be analyzed. Finally, the clubs will be provided with judicial handholds in order to anticipate adequately regarding this issue in future.

2. Protected Period

   Before entering into the substance of the matter, a short explanation with regards to the protected period (and the sporting sanctions) is necessary. A club and a player entering into an agreement should in principle respect and honour the contractual obligations during the term of the contract, also known as the principle of "Pacta Sunt Servanda". FIFA therefore introduced the so-called protected period, which was meant to safeguard the maintenance of contractual stability between players and clubs. The protected period is the period of three entire seasons or three years, whichever comes first, following the entry into force, if such contract was concluded prior to the professional's 28TH birthday. If the professional's contract was concluded after the 28TH birthday of the player, the protected period is two seasons or two years.

   With the introduction of the protected period, FIFA intended to protect a certain period of the contract by discouraging players and clubs from terminating the contract during this period. FIFA believed that unilateral termination of a contract without a justified reason, especially during the protected period, had to be vehemently discouraged. (3) It is noteworthy to mention that sporting sanctions shall only be imposed on a player found to be in breach of contract during the protected period. This sanction shall be a four-month restriction on playing in official matches. In the case of aggravating circumstances, the restriction shall last six months. In case a club is found to be in breach of contract or is found to be inducing a breach of contract (4) during the protected period, sporting sanctions shall also be imposed.

   In that case, the club shall be banned from registering any new players, either nationally or internationally, for two registration periods. Please further note that in the RSTP is also laid down that if a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment.

   In view of the above, it is important to keep in mind that a unilateral breach of the employment contract without just cause after the protected period shall not result in sporting sanctions. Only disciplinary measures may, however, be imposed outside the protected period for failure to give notice of termination within 15 days of the last official match of the season (including national cups) of the club with which the player is registered. (5) Furthermore, it is important to mention in that respect that the protected period starts again when, while renewing the contract, the duration of the previous contract is extended. In order to avoid any misunderstanding, this article only focuses on the unilateral termination of a player after the protected period of the employment contract as result of which sporting sanctions will not be imposed.

3. Webster

   The Webster-case started with a decision of the DRC of 4 April 2007, in which the chamber had to adjudicate with respect to the amount of compensation to be paid by player Andrew Webster now he left his club Heart of Midlothian outside the protected period. (6) The facts, in short, were as follows. The Scottish international Andrew Webster was a professional player with Heart of Midlothian and after a conflict with the club owner Vladimir Romanov in 2006, he was degraded to the bench. That was reason for Webster to terminate his contract. Webster terminated his employment contract outside the protected period and therefore no sporting sanctions would be imposed on him. Following the termination, Webster signed a new contract with Wigan Athletic. However, Heart of Midlothian did not agree with the termination and refused to cooperate with the transfer to Wigan Athletic. As result thereof...