The new ‘FIFA Regulation on working with
Intermediaries’, which would come into force on 1st of April of 2015[1].
We talk about this Regulation in sportslawwindow.com in an article on 6th
of August of 2014[2], where we submitted the changes about the actual
Regulation on agents, moreover the new provisions introduced by the new
Regulation. Also the well-regarded Argentinean jurist Mr. Eduardo Víctor
Galeano talked about this topic in an article on IUSPORT.com on 10th
of October of 2014[3], where he raised a doubt due to his conviction that the
prohibition from making any payments to an intermediary if the player concerned
is a minor, is a relative ban instead an absolute one.
Specifically, the article 7.8 of the FIFA new
Regulation on working with Intermediaries (hereinafter, “new Regulation”) states as follows: “Players and/or clubs
that engage the services of an intermediary when negotiating an employment
contract and/or a transfer agreement are prohibited from making any payments to
such intermediary if the player concerned is a minor”. We should bear in
mind what we understand as a minor. It comes defined in the FIFA Regulation on
the Status and Transfer of Players [4], being minor when he/she has not reached
18 years old. The article seems clear expressing its aim, and it carry us to
the gratuity of the services when the player concerned is a minor that means an
absolute ban.
As far as the relative ban thesis concerns, the
article 5.2 of the new Regulation, which is based on the idea of the
representation contract as a paid contract, because of it is included a minimum
element that should be in the contract: “the remuneration due to the
intermediary”, in addition the signature of the parties. The Argentinean
author adds in relation to that signature that if the player would be a minor,
the signature of the player’s legal guardian would validate the payment to the
Intermediary, in accordance with this argument. The jurist also states that
otherwise the “basic principle of universal order” and the “right to remuneration”
would be violated.
Nevertheless, one feature of the new Regulation
on Intermediaries is the signature by the Intermediary of the declaration where
he confirms the knowledge of all the FIFA Status and Regulations, moreover the
regulations of every member association and confederation where he carries out
his tasks. One of the clauses of this declaration expressly refers to the issue
that we are talking about, declaring that “I shall not accept any payment
from any party if the player concerned is a minor” (point 6, Annexe 1
–natural persons- and 2 –legal persons-). Furthermore, the Circular no. 1417
(30th of April of 2014)[5], the Executive Committee approved this
Regulation, and its point 6, referring to the payments to intermediaries (art.
7 of the new Regulation) states: “A stricter approach has also been
incorporated in relation to transactions involving minor players, prohibiting
any payments to intermediaries”. It
seems clear the FIFA’s will to ban any payment when a minor is involve at the
operation.
In the light of all this, we should recover the
concept of “right to remuneration” that we expressed previously. Being this a
right recognized in The Universal Declaration of Human Rights (article
23.3)[6], introducing the notion of the right to “just and favourable
remuneration”, to every employee, adding it should be “worthy of human
dignity”. In addition we can find the International Covenant on Economic,
Social and Cultural Rights[7] and the article 7, where states the elements of a
just and favourable remuneration.
On the other hand, it seems that the concept of
fair, just and favourable remuneration under previous international texts
analyzed, and its literal wording, is linked more closely to labor law as a
right of the workers. What makes us rethink another aspect to solve this issue
and is none other than: What legal nature has the contracts that formalize a
club or player and the agent?
LEGAL NATURE OF THE CONTRACT
We perfectly know the work of the
agents/intermediaries (we can call them how we want) at the football level,
closing different kind of deals, agreements and contracts with a club and/or a
player who works for, besides finding a club and negotiating a transfer to his
player or club that he/she represents. The European Commission itself published
in 2009 the document: “Study on sports agents in the EU”[8]. In this extensive
publication about the agents in sports, we can find what type of contract is
related with the work of an agent. Those are, the mandate contract and the brokerage
contract (atypical contract in Spain without specific regulation). That means
that this contract is on the civil law scope. Being one of the basic principles
of the civil law the freedom of contract and freedom of choice.
-
The
mandate contract stipulates that the player o club (the principal)
allows to other, in this case the agent (the representative) the powers and the
function of acting in his name in certain matters (for instance, the
negotiations of a contract).
-
The
brokerage contract is a contract by which an intermediary (the sports
agent) joins to parties (club and player) with the aim that they conclude an
agreement (employment contract). However this kind of contract (in contrast to
the mandate) does not allow the agent to act in the name of his client.
-
It
is fair to point that some Member States also refer to this legal business
(specially when the agent looks for a club for his client) as a “placement
contract”.
Furthermore, another publication called
“Principles, Definitions an Model Rules of European Private Law”[9], which
carries out a study on everything around the civil law in EU (this work talks
about a harmonization proposal of the private law in the EU), specially on the
type of contracts, among which we find the mandate, and the brokerage as a
speciality of the later. Also we observe with special attention the agency
contract, which could refer to the function of the agent by the reason of his
activities in the football.
We should focus on the mandate contract, this work based on the study of the European
Civil Law, which was carried out taking into account the totality of the
legislations of every Member State. We will refer to the legal status of this
contract, due to it could be possible that the service is free of charge (we
cannot forget that the legal nature of the mandate is free of charge), but the
thing is that this gratuity is something that it does not occur at this moment.
In fact, in Belgium (art. 1.986 of its Civil Code[10]) the mandate is a
non-remunerated contract as general rule, unless the parties agree something
different. In England instead, is the opposite, when the principal requires the
services of a professional agent; he should be remunerated (Miller v. Beale
-1879-[11]). In Spain, in the same like in Belgium, the article 1711 Civil Code
and the STS 30th of April of 1993 state that. Even though the
article 1711 CC that if the representative is acting in accordance his
profession it will constitute the obligation to make him a payment for the
services. Moreover, the CAS, in an award dated on 16th of April 2008
(B. Heiderscheid v. F. Ribéry -2007 / 0/1310 [14]) hold that remuneration is an
essential component of the brokerage contract or mandate. Adding that any
service provided by the agent should be paid, provided that it has played a
decisive role in the operation and has complied with the duties and obligations
of the contract signed by both parties. However this case does not refer to minors,
gives us an idea of the importance of remuneration in the provision of this
service by the agent. Despite the obvious possibility that gives this type of
contract within the freedom of contract of civil law. It seems clear that the
contract of mandate, once it hired a professional to provide the service, shall
be paid, without ever forgetting the possibility of gratuity by the possible
agreement between the parties, we understand, that would be lawful.
With respect to the agency contract, the mandatory reference is logically the Directive
86/653/CEE[15], which talks about this contract and the its remuneration
feature. This directive expressly excludes of its scope the non-remunerated
agents. Likewise the Spanish Act on agency contract (12/1997, 27th
of May) has preferred to add this feature in the first article of the Act. Moreover,
we should bear in mind that the lack of an express stipulation at the contract
about this point does not mean that is a gratuity service, but the payment will
be fixed in accordance with practices. Understanding the remuneration as a
right of the agent. We can observe that if we were in the scope of the agency
contract (as far as the football-intermediary service concerned) we would be in
front of a conflict of law case between the FIFA Regulation and this Directive,
avoiding the primacy principle. This would involve the invalidity of the
provision in the Regulation. Another aspect to take into account is the
expenditure incurred by the agent in the course of its business, which are
charged to the principal, that would involve another contradiction which would
be resolve on the same way.
Finally, on the brokerage contract, a contract without specifically regulation in
Spain, we will explain what constitutes. The Tribunal Supremo (our High Court) defines this contract as one for
which a person (called offeror) instructs another (who is called the mediator)
to report about the occasion or opportunity to conclude with any person or
persons a business or make the necessary arrangements to obtain the voluntary
agreement aimed at their achievement, promising in return to satisfy financial
reward in the event that the contract would be conclude. As we cannot find any
provision about this kind of legal business we are ruled by the general rules
of our Civil Code where predominates the freedom of choice (art. 1.255 CC) and
the article 1.091, which states: "The obligations arising from contracts
have the force of law between the contracting parties and must be complied with
under the same". That would suggest in our domestic legal system would be
allowed the pact of the gratuity. But as the Tribunal Supremo holds, the
offeror (the player or club, for the present case) is committed to
"remunerate the mediator" (agent), once the "contract is concluded",
here is the remunerative nature of this contract.
The result of all of this complex structure
searching for the most adequate regulation of this matter generates on the one
hand situations where we can find legal loopholes, or on the other hand a great
number of sources that are applicable to the case and can create conflict of
laws. Being the biggest problem, when there is still no consensus between
stakeholders and government bodies at national and European level. The main
factor that there is no specific regulation is the international dimension of
sport and global reach. Only, Bulgaria, Greece, Hungary, Portugal and France
have specific intermediary figure in football provisions.
In fact, the FIFA’s prohibition to remunerate
this service when exists a minor involved with the transfer or the employment
agreement has much to do with the French influence on this issue. France has
provided this same aspect at its Sports Code[17] (article 225-5), being a just
cause to terminate the contract for violation this article.
APPLICABLE LAW
Another complication establishing the applicable
law, due to every Member States regulate this matter on different ways. We
ought to add the international scope that the intermediary’s function can
reach, being easy closing deals around several countries. Because of all of
this we have to consider the rules of applicable law for this topic. Two
international treaties can be useful to resolve this problem. The Convention of
14th March 1978 on Law Applicable to Intermediary and Representation
contracts[18]; and the Rome Convention of 19th June 1980 on the law
applicable to contract obligations (Convention 80/934/ECC, “Rome I”)[19]. The
logic establishes that we have to choose the Hague Convention, but the problem
is that only France, Portugal and Netherlands have ratified it. Therefore we
should use the Rome Convention, which states:
- Firstly, the agreement between the
parties and, failing this,
- Law of the place where the
contract was concluded, alternatively, where the agent has his business
establishment, or, finally, in which he has his habitual residence (Art. 4).
CONCLUSIONS
On the one hand, I completely agree with the renowned
jurist Mr. Victor Eduardo Galeano to claim the right to remuneration for the
performance of a function and the service. Especially when this is done in the
professional field. And as established the CAS in the case Heiderscheid B. v.
F. Ribéry, the payment is an essential element in this type of contract
(despite the historic nature of the mandate, for example). And it is true that
this is an act that has been continuously carries out in the world of football,
as well as the acceptance by the international community of this sport that has
considered this practice as binding, these are factors due to the FIFA decision
could be consider as controversial. Another argument is the provision of
European legislation to compensate the agent within the contract term, as we
have seen, when he/she is performing a professional work. Another assumption is
given in the Directive 86/653/EEC, which mentions the paid nature of the agency
contract, to be established in the absence of a contractual clause, according
to custom or practices. And finally, as established by the Spanish Tribunal Supremo in the case of
brokerage agreement, along the lines of the above, the performance will be paid
when the agents accomplish a "professional" service.
On the other hand, it is true that we have a
problem that affects minors and is also well known the protection that they
have in the international community, so ethically, and with my finger pointing
on those who take advantage of situations created by the effort of the children
to succeed in a world that they do not known, seems a good measure. We have
seen that FIFA does not hesitate when they have to apply sanctions in a minors’
case (an example is the current Barça’s ban that prohibits the Catalan club to sing
any player until next year). Another advantage is the freedom of choice and
freedom to draw up contracts, which we have named and governs the civil law, which
allows to agree free of charge (as we saw) without any problem, especially in
the mandate contract and the contract of brokerage. It is true that we are
facing an imposition of the FIFA Regulation on Intermediaries, with French
influence (as we previously discussed). In this Regulation the article 7.8, moreover
the two Annexes (statement that the intermediary must sign to represent a club
or player) expressly provide for the prohibition to be paid when there is a
minor involved in the operation (either contract or transfer). No enabling the
possibility that the parties cannot negotiate or pay when it is given with a
minor. Seeing as it is undermined the negotiating capacity and the freedom to
draw up contracts, as well as the right to compensation, by the grace of FIFA
and its regulatory power.
In my opinion, I believe that we are again
witnessing the will of FIFA to ban any problem that generates a headache. And I
say again, because recently we have seen how FIFA has also decided to ban the
TPOs in football (I would prefer a proper regulation), as I am for the
protection of minors in football, without undermining the right to remuneration
for a service provided by the intermediary and a proper and harmonized
regulation. After thoroughly analyze this aspect, it strikes me as solutions for
instance, a mandatory maximum percentage on the remuneration, not a "recommendation"
for this case, where there are children involved, establishing a maximum of 3%
to the intermediary; also provide of complete transparency every movement the
intermediary would pretend with the minor (from the offers it receives, to the
contracts that the intermediary has signed with the minor and/or the legal
guardian). All with the aim of regulating this problem that the intermediaries
should deal from 1st of April of 2015 and in order that all parties
are satisfied, although it is well known that we cannot please everyone.
REFERENCES
[1]
FIFA Regulation on working with Intermediaries.
[2]
“The new FIFA Regulation on Intermediaries”. Author: Luis Torres. Source:
sportslawwindow.blogspot.com
[3]
“De nuevo sobre el Reglamento FIFA sobre intermediarios: peor el remedia que la
enfermedad”. Source: IUSPORT. Author: Eduardo Víctor Galeano (Legal advisor
Club A. River Plate).
[4]
Regulations on the Status and Transfer of Players.
[5]
Circular FIFA no. 1417 adopted by the FIFA Executive Committee, on 30th of April
2014.
[6]
Universal Declaration of Human Rights.
[7]
International Covenant
on Economic, Social and Cultural Rights.
[8]
Study on sports agents in the EU. A study
commissioned by the European Commission. November 2009.
[9]
Principles, Definitions and Model
Rules of European Private Law. Study Group on a European Civil Code.
[10] Civil Code (Belgium).
[11] Miller v Beale (1879) 27 WR 403.
[12] Civil Code (Spain).
[13] Tribunal Supremo Judgment. Sala de lo Civil
(Civil Camber). STS 17456/1993
[14] B. Heiderscheid v. F. Ribéry (CAS
2007/0/1310).
[15]
Directive 86/653/CEE, on agency contracts.MCC
[16] La
Ley 12/1997, de 27 de mayo sobre el contrato de agencia.
[17] French
Sports Code (Code du sport).
[18] Convention of 14th March
1978 on Law Applicable to Intermediary and Representation contracts.
[19] Rome
Convention of 19th June 1980 on the law applicable to contract
obligations (Convention 80/934/ECC, “Rome I”).
