Football & Law, Current affairs procedural law, December 2021: Part II (in addition to Part I of December 1, 2021)
This year, our sports law section – in addition to providing a broad range of services to clients in the sports sector – once again litigated in several football-related cases, including a number of remarkable ones. Hereby, in two parts, an insight into a number of these matters that are relevant to football, but certainly also to the civil law practice. Part two will follow on Friday December 3, 2021.
III. An intermediary wrongly claims wages and expenses directly from a professional football player; conflict with the WAADI (Dutch law that prohibits an intermediary to claim a commission from the employee)
In a procedure before the Court of Rotterdam in which a judgment was rendered on 29 September 2021 (link: https://uitspraak.rechtspraak.nl/inziendocument?id=ECLI:NL:RBROT:2021:9640), an intermediary of a player claimed an amount of EUR 40,000 in wages and more than EUR 18,000 in expenses. Both claims of the intermediary were rejected by the court.
What was the case?
The intermediary in question became involved in the finalization of a transfer to Red Star Belgrade, while in fact all negotiations with the club had already been completed and the “match” with the club had not been established by this intermediary. The intermediary’s contribution to the conclusion of the deal was therefore minimal. Nevertheless, given the good relation the player had with the intermediary, the player allowed the intermediary to finalize the deal and consequently receipt of a portion of the club’s commission.
Ultimately, the relationship between player and club was very tense, for example, wages were not paid in time and in full, and it wasn’t a sportive success either. In the end, the player terminated the agreement with the club through a settlement agreement in which the arrears of wages were also arranged. That agreement was not fulfilled. The intermediary turned out to be unable to secure payment of the outstanding wages for the player. However, the intermediary had negotiated a good commutation of his commission scheme for himself at the club. So the player no longer wanted assistance from the intermediary during the continuation of his career. The intermediary disagreed and claimed the aforementioned amounts of wages and reimbursement of expenses from the player.
Now that, according to the intermediary, there was an agreement for services with the player, according to the intermediary there was still a right to payment of a reasonable wage under Sections 7:405 and 406 BW (the Dutch Civil Code). The court disagreed with the intermediary and considered the following in legal consideration 5.10:
“It has been established that there is a custom in mediation in the football sector that deviates from the provisions of Article 7:405 paragraph 1 of the Dutch Civil Code and Article 7:406 paragraph 1 of the Dutch Civil Code. After all, the intermediary stated at the hearing that it is true that in the football sector the brokerage fee is paid by the football club and that a player never actually pays wages or reimburses the intermediary’s expenses. As far as job placement is concerned, that practice corresponds to Article 3 of the WAADI and as far as other interference is concerned, this is confirmed by the Whatsapp message of January 17, 2020 in which the intermediary informed the player that he paid the lawyer.”
Pursuant to Article 3 of the WAADI (Allocation of Labor Forces by Intermediaries Act), no consideration may be stipulated for the jobseeker (in this case, the player) in employment mediation.
With regard to the reimbursement of costs claimed by the intermediary, the court considered the following in legal considerations 5.11 and 5.12:
“The conclusion of the termination agreement between the player and Red Star and the assistance provided in collecting overdue salary and the agreed termination compensation must be regarded as performed activities in the context of that mediation. After all, it has not been stated that the performance of those activities was clearly agreed separately between the parties and the conclusion of the termination agreement was moreover necessary for the intermediary itself to still receive part of the commission paid by Red Star. In addition, from his announcement “so nothing remains on our side” in his WhatsApp message to the brother of the player of 1 July 2020, it appears that the intermediary permanently assumed that the lawyer fees incurred were permanently for the account of the intermediary.
On the basis of the foregoing, the intermediary’s appeal to Article 7:411 of the Dutch Civil Code also fails. It cannot be established that the player owed any wage or expense allowance to the intermediary from September 28, 2020 – the date on which the mediation ended when an agreement was concluded.”
An appeal against the judgment has been announced by the intermediary.
IV. A 50/50 split agreement between two intermediaries on commission income related to one specific player. Can this agreement be canceled unilaterally or not?
On June 29, 2021, the Court of Appeal of The Hague rendered a judgment in a dispute between two intermediaries regarding an agreement to divide the commission funds with regard to one specific professional football player. The court held that the intermediary who had “transferred” the player on his own initiative to a fellow intermediary, in exchange for an ongoing 50/50 agreement on the distribution of future commissions, was indeed entitled to 50% of these annual commissions as long as the new intermediary assisted and would still assist the player. The new intermediary was ordered to pay the old intermediary an amount of EUR 400,000 in principal, plus statutory commercial interest on commissions already due from 2016 and to pay 50% of the future commissions.
What was the case?
The old intermediary had assisted the player from his younger years and guided him until the player reached the highest level in the Netherlands and eventually even made it to the Dutch national team. Despite an ongoing representation agreement, the old intermediary was of the opinion that it was wise to have a larger party as intermediary in the further development of the international career of the player. This is how the conversations with this new intermediary arose. After good constructive discussions, it was agreed that the new intermediary would assist the player with the agreement that the old intermediary would at all times keep 50% of the (future) commissions as a reward for introducing the player.
The parties recorded this, not in a formal written agreement, but in the text messages and in an email below:
A message from the player to the new intermediary:
“Once the deal is done, the new and the old intermediary will share their commission 50/50. I want the new intermediary to take the lead in negotiations.
The new intermediary represents me the old intermediary is my friend
This agreement applies as long as the new intermediary represents me”
A message from the new to the old intermediary:
“… then it goes without saying that we share the only revenues on a 50/50 basis”
An email from the new to the old intermediary:
“As for the financial agreements, it should be clear: we do that on a fifty/fifty basis”.
Ultimately, after a period of a number of years, the new intermediary apparently thought that the agreement cost him too much money and he tried to get back to the old intermediary. According to the new intermediary, the agreement could be terminated prematurely and he had validly terminated it. The new intermediary then stopped paying the 50% commission – after initially having fulfilled this agreement from 20214 – and forced the old intermediary to litigate.
The court established that the 50/50 agreement had indeed been agreed between the parties and that it could not be terminated unilaterally by the new intermediary. To this end, the Court of Appeal considered in legal consideration 4.7:
“After 2014, the guidance of the player by the old intermediary was no longer an issue because of the (final) rift between them at the end of 2014. Nevertheless, as is apparent from the considerations under 4.5 and 4.6, the new intermediary still assumed in 2016/2018 the existence of the apportionment agreement made in 2012, which meant that the old intermediary was entitled to 50% of the money paid for the transfers of the player receive commissions. This can only be interpreted as meaning that the new intermediary did not assume that guidance of the player by the old intermediary constituted consideration for that right.”
In legal consideration 5.1 it was further considered:
“Because the old intermediary had already fulfilled its only (enforceable) obligation towards the new intermediary when the 50/50 agreement in the 2012 Agreement was concluded – namely: introducing the player – that agreement for the old intermediary no continuous or recurring obligations have been created with regard to the new intermediary. There was therefore no continuing performance agreement between the old and the new intermediary. This means that the agreement with regard to the old intermediary could not be terminated. A conclusion to the contrary would lead to the incongruous consequence that the old intermediary had fully performed its performance, but that by giving notice the new intermediary could unilaterally release itself from its still ongoing obligation to pay 50% of the player’s transfer fees commission to be paid to the old intermediary”.
A salient detail in this procedure was the fact that the new intermediary at some point made an offer to the old intermediary to pay 25% instead of 50% commission from that moment on, which could also be interpreted as an acknowledgment of the ongoing 50/50 deal. According to the new intermediary, during her plea before the court, however, he meant by ’25 per year’ a bid of GBP 25,000, which would correspond to an invoice of EUR 24,100 paid to the old intermediary later. During the pleadings, the old intermediary immediately noted in response that this calculation was really incorrect in view of the generally known exchange rate – not to mention the substantive statement. The court also ruled:
“… it is generally known that a pound is and was worth more than a euro… Taking all this into consideration, the statement of the new intermediary, that with ’25 per year’ in the app of the new intermediary of 4 February 2018, does not miss a distribution, but a sum of money is intended, a sound substantiation, so that the statement of the old intermediary that this refers to a distribution must be regarded as established.”
The new intermediary really pulled out all the stops when conducting its defence. The new intermediary has not yet paid the old intermediary, despite a provisionally enforceable judgment, and has meanwhile lodged an appeal in cassation with the Supreme Court against the decision of the Court of Appeal. So this case will continue.
In 2022 we will again be fully active within this beautiful and always fascinating area of law and we will keep you informed of further developments.
If you have any questions about these or other football-related matters or about other aspects of (international) sports and employment law, please contact Joes Blakborn or Max Hazewinkel, lawyers specialized in football and other sports-related issues, at Van Diepen Van der Kroef Attorneys from Amsterdam.
Amsterdam, December 3, 2021