BASKETBALL ARBITRAL TRIBUNAL (BAT)
Mr. Klaus Reichert SC
in the arbitration proceedings between
Mr. Luca Infante
– Claimant –
represented by Mr. Giuseppe Cassi, attorney at law, Via Archimede 18, 97100 Ragusa, Italy
Basket Veroli s.r.l.
Parco della Rimembranza, 51, 03029 Veroli (FR), Italy
– Respondent –
1. The Parties
1.1 The Claimant
1. Mr. Luca Infante (hereinafter referred to as “Player”) is a professional basketball player who was retained by Basket Veroli s.r.l. for the 2012-2013 season.
1.2 The Respondent
2. Basket Veroli s.r.l. (hereinafter referred to as “Respondent”) is a professional basketball club in Veroli, Italy.
2. The Arbitrator
3. On 6 May 2013, Prof. Richard H. McLaren, President of the Basketball Arbitral Tribunal (the “BAT”), appointed Mr. Klaus Reichert SC, as arbitrator (hereinafter the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (hereinafter the “BAT Rules”). None of the Parties has raised any objections to the appointment of the Arbitrator or to his declaration of independence.
3. Facts and Proceedings
3.1 Summary of the Background and the Dispute
4. On 12 July 2012, Player and Respondent entered into an agreement (“the Agreement”) whereby the latter engaged the former to play basketball for the 2012-2013 season. The salary of Player was agreed at EUR 85,000.00 net of tax, payable in 10 monthly instalments on the 10th of each month from October 2012 to July 2013.
5. At the time of the filing of his Request for Arbitration (15 March 2013), Player says that
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he had not been paid any portion of his January, February and March instalments, with an amount of EUR 7,626.00 remaining unpaid from his December instalment.
3.2 The Proceedings before the BAT
6. On 15 March 2013, Player filed a Request for Arbitration of that date in accordance with the BAT Rules.
7. The non-reimbursable handling fee in the amount of EUR 2,000.00 was paid on 19
8. On 7 May 2013, the BAT informed the Parties that Mr. Klaus Reichert, SC had been appointed as the Arbitrator in this matter. Further, the BAT fixed the advance on costs to be paid by the Parties as follows:
“Claimant (Mr Luca Infante) EUR 3,500
Respondent (Basket Veroli s.r.l.) EUR 3,500”
The foregoing sums were paid as follows (all on behalf of Player): 17 May 2013, EUR
3,500.00; and 13 June 2013, EUR 3,500.00.
9. Respondent did not participate in the arbitration and did not file an Answer, despite several invitations by the BAT to do so.
10. On 8 July 2013, the Parties were invited to submit their statements of costs by 16 July
2013 and were notified that the exchange of documentation was closed in accordance with Article 12.1 of the BAT Rules.
11. On 15 July 2013, Player submitted his statement of costs.
12. Respondent did not submit any costs.
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13. On 17 July 2013 Respondent was invited to comment on the claim for costs of Player by 24 July 2013. Respondent did not do so.
14. On 5 August 2013, Player was asked by the Arbitrator exactly how much he had received from Respondent and what, if any, amounts were now claimed to be due to him.
15. On 6 August 2013, Player responded as follows through his Counsel:
“The Claimant Mr. Infante confirms that he has received from Respondent until today the
amount of Euros 40,644.00 (forty thousands six hundred forty four).
Mr. Infante claims to be due to him the amount of Euros 44,356.00 (forty four thousands three hundred fifty six) net of all taxes, with the interests, the expenses and the costs of the Procedure.”
16. On 6 August 2013 the Arbitrator afforded an opportunity to Respondent to confirm the accuracy of the figures stated by Player (as above, paragraph 15), by no later than 9
August 2013. Respondent did not avail itself of that opportunity.
4. The Positions of the Parties
17. Player says that his case is a simple one. Respondent was obliged to pay him agreed monthly salaries, but did not pay him a due amount of EUR 44,356.00.
18. As already noted, despite several invitations by the BAT, Respondent did not participate in this arbitration.
5. The Jurisdiction of the BAT
19. As a preliminary matter, the Arbitrator wishes to emphasize that, since Respondent did not participate in this arbitration, he will examine his jurisdiction ex officio, on the basis of the record as it stands.
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20. Pursuant to Article 2.1 of the BAT Rules, “[t]he seat of the BAT and of each arbitral proceeding before the Arbitrator shall be Geneva, Switzerland”. Hence, this BAT arbitration is governed by Chapter 12 of the Swiss Act on Private International Law (PILA).
21. The jurisdiction of the BAT presupposes the arbitrability of the dispute and the existence of a valid arbitration agreement between the parties.
22. The Arbitrator finds that the dispute referred to him is of a financial nature and is thus arbitrable within the meaning of Article 177(1) PILA.1
23. The jurisdiction of the BAT over Player’s claims is stated to result from the arbitration clause in paragraph 6 of the Agreement, which reads as follows (in the translation provided with the Request for Arbitration):
“Notwithstanding the possibility to refer the matter to an Italian (Federal or League) arbitrator, the parties expressly agree that any dispute arising about the present agreement can be submitted to the Fiba Arbitrator BAT – Basketball Arbitral Tribunal – with sit [sic] in Geneva, Switzerland according to the procedure of Unique Arbitrator appointed by the President of BAT. In this case both parties agreed to the regulations proceeding provided by BAT rules, to be respected without terms. The arbitration shall be governed by chapter 12 of the Swiss Act on private law (PIL), independently of parties domicile. The language of the arbitration shall be Italian or that the proceeding requires. If the player failure to use this option shall be valid the arbitration clause provided by Italian Federation and League rules.”
24. This arbitration clause is in written form and thus it fulfils the formal requirements of
Article 178(1) PILA.
25. With respect to substantive validity, the Arbitrator considers that there is no indication in the file that could cast doubt on the validity of the arbitration clause under Swiss law (referred to by Article 178(2) PILA).
1 Decision of the Federal Tribunal 4P.230/2000 of 7 February 2001 reported in ASA Bulletin 2001, p. 523.
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26. The language of the arbitration clause is quite clear, the parties have opted for BAT arbitration. In the first sentence, there also appears to be an option to go under local Italian arbitration rules, however upon a proper construction of the language, it appears to the Arbitrator that that is an option open to a party at the start of the process; this is referred to in some instances as a fork in the road. A party commencing an arbitration under this clause has the option to take one of two options, either BAT arbitration, or local Italian arbitration. Once that choice is made, the other option falls away completely and cannot be resurrected by either side.
27. For the above reasons, the Arbitrator has jurisdiction to adjudicate Player’s claims.
6. Other Procedural Issues
28. Article 14.2 of the BAT Rules specifies that “the Arbitrator may […] proceed with the arbitration and deliver an award” if “the Respondent fails to submit an Answer.” The Arbitrator’s authority to proceed with the arbitration in case of default by one of the parties is in accordance with Swiss arbitration law and the practice of the BAT.2
However, the Arbitrator must make every effort to allow the defaulting party to assert its rights.
29. This requirement is met in the present case. The Respondent was informed of the initiation of the proceedings and of the appointment of the Arbitrator in accordance with the relevant rules. It was also given sufficient opportunity to respond to Player’s Request for Arbitration, to his Account on Costs and the accuracy of the figures
provided by him. Respondent, however, chose not to participate in this Arbitration.
2 See ex multis BAT cases 0001/07, Ostojic and Raznatovic vs. PAOK KAE; 0018/08, Nicevic vs. Beşiktaş;
0093/09, A.S.D. Pallacanestro Femminile Schio vs. Braxton; 0170/11, Haritopoulos and Kallergis vs. Panionios BC K.A.E. and Gallis.
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30. Finally, the language provision in the above-mentioned arbitration clause does provide for Italian, however there is an option for another language to be used as the case requires. The default position under the BAT Rules (Article 4) is that English is the working language of BAT. This is a requirement of the BAT Rules, and therefore, upon the Arbitrator’s assessment of the arbitration clause, is one which is permissible by the clause at hand.
7.1 Applicable Law – ex aequo et bono
31. With respect to the law governing the merits of the dispute, Article 187(1) PILA provides that the arbitral tribunal must decide the case according to the rules of law chosen by the parties or, in the absence of a choice, according to the rules of law with which the case has the closest connection. Article 187(2) PILA adds that the parties may authorize the Arbitrators to decide “en équité” instead of choosing the application of rules of law. Article 187(2) PILA is generally translated into English as follows:
“the parties may authorize the arbitral tribunal to decide ex aequo et bono”.
32. Under the heading “Applicable Law”, Article 15.1 of the BAT Rules reads as follows:
“Unless the parties have agreed otherwise the Arbitrator shall decide the dispute ex aequo et bono, applying general considerations of justice and fairness without reference to any particular national or international law.”
33. The Parties have chosen the BAT Rules as one of two options for resolving disputes.
Once Player took the BAT option with the filing of his Request for Arbitration, all aspects of the BAT Rules crystallised and took force in this case, including the provision for ex aequo et bono determination by the Arbitrator pursuant to Article 15. This is the default position under the BAT Rules and covers a situation, such as this
one here, where the parties have not included language concerning a governing law or
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34. Therefore, the Arbitrator will decide the dispute at hand ex aequo et bono.
35. The concept of “équité” (or ex aequo et bono) used in Article 187(2) PILA originates from Article 31(3) of the Concordat intercantonal sur l’arbitrage3 (Concordat)4, under which Swiss courts have held that arbitration “en équité” is fundamentally different from arbitration “en droit”:
“When deciding ex aequo et bono, the Arbitrators pursue a conception of justice which is not inspired by the rules of law which are in force and which might even be contrary to those rules.”5
36. In substance, it is generally considered that the arbitrator deciding ex aequo et bono receives “a mandate to give a decision based exclusively on equity, without regard to legal rules. Instead of applying general and abstract rules, he/she must stick to the circumstances of the case.”6
37. This is confirmed by Article 15.1 of the BAT Rules in fine, according to which the Arbitrator applies “general considerations of justice and fairness without reference to any particular national or international law.”
38. In light of the foregoing considerations, the Arbitrator makes the findings below.
3 That is the Swiss statute that governed international and domestic arbitration before the enactment of the PILA (governing international arbitration) and, most recently, the Swiss Code of Civil Procedure (governing domestic arbitration).
4 P.A. Karrer, Basler Kommentar, No. 289 ad Art. 187 PILA.
5 JdT 1981 III, p. 93 (free translation).
6 Poudret/Besson, Comparative Law of International Arbitration, London 2007, No. 717. pp.625-626.
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39. The doctrine of pacta sunt servanda (which is consistent with justice and equity – parties who make a bargain are expected to stick to that bargain) is the principle by which the Arbitrator will examine the merits of the claims.
40. First, Player’s claim has not been disputed by Respondent, notwithstanding the several
opportunities granted to it to participate in this arbitration.
41. Secondly, the Agreement is abundantly clear – Player has a guaranteed, no cut, salary of EUR 85,000.00 payable in ten monthly instalments. Respondent had to pay him this money in this manner; that is what Respondent agreed to and Player legitimately expected that he would receive this money.
42. Respondent only paid Player EUR 40,644.00 out of a total due of EUR 85,000.00 which plainly leaves an outstanding amount of EUR 44,356.00. The Arbitrator accepts Player’s submission through his Counsel, and upon that representation, holds that Respondent is liable in that amount, which shall be paid net of all taxes as provided for in Article 2 of the Agreement and as mentioned by the Player in his Request for Arbitration.
43. Turning to interest, which as a matter of justice and equity (and also consistent BAT jurisprudence) is awarded to a person to whom money is outstanding, the question arises as to when interest should start to run. A total payment of EUR 40,644.00 represents four whole months of salary installments and EUR 6,644.00 towards the fifth monthly salary installment of EUR 8,500.00. On these figures, Player was paid his October, November, December and January installments in full by Respondent. He was left somewhat short in his February installment and received nothing whatsoever
for his March-July installments inclusive.
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44. Taking the foregoing into account and also the fact that the Player did not request the interest to accrue from a specific date, the Arbitrator finds that it is just and equitable that interest runs from the day after the last installment due under the Agreement, i.e. from 11 July 2013, and that interest at 5% (consistent with BAT jurisprudence) per annum is applicable to the full due amount of EUR 44,356.00.
45. Article 17 of the BAT Rules provides that the final amount of the costs of the arbitration shall be determined by the BAT President and that the award shall determine which party shall bear the arbitration costs and in what proportion; and, as a general rule, shall grant the prevailing party a contribution towards its reasonable legal fees and expenses incurred in connection with the proceedings.
46. On 27 September. 2013 – considering that pursuant to Article 17.2 of the BAT Rules “the BAT President shall determine the final amount of the costs of the arbitration which shall include the administrative and other costs of BAT and the fees and costs of the BAT President and the Arbitrator”, and that “the fees of the Arbitrator shall be calculated on the basis of time spent at a rate to be determined by the BAT President from time to time”, taking into account all the circumstances of the case, including the time spent by the Arbitrator, the complexity of the case and the procedural questions raised – the BAT President determined the arbitration costs in the present matter to be EUR 6215.00.
47. Considering that Player prevailed in his claim, it is fair that the fees and costs of the arbitration be borne by Respondent and that it be required to cover its own legal fees and expenses as well as those of Player.
48. Player’s claim for legal fees and expenses amounts to EUR 2,000.00, namely the non- reimbursable handling fee and, principally, EUR 5,000.00 for the Request for
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Arbitration (quite apart from local VAT and other state charges). This is a total of EUR
7,000.00 which is at the upper end of the scale of fees provided in Article 17.4 of the BAT Rules for cases between EUR 30,001 to EUR 100,000.00. The Arbitrator also considers that the Request for Arbitration herein, which is a short document in a non- complex case, does not support a fee of EUR 5,000.00. The Arbitrator decides that a total figure of EUR 5,000.00 (which is inclusive of all local VAT, state charges etc) is fair and reasonable in the circumstances.
49. Given that Player paid advances on costs of EUR 7,000.00, as well as a non- reimbursable handling fee of EUR 2,000.00 (which, as noted above, is taken into account when determining Player’s legal expenses), the Arbitrator decides that in application of article 17.3 of the BAT Rules:
(i) BAT shall reimburse EUR 785.00 to the Player, being the difference between the costs advanced by them and the arbitration costs fixed by the BAT President;
(ii) Respondent shall pay EUR 6215.00 to Player, being the difference between the costs advanced by him and the amount he is going to receive in reimbursement from the BAT;
(iii) Respondent shall pay EUR 5,000.00 to Player, representing a contribution by it to his legal fees and expenses.
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For the reasons set forth above, the Arbitrator decides as follows:
1. Basket Veroli s.r.l. must pay Mr. Luca Infante EUR 44,356.00 net as outstanding salary together with interest at 5% per annum from 11 July
2. Basket Veroli s.r.l. must pay Mr. Luca Infante EUR 6215.00 as reimbursement for his arbitration costs. The balance of the Advance on Costs, in the amount of EUR 785.00 will be reimbursed to Mr. Luca Infante by the BAT.
3. Basket Veroli s.r.l. must pay Mr. Luca Infante EUR 5,000.00 as a contribution to his legal fees and expenses.
4. Any other or further-reaching requests for relief are dismissed.
Geneva, seat of the arbitration, 30 September 2013
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