0471 Filopovski vs KK Union Olimpija Ljubljana

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ARBITRAL AWARD

(BAT 0471/13)

by the

BASKETBALL ARBITRAL TRIBUNAL (BAT)

Mr. Raj Parker

in the arbitration proceedings between

Mr. Saso Filopovski

– Claimant –

represented by Mr. Sebastien Ledure, attorney at law, Lorenz International Lawyers, Boulevard du Regent 37-40,
1000 Brussels, Belgium
vs.

KK Union Olimpija Ljubljana

Vojkova 100, 1000 Ljubljana, Slovenia

– Respondent –

represented by Ms. Martina Zaucer, attorney at law,
Kozinc & Partnerji, Dalmatinova 2, 1000 Ljubljana, Slovenia

1. The Parties

1.1 The Claimant

1. Mr. Saso Filopovski (hereinafter the “Claimant”) is a professional basketball coach from
Slovenia.
2. In these proceedings, the Claimant is represented by Mr. Sebastien Ledure of Lorenz
International Lawyers, Boulevard du Regent 37-40, 1000 Brussels, Belgium.

1.2 The Respondent

3. KK Union Olimpija Ljubljana (hereinafter the “Respondent”) is a professional basketball club in Slovenia.
4. In these proceedings, the Respondent is represented by Ms. Martina Zaucer of Kozinc
& Partnerji, Dalmatinova 2, 1000 Ljubljana, Slovenia.

2. The Arbitrator

5. On 3 December 2013, Prof. Richard H. McLaren, the President of the Basketball Arbitral Tribunal (hereinafter the “BAT”) appointed Mr. Raj Parker as arbitrator (hereinafter the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (hereinafter the “BAT Rules”).
6. Neither of the Parties has raised objections to the appointment of the Arbitrator or to his declaration of independence.

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3. Facts and Proceedings

3.1 Background Facts

7. On 17 June 2011, the Claimant and the Respondent entered into a contract whereby the Respondent employed the Claimant as its professional basketball coach for the
2011-2012, 2012-2013 and 2013-2014 seasons (hereinafter the “Contract”).
8. The Contract contains, among others, the following provisions:

“Article 2. Obligations of the Coach

Coach agrees:

A) To prepare to lead and execute all games, practices and all other necessary sessions and activities for the Club with the purpose to achieve the best possible goals in all competitions, both league and cup, in which [sic] participates.

B) To be an example for the players on and off the court in all respects.

C) To participate in all activities of the Club with a positive outlook and serious manner.

D) To keep up with the most recent developments in the sport of basketball and to assimilate the instructions promulgated by the directors of the Club with intention of putting his talents at the service of the Club in order to assure a good performance before the public/spectators.

E) To be present at all meetings and events organised by the Club (press conferences, meetings with sponsors, receptions, dinners etc).

F) To lead a serious life compatible with the practice of sport at the highest level of competition.

G) To wear the equipment (shoes, clothes) provided by the Club in all activities in relation to this contract.

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H) Comply with the Club’s internal rules and regulations. Coach must be provided with a copy of the Club’s rules in English upon Coach’s arrival to the Club.

Article 3. Obligations of the Club

The Club agrees to pay to the Coach a base salary of 150,000 Euro Net of taxes for the 2011/2012 basketball season, 150,000 Euro Net of taxes for the

2012/2013 basketball season and 150,000 Euro Net of taxes for the

2013/2014 basketball season in accordance with the payment schedule set forth below.

[…]

Season 2012/2013:

September 15,2012 – 15,000 Euro October 15,2012 – 15,000 Euro November 15,2012 – 15,000 Euro December 15,2012 – 15,000 Euro January 15,2013 – 15,000 Euro February 15,2013 – 15,000 Euro March 15,2013 – 15,000 Euro April 15,2013 – 15,000 Euro May 15,2013 – 15,000 Euro June 15,2013 – 15,000 Euro

[…]

Club agrees that this is a three (3) basketball seasons (2011/2012,

2012/2013 and 2013/2014) fully guaranteed contract.

If any scheduled payment is not received by Coach’s bank within sixty (60) days of the date due, Coach shall have the right, at Coach’s option, to terminate this contract. In this case Club shall be obligated to pay to Coach all money due until the day of the termination and additional six (6) monthly salaries. This payment shall become due on the day of the termination. In this case, Coach shall be free to leave Club to coach basketball as a free agent anywhere in the world he chooses. Furthermore, the Club shall have no rights over or with respect to Coach, and the Club will not be entitled to request or receive any payments pertaining to the Coach coaching basketball anywhere in the world.

Club shall have the option to terminate this contract by providing Coach and

Agent with written notice about the contract termination. In this case Club

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shall be obligated to pay to Coach all money due until the day of the termination and additional six (6) monthly salaries. This payment shall become due on the day of the termination. In this case, Coach shall be free to leave Club to coach basketball as a free agent anywhere in the world he chooses. Furthermore, the Club shall have no rights over or with respect to Coach, and the Club will not be entitled to request or receive any payments pertaining to the Coach coaching basketball anywhere in the world.

Club shall have the option to terminate this contract by providing Coach and Agent with written notice about the contract termination in case of Coach’s illness, injury or other mental or physical disability (whether incurred on or off the court) that prevents him from continuously fulfilling his contractual obligations for period longer than sixty (60) days. In this case Club shall be obligated to pay to Coach all money due until the day of the termination and additional six (6) monthly salaries. This payment shall become due on the day of the termination. In this case, Coach shall be free to leave Club to coach basketball as a free agent anywhere in the world he chooses. Furthermore, the Club shall have no rights over or with respect to Coach, and the Club will not be entitled to request or receive any payments pertaining to the Coach coaching basketball anywhere in the world.

[…]

Article 5. Taxes

The Club agrees to make all payments of Slovenian taxes of any nature according to Slovenian law. Also all bonus payments paid to Coach hereunder shall be fully net of all Slovenian taxes which will be paid by the club. Payments of Slovenian taxes will be made in addition and at the same time to all other payments required to be made to Coach under this Agreement and will be fully guaranteed by Club in the same manner that all payments to Coach are guaranteed hereunder. It is understood that Club shall be required to provide to Coach a bank certificate evidencing that all taxes are paid by Club as provided in this Article 5 when requested by Coach or Agent.

Article 7. No Cut – Fully Guaranteed contract

The Club and coach agree that this is No Cut – Full Guaranteed contract. This means that neither the Club nor the Coach nor any assignee thereof nor the League can terminate this contact other than for specific reasons described in Article 3 of this Contact…

Article 8. Disputes

Any disputes arising or related to the present Agreement shall be submitted to the FIBA Basketball Arbitral Tribunal (BAT) in Geneva, Switzerland and shall be resolved in accordance with the BAT Arbitration Rules by a single arbitrator appointed by the BAT President.

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The arbitration shall be governed by Chapter 12 of the Swiss Act on Private

International Law (PIL), irrespective of the parties’ domicile. The seat of the arbitration shall be Geneva, Switzerland. The language of the arbitration shall be English.

The arbitrator shall decide the dispute ex aequo et bono.”

9. On 28 April 2013, the Respondent sent a letter to the Claimant (hereinafter the “Termination Letter”). The Termination Letter stated that the Respondent had terminated the Contract and that the Claimant was “no longer obligated to take any more training sessions, coach at games and fulfil any other contractual obligations”. It further stated that “the parties agree that they will resolve all details of the termination of contract in writing through their official representatives”.
10. To date, the Respondent has paid a total of EUR 76,700.00 to the Claimant pursuant to the Contract in respect of salaries owed for the 2012-2013 season.

3.2 The Proceedings before the BAT

11. On 15 October 2013, the BAT received the non-reimbursable handling fee of EUR
3,000.00 from the Claimant. On 12 November 2013, the Claimant filed a Request for
Arbitration in accordance with the BAT Rules.
12. By letter dated 10 December 2013, the BAT Secretariat fixed a time limit until
14 January 2014 for the Respondent to file its Answer to the Request for Arbitration. By the same letter, and with a time limit for payment of 14 January 2014, the following amounts were fixed as the Advance on Costs:

“Claimant (Mr. Saso Filipovski) EUR 4,500

Respondent (KK Olimpija Ljubljana) EUR 4,500”

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13. The Respondent filed its Answer to the Request for Arbitration on 14 January 2014.
14. The Claimant paid his share of the Advance on Costs on 20 December 2013. The Respondent failed to pay its share of the Advance on Costs before 14 January 2014. On 30 January 2014, the Claimant paid the Respondent’s share of the Advance on Costs.
15. On 18 February 2014, the Arbitrator issued a Procedural Order (hereinafter the “First Procedural Order”) in which he requested further information from the Claimant and the Respondent.
16. The Respondent submitted its response to the First Procedural Order on 27 February
2014. The Claimant submitted his response to the First Procedural Order on 28
February 2014.
17. By Procedural Order dated 4 March 2014, the Arbitrator declared the exchange of documents complete, and requested that the Parties submit detailed accounts of their costs by 11 March 2014.
18. The Respondent submitted its account of costs on 10 March 2014 and the Claimant submitted his account of costs on 11 March 2014.
19. The Claimant’s account of costs provided that:
(i) The Claimant’s legal expenses cover 36.5 hours spent on “file analysis, correspondence, drafting notice letter, client contacts and meetings, reviewing BAT case law, drafting all required BAT procedural acts (Power of Attorney, Request for Arbitration, Inventory of Exhibits…) and replying to questions raised

by the Arbitrator”;

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(ii) The Claimant’s legal expenses “exceed the maximum contribution of ten thousand Euro”; and
(iii) “The Claimant limits his claim for the reimbursement of his legal expenses to the maximum contribution of ten thousand Euro (10,000€)in accordance with article

17.4 of the BAT Rules.”

20. The Respondent submitted the following account of costs:

“In accordance with rule 17.1 of Bat Arbitration Rules, the Respondent declares the costs incurred up to date in the amount of 4,618.95 EUR.

– Costs of legal representation and administrative costs in the amount of 4,500.00 EUR;

– Costs of interpreters in the amount of 118.95 EUR.

The Club hereby submits the invoices as of 5th March 2014 in the sum of 118.95 EUR for translation fees.

Legal costs and fees are calculated in accordance with the Act on Attorney Tariff.”

21. By email dated 12 March 2014, the BAT Secretariat sent the Parties’ respective accounts of costs to one another and requested that the Parties submit any comments on the other side’s account of costs by no later than 18 March 2014.
22. On 18 March 2014, the Respondent submitted a letter to the BAT Secretariat regarding the Claimant’s account of costs. In that letter, the Respondent:
(i) noted that the Claimant had not submitted any evidence of what costs had actually been incurred; and
(ii) submitted that the Claimant’s request for costs of EUR 10,000.00 was not

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reasonable, as the maximum contribution should only be awarded in very complicated and lengthy proceedings (which these proceedings were not).
23. On 19 March 2014, the Claimant informed the BAT Secretariat that its fee statement was available, if required. This was duly requested by the Arbitrator and provided by the Claimant on 31 March 2014. The fee statement confirmed that the Claimant had incurred costs of EUR 11,370.

4. The Parties’ Submissions

4.1 The Claimant’s Submissions

24. The Claimant asserts that, on termination of the Contract on 28 April 2013, the Respondent was required to pay him, pursuant to Article 3 of the Contract (i) any unpaid salary up to that date; and (ii) an additional six months salary.
25. On the date of termination of the Contract, the amount of salary in respect of the
2012-2013 season owing to the Claimant was EUR 126,500.00. To date, the Respondent has paid (in aggregate) EUR 76,700.00 in salary to the Claimant in respect of the 2012-2013 season.
26. Therefore, the Claimant claims, pursuant to Article 3 of the Contract, EUR 49,800.00 in outstanding salary in respect of the 2012-2013 season and an amount equivalent to six months salary (EUR 90,000.00), together with interest.
27. The Claimant’s request for relief states:

Request for Relief

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Claimant requests an award to be rendered against Respondent, according to which:

– Respondent is liable to pay Claimant an amount of one hundred and thirty-nine thousand eight hundred Euro (139.800€)net in principal;

– Respondent is liable to pay Claimant interest on late payments at a rate of 5% per annum on the amount of one hundred and thirty-nine thousand eight hundred Euro (139.800€) net as from the dateof the filing of the present Request for Arbitration until the date of complete payment;

– Respondent is liable to provide Claimant with a tax certificate indicating the net nature of all payments made under the Employment Agreement;

– Respondent is liable to reimburse Claimant all BAT expenses and procedure costs; and

– Respondent shall indemnify Claimant for incurred legal expenses (including attorney’s fees) up to an amount to be determined in the course of the BAT proceedings.

4.2 The Respondent’s Answer

28. The Respondent acknowledges that it owes the Claimant EUR 49,800.00 in unpaid salary in respect of the 2012-2013 season. However, it denies liability in respect of the Claimant’s claim to an additional six months of salary (EUR 90,000.00) pursuant to Article 3 of the Contract.
29. The Respondent submits that it terminated the Contract on 28 April 2013 due to the Claimant’s failure to fulfil his obligations under the Contract. In particular, the Respondent submits that the Claimant breached Article 2 of the Contract by:
(i) encouraging the players to disrespect the Respondent; (ii) displaying unsporting behaviour;
(iii) harming the Respondent’s reputation;

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(iv) failing to act in the best interests of the Respondent and its players; (v) insulting the Respondent and its representatives via the media;
(vi) making false public statements regarding the Respondent’s financial situation;
(vii) disclosing confidential information regarding the Respondent’s financial situation;
and
(viii) making statements to the media in breach of the BC Olimpija Media
Communications Rulebook.
30. The Respondent relies on three media articles dated 8 October 2012, 23 July 2012 and
14 December 2012 and the BC Olimpija Media Communications Rulebook as evidence of these alleged breaches of contract.
31. The Respondent submits that the requirement in Article 3 of the Contract to pay an additional six months salary upon the termination of the Contract does not apply in circumstances where the Contract is terminated due to the Claimant’s breach of contract.
32. The Respondent therefore requests that the Claimant’s claim in respect of six months additional salary (EUR 90,000.00) is dismissed.

5. Jurisdiction

33. 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

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(PILA).
34. The jurisdiction of the BAT presupposes the arbitrability of the dispute and the existence of a valid arbitration agreement between the Parties.

5.1 Arbitrability

35. The Arbitrator notes that the dispute referred to him is clearly of a financial nature and is thus arbitrable within the meaning of Article 177(1) PILA.1

5.2 Formal and substantive validity of the arbitration agreements

36. The existence of a valid arbitration agreement is to be examined in light of Article 178
PILA, which reads as follows:

“1 The arbitration agreement must be made in writing, by telegram, telex, telecopier or any other means of communication which permits it to be evidenced by a text.

2 Furthermore, an arbitration agreement is valid if it conforms either to the law chosen by the parties, or to the law governing the subject-matter of the dispute, in particular the main contract, or to Swiss law.

3 The validity of an arbitration agreement may not be contested on the grounds that the principal contract is invalid or that the arbitration agreement concerns a dispute which has not yet arisen.”

37. As mentioned in para. 8 above, Article 8 of the Contract contains an arbitration clause in favour of BAT.

1 Decision of the Federal Tribunal 4P.230/2000 of 7 February 2001 reported in ASA Bulletin 2001, p. 523.

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38. The Contract is in written form and thus the arbitration clause fulfils the formal requirements of Article 178(1) PILA. 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 agreement under Swiss law (referred to by Article 178(2) of the PILA). In particular, the wording “[a]ny disputes arising or related to the present Agreement” in Article 8 of the Contract clearly covers the present dispute. In addition, the Respondent did not object to the jurisdiction of BAT.
39. For the above reasons, the Arbitrator has jurisdiction to adjudicate the Claimant’s claim.

6. Discussion

6.1 Applicable Law – ex aequo et bono

40. 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”, as opposed to a decision according to the rule of law referred to in Article 187(1). Article 187(2) PILA is generally translated into English as follows:

“the parties may authorize the arbitral tribunal to decide ex aequo et bono”.

41. 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.”

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42. Article 8 of the Contract states “[t]he arbitrator shall decide the dispute ex aequo et bono”.
43. In light of the above, the Arbitrator will decide the issues submitted to him in this proceeding ex aequo et bono.
44. 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’arbitrage2 (Concordat),3 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.”4

45. 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”.5
46. 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”.
47. In light of the foregoing matters, the Arbitrator makes the following findings.

2 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).

3 P.A. KARRER, Basler Kommentar, No. 289 ad Art. 187 PILA.

4 JdT 1981 III, p. 93 (free translation).

5 POUDRET/BESSON, Comparative Law of International Arbitration, London 2007, No. 717, pp. 625-626.

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6.2 Findings

6.2.1 The contractual position

48. Based on the termination of the Contract by the Respondent on 28 April 2013, the Claimant claims an entitlement under Article 3 of the Contract to (i) EUR 49,800.00 in unpaid wages in respect of the 2012-2013 season; and (ii) an additional six months salary (EUR 90,000.00). The Claimant also seeks, pursuant to Article 5 of the Contract, the provision of a tax certificate from the Respondent indicating that the payments made to him under the Contract are net of all Slovenian taxes.
49. The Respondent admits that it terminated the Contract on 28 April 2013 and that it owes the Claimant EUR 49,800.00 in unpaid salary. However, the Respondent denies liability in respect of the Claimant’s entitlement to an additional six months salary under Article 3 on the basis that it terminated that Contract due to the Claimant’s breaches of contract.
50. Therefore, the first question for the Arbitrator to consider is the proper application of
Article 3 of the Contract.
51. Article 3 provides that:

“Club shall have the option to terminate this contract by providing Coach and Agent with written notice about the contract termination. In this case Club shall be obligated to pay to Coach all money due until the day of the termination and additional six (6) monthly salaries. This payment shall become due on the day of the termination. In this case, Coach shall be free to leave Club to coach basketball as a free agent anywhere in the world he chooses. Furthermore, the Club shall have no rights over or with respect to Coach, and the Club will not be entitled to request or receive any payments pertaining to the Coach coaching basketball anywhere in the world.

Club shall have the option to terminate this contract by providing Coach and

Agent with written notice about the contract termination in case of Coach’s

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illness, injury or other mental or physical disability (whether incurred on or off the court) that prevents him from continuously fulfilling his contractual obligations for period longer than sixty (60) days. In this case Club shall be obligated to pay to Coach all money due until the day of the termination and additional six (6) monthly salaries. This payment shall become due on the day of the termination. In this case, Coach shall be free to leave Club to coach basketball as a free agent anywhere in the world he chooses. Furthermore, the Club shall have no rights over or with respect to Coach, and the Club will not be entitled to request or receive any payments pertaining to the Coach coaching basketball anywhere in the world.”

(emphasis added)

52. Article 7 of the Contract provides:

“The Club and coach agree that this is No Cut – Full Guaranteed contract. This means that neither the Club nor the Coach nor any assignee thereof nor the League can terminate this contact other than for specific reasons described in Article 3 of this Contact.”

(emphasis added)

53. The Claimant submits that the effect of Article 7 is that the Contract can only be terminated in accordance with the terms of Article 3, which provides that in each case the Respondent must pay to the Claimant “all money due until the day of the termination and additional six (6) monthly salaries”.
54. The Respondent submits that, ex aequo et bono, the requirement to pay an additional six months of salary should not apply in circumstances where the Contract is terminated due to the Claimant’s breach of contract.
55. The Arbitrator considers that if the Respondent’s submission in relation to the proper interpretation of Article 3 is accepted, it would be necessary for the Respondent to
demonstrate that:

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(i) the breach of contract was sufficiently serious so as to constitute a repudiatory breach of contract (in the sense of providing the aggrieved party with the right to terminate the contract); and
(ii) the Contract was terminated on the basis of the Claimant’s repudiatory breach of contract (and not for some other reason).
56. The Arbitrator considers each of these requirements below.

6.2.2 The alleged breaches of Contract

57. The Respondent submits that the Claimant breached Article 2 of the Contract for the reasons set out in paragraph 29 above (collectively, the “Alleged Breaches”):
58. The only evidence submitted by the Respondent in support of the Alleged Breaches is a copy of the Rulebook and three media articles dated 23 July 2012, 8 October 2012 and 14 December 2012.
59. The relevant part of the Rulebook relied on by the Respondent provides that:

“Statements for the public may be delivered exclusively by the following club representatives: President, General Manager, Communications Directors, authorised representatives of the president or general manager.”

60. The three media articles relied on by the Respondent contain comments from the Claimant in relation to the financial position of the Respondent (including in relation to delays in paying players’ salaries and other financial difficulties).
61. In order to constitute a repudiatory breach of contract (and thus give rise to a right of termination on behalf of the aggrieved party), the Arbitrator considers that the breach

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must be fundamental (or constitute a breach of a fundamental term) and evince an intention, on the part of the party in breach, not to perform his obligations under the contract in some essential respect. The Arbitrator does not consider that the evidence submitted by the Respondent establishes that any of the Alleged Breaches are repudiatory. In particular, the Arbitrator finds that whilst the comments attributed to the Claimant in the media articles may constitute a breach of the Rulebook (and therefore a breach of the Contract), the alleged misconduct would not constitute a fundamental breach nor would it evince an intention on the part of the Claimant not to perform his obligations under the Contract.
62. The Arbitrator also notes that the Termination Letter dated 28 April 2013 pursuant to which the Respondent terminated the Contract does not mention any of the Alleged Breaches (or indeed any misconduct on the part of the Claimant).
63. Moreover, the Respondent has not provided any documentary evidence of notice being given to, or concerns being raised with, the Claimant in relation to any of the Alleged Breaches (or the Claimant’s conduct more generally), despite being specifically requested for such evidence in the First Procedural Order. Therefore, based on the evidence before him, the Arbitrator accepts the Claimant’s assertion that the Respondent first raised concerns in writing about the Alleged Breaches in its Answer, submitted in the course of these proceedings.
64. In these circumstances, the Arbitrator finds that the Contract was not terminated on the basis of the Alleged Breaches committed by the Claimant (which in any event are not capable of constituting repudiatory breaches of contract).
65. Accordingly, the Respondent is prima facie liable to pay the Claimant an additional six months salary in accordance with Article 3 of the Contract (subject to the Arbitrator’s findings below).

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6.2.3 Mitigation of the Claimant’s losses

66. The Claimant submits that, despite his best efforts and those of his agent, he has not been able to secure new employment since the Contract was terminated on 28 April
2013.
67. The Claimant has not, however, provided specific details or any documentary evidence of his attempts to find new employment, despite being requested to do so in the First Procedural Order. Instead the Claimant merely submits that he and his agent have used “continuous efforts” in seeking new employment.
68. The Claimant argues that Article 3 of the Contract (which requires the Respondent to pay the Claimant six months worth of salary upon the Claimant’s termination of the Contract) is an indemnity against breach of contract, rather than compensation for unpaid wages. As such, the Claimant is not subject to the normal requirements to mitigate his losses. The Arbitrator does not accept this argument. Firstly, there is no established principle in BAT jurisprudence that indemnities against breach of contract are not subject to the usual principles of mitigation. Secondly, the Arbitrator considers that Article 3 operates to compensate the Claimant against losses he may suffer if it becomes necessary to terminate the Contract. If the Claimant terminates the Contract and benefits by signing a new and lucrative contract, such compensation is not required to the same extent and so, in principle, it could be unjust for the Claimant to recover the full amount of such compensation. However, the Arbitrator does accept that, in certain circumstances, there may be a difference in the level of mitigation which might be required where the claim in question is brought in relation to an indemnity, rather than in relation to past due and unpaid salaries.
69. The Arbitrator notes that there were approximately two months of the 2012-2013 season left when the Claimant terminated the Contract. The Arbitrator considers that it is de facto often more difficult for a coach to find a new contract during the course of a

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season (as compared with a player). However, the Arbitrator notes that the Claimant was still in a position to secure employment for the entire 2013-2014 season.
70. In these circumstances, the Arbitrator finds, ex aequo et bono, that the EUR 90,000.00 payable as six months salary to the Claimant under Article 3 of the Contract should be reduced by EUR 10,000.00 due to the Claimant’s failure to adequately mitigate his losses.
71. Accordingly, the Respondent must pay the Claimant compensation totalling EUR
129,800.00 (being EUR 49,800.00 in unpaid salary and EUR 80,000.00 as the sum representing six months salary).

6.2.4 Interest

72. The Claimant has requested interest at a rate of 5% per annum, from the date of the filing of his Request for Arbitration, on the monies owed to him by the Respondent. Although the Contract does not provide for the payment of default interest, this is a generally accepted principle embodied in most legal systems. Indeed, payment of interest is a customary and necessary compensation for late payment, and the Arbitrator considers that there is no reason why the Claimant should not be awarded interest in this case. Also, according to BAT jurisprudence, default interest can be awarded even if the underlying agreement does not explicitly provide for an obligation to pay interest. The Arbitrator further considers, in line with the jurisprudence of the BAT, that 5% per annum is a reasonable rate of interest and that such rate should be applied from the date of the filing of the Request for Arbitration. The Arbitrator therefore awards interest on the sum of EUR 129,800.00 at a rate of 5% per annum from
12 November 2013.

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6.2.5 Tax certificate

73. The Claimant also seeks from the Respondent “a tax certificate indicating the net nature of all payments” made under the Contract.
74. Article 5 of the Contract provides the Claimant with a contractual right to this information. It provides:

“The Club agrees to make all payments of Slovenian taxes of any nature according to

Slovenian law. […]

It is understood that Club shall be required to provide to Coach a bank certificate evidencing that all taxes are paid by Club as provided in this Article 5 when requested by Coach or Agent.”

75. Accordingly, the Arbitrator finds that the Respondent is obliged to provide the Claimant with a bank certificate evidencing that all payments made to the Claimant under the Contract (including payments made pursuant to this BAT Award) have been made net of all Slovenian taxes.

7. Costs

76. Article 17.2 of the BAT Rules provides that the final amount of the costs of the arbitration shall be determined by the BAT President and may either be included in the award or communicated to the Parties separately. Furthermore, Article 17.3 of the BAT Rules provides that the award shall grant the prevailing party a contribution towards its
reasonable legal fees and expenses incurred in connection with the proceedings.

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77. On 12 April 2014, 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 at EUR 8,220.00.
78. The Arbitrator notes that the Claimant was successful in establishing the Respondent’s liability to pay compensation for unpaid salaries and an additional six months salary. The Claimant was, however, awarded slightly less than the amount of compensation that he claimed. The Arbitrator also notes that the Respondent failed to pay its share of the Advance on Costs. Thus, the Arbitrator decides that, in application of Article 17.3 of the BAT Rules and in light of the circumstances of the case, the Respondent shall bear the costs of the arbitration. Therefore, the Arbitrator decides that the Respondent shall pay to the Claimant EUR 8,220.00 as reimbursement of arbitration costs advanced by the Claimant. The BAT shall reimburse EUR 780.00 to the Claimants, being the difference between the costs advanced by them and the arbitration costs fixed by the BAT President.
79. The Claimant has claimed EUR 10,000.00 in legal fees and expenses (including the non-reimbursable fee of EUR 3,000.00). The Arbitrator considers that such fees and costs are excessive for this case, given the volume and content of submissions that were required to be made (for example, the Arbitrator notes that only one procedural order requesting further information from the Parties was made). In the circumstances, the Arbitrator finds that it would be reasonable for the Respondent to pay to the Claimant EUR 7,500.00 as a contribution towards the Claimant’s legal fees and
expenses, including the non-reimbursable fee.

Arbitral Award 22/23

BAT 0471/13

8. AWARD

For the reasons set forth above, the Arbitrator decides as follows:

1. KK Union Olimpija Ljubljana is ordered to pay to Mr. Saso Filopovski EUR 129,800.00 as compensation for unpaid salaries and for early termination of contract, together with interest payable at a rate of 5% per annum on such amount from 12 November 2013.

2. KK Union Olimpija Ljubljana is ordered to pay to Mr. Saso Filopovski

EUR 8,220.00 as reimbursement of the advance on BAT costs.

3. KK Union Olimpija Ljubljana is ordered to pay to Mr. Saso Filopovski

EUR 7,500.00 as a contribution towards his legal fees and expenses.

4. KK Union Olimpija Ljubljana is ordered to provide Mr. Saso Filopovski with a bank certificate evidencing that all payments made to him under the contract between them dated 17 June 2011 have been made net of all Slovenian taxes.

5. Any other or further-reaching requests for relief are dismissed.

Geneva, seat of the arbitration, 28 April 2014
Raj Parker
(Arbitrator)

Arbitral Award 23/23

BAT 0471/13