BASKETBALL ARBITRAL TRIBUNAL (BAT)
Ms. Annett Rombach
in the arbitration proceedings between
Mr. Sandro Nicevic
– Claimant –
represented by Mr. Miodrag Raznatovic, attorney at law
Strahinjica bana 18, 11000 Belgrade, Serbia
S.S. Sutor Srl
Viale Zaccagnini 108, 63812 Montegranaro (FM), Italy
– Respondent –
1. The Parties
1.1 The Claimant
1. Mr. Sandro Nicevic (the “Player” or “Claimant”) is a professional basketball player of
1.2 The Respondent
2. S.S. Sutor Srl (the “Club” or “Respondent”, and together with Claimant the “Parties”) is a professional basketball club located in Montegranaro, Italy.
2. The Arbitrator
3. On 21 January 2014, Prof. Richard H. McLaren, the President of the Basketball Arbitral Tribunal (the “BAT”), appointed Ms. Annett Rombach as arbitrator (the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (the “BAT Rules”). Neither of the Parties has raised any objections to the appointment of the Arbitrator nor to her declaration of independence.
3. Facts and Proceedings
3.1 Summary of the Dispute
4. On 7 July 2011, the Parties entered into a contract (the “Player Contract”), pursuant to which Respondent engaged the Player as a professional basketball player for the seasons of 2011-2012 and 2012-2013 (with a mutual buy-out option after the end of the first season). According to Clause 2 of the Player Contract, Respondent undertook to
make the following payments:
Arbitral Award 2/13 (BAT 0486/13)
EUR 180,000.00 (net) as base salary for the 2011-2012 season, payable in 10 equal instalments from 10 September 2011 to 10 June 2012;
EUR 210,000.00 (net) as base salary for the 2012-2013 season, payable in 10 equal instalments from 10 September 2012 to 10 June 2013.
5. The Player played for the Club during the 2011-2012 season. According to publicly available sources, he joined KK Cibona Zagreb in February 2013, without having participated in any official matches for Respondent in the 2012-2013 season.1
6. In this arbitration, Claimant’s primary claim is for outstanding salaries in the amount of
EUR 79,150.00 (net).
3.2 The Proceedings before the BAT
7. On 16 December 2013, the BAT Secretariat received a Request for Arbitration (with several exhibits) of the same date. The non-reimbursable handling fee of EUR 2,000 was received in the BAT bank account on 25 September 2013.
8. On 28 January 2014, the BAT informed the Parties that Ms. Annett Rombach had been appointed as Arbitrator in this matter, invited Respondent to file its Answer in accordance with Article 11.2 of the BAT Rules by no later than 18 February 2014 (the “Answer”), and requested each Party to pay an amount of EUR 4,000.00 as the Advance on Costs.
9. By letter to the Parties of 20 February 2014, the BAT Secretariat informed the Parties that Respondent had failed to submit its Answer within the time limit and the Arbitrator
21 April 2014).
Arbitral Award 3/13 (BAT 0486/13)
granted a final opportunity to submit the Answer by 25 February 2014. It further acknowledged receipt of Claimant’s share of the Advance on Costs.
10. Claimant paid its share of the Advance of Costs and substituted for Respondent’s
11. On 1 April 2014, the Parties were informed that Respondent had failed to submit its Answer in accordance with the BAT’s correspondence. The Arbitrator declared the exchange of documents completed and invited the Parties to submit a detailed account of their costs by no later than 8 April 2014.
12. By e-mail of 1 April 2014, Claimant submitted the following account of costs:
“- Costs for paying ‘Advance on Costs’ to BAT in the amount of 8.000 EUR
– Legal expenses in the amount of 5.350 EUR Total amounts of our costs is 13.350 EUR.”
13. On 10 April 2014, the BAT Secretariat forwarded Claimant’s account of costs to
Respondent and invited it to comment on it by no later than 16 April 2014. No comments were filed by the Respondent.
14. The Parties did not request the BAT to hold a hearing. The Arbitrator therefore decided in accordance with Article 13.1 of the BAT Rules not to hold a hearing.
4. The Positions of the Parties
4.1 Claimant’s Position and Request for Relief
15. Claimant submits that the Club did not make certain salary payments due under the
Player Contract despite several reminders and efforts to receive the outstanding payments.
Arbitral Award 4/13 (BAT 0486/13)
16. In his Request for Arbitration, Claimant requests the following relief:
“a) To award Claimant with amount of 79.150 EUR.
b) To award Claimant’s [sic] interest on 79.150 EUR at the applicable Swiss statutory rate, starting from the 30th July of 2012.
c) To award Claimant with the full covered costs of this Arbitration.”
4.2 Respondent’s Position and Request for Relief
17. Despite several invitations by the BAT, the Club neither engaged in the arbitration proceedings at hand, nor did it make any submissions within the time limits set by the Arbitrator in accordance with the BAT Rules.
5. The Jurisdiction of the BAT
18. As a preliminary matter, the Arbitrator wishes to emphasize that, since Respondent did not make any submissions in relation to the merits of this case, she will examine her jurisdiction ex officio on the basis of the record as it stands.
19. Pursuant to Art. 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).
20. The jurisdiction of the BAT presupposes the arbitrability of the dispute and the existence of a valid arbitration agreement between the parties.
21. The Arbitrator finds that the dispute referred to her is of a financial nature and is thus arbitrable within the meaning of Art. 177(1) PILA.
Arbitral Award 5/13 (BAT 0486/13)
22. The jurisdiction of the BAT over the dispute results from the arbitration clause contained in Clause 7 of the Player Contract, which – in relevant part – reads as follows:
“Any dispute arising from or related to the present contract shall be submitted to the 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. The seat of the arbitration shall be Geneva, Switzerland. The arbitration shall be governed by Chapter 12 of the Swiss Act on Private International Law (PIL), irrespective of the parties’ domicile. The language of the arbitration shall be English. The arbitrator upon appeal shall decide the dispute ex aequo et bono.”
23. The Agreement is in written form and thus the arbitration clause fulfils the formal requirements of Article 178(1) PILA.
24. With respect to substantive validity, the Arbitrator considers that there is no indication in the file which could cast any doubt on the validity of the arbitration agreement in the present matter under Swiss law (cf. Article 178(2) PILA). In particular, the wording “[a]ny dispute arising from or related to the present contract” in Clause 7 of the Player Contract clearly covers the present dispute.
25. Finally, the Arbitrator notes that the jurisdiction of BAT has not been contested by either Claimant or Respondent. In view of all the above, the Arbitrator, therefore, holds that she has jurisdiction to decide the present dispute.
6. Other Procedural Issues
26. 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
Arbitral Award 6/13 (BAT 0486/13)
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.
27. This requirement is met in the present case. The Club 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 Claimant’s Request for Arbitration and to its Account on Costs. Respondent, however, chose not to participate in this Arbitration.
7. Applicable Law – ex aequo et bono
28. 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 reads as follows:
“the parties may authorize the arbitral tribunal to decide ex aequo et bono”.
29. 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.”
30. In Clause 7 of the Player Contract, the Parties set forth that “[t]he arbitrator upon
appeal shall decide the dispute ex aequo et bono”.
2 See ex multis BAT cases 0001/07; 0018/08; 0093/09; 0170/11.
Arbitral Award 7/13 (BAT 0486/13)
31. The Arbitrator notes that the insertion “upon appeal” into the Parties’ choice of law clause is somewhat confusing and could (prima facie) suggest that ex aequo et bono shall only apply in appeal proceedings (as opposed to first instance proceedings) before an arbitrator. Such a literal reading must, however, be rejected, because it would render the clause entirely meaningless. The present case cannot be appealed to an arbitrator, because the Parties did not provide for the possibility to appeal this BAT award before the CAS. Absent such an express choice in favour of the CAS’ appellate powers, the Parties are not permitted to challenge the award before any arbitrator, but are limited to seek annulment before the Swiss Federal Tribunal, which is a state court and not an “arbitrator”. The Arbitrator arrives at this conclusion also keeping in mind that the Player Contract was signed in the summer 2011, i.e. shortly after the change in the BAT Rules eliminating the right of appeal to CAS. Indeed, an older version of the BAT clause stipulated that “[…] the arbitrator and CAS upon appeal shall decide the dispute ex aequo et bono […]”. This change was effected in early 2011, at a period when several clubs and agents where adapting the BAT clause in their template contracts to the updated BAT Rules. It is therefore possible that the words “upon appeal” have been left in the contract inadvertently.
32. Therefore, to give the Parties’ choice of law clause any practical effect, the arbitrator believes that the term “upon appeal” must be read in the sense of “the arbitrator, upon being called to decide the dispute”. Accordingly, in compliance with Article 15.1 of the BAT Rules, this dispute must be decided according to the principles of ex aequo et bono. 3
33. In light of the foregoing considerations, the Arbitrator makes the findings below.
3 This also applies to Claimant’s claims for the payment of interest, despite the fact that Claimant, in his request for relief, claims interest “at the applicable Swiss statutory rate”. The parties’ choice of law generally extends to ancillary claims (such as claims for the payment of interest) absent any agreement between them to the contrary. There is nothing in the record suggesting that the parties agreed to have interest claims governed by Swiss law.
Arbitral Award 8/13 (BAT 0486/13)
34. Claimant requests the payment of outstanding salary (8.1), and interest “at the applicable Swiss statutory rate” on all outstanding amounts (8.2).
8.1 Salary in the Amount of EUR 79,150.00
35. According to the Player Contract, Claimant was entitled to base salaries of
EUR 180,000.00 (net) for the 2011-2012 season and EUR 210,000.00 (net) for the
2012-2013 season. He alleges that the amount of EUR 79,150.00 is still outstanding. Respondent neither disputed the very existence, nor the quantum of the claimed amounts before or during this arbitration. Based on the record before her, the Arbitrator finds that there is no indication that would cast doubt on the existence of the Club’s obligation to pay Claimant the (outstanding) salary, even if one were to assume that the Player Contract was terminated after the first season.4 The amount requested in this arbitration is less than a half of the total amount owed for the first season, in which the Player was undisputedly under a valid contract at Respondent.
36. The Arbitrator therefore finds that Claimant is entitled to the claimed salary payments in the amount of EUR 79,150.00.
37. Claimant requests the payment of interest on the outstanding salary from 30 July 2012
“at the applicable Swiss statutory rate”.
4 The fact that the Player joined a new club in the middle of the 2012-2013 season and did not participate in any official matches for Respondent earlier in the 2012-2013 season indicates that one of the Parties exercised the buy-out option provided for in the Player Contract at the end of the 2011-2012 season.
Arbitral Award 9/13 (BAT 0486/13)
38. As a preliminary matter, the Arbitrator finds that the issue of (default) interest is one that is governed by the same substantive law applicable to Claimant’s main claim, i.e. must be decided in accordance with the principles of ex aequo et bono.5
39. The Player Contract does not provide for any obligation by the Club to pay interest in case of a non-payment. However, it is a generally accepted principle embodied in most legal systems and reflected in the BAT jurisprudence6 that default interest can be awarded even if the underlying agreement does not explicitly provide for an obligation to pay interest. The Arbitrator, deciding ex aequo et bono and in accordance with constant BAT jurisprudence, considers an interest rate of 5% to be fair and just to preclude the Club from deriving any profit from the non-fulfillment of its obligations.
40. The starting date of 30 July 2012 requested by Claimant is justified. Pursuant to the payment conditions addressed in Clause 2 of the Player Contract, the last salary instalment for the 2011-2012 season became due on 10 June 2012. Irrespective of whether default interest accrues immediately from the day after a payment becomes due or at some later point in time, the Arbitrator finds that, in the present case, a sufficient amount of time has elapsed between the due date of the (last) salary payment of the 2011-2012 season7 and the requested starting date for the interest calculation. Because the due date for each instalment is explicitly set out in the Player Contract, there was no need for Claimant to notify the Club of his outstanding claims by
means of a notice letter.
5 See above footnote 3.
6 See, ex multis, the following BAT awards: 0092/10; 0069/09; 0056/09; 0237/11.
7 Based on the facts summarized in Fn. 4 above, the Arbitrator, for the sake of interest calculation, finds that the outstanding salary amounts entirely belong to the 2011-2012 season. There is no indication that Respondent owes any salary for the 2012-2013 season. Additionally, Respondent did not contest Claimant’s calculation of interest.
Arbitral Award 10/13 (BAT 0486/13)
41. 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 legal fees and expenses incurred in connection with the proceedings.
42. On 29 May 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”; 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”, and 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 4,920.00.
43. Considering that Claimant prevailed with all of his claims, it is appropriate that all of the fees and costs related to this arbitration be borne by Respondent and that Respondent be required to cover its own legal costs.
44. However, with respect to Claimant’s legal expenses in the amount of EUR 5,350.00, the Arbitrator is of the opinion that these costs are excessive and that Respondent must bear only a portion of them. The Request for Arbitration was rather short and simple and included only a very small number of exhibits. The proceedings required only one round of submissions and Respondent did not participate in them at all. In light of these circumstances, the Arbitrator finds, in accordance with Article 17.3 of the BAT Rules, that Claimant should be granted a reduced contribution towards its legal
expenses in the amount of EUR 2,500.00.
Arbitral Award 11/13 (BAT 0486/13)
45. Although, in his cost account, Claimant did not explicitly address the handling fee paid by him in accordance with Article 9.2 of the BAT Rules, Respondent must reimburse Claimant also for this amount. In awarding Claimant the handling fee, the Arbitrator does not act ultra petita, because Claimant expressly requests “the full covered costs of this Arbitration” in his request for relief. The request for “full covered costs” can only be understood to include all expenses in connection with the arbitration, including the handling fee.
46. Given that Claimant paid both shares of the Advance on Costs in the amount of EUR 4,000.00 each (in total EUR 8,000.00), the Arbitrator decides that in application of Article 17.3 of the BAT Rules:
(i) BAT shall reimburse EUR 3,080.00 to Claimant, being the difference between the costs advanced by him and the arbitration costs fixed by the BAT President;
(ii) Respondent shall pay EUR 4,920.00 to Claimant, being the difference between the costs advanced by Claimant and the amount to be reimbursed by the BAT.
(iii) Furthermore, as stated above, the Arbitrator considers it appropriate to take into account the non-reimbursable handling fee of EUR 2,000.00 when assessing the expenses incurred by Claimant in connection with these proceedings. Hence, because a further amount of EUR 2,500.00 for Claimant’s legal fees and expenses is reasonable, the Arbitrator fixes the contribution towards the Claimant’s legal fees and expenses at EUR 4,500.00.
Arbitral Award 12/13 (BAT 0486/13)
For the reasons set forth above, the Arbitrator decides as follows:
1. S.S. Sutor Srl is ordered to pay to Mr. Sandro Nicevic EUR 79,150.00 together with interest of 5% p.a. on this amount from 31 July 2012.
2. S.S. Sutor Srl is ordered to pay to Mr. Sandro Nicevic EUR 4,920.00 as a reimbursement of the Advance on Costs.
3. S.S. Sutor Srl is ordered to pay to Mr. Sandro Nicevic EUR 4,500.00 as a contribution towards his legal fees and expenses.
4. Any other or further-reaching requests for relief are dismissed.
Geneva, seat of the arbitration, 12 June 2014
Arbitral Award 13/13 (BAT 0486/13)