Football – Webster / Heart of Midlothian / Wigan
The CAS Issues its Decision:
Compensation of £150,000 to be paid to Heart of Midlothian
Lausanne, 30 January 2008 – The Court of Arbitration for Sport (CAS) has rendered its decision in the case involving the Scottish footballer Andrew Webster, Heart of Midlothian PLC (Hearts) and Wigan Athletic FC (Wigan) following the decision of Webster to terminate his contract with Hearts. The CAS has determined that an amount of £150,000 has to be paid by Webster to Hearts as compensation for unilateral breach of contract.
In early 2001, Andrew Webster was transferred to Hearts for a fee of £75,000 and engaged under a contract that was initially due to expire on 30 June 2005 but which the parties later agreed to extend until 30 June 2007. In April 2005, Hearts offered to extend again the Player’s contract for a further two seasons, until 2009, but no agreement was reached. Thereafter, during the Spring of 2006, the relations between the Player and the Club became difficult. On 26 May 2006, Webster notified Hearts that he had decided to unilaterally terminate his contract. On 9 August 2006, Webster signed a three-year contract with Wigan.
In November 2006, Hearts filed a claim against Webster and Wigan before the FIFA Dispute Resolution Chamber which decided on 4 April 2007 that Webster had to pay the amount of £625,000 to Hearts for unilateral breach of contract.
On 24 and 25 May 2007, Wigan, Webster and Hearts each filed an appeal before the CAS. Hearts requested the payment of £4.6 million in contractual damages, including a claim of £4 million as the alleged replacement value for the Player and loss of opportunity to transfer him, while Wigan and Webster requested that the compensation be fixed at an amount representing no more than the residual value of his contract. The procedure was submitted to a Panel of CAS arbitrators composed of Mr Quentin Byrne-Sutton, Attorney-at-Law in Geneva, Switzerland (President), Mr Jean-Jacques Bertrand, Attorney-at-Law in Paris, France and the Hon. Michael Beloff QC, Barrister in London, United Kingdom. The parties, their witnesses and experts were heard at an oral hearing at the CAS headquarters in Lausanne on 17 and 18 October 2007.
In front of the CAS Panel it was undisputed by the parties that the case involved a unilateral termination of the contract by Webster, without cause, as provided by Article 17 of the FIFA Players’ Status Regulations (PSR), and that the compensation had to be calculated in accordance with that provision. The Panel found that the termination of the contract was essentially generated by a mutual breakdown in trust between the Player and Hearts. It also considered that there was no evidence of bad faith on either side since the negotiations between Webster and Hearts had already broken down and the contract been terminated before Wigan first contacted the Player and made him an offer.
The CAS Panel underlined that the criteria listed in Article 17 of the FIFA PSR do not entitle a club or a player to unilaterally terminate an employment contract without cause; on the contrary, any such termination is clearly deemed a breach of contract, even outside the so-called “Protected Period”, as in the present case. Therefore, the mission of the Panel was to determine the amount of compensation due to Hearts by Webster and/or Wigan.
The CAS Panel considered that in the circumstances of this case, the concepts of lost profit/replacement value of the Player could not be applied in determining the level of compensation, notably because they would result in a form of punitive damage or unjust enrichment, and found that the purchase amount paid by Hearts in 2001 for the Player had already been amortised over the initial contractual term. Moreover, the CAS Panel considered that the possible payment of training compensation was a separate issue from that of payment of compensation for unilateral breach regulated by Art. 17 of the FIFA PSR. The Panel therefore concluded that under Art. 17 of the FIFA PSR the most appropriate criterion to apply in determining the level of compensation owed to Hearts by Webster and/or Wigan was the remaining remuneration due to the Player under the employment contract upon its date of termination, which the parties referred to as the residual value of the contract, for the season 2006-2007. The parties having agreed in their submissions that the quantum of the residual value represented an amount of £150,000, the Panel decided that it should be the amount of compensation payable to Hearts. The Panel found that Webster and Wigan are jointly and severally liable for the payment of such amount, in accordance with the terms of Art. 17 of the FIFA PSR.
The full award, with the grounds, is published on the CAS website (www.tas-cas.org, section Case Law).
For further information related to the CAS activity and procedures in general, please contact Mr. Matthieu Reeb, Secretary General, 28, Château de Béthusy, Avenue de Beaumont 2, 1012 Lausanne, Switzerland, Tel. : (41 21) 613 50 00; fax : (41 21) 613 50 01 or consult the CAS website : www.tas-cas.org.