Arbitral Award Basketball Arbitral Tribunal (Bat)

ARBITRAL AWARD

(BAT 0660/15)

by the

BASKETBALL ARBITRAL TRIBUNAL (BAT)

Mr. Ulrich Haas

in the arbitration proceedings between

Mr. Marius Linartas

- Claimant - represented by Mr. Atanas Paulauskas, attorney at law, Gyn ėjų g. 16, 01109 Vilnius, Republic of Lithuania

vs.

Basketball Club “Krasny Octyabr” Lenina avenue 65, 400005 Volgograd, Russian Federation - Respondent - represented by Mr. Roman Brtka and Dr. Joseph Fesenmair, attorneys at law, Maximiliansplatz 22, 80333 Munich, Germany

1. The Parties

1.1 The Claimant

1. Mr. Marius Linartas (hereinafter also referred to as “the Coach” or “the Claimant”) is a professional basketball coach from Lithuania.

1.2 The Respondent

2. Basketball Club “Krasny Octyabr” (hereinafter also referred to as “the Club” or “the Respondent”) is a professional basketball club located in Volgograd, Russian Federation.

2. The Arbitrator

3. On 10 February 2015, the President of the Basketball Arbitral Tribunal (the “BAT”), Prof. Richard H. McLaren, appointed Prof. Dr. Ulrich Haas as arbitrator (hereinafter the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (hereinafter the “BAT Rules”). Neither of the Parties raised any objections to the appointment of the Arbitrator or to his declaration of independence.

3. Facts and Proceedings

3.1 Summary of the Dispute

4. On 4 September 2013, Claimant and Respondent entered into an agreement (hereinafter referred to as “Agreement 1”) whereby Claimant was engaged as assistant scouting coach for the season 2013/2014. The Agreement 1 provided for a monthly salary in the amount of USD 3,000.00 from 15 September 2013 until 15 April 2014 – in total an amount of USD 24,000.00. Furthermore, the Agreement 1 provided the

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following bonus payments for the season 2013/2014: winner of VTB-league USD 15,000.00, 2nd place in play-offs USD 10,000.00, 3rd place in play-offs USD 7,000.00, and for entering VTB play-offs USD 3,000.00.

5. The following payments in USD were registered in Claimant’s bank account [bank details]:

25 September 2013 2,990.00 [bank details] 4 November 2013 5,990.00 [bank details] 27 December 2013 2,990.00 [bank details] 7 February 2014 4,490.00 [bank details] 3 March 2014 4,490.00 [bank details] 21 March 2014 4,490.00 [bank details] 25 April 2015 4,490.00 [bank details] 2 May 2014 2,990.00 [bank details]

6. On or about 23 October 2013, Claimant was provided with a work permit for foreign citizens or stateless people issued by the Federal Migration Service of Russia. The work permit was valid from 23 October 2013 until 22 October 2015.

7. On 7 November 2013, Joint Stock Company Sport-Expo, a closed joint-stock company (hereinafter also referred to as “Sport-Expo”) and ALFA-Bank concluded a contract on money remittance [bank details], under which ALFA-Bank provides Sport-Expo with money remittance services (for salaries, social payments and other payments) in the currency of the Russian Federation for accounts of employees specified by Sport-Expo. The contact person at Sport-Expo for the salary project was Mrs. Y. G. Pushkarskaya She holds the position of General Director with Sport-Expo.

8. On 15 January 2014, a Client’s Questionnaire bearing the Claimant’s signature was submitted to ALFA-Bank in order to open a bank account in the name of the Claimant. For this purpose, ALFA-Bank was provided with Claimant’s passport and migration card. Subsequently, a bank account (with the status “salary account”) with the account [bank details] was opened in the name of the Claimant (hereinafter referred to as the

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“Salary Account”).

9. On 17 January 2014, the amount of RUB 100,880.55 was paid into the Salary Account (details: transfer of salary; grounds: [bank details]; payment order no 5 of 17 January 2014).

10. On 3 February 2014, another amount of RUB 147,900.00 was paid into the Salary Account (details: transfer of salary; grounds: [bank details]; payment order no 13 of 3 February 2014).

11. Subsequently, Claimant and the Club entered into an agreement (hereinafter referred to as “Agreement 2”) whereby the Club engaged Claimant as assistant coach and team manager for the 2014/2015 season. The Parties are in dispute as to when exactly Agreement 2 was concluded. Agreement 2 bears the date 24 February 2014. At the time Agreement 2 was signed Claimant was represented by Jump Start Agency, in particular by the FIBA-licensed agent Mr. Saulius Svetkauskas (hereinafter referred to as the “Agent” or “Claimant’s Agent”).

12. The main clauses in Agreement 2 provide as follows:

Article I: Term and Assistant Coach Services

“A. Term. The Club hereby engages the services of Assistant Coach one (1) season, the 2014-15 season. The term of this Agreement shall begin on August 15, 2014 and end on May 15, 2015, unless sooner terminated in accordance with other provisions herein. The Term may be prolonged by the mutual agreement of the Parties. […].

B. Assistant Coach Services. During the Term, Assistant Coach shall attend and perform his duties during (unless Assistant Coach is injured, ill, or Club otherwise excuses Assistant Coach from attendance) all practices and all regular season Club games as well as all exhibition, All-Star, playoff, tournament, European club competition, and Cup games scheduled by or entered into by the Club unless he is other opponents. Assistant Coach hereby agrees to and accepts the terms and conditions for said employment set out herein. The Coach shall perform those duties usual and customary for an assistant coach and undertake such other responsibilities as may be reasonably assigned by the

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Club. The Coach shall work under the immediate supervision of, and report directly to the Head Coach and shall confer with him on all matters requiring administrative decisions. […].”

Article II: Compensation and Taxes

“A. Compensation. The Club agrees to pay Assistant Coach the salary for season 2014/15 48,000USD (Fourty eight thousand) USD NET.

B. Monthly compensation net of all taxes, fees, and other charges (the “Guaranteed Compensation”) for the 2014/15 season in the amount of USD 4,800. All salary to Assistant Coach shall be fully guaranteed, vested, and owed in full upon execution of this Agreement by the Assistant Coach and Club.

Each of the payments must be paid to the coach on the following dates:

30 August 2014 4,800 USD

30 September 2014 4,800 USD

30 October 2014 4,800 USD

30 November 2014 4,800 USD

30 December 2014 4,800 USD

30 January 2014 4,800 USD

30 February 2014 4,800 USD

30 March 2014 4,800 USD

30 April 2014 4,800 USD

30 May 2014 4,800 USD

B. Taxes. […] Said salaries are net amounts after the club has paid in USD to the bank account of the player. A delay in payment of more than 15 days will be regarded as a breach of the contract by the club. In this case the player is entitled to immediately go on strike and refuse to render his services to the club.

If after 15 additional days the club still has not fulfilled all its financial commitments towards the player, the player will be free to leave, while the club has to pay all salaries mentioned above for the whole contracting period, and issue a letter of clearance. The contracting parties agree this solution is EX AEQUO ET BONO. […].”

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Article III: Additional Benefits

“In addition to the compensation set forth above, Club agrees to provide, throughout each season of the Term of this Agreement, and at no cost to Assistant Coach, the following:

B. Airplane Tickets. Club shall pay for the following airplane tickets from Assistant Coach’s residence or other Assistant Coach designated location during the season: 3 round-trip economy class airline tickets Lithuania to Russia.“

Article V: Contract Guarantee

“A. Club agrees that this Agreement is an unconditionally guaranteed contractual Agreement and that Assistant Coach’s Compensation is fully guaranteed, due and payable, including but not limited to in the event of Assistant Coach’s illness. Club agrees to meet all payment obligations to Assistant Coach. […].”

Article VIII: Special termination for Club and Assistant Scouting Coach for Material Breach

“If the Club or Assistant Scouting Coach materially breaches any material term of this Agreement, and fails to cure such breach within fifteen (15) days after receiving notice of such breach from the non-breaching party, the non-breaching shall have the right to terminate this Agreement without further obligation. Failure to pay (15 days delay) shall constitute breach of entire contract. Assistant Scouting Coach is then free to depart and may sign with any other team worldwide with nothing whatsoever due to Club and Assistant Scouting Coach have to right to asking his money accordance with the applicable law and jurisdiction.”

13. It is undisputed that at the beginning of the season 2014/2015 the Claimant fully performed his duties under Agreement 2.

14. The following payments were made by the Respondent – in addition to the ones mentioned under paras. 9 and 10 above – to the Salary Account:

4 March 2014 RUB 147,900.00 [bank details]

28 March 2014 RUB 147,900.00 [bank details]

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29 April 2014 RUB 147,900.00 [bank details]

20 May 2014 RUB 147,900.00 [bank details]

9 June 2014 RUB 147,900.00 [bank details]

3 July 2014 RUB 147,900.00 [bank details]

5 August 2014 RUB 147,900.00 [bank details]

22 September 2014 RUB 147,900.00 [bank details]

17 October 2014 RUB 147,900.00 [bank details]

15. On 4 September 2014, the autonomous non-commercial organization United Basketball League and Sport-Expo concluded an agreement. Sport-Expo is a member of United Basketball League and assumes all rights and duties in accordance with the charter of the United Basketball League. Said agreement deals with the mutual obligations of the contracting parties in relation to the participation of the basketball team Krasny Oktyabr in the VTB United League Championship (cf. agreement no. 16 as of 4 September 2014, Annex R2 to Respondent’s answer of 13 March 2015 and 9 April 2015 ).

16. On 2 October 2014, the Claimant received a transfer in the amount of USD 9,590.00 on his bank account [bank details].

17. On 11 October 2014, the Respondent booked an airplane ticket for Claimant to fly from Volgograd to Moscow on 21 October 2014 (departure time 15:10 – arrival time 16:50) and from Moscow to Tel Aviv on the same date (departure time 20:45 – arrival time 23:50).

18. On 18 October 2014, following the match between Respondent and BC Kalev/Cramo, the president of the Respondent, Mr. Dmitry Gerasimenko, approached Claimant and

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expressed his wish to dismiss Claimant from Respondent’s team. Claimant disagreed with the termination of Agreement 2 and stated that he would continue to provide his services as an assistant coach for the Respondent.

19. On 20 October 2014, the amount of RUB 1,492,930.00 was paid to the Salary Account (details: transfer of salary; grounds[bank details], payment order no 657 of 20 October 2014).

20. On the same day, Respondent’s sports director, Mr. Stanislav Momot, informed the Claimant that he was no longer a member of the Club and that he was no longer welcome at the training sessions and would not be provided with transportation by the Club to the training sessions.

21. On the same day, Claimant’s Agent sent two emails to Mr. Dmitry Gerasimenko. The first email reads as follows:

“[…] I was informed that Marius Linartas doesn’t have ticket to go to Israel with the team. I want to remind you that he is still an assistant coach and team manager of a team. If he is not going to go to Israel it will not be his fault and he will not breach the contract but instead team will breach the contract and he will not be responsible for it. He will still participate in all team practices and games unless we do find a proper solution. […]” (cf. email as of 20 October 2014 19:29:16, Annex 2 of the RfA ).

The second e-mail had the following content:

“[…] I was informed that team decided not to take Marius Linartas to practices with teams bus which they regularly did all this and past season. We want to inform you that he is waiting for his car which is in his fully guaranteed contract which we signed this summer. Please provide him his car as soon as possible because he is still on contract with Your club. He is still going to be part of the team and he will participate in all practices and games. […]” (cf. email as of 20 October 2014 12:00:30, Annex 3 of the RfA ).

22. Respondent did not respond to the above e-mails.

23. Still on 20 October 2014, Mr. Stanislav Momot from Respondent requested Euroleague to deregister Claimant for the 2014/2015 Eurocup competition. The deregistration was

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performed on 21 October 2014 (cf. email as of 3 February 2015, 08:19:40, Annex 9 of the RfA ).

24. On 22 October 2014, Claimant’s Agent sent an e-mail to the representatives of Euroleague, to VTB United League and to FIBA, informing them as follows:

“I want to let You know situation we are having with my client Marius Linartas (coach) and his current team in Russia Krasny Octybar from Volgograd. Marius has a guaranteed contract for this season and for no reason president said he is fired. Now they are not giving him any official papers that he is fired, but they are not letting him into practices, nor takes to away games. Team is still not in a breach of contract officially (they are late to pay agent fee and after 23 days after salary). They offered settlement to coach of 2 salaries and agent fee but we still have 8 salaries and agent fee on the contract remaining. As we don’t see real reason that we should step up and take their offer. Team doesn’t write official release papers and they are trying him to fly home and most likely they want us to be in breach … I wanted to let you know about this. ”

25. On the same date, Respondent booked a flight ticket for Claimant to fly from Volgograd to Vilnius (with stopover in Moscow) on 25 October 2014 (departure time 18:40 – arrival time 22:30).

26. Still on 22 October 2014, the Claimant’s Agent wrote to Respondent as follows:

“… by this email I want you to let you know that all current situation with coach Marius Linartas is givet to FIBA, Euroleague and VTB league staff and that we will not fly anywhere without official release papers or settlement with our conditions. He has guaranteed contract and he will be there as long as the contract runs out or team will be in breach of contract. The best solution is for you that Marius could continue his work and help Your team win.” (sic)

27. On 23 October 2014, Claimant’s Agent wrote to Respondent as follows:

“by this email I want You to know that I was informed that 18:30 Moscow time Coach Marius Linartas got tickets to fly to Vilnius. We would like to know basis on what he has to fly? I want to remind you that he has guaranteed contract for remainder of this season and that he is going to do all his best to perform his job. If you want him to fly please provide me and Marius any kind of papers stating his

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current situation.”

28. On 24 October 2014, Respondent informed VTB United League that Claimant was no longer its coach and that Respondent, thus, cancelled Claimant’s licence as an assistant coach.

29. On the same day, Claimant’s Agent wrote to VTB United League as follows:

“We would like to know why Krasny Octyabr has took out license of Marius Linartas out of team? What is the reason they told you about because Marius has guaranteed contract for remainder of season and team hasn’t gave him any official papers. Please inform us asap because Marius has ticket to fly home tomorrow and if we get some official information we would better fly.” (sic)

30. Still on 24 October 2014, VTB United League answered to Claimant’s Agent as follows:

“everytime any club makes changes in its team passport whether it is applying new player/coach/team follower and cancel their licenses, club just send us request to include/exclude player/coach/team follower to/from team passport without describing reason. We as the League do not ask the reason, it is club’s decision. …” (sic)

31. Respondent played the Eurocup game against Hapoel Jerusalem basketball team without the Claimant attending the match. Likewise, Respondent played the VTB United League game against Astana BC (return of the team on 26 October 2014) without the Claimant attending the match.

32. On 25 October 2015, the Claimant’s Agent inquired with the Respondent why Claimant’s license as assistant coach had been cancelled (cf. e-mail of 25 October 2014 13:30:12, Annex 12 of the RfA ). Respondent did not respond to this enquiry.

33. On 27 October 2014, Claimant tried to attend Respondent’s training session in order to perform his obligations as an assistant coach. However, Claimant was prevented from entering the premises. On 28 October 2014, Claimant was again prevented from

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attending the morning and evening training sessions.

34. On 28 October 2014, Claimant’s Agent again tried to contact Respondent and asked for information regarding Claimant’s current situation with the Club (cf. mail as of 28 October 2014 17:55, Annex 13 of the RfA ).

35. On 30 October 2014, Claimant’s Agent sent the following email to Respondent:

“Dear club Krasny Octybar, this email is to remind that team is late to pay agents fee for Marius Linartas 30 days now. according to contract which we signed this summer failure to pay agents fee on September 30 and being now late for 30 days team is in breach of contract and all money is going to be owed to agent and coach. Failure to pay agents fee today will be regarded as breach of the contract and after tomorrow we will be owed the following amounts agents fee 4800 USD and the remaining salary of contract 38400 USD plus bonuses and other benefits from contract. …” (sic)

36. On 6 November 2014, Claimant had to leave his apartment, which was rented by the Club, since the latter had failed to pay tenancy fee to the owner of the flat.

37. Thereupon, Claimant’s Agent advised the Respondent on 7 November 2014 as follows:

“By this email I want to let you know that I was informed that my client was moved out from his apartment which is guarantee for him in his guaranteed contract which you signed this summer for full season. Marius Linartas also is no longer on website of bcredoctober.com his licenses are removed from VTB and Eurocup. He is not being let into practices or participate with the team in anything which he is supposed to do. This is not his fault that he can’t comply his obligations in the contract but TEAMS only. Team is trying everything to discredit him and feel he is longer needed at the club. We have not received any official proposal or email regarding this situation and we would like to hear soon … .” (sic)

38. By letter of 18 November 2014, Claimant requested Respondent to pay to Claimant the outstanding salary in the amount of USD 4,800.00 and to provide him with a new accommodation. Furthermore, Claimant informed Respondent that failing any payment

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within the following 15 days, the Claimant would be entitled to accelerate all future contractual payments in accordance with Art. II (B) of Agreement 2 (cf. letter dated 18 November 2014, Annex 16 of the RfA ). Respondent did not respond to this letter.

39. By letter dated 1 December 2014, Mr. Nilo Effori, a lawyer acting on behalf of Claimant, terminated Agreement 2 (cf. letter dated 1 December 2014, Annex 17 of the RfA ).

40. On the same date, Claimant left Volgograd for Vilnius.

41. On 9 December 2014, Claimant sent a settlement offer to Respondent, according to which Respondent had to pay to Claimant five monthly salaries in the total amount of USD 24,000.00.

42. By email of 15 December 2014, Claimant informed the Respondent that the settlement offer was no longer valid and that Claimant would file a Request for Arbitration with the BAT (cf. email of 15 December 2014, Annex 22 of the RfA ).

3.2 The Proceedings before the BAT

43. On 5 February 2015, the Claimant, represented by Mr. Antanas Paulauskas, filed a Request for Arbitration in accordance with the BAT Rules. In addition, Claimant paid the non-reimbursable handling fee of EUR 2,000.00 on 4 February 2015.

44. On 13 February 2013, the BAT Secretariat informed the parties that Mr. Ulrich Haas had been appointed as Arbitrator in this matter and invited the Respondent to file its answer to the Request for Arbitration until 6 March 2015. Furthermore, the BAT Secretariat fixed the Advance on Costs to be paid by the Parties until 23 February 2015 as follows:

“Claimant (Mr. Marius Linartas) EUR 5,500.00 Respondent (BC Krasny Octyabr) EUR 5,500.00”.

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45. By email dated 5 March 2015, Respondent requested an extension of the deadline for filing its answer until 13 March 2015. The request was granted.

46. On 13 March 2015, Respondent submitted its answer to the Request for Arbitration to the BAT Secretariat.

47. On 24 March 2015, the BAT Secretariat acknowledged that both Parties had paid their respective share of the Advance on Costs. Furthermore, BAT invited Respondent to file the following documents and to reply to the following questions by no later than 7 April 2015:

“1. Submit an English translation of:

a. Exhibit No. R7 Individual payments orders towards Claimant;

b. - Exhibit No. R8 Airline tickets to Eurocup game;

c. - Exhibit No. R9 Airline ticket to Vilnus.

2. Respondent is invited to explain the legal relationship between Respondent and "Sport Expo" Closed Joint-Stock Company (represented by Mrs. Y.G. Pushkarskaya, director General) and ZAO "Sport-Expo" (addressee of the bank confirmation of payments Exhibit No. R6) and also their relationship to the Claimant.

3. In light of Exhibit No. R2 Respondent is invited to submit the Agreement No.6 from 4 September 2014 signed between JSC "Sport-Expo" and ANO "United basketball leagues", which provides that JSC "Sport-Expo" bears all juridical rights and obligations regarding participation of Respondent in VTB United League Championship.”

48. By email dated 2 April 2015, the Respondent requested an extension of the deadline to answer to the above questions until 9 April 2015. The request was granted.

49. On 9 April 2015, Respondent provided its answers to the procedural order.

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50. By email dated 14 April 2015, the Claimant requested that the documents produced by the Respondent be forwarded to him.

51. On 16 April 2015, the Claimant was provided with Respondent’s answers and documents. Furthermore, Claimant was granted a deadline until 30 April 2015 to comment on Respondent’s submissions.

52. On 30 April 2015, the Claimant submitted his comments.

53. By procedural order dated 26 May 2015, the Respondent was invited to respond to the following until 16 June 2015:

“The Respondent is herewith invited:

1. to submit the original of the “Employment Agreement” of 30 April 2014 and the original “ORDER on Hiring of the Employee” of 20 April 2014.

2. to submit the original of the “AGREEMENT” of 24 February 2014. The Arbitrator reserves the right to order a graphological expertise. In such case the parties will be requested to pay an additional advance on costs.

3. to explain how he was advised of the bank account: ALFA-BANK account No.: 40820810108630000042. Furthermore, Respondent is invited to provide all correspondence by Claimant to it, in which Respondent is advised of the new bank details.

4. to explain why it signed two contracts, i.e. the “Agreement” and the “Employment Agreement”.

5. to provide detailed evidence for Claimant’s breaches of the “Agreement” or “Employment Agreement”.

54. On 8 June 2015, the Claimant requested the BAT to admit further evidence on file.

55. By email dated 12 June 2015, the Respondent requested an extension of time until

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19 June 2015 to respond to the procedural order dated 26 May 2015. The request was granted by the Arbitrator.

56. On 19 June 2015, the Respondent submitted its response to the procedural order dated 26 May 2015.

57. On 23 June 2015, the Arbitrator invited the Respondent’s counsel to submit until 29 June 2015 an affidavit confirming:

“1. that a Russian Court proceeding between JSC Sport-Expo and Claimant is pending;

2. that the requested documents (Procedural Order from 26 May 2015) are required by and being used in these proceeding before the Russian Court;

3. that it is not possible to transmit these documents to the BAT.”

58. On 29 June 2015, the Respondent submitted an affidavit by Mr. Dimitry Gerasimenko, the president of the Respondent.

59. On 30 June 2015, the Claimant requested to be provided with an opportunity to comment on Respondent’s submissions. This request was granted.

60. On 8 July 2015, the Claimant submitted his comments.

61. On 26 August 2015, the Arbitrator invited the Respondent to reply to the following questions by no later than 9 September 2015:

“(1) Please submit the statement of claim and all documents (with an English translation) relating to the lawsuit between JSC Sport-Expo and the Claimant, Mr Marius Linartas, which is pending before the Central court Volgograd city in Volgograd/Russia.

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(2) By procedural order as of 23 June 2015 the Arbitrator invited the Respondent’s Counsel to submit an affidavit confirming:

“1. that a Russian Court proceeding between JSC Sport-Expo and Claimant is pending;

2. that the requested documents (Procedural Order of 26 May 2015) are required by and being used in proceeding before the Russian Court;

3. that it is not possible to transmit these documents to the BAT.”

Respondent's Counsel didn't send the aforementioned affidavit. In fact, Mr. Dimitry Gerasimenko sent an affidavit confirming that a lawsuit between JSC Sport-Expo and Mr. Antanas Linartas is pending before the Central Court Volgograd city in Volgograd/Russia.

Therefore, Arbitrator invites Respondent's Counsel once again to submit an affidavit confirming:

1. that a Russian Court proceeding between JSC Sport-Expo and Claimant is pending;

2. that the requested documents (Procedural Order from 26 May 2015) are required by and being used in proceeding before the Russian Court;

3. that it is not possible to transmit these documents to the BAT.

(3) According to Respondent's submission of 19 June 2015 (p. 6/7) please submit the "Employment Agreement" (2nd Contract) between JSC Sport-Expo and Claimant for the season 2013/2014.”

62. On 28 August 2015, the Respondent submitted an answer to the procedural order.

63. On 3 September 2015, Arbitrator clarified his procedural order of 23 June 2015 and explained that the affidavit was to be provided by Respondent’s counsel. The Arbitrator set a final deadline until 9 September 2015 for the production of the affidavit.

64. On 9 September 2015, Respondent’s counsel filed three separate submissions. In his

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first submission the Respondent submitted that the procedural order was inadmissible. The second submission contained a reply to Claimant’s comments. The third submission read as follows:

“In light of the above grounds of compliant Counsel for the Respondent requests that a new Arbitrator is assigned to the present arbitration proceedings. It is further requested that all negative conclusions that might be drawn from a refusal to send the affidavit are disregarded. As any participant of proceedings as the current one, the Respondent seeks for a fair trial. The actions taken have been undertaken only to safeguard this interest. Should the Arbitrator withdraw the request in question the Respondent will no longer uphold this request.”

65. On 17 September 2015, the President of the BAT issued the following procedural directions:

“1. Mr. Haas und Claimant are invited to state their position on the Respondent’s letter dated 9 September 2015 (with exhibits) by no later than Wednesday, 30 September 2015.

2. Following receipt of the above submissions, and subject to any further clarifications required, the President of the BAT will rule on the challenge.”

66. By letter dated 28 September 2015, the Claimant submitted his comments on Respondent’s request.

67. On 28 September 2015, the Arbitrator requested an extension of the deadline until 2 October 2015.

68. On 29 September 2015, the President of the BAT granted the Arbitrator’s request.

69. On 2 October 2015, the Arbitrator submitted his comments.

70. By letter dated 9 October 2015, the President of the BAT rejected Respondent’s challenge of the Arbitrator as follows:

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“On 9 September 2015, the Respondent in this matter has challenged the appointment of the arbitrator Ulrich Haas. In the Respondent’s view, the Arbitrator’s request that Respondent’s counsel submit an affidavit concerning certain factual submissions “give[s] rise to legitimate doubts regarding his independence, as they breach general procedural principles to the detriment of the Respondent.” Respondent submits that such affidavit cannot factually be provided, is irrelevant to the case and would compromise the position of its counsel.

On 28 September 2015, the Claimant stated that he deems the challenge “groundless and unfair”, noting that the Arbitrator’s request for an affidavit signed by Respondent’s counsel is “fully justified” and that Respondent’s counsel was given the opportunity to make comments should he not provide the requested affidavit.

On 2 October 2015, the Arbitrator submitted that “the circumstances were sufficiently special to request an affidavit of the Counsel of Respondent”, and explained what he considered these circumstances to be.

I have now considered the submissions of the Respondent as well as the Claimant’s and the Arbitrator’s comments thereupon. On this basis, I have decided to reject the challenge for the following reasons.

The parties voluntarily submitted themselves to BAT arbitration. This means that this arbitration is governed by the Swiss Private International Law Act (the “PILA”) and by the BAT Arbitration Rules (the “BAT Rules”). Both the PILA and the BAT Rules give the arbitrator a wide authority to determine the procedure in the arbitration before him (Article 182 of the PILA, Article 3.1 of the BAT Rules).

The direction issued by the Arbitrator in this matter, i.e. that Respondent’s counsel submit an affidavit signed by himself, is indeed unusual. However, I do not find that this order is violating Article 182 of the PILA (or, in fact, any other PILA provision) or Swiss public policy. Respondent’s submissions, which were anyway largely based on German law, have not convinced me otherwise.

Also, the request for an affidavit by Respondent’s counsel was part of the Arbitrator’s fact-finding process and as such does not cast any reasonable doubts on his independence as required by Article 8.3 of the BAT Rules and by Article 180 (1)(c) of the PILA.

Contrary to what Respondent seems to be alluding to, there is no indication in the Arbitrator’s order that there would be any adverse inference drawn from a failure of Respondent’s counsel to provide the requested affidavit. In any event, I consider

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that such negative inference would not cast reasonable doubt on the independence of the arbitrator.

Consequently, the appointment shall stand and the objection is overruled.”

71. On 14 October 2015, the Arbitrator issued a procedural order that reads as follows:

“The Arbitrator acknowledges receipt of Respondent's objections to his order to submit an affidavit of Respondent's counsel (23 June 2015). In this context the Arbitrator notes that Counsel for the Appellant submits that he does not have "direct knowledge [...] regarding the relevant facts", because he "does not have and never had the mandate to represent the Respondent before the Russian Central Court in Volgograd". In view of this explanation Counsel of Respondent is dispensed from providing the respective affidavit.

In his procedural order dated 26 August 2015 the Arbitrator also invited the Respondent to submit the Employment Agreement between JSC Sport-Expo and Claimant for the season 2013/2014. The Arbitrator reiterates the request to provide the Employment Agreement between JSC Sport-Expo and Claimant for the season 2013/2014 together with the respective order of hiring of the employee by no later than Wednesday, 28 October 2015.

In his procedural order dated 26 August 2015 the Arbitrator invited Respondent further to submit "the statement of claim and all documents (with an English translation) relating to the lawsuit between JSC Sport-Expo and the Claimant, Mr Marius Linartas [...] pending before the Central Court Volgograd city […]". Respondent in response to this order filed on 9 September 2015 a copy of a "Default Decision”. However, the respective statement of claim was not filed. Furthermore, in its letter dated 9 September 2015 to the BAT, the Respondent stated - for the first time - that JSC Sport-Expo was and still is not only involved in one, but "involved in three proceedings against the Claimant concerning the labor relationship between the parties before the Central District Court Volgograd City".

Accordingly, the Respondent is invited to submit the statement of claim (with an English translation and, at this stage, without annexes) relating to the "three proceedings" pending before the Central Court Volgograd city by no later than Wednesday, 28 October 2015.”

72. By letter of 28 October 2015, the Respondent submitted a copy of the Employment Agreement between Sport-Expo and Claimant for the season 2013/2014. In addition, the Respondent submitted copies of two default judgments (one dated 20 July 2015

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and issued by the Justice of the Peace of the Judicial District no. 116 of Central District of the City Volgograd, and the other one dated 1 October 2015 and issued by the Krasnooktyabrsy District Court of the City of Volgograd). Furthermore, Respondent declared that, at present, he was not able to provide the BAT with the requested statement of claims. Respondent did not give any reasons in this respect.

73. On 4 November 2015, the Arbitrator acknowledged Respondent’s submissions and granted a final deadline until 13 November 2015 for submitting the statements of claim relating to the three proceedings against Claimant as mentioned in the procedural order dated 14 October 2015. Furthermore, the Arbitrator invited Claimant to submit his comments on Respondent’s submissions.

74. On 13 November 2015, the Respondent submitted the statement of claim relating to the legal proceedings before the Justice of Peace of Judicial District no. 116 of Central District of the City of Volgograd. Furthermore, the Respondent explained that it was unable to provide the BAT with the requested statement of claims relating to the other proceedings.

75. On the same day, Claimant submitted his comments to Respondent’s submissions.

76. By letter dated 1 December 2015, the BAT declared the exchange of documents completed and invited the Parties to submit a detailed account of their costs until 8 December 2015.

77. On 7 December 2015, the Claimant submitted his account of costs.

78. On 8 December 2015, the Respondent submitted its account on costs. In addition, the Respondent enquired with the BAT whether it was entitled to claim the reimbursement of higher legal fees than provided for in Art. 17.4 of the BAT Arbitration Rules.

Arbitral Award 20/54 (BAT 0660/15)

79. On 9 December 2015, the BAT acknowledged receipt of the parties’ accounts of costs and invited the parties to submit their comments on the other party’s account of costs until 14 December 2015.

80. On 14 December 2015, the Arbitrator acknowledged Respondent’s request regarding the Procedural Order dated 1 December 2015. The Arbitrator clarified that he would decide on the issue of reimbursement of legal fees and other expenses in the final award.

81. On the same day, Respondent submitted its comments on Claimant’s costs.

82. On 15 December 2015, the BAT acknowledged receipt of Respondent’s comments.

3.3 The Claimant's Position

83. The Claimant submits the following in substance:

(1) as to the relevant legal framework

- Claimant entered into two agreements with Respondent, one for the season 2013/2014 (Agreement 1) and one for the season 2014/2015 (Agreement 2). Claimant contests Respondent’s allegation that, in addition to Agreement 2, he signed a so-called Employment Agreement on 30 April 2014 with Sport-Expo. The copy of the Employment Agreement dated 30 April 2014, which contains the banking details relating to the Salary Account, has been forged.

- The Claimant concedes that he did sign another document – in addition to Agreement 1 – at the time he was initially hired for the basketball season 2013/2014. This was because Respondent advised him that such additional document was necessary in order to obtain a work permit from the Federal

Arbitral Award 21/54 (BAT 0660/15)

Migration Service of Russia. The Claimant signed the said document in October 2013 (a copy of which has never been returned to him). In the following he received a work permit on 23 October 2013. There was no need for Claimant to sign yet another document for the basketball season 2014/2015, since the validation period of the work permit already issued covered a period from 23 October 2013 until 22 October 2015. To conclude, the Claimant submits that Agreement 2 constitutes the only relevant legal framework.

(2) as to the termination of Agreement 2

- Claimant terminated Agreement 2 with just cause, because Respondent failed to make the payments agreed upon despite several notices. Respondent prevented Claimant from rendering his services by not admitting him to the team’s training sessions and matches. Claimant maintains that Respondent wanted to get rid of him, referring by way of evidence to the fact that:

• on 18 October 2014, Mr. Dmitry Gerasimenko, Respondent’s president, approached Claimant and expressed his wish to dismiss him; • on 19 October 2014, the Respondent offered to Claimant a payment in the amount of two monthly salaries in case of mutual termination of Agreement 2; • on 20 October 2014, Mr. Stanislav Momot, Respondent’s sport director, informed the Claimant that he was no longer a member of the Club and that he was not welcome at the training sessions any longer and would not be provided with transportation by the Club to the training sessions. Furthermore, Mr. Stanislav Moto requested Euroleague to deregister Claimant for the 2014/2015 Eurocup competition; • the Claimant was not provided with airplane tickets to attend the team’s matches in Israel and Kazakhstan; • the Respondent, on 24 October 2014, cancelled Claimant’s licence as an

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assistant coach; • Respondent requested Claimant to leave Volgograd and provided him with an airplane ticket from Volgograd to Vilnius for 25 October 2014.

(3) as to the outstanding salaries

- Claimant is entitled to all outstanding salaries until the termination of Agreement 2. Claimant submits that he only received one payment in the amount of USD 9,600.00. That payment was made on 29 September 2014 to Claimant’s bank account number LT577180300075080348 at Siauliu Bank. The amount was credited to Claimant’s bank account on 2 October 2014. Thus, he is entitled to receive another USD 9,600.00 for the outstanding salaries for October and November 2014.

(4) as to the payments made to the Salary Account

- Furthermore, the Claimant submits that none of the payments which Respondent made to the Salary Account ever reached him. Until Respondent’s answer to the Request for Arbitration, Claimant was unaware that a bank account in his name existed with ALFA-Bank and that Respondent had made payments to the Salary Account. Claimant has neither opened the said bank account nor did he have the power to dispose of the Salary Account. In particular, the Claimant submits that he was never provided with a bank card for the Salary Account and, consequently, never withdrew any monies from said Salary Account. In particular, he submits that:

• the bank account was opened in the name of the Claimant on the basis of forged documentation. Claimant has never received, filled in or signed the Client’s Questionnaire submitted to the ALFA-Bank. It is evident – according to the Claimant – that the signature on the Client’s

Arbitral Award 23/54 (BAT 0660/15)

Questionnaire is not his signature;

• the payment received under Agreement 2 in the amount of USD 9,600.00 (for the August and September salary) was made to the same account as all previous payments under Agreement 1 [bank details]. That this was the only account the Claimant disposed of is evidenced by the fact that:

‹ Claimant informed Respondent’s president, Mr. Dimitry Gerasimenko, by emails of 11 September 2013 and 24 September 2013 that all payments were to be made to the account with Siauliu Bank;

‹ the payments made under Agreement 1 to the bank account with Siauliu Bank correspond with the salary agreed upon between the Parties;

‹ it was (orally) agreed with Respondent’s president that all payments to Claimant and Agent under Agreement 2 should be made to the same bank account as all payments before;

‹ it is rather unusual that Respondent used two different bank accounts to execute the agreed payments under Agreement 2. Furthermore, the Claimant submits that payments to the Salary Account started as of 17 January 2014, i.e. long before Agreement 2 was entered into. Furthermore, the Claimant submits that the payments made to the Salary Account do neither match the salaries agreed upon under Agreement 1 nor those under Agreement 2.

• since Claimant never had the power to dispose of the Salary Account, the

Arbitral Award 24/54 (BAT 0660/15)

payments made to this account cannot be attributed to him. Furthermore, the Claimant never withdrew any money from the Salary Account. That someone other than him withdrew money from the Salary Account is evidenced by the fact that withdrawals were made through an ATM machine in Volgograd on 5 June 2014, 13 June 2014, 9 July 2014, 14 August 2014 and 23 September 2014, i.e. while he was definitely not in Volgograd but abroad.

(5) as to damages

- Because of the Respondent’s breach of Agreement 2, Claimant is entitled to damages for the duration of the contract period from 1 December until the end of the 2014/2015 season. Claimant submits that Respondent had – in principle – already acknowledged this duty to pay compensation. On 3 December 2014, Respondent’s sport director, Mr. Stanislav Momot, contacted Claimant’s Agent by phone and invited him to meet after the Eurocup game, in order to solve the ongoing dispute. At the said meeting Mr. Stanislav Momot submitted a draft settlement offer to Claimant’s Agent. The draft provided that the Club pay Claimant the outstanding salary for 2014/2015 in the amount of USD 28,800.00. On 8 December 2014, Claimant declined the offer and provided Respondent with a counteroffer. On the same date, Respondent’s president, Mr. Dmitry Gerasimenko, called Claimant’s Agent and informed him that the conditions set forth in the counteroffer were acceptable. Agent, thereupon, sent Respondent the signed settlement agreement. However, the Respondent did not return a countersigned copy.

- Claimant submits that he made efforts to find employment with a new club in order to continue his career as coach or assistant coach for the remaining part of the season 2014/2015. Therefore, Claimant registered himself in the Vilnius territorial labour exchange but did not get any job offers. Claimant’s Agent, as

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well, tried to find a new club for Claimant.

84. In his Request for Arbitration dated 5 February 2015, Claimant requested the following relief:

"REQUESTS OF THE CLAIMANT With regard to all the circumstances and legal arguments set forth herein, the Claimant Mr. Marius Linartas hereby requests the Basketball Arbitral Tribunal: - To award the outstanding salary in the amount of 9,600.00 USD (nine thousand six hundred US dollars) from the Respondent Basketball Club “Krasny Octyabr” in favour of the Claimant Mr. Marius Linartas; - To award interest at a rate of 5 % per annum on the below indicated amounts from the Respondent Basketball Club “Krasny Octyabr” in favour of the Claimant Mr. Marius Linartas: • 4,800.00 USD (four thousand eight hundred US dollars) for the period starting from 31 October 2014 to the actual day of this payment • 4,800.00 USD (four thousand eight hundred US dollars) for the period starting from 1 December 2014 to the actual day of this payment

- To award compensation in the amount of 28,800.00 USD (twenty eight thousand eight hundred US dollars) plus interest rate of 5 % per annum on such amount for the period starting from 1 December 2014 to the actual day of payment of this amount from Respondent Basketball Club “Krasny Octyabr” in favour of the Claimant Mr. Marius Linartas; - To award a compensation in the amount of 4,268.00 RUB (four thousand two hundred and sixty eight Russian rubles) plus interest at rate of 5 % per annum on such amount for the period starting from 01 December 2014 to the actual day of payment of this amount from the Respondent Basketball Club “Krasny Octyabr” in favour of the Claimant Mr. Marius Linartas; - To award legal fees and other expenses incurred by the Claimant Mr. Marius Linartas in connection with the proceedings of arbitration from the Respondent Basketball Club “Krasny Octyabr” in favour of the Claimant Mr. Marius Linartas.”

3.4 Respondent's Position

85. The Respondent submits the following in substance:

(1) as to the legal framework

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- The Respondent is only the name of the basketball team, which plays in the VTB United League Championship. Respondent is not a legal entity. Instead, the (relevant) entity behind the Respondent is Sport-Expo. According to the agreement between United Basketball League and Sport-Expo concluded on 4 September 2014 it is Sport-Expo that bears all judicial rights and obligations regarding the participation of the Respondent in the VTB United League Championship. Therefore, the Claimant – according to the Respondent – “[also] had a ‘labour contract’ with Sport-Expo, which is the party with the performance obligations under the … [Agreement 2]”.

- Accordingly, the Claimant had to sign the Employment Agreement with Sport- Expo. This was done on 30 April 2014. Sport-Expo bears the performance obligations in relation to the Agreement 2. Thus, Claimant was employed by Sport-Expo as a coach and team manager. This is also evidenced by the working visa in Claimant’s passport, which states that Claimant was invited to Russia by “ZAO SPORT-EXPO VOLGOGRAD” (Sport-Expo).

- The signing of the (new) Employment Agreement on 30 April 2014 was also required by Russian Law. According thereto, a labour contract needs to be redacted in the Russian language in order to be valid. Since the Agreement 2 was concluded in English, a new document had to be redacted in Russian, i.e. the Employment Agreement dated 30 April 2014. This procedure had been followed for the season 2013/2014 and for the season 2014/2015. Thus, for each of the two seasons there were two contracts (an official version in English setting out the details and a Russian version complying with the legal requirements and containing the bank details).

(2) as to the termination of Agreement 2 / Employment Agreement dated 30 April 2014

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- In September 2014, Claimant expressed his dissatisfaction with his job as a team manager and his wish to work as an assistant coach only.

- On 17 October 2014, Respondent paid Claimant part of his salary for October 2015 by transferring the amount of USD 3,629.83 to Claimant’s Salary Account. After receiving the payment Claimant turned to Respondent and requested the payment of the full salary because of his tense financial situation and his need “to pay large amounts for personal expenses ”. On 20 October 2014, Respondent paid all outstanding and future salaries under Agreement 2.

- On 20 October 2014, after Claimant received the full salary, he suddenly refused to fulfil his duties as an assistant coach and team manager, allegedly because of the head coach’s absence.

- On 21 October 2014, Claimant refused to travel to the Eurocup match against Hapoel Jerusalem, even though the Respondent had bought an airplane ticket (Volgograd – Moscow, Moscow – Tel-Aviv) and given it to him so he could attend the match.

- Respondent then instructed Claimant to travel to Vilnius and help the new head coach, Dirk Bauermann, to obtain a Russian visa at the embassy in Lithuania.

- On account of Claimant’s serious contract violations, Respondent orally terminated the contractual relationship with the Claimant around 20 October 2014. In confirmation thereof, the Respondent, 24 October 2014, notified the VTB of Claimant’s withdrawal of the license.

- Claimant’s termination was legally ineffective for procedural and substantive reasons. There was no just cause for such termination. Even if Respondent was in delay of payments, Claimant would have been obliged (pursuant to Article VIII

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of the Contract) to send a 15-day advance warning notice that payment was due and a warning of termination in case of continued non-payment. Claimant’s letter dated 18 November 2014 did not contain such a warning of termination.

(3) as to the payments made by Respondent

- The Employment Agreement dated 30 April 2014, which was signed by the Claimant, contained the banking details with respect to the Salary Account with ALFA-Bank. Respondent contests that it opened the Salary Account on behalf and in the name of the Claimant.

- Sport-Expo made the following salary payments on behalf of the Respondent to the Salary Account (with regard to the obligations under the Agreement 2):

Salary Obligations Payment Salary Amount in Central USD period in USD date register RUB bank equivalent (under rate Agreement 2) August 4,800.00 05/08/14 77 147,900.00 35.6605 4,147.45 2014 September 4,800.00 22/09/14 96 147,900.00 38.4134 3,850.22 2014 October 4,800.00 17/10/14 105 147,900.00 40.7457 3,629.83 2014 All season 20/10/14 108 1,492,930.00 41.0450 36,373.01 Total: 1,963,630.00 48,000.50

- All transfers to the Salary Account were executed by Sport-Expo. In essence the procedure followed was as follows: Sport-Expo transferred the salaries for all employees in one single transaction to a specific “salary bank account” at ALFA- Bank. ALFA-Bank processed the transfer and transferred the respective amounts to the employees’ individual accounts pursuant to the relevant registers provided by Sport-Expo. Respondent notes that all salaries to the Claimant were paid in

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the currency of the Russian Federation, i.e. in RUB as this is an obligation following from Art. 131 of the Labour Code of the Russian Federation.

- Respondent submits that all payments to the Claimant were made to the Salary Account and that neither for the 2013/2014 nor for the 2014/2015 season any payments were made to Claimant’s bank account at Siauliu Bank. Respondent submits that this is – inter alia – evidenced by the fact that the payments that Claimant allegedly received in respect to Agreement 1 on his Siauliu Bank account amount to USD 33,000.00. However, according to Agreement 1, the Claimant was only entitled to salaries up to USD 24,000.00. Thus, the figures do not match up and the difference of USD 9,000.00 cannot be explained by any bonus payments provided for in the Agreement 1.

- Respondent submits that the payments executed by a company called “TYNBEX CORPORATION DRAKE CHAMBERS” to Claimant’s Lithuanian account cannot be attributed to Respondent. There is no proof that these transfers were made on behalf of Respondent. Instead, the Respondent submits that it is a common practice for foreign employees in Russia to receive their salary in Russian currency, withdraw the amounts in cash and then to immediately deposit the money with Western Union or similar companies in order to transfer USD, EUR, or other foreign currencies to their foreign accounts.

- Respondent further submits that the fact that withdrawals were made from an ATM machine in Volgograd while the Claimant was abroad does not prove that the latter had no power of disposal in respect of the Salary Account. Respondent submits that Claimant may have given his credit card to third persons who could then have withdrawn the respective amounts from the Salary Account.

(4) as to the outstanding salaries

Arbitral Award 30/54 (BAT 0660/15)

- At the time of termination, Sport-Expo had already paid all amounts owed pursuant to Agreement 2. All payments had been made in RUB and were equivalent to USD 48,000.00. ALFA-Bank also confirmed that all tax payments in connection with the salary payments to Claimant had been transferred in full by Sport-Expo to the tax authorities of the Russian Federation.

(3) as to the damages

- Respondent submits that no settlement agreement/offer was ever made or signed by the Club and that the document submitted by the Claimant on behalf of Mr. Stanislav Momot, Respondent’s sport director, appears to be a forgery.

86. In its Answer to the Request of Arbitration dated 13 March 2015, Respondent requested:

"1. that the Claimant’s requests in the Request for Arbitration of 5 February 2015 be dismissed in full, 2. that the Claimant be ordered to pay the entire costs of the arbitration, and 3. that the Claimant be ordered to pay the Respondent’s legal costs of the arbitration at hand. ”

4. The Jurisdiction of the BAT

87. 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).

88. The jurisdiction of the BAT presupposes the arbitrability of the dispute and the existence of a valid arbitration agreement between the parties.

89. The Arbitrator finds that the dispute referred to him is of a financial nature and is thus

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arbitrable within the meaning of Article 177(1) PILA 1.

90. The jurisdiction of the BAT in the present case results from the arbitration clause contained in Article VI (“Governing Law, Disputes, Translation”) of Agreement 2:

“This Agreement contains the entire agreement between the parties and there is no oral written inducements, promises or agreements except as contained herein. Any or all prior agreements or contracts are void upon the execution of this Agreement. 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 an 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 in English. The arbitrator upon appeal shall decide the dispute ex aequo et bono. The prevailing party shall be entitled to recover all costs, fees, and attorneys’ fees from the other party in any such dispute. […]”.

91. This Agreement is in written form. Hence, the arbitration agreement fulfils the formal requirements of Article 178(1) PILA.

92. With respect to substantive validity, the Arbitrator considers that there is no indication in the file that could cast any doubt on the validity of the arbitration agreement under Swiss law (referred to by Article 178(2) PILA).

93. Also, the wording “[a] ny dispute arising from or related to the present contract […]” clearly covers the present dispute.

94. The Arbitrator holds that he has jurisdiction over the matter in dispute.

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

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5. Discussion

5.1 Applicable Law – ex aequo et bono

95. 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 Arbitrator 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”.

96. 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.”

97. Art. VI of Agreement 2 explicitly confers to the Arbitrator the mandate to decide the dispute ex aequo et bono .

98. 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’arbitrage 2 (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

2 Swiss statute that governed international and domestic arbitration before the enactment of the PILA (governing international arbitration) and, more recently, the Swiss Code of Civil Procedure (governing domestic arbitration). 3 P.A. Karrer, Basler Kommentar, No. 289 ad Art. 187 PILA.

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which is not inspired by the rules of law which are in force and which might even be contrary to those rules.” 4

99. 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”.

100. In light of the foregoing considerations, the Arbitrator makes the findings below.

6.2 Findings

6.2.1. The Contractual Framework

101. It is undisputed that the Parties entered into Agreement 2. Respondent argues that Claimant, in addition, “also had a labour contract with Sport-Expo ”. In proof of this allegation, Respondent submitted a copy of an agreement entitled “Employment Contract” dated 30 April 2014 between Claimant and Sport-Expo (i.e., the Employment Agreement). This contract, which – according to the Respondent – bears the signature of the Claimant, provides inter alia that it is the “ primary employment agreement for the Employee ” (Art. 2.1.2) and that the “ amount of salary is defined by the terms of the clause II of the … [Agreement 2] (Art. 5.1). Claimant submits that the Employment Agreement dated 30 April 2014 is a forgery.

102. The Arbitrator notes that the facts and circumstances surrounding the Employment Agreement dated 30 April 2014 raise many questions. In particular, it is doubtful whether this contract was signed by the Claimant. But, whichever way this may be, the Arbitrator finds that this question can be left unanswered. Regardless of whether the Employment Agreement dated 30 April 2014 was validly concluded, the present

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

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dispute concerns only Claimant and Respondent. Whether Claimant and Sport-Expo ever entered into an additional agreement has, in principle, no bearing on whether or not the Parties to this procedure fulfilled their contractual obligations as per Agreement 2 and whether said agreement was terminated with just cause or not. The Employment Agreement dated 30 April 2014 neither alters the salary-related obligations of the Respondent nor does it amend the applicable provisions and/or legal principles in case of breach of those obligations arising out of Agreement 2. It is true that – unlike Agreement 2 – the Employment Agreement dated 30 April 2014 makes reference to the Salary Account. However, it was not through this reference contained in the Employment Agreement that the Respondent was first made aware of the Salary Account. Thus, it could not have been the Employment Agreement that triggered payments to the Salary Account allegedly on behalf of the Claimant. Respondent did not become aware of the existence of the Salary Account through the Employment Agreement. Instead, Respondent obtained knowledge of the the Salary Account long before the alleged conclusion of the Employment Agreement of 30 April 2014. Respondent itself submitted that it was informed of the existence of the Salary Account directly by ALFA-Bank shortly after, based on the Client’s Questionnaire, the bank account had been opened. The Respondent refers in this respect to the Client’s Questionnaire, which reads – inter alia – as follows:

“I hereby commission … [ALFA-Bank] to provide my employer with information on the number of Current Account opened in my name with … [ALFA-Bank].”

103. To conclude, therefore, whether or not the Employment Agreement dated 30 April 2014 was validly concluded or not, is immaterial for the dispute at hand.

104. Respondent has submitted on 19 June 2015 that “ BC Krasny Octyabr’ is no legal entity itself ”, and that “ the legal entity behind the ‘team-name’ … is JSC Sport-Expo.” This statement is difficult to understand and accommodate. In any event, the Arbitrator is not prepared to acknowledge that Respondent lacks capacity to sue and to be sued and/or legal capacity. By submitting a power of attorney in favour of the law firm Bird &

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Bird LLP, which explicitly states that “ full power and authority to provide legal representation [is given] for Basketball Club krasny Octyabr .”, Respondent acknowledges that it does have legal capacity. This finding is further corroborated by the fact that in its answer to the Request for Arbitration Respondent submits that “Claimant also had a labour contract with Sport-Expo” (emphasis added).

105. To conclude, the Arbitrator finds that the only relevant contract in this procedure is Agreement 2 and that this contract has been concluded between two parties having legal capacity.

6.2.2. The Termination of Agreement 2

106. It is undisputed between the Parties that Agreement 2 was terminated at the latest with Claimant’s termination letter of 1 December 2014 and his definitive departure from the Russian Federation on the same day. However, the Parties’ accounts differ quite considerably when it comes to the question of who terminated the Agreement 2 and on what basis.

(1) The Respondent’s version

107. The Respondent submits that it terminated the contractual relationship with the Claimant for just cause. Since the onus of proof rests with the party which asserts a fact, Respondent has to provide proof for its account of facts. According to the Respondent, it made a partial salary payment to the Claimant on 17 October 2014; the Claimant then requested another advance payment because he was in need of money. Following Claimant’s request Respondent submits to have paid all salaries due to Claimant under Agreement 2 on 20 October 2014. After having received the advance payment, the Claimant – according to the Respondent – suddenly refused to fulfil his duties as an assistant coach. In particular, Respondent submits that:

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˗ on 21 October 2014, Claimant refused to travel to the Eurocup match against Hapoel Jerusalem;

- Claimant refused to travel to Vilnius on 25 October 2014 where he was supposed to assist the new head coach, Dirk Bauermann, in obtaining a Russian visa at the embassy in Lithuania.

108. This version of accounts – alleged by the Respondent and contested by the Claimant – is obviously flawed. Under Agreement 2 the Respondent was obliged to pay the October 2014 salary (in the amount of USD 4,800.00) on 30 October 2014. It is, thus, hard to believe that the Respondent – by its own accord – made an early partial payment towards Claimant’s October salary on 17 October. It is even more startling that – upon Claimant’s request – the Respondent should have made another advance payment on 20 October 2014, (allegedly) covering all future salaries under Agreement 2, i.e., in the amount of RUB 1,492,930.00. The Respondent provides the following explanation for its highly unusual behaviour:

“[…] the Claimant spoke with the club management and asked them to pay him – i.e. to his bank account – the full salary agreed to in the agreement. The reasons he gave were his poor financial situation and the need to pay large amounts of personal expenses. In light of the long-standing working relationship, the club management agreed to do this. On 20 October 2014, the Respondent paid – by way of transfer to his bank account – the full remaining salary owed to him up to the end of the agreement” .

109. This account of facts is in contradiction with the fact that Respondent – already on 20 October 2014 – deregistered Claimant from the participation of all Eurocup matches. Furthermore, it is inconsistent with Respondent’s submissions before the courts of Volgograd. The default judgment dated 1 October 2015 of the Krasnooktyabrsy District Court of the City of Volgograd states in this respect as follows:

“Upon dismissal, the single payment of 149,293 Rubles 00 kopeks was established to the employee Marius L. However, when making an actual transfer of money to

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the respondent, due to calculation error there were transferred the money of 1,492,930 Rubles 00 kopeks. Thus the respondent was overpaid the sum of 1,353,637 Rubles 00 kopeks” .

110. It appears, thus, that the Respondent pleaded before the Krasnooktyabrsy District Court of the City of Volgograd that the transfer on 20 October 2014 of RUB 1,492,930.00 to the Salary Account was due to a calculation error. This account of facts differs substantially from what Respondent has submitted in the present arbitration proceedings.

111. The rest of Respondent’s submissions is similarly incoherent and lacking credibility. Respondent, for instance, fails to plausibly explain why the Claimant, after having received the full remaining salary under the Agreement 2, would all of a sudden stop complying with his obligations under said agreement. In addition, it would be highly unusual for a professional employer to terminate the contractual relationship orally “ on or around 20 October 2014 ”, i.e. the very day the full payment for the entire season was allegedly effected to the Claimant. Rather unconvincingly, Respondent does not recall the exact date of and the facts surrounding the termination of the contractual relationship. Furthermore, there is no evidence on file that Respondent ever gave the Claimant written notice of an alleged breach of his contractual duties. Even more surprising is the fact that the termination should have occurred only a few days (at maximum) after Respondent had paid Claimant’s salaries for the entire season 2014/2015. Such behaviour does not make sense economically, nor is it in compliance with the terms of Agreement 2, which provides in Art. VIII ( Special Termination for Club and Assistant Coach for Material Breach) as follows:

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112. It follows from this provision that any termination of the contractual relationship must – in principle – be preceded by a notice of the “non-breaching party” to the other party. No such notice occurred here. In addition, Respondent’s account of facts is difficult to reconcile with the findings of the courts of Volgograd. The default judgement of 1 October 2015 submitted by the Respondent states as follows:

“According to the order of SE No. 15 dated October 20, 2014 employment relations with the employee were terminated under item 1 article 77 of Labour Code of the Russian Federation by agreement of the parties” .

113. It appears that the Volgograd court based its finding in the default judgment (i.e. later in time than the submissions of the Respondent) on the assumption that the contractual relationship between the Parties had been terminated by mutual agreement of the Parties. This finding, however, is impossible to reconcile with the allegation in Respondent’s answer to the Request for Arbitration, which reads “because of these serious violations, the club was forced to terminate the contract with the Claimant” and “the Respondent had declared around 20 th October 2014 the premature termination of the contract” .

114. In addition, it is worth noting that Respondent bases the termination of Agreement 2 – inter alia – on Claimant’s alleged refusal to travel to the Eurocup match against Hapoel Jerusalem on 21 October 2014. This argument is inconsistent with the fact that Respondent already on 20 October 2014 requested Euroleague to deregister Claimant from the Eurocup competition.

115. Finally, the Arbitrator notes that in the procedural order dated 26 May 2015 he invited the Club to submit detailed evidence for Claimant’s alleged breaches of Agreement 2. In its answer to the procedural order the Respondent declined to provide further evidence and simply referred to (unsubstantiated factual submissions in) its answer to Claimant’s Request for Arbitration.

Arbitral Award 39/54 (BAT 0660/15)

(2) The Claimant’s version

116. Contrary to Respondent’s account of facts, the version submitted by Claimant is plausible and corroborated by evidence. Reference is made – inter alia – to the two emails by Claimant’s Agent to Mr. Dmitry Gerasimenko (president of Respondent) dated 20 October 2014. The first email explicitly mentions the fact that Claimant was not provided with plane tickets to attend Respondent’s match against Hapoel Jerusalem. The second email (dated the same day) corroborates Claimant’s submissions, according to which Respondent suddenly refused to let Claimant travel to training sessions on the team bus. Various other emails sent by Claimant’s Agent to Respondent, VTB United league and to FIBA further support Claimant’s account of facts, i.e. that Respondent tried to get rid of Claimant by excluding him from team practices and matches and that Respondent left Claimant in doubt as to his employment status with the Respondent. In particular, it follows from the email correspondence submitted by the Claimant that Respondent did not advise Claimant about the purpose of the trip to Vilnius on 25 October 2014.

117. Furthermore, Claimant submitted a letter by his Agent dated 18 November 2014 in which Respondent was advised that the salary for October 2014 (due on 30 October 2014) was still unpaid. The letter, inter alia , states the following:

“This letter notifies the club that 15 days have passed without payment, resulting in the Coach to immediately go on strike as his right under the Contract until the payment is made. In absence of any payment in the next 15 days and in accordance with Article 2, this Contract will be breached. If the Contract is breached, the Coach is entitled to accelerate all future contractual payments and your duties and liabilities toward the Coach continue in full force and effect”.

118. This letter qualifies as a notice within the meaning of Art. VIII ( Special Termination for Club and Assistant Coach for Material Breach) of Agreement 2. Since the October salary (due on 30 October 2014) was still outstanding on 1 December 2014 (see below section 6.2.3), the Claimant was entitled to terminate the contractual relationship with

Arbitral Award 40/54 (BAT 0660/15)

Respondent on 1 December 2014.

(3) Conclusion

119. The Arbitrator concludes that – unlike the submissions made by the Claimant – Respondent’s account of facts is unsubstantiated as well as contradictory, implausible and incompatible with general experience of life and sound economic behaviour. Thus, the Arbitrator is not prepared to follow Respondent’s version of the facts. In conclusion the Arbitrator holds that the contractual relationship between the Parties was terminated by the Claimant on 1 December 2014 and that Claimant, in doing so, acted with just cause and in compliance with the terms of Agreement 2.

6.2.3. The Outstanding Payments until the Termination of the Contractual Relationship

120. The Parties’ submissions with regard to whether salaries were outstanding at the time the contractual relationship was terminated (1 December 2014) differ considerably. Claimant basically asserts that salaries in the amount of USD 9,600.00 were outstanding on 1 December 2014. In support of his allegations Claimant submits that all payments made by the Respondent under Agreement 1 and Agreement 2 were made by transfer to his bank account with Siauliu Bank (see supra no. 5). The records for this bank account show that during the term of the Agreement 2 only one transfer in the amount of USD 9,590.00 was made, on 2 October 2014. According to the Claimant this payment covers the salaries for the months of August and September 2014 (under Agreement 2). Thus, on 1 December 2014 the salaries for the months of October and November, totalling USD 9,600.00, were still outstanding. Contrary to this, Respondent submits that it never executed any payments to Claimant’s bank account with Siauliu Bank but instead used – exclusively – the Salary Account for transferring salary payments to the Claimant. According to the Respondent, the records of the Salary Account show that it was not in default with payments on 1 December 2014, but,

Arbitral Award 41/54 (BAT 0660/15)

instead, had made overpayments.

121. The Arbitrator has serious doubts as to the veracity of Respondent’s account of facts and, thus, is not prepared to follow Respondent’s submissions:

(1) No Link between the Agreement 1 and 2 and the payments made to the Salary Account

122. Respondent submits that it made the following payments to the Salary Account during the term of Agreement 2 (15 August 2014 until 15 May 2015):

Date of payment Amount paid (RUB) 5 August 2014 RUB 147,900.00 22 September 2014 RUB 147,900.00 17 October 2014 RUB 147,900.00 20 October 2014 RUB 1,492,930.00

123. It is quite apparent that these payments are not in line with Respondent’s contractual obligations under Agreement 2. There are discrepancies as to the amounts (owed vs. paid), the currency in which the payments were made (USD vs. RUB) and in relation to the date on which the salary payments were due and payable.

Date payment Amount paid Contractual due Amount paid Contractually was made (RUB) date converted in agreed USD amount in USD 5 August 2014 147,900.00 30 August 2014 4,147.45 4,800.00 22 September 147,900.00 30 September 2014 3,850.22 4,800.00 2014 17 October 2014 147,900.00 3,629.83 4,800.00 30 October 2014 20 October 2014 1,492,930.00 36,373.01 4,800.00 124. The inconsistencies with regard to Respondent’s submissions are even more striking when looking at the amounts credited to the Salary Account during the term of the Agreement 1:

Arbitral Award 42/54 (BAT 0660/15)

Date payment Amount paid in Contractual due Amount paid Contractually was made RUB date converted in agreed USD amount in USD - - 15 September - 3,000.00 2013 - - 15 October 2013 - 3,000.00 - - 15 November 2013 - 3,000.00 - - 15 December 2013 - 3,000.00 17 January 2014 100,880.55 15 January 2014 3,070.52 3,000.00 3 February 2014 147,900.00 15 February 2014 4,212.45 3,000.00 4 March 2014 147,900.00 15 March 2014 4,098.66 3,000.00 28 March 2014 147,900.00 4,135.18 29 April 2014 147,900.00 15 April 2014 4,149.72 3,000.00 20 May 2014 147,900.00 - 4,283.12 - 9 June 2014 147,900.00 - 4,305.31 - 3 July 2014 147,900.00 - 4,317.10 Total 32,572.06 24,000.00

125. To conclude, therefore, there is no apparent link between the payments made to the Salary Account and the payment obligations under Agreements 1 and 2.

(2) No Power of Claimant to dispose of the Salary Account

126. In addition, the facts on file clearly suggest that Claimant had no power to dispose of the Salary Account. Respondent’s allegation that it was Claimant who opened and had disposal of the Salary Account is highly unlikely.

127. It is undisputed that ALFA-Bank and Sport-Expo entered into a contract on 7 November 2013, i.e. after Agreement 1 was signed and executed [bank details]. According to this contract ALFA-Bank provided services to Sport-Expo with respect to money remittances (salaries, social security payments and other payments) in the currency of the Russian Federation (RUB) for employees’ accounts to be specified by Sport-Expo. The person in charge for this salary project on behalf of Sport-Expo was its General Director, Mrs. Y. G. Pushkarskaya.

Arbitral Award 43/54 (BAT 0660/15)

128. Whether there was any contract between the Claimant and ALFA-Bank is disputed between the Parties. In response to Claimant’s inquiry on 25 March 2015 and 1 April 2015, ALFA-Bank sent Claimant the documentation based on which the Salary Account had been opened. Among those documents was the Client’s Questionnaire. Furthermore, ALFA-Bank informed the Claimant that according to their information Claimant and the bank “concluded the agreement on Comprehensive Banking Service of Natural Persons in OAO ALFA-BANK consent to accession whereto you expressed by affixing your signature in the Client’s Questionnaire. Current Account No [bank details] was opened and bank cards were issued in your name under the Agreement . The cards issued in your name were handed out on the basis of the registers of the hand-over of bank cards and PIN envelopes signed by the receiver.”

129. According to this statement, ALFA-Bank’s perception was that it was in a contractual relationship with Claimant based on the Client’s Questionnaire allegedly signed by the Claimant. ALFA-Bank does not recall by whom the Salary Account was opened. The bank merely states that according to its records (i.e. the signature on the Client’s Questionnaire) it appears that Claimant was the person who opened the Salary Account. However, this finding is contradicted by the fact that the signature in the Client’s Questionnaire is in Cyrillic lettering and, in addition, has no resemblance whatsoever with Claimant’s (normal) signature in his passport or under the Agreement 1 and/or 2. From all of this it is rather obvious to the Arbitrator that a person other than Claimant must have signed the Client’s Questionnaire. Respondent has contested this finding and submitted a declaration from a Russian lawyer, Mr. Andrey Vladimirovich Frolov (register number 34/894 in the lawyers’ register of Volgograd region), that reads – inter alia – as follows:

“According to item 3.1. of the Regulations of the Bank of Russia dated 30.05.2014 No. 153-I ‘Concerning the opening and closing of bank accounts, accounts on deposits, deposit accounts’ (registered in the Ministry of Justice of the Russian Federation on 19.06.2014 No. 32813) (hereinafter referred to as Regulations), in order to open a current account to a natural person being a foreign citizen or a stateless person there shall be submitted the documents specified in item 3.1 of

Arbitral Award 44/54 (BAT 0660/15)

these Regulations, as well as the migration card and (or) the document confirming the right for a foreign citizen or a stateless person to stay (reside) in the Russian Federation, where their availability is provided for by the legislation of the Russian Federation. […] According to item 5 article 7 of Federal law No. 115-FZ the credit organizations are prohibited from opening bank accounts, deposit accounts for natural persons without the personal presence of a person who is opening the bank account (deposit account), or of his/her representative. Credit organization shall deny to the client the conclusion of bank account or deposit account agreement on the basis of item 5 article 7 of Federal law No. 115-FZ if the documents have not been submitted that are required for identification of a client or a client’s representative. It is provided by item 1.2 of the Regulations that Client representative, persons authorized to dispose of the money being on the account, when using an equivalent of autograph signature, and the persons having signature right sign are required to present a personal identification document, as well as the documents confirming existence of appropriate powers. According to item 1 art. 185.1 of Civil Code of the Russian Federation, a power of attorney to make the transactions requiring notarial form [of execution], to file applications for state registration of rights and transactions, as well as to dispose of the rights registered in state registers must be notary certified, except for instances provided by law. According to article 59 of the “Basic Principles of the Legislation of Russian Federation on Notarization” approved by Supreme Soviet of the Russian Federation on 11.02.1993 No. 4462-1, a notary shall certify a power of attorney from one or several persons in the name of or several persons.”

130. The Arbitrator does not contest that the applicable Russian provisions, in principle, require a client to be physically present when opening a bank account, and the respective bank to check the identity of the client or person opening the bank account in accordance with the applicable provisions. However, whether these legal precautions can prevent forgery in all instances is another matter. In any event, Respondent’s general description of the legal situation in Russia cannot undo the obvious fact that the signature on the Client’s Questionnaire bears no similarity whatsoever with Claimant’s signature and is obviously forged. It appears that, on the part of ALFA-Bank, the possibility of forgery is not excluded either, as they responded to Claimant’s enquiry by letter dated 1 June 2015 – inter alia – as follows:

“If you did not sign the documents regarding the opening of the account and receipt of the cards, we recommend you applying to law enforcement agencies for the examination of the lawfulness of the actions of ZAO Sport-Expo.”

131. Thus, the Arbitrator is not prepared to accept that Claimant signed the Client’s

Arbitral Award 45/54 (BAT 0660/15)

Questionnaire in order to open the Salary Account.

132. The Arbitrator finds that this conclusion is corroborated when looking at some of the money withdrawals from the Salary Account. It is undisputed that the Salary Account was opened in January 2014 and closed on 15 December 2014. The closing balance was RUB 10.55. Claimant contests that he ever withdrew any money from the Salary Account. In support of this Claimant has provided evidence that he was not in Volgograd on various of the dates on which withdrawals from the Salary Account took place via an ATM machine in Volgograd. The evidence consists in a copy of Claimant’s passport with stamps from customs/immigration showing that Claimant was not in Russia during the periods from 5 May 2014 to 26 July 2014, 26 July 2014 to 7 August 2014, and 7 August 2014 to 27 September 2014. Nevertheless, withdrawals were effectuated from the Salary Account via ATM machines in Volgograd during these periods (on 6 May 2014, 9 June 2014, 17 June 2014, 9 July 2014, 11 July 2014 17 July 2014 and 25 September 2015). All of this speaks in favour of Claimant’s submission that he never had the power of disposal concerning the Salary Account and, in particular, that the respective credit/debit cards were never delivered to him, but must have been handed out to some other person. Respondent contests this conclusion by suggesting that Claimant could have given his debit/credit card to someone else during his absence from Russia. However, this has the appearance of being a self-serving declaration of Respondent that is not supported by any – even scarce – evidence and is incompatible with general experience of life.

133. Finally, the Arbitrator takes note of the fact that the Salary Account was closed on 15 December, i.e. at a moment in time when the Claimant (undisputedly) had left the Russian Federation.

(3) Respondent’s incoherent behavior in these proceedings

134. On a subsidiary basis, the Arbitrator notes that throughout the proceedings the

Arbitral Award 46/54 (BAT 0660/15)

Respondent has not been particularly cooperative in clarifying the facts of the case. In its answer to the Request of Arbitration, Respondent did not mention that court proceedings in Russia were pending, or even envisaged, between Sport-Expo and the Claimant. Only after the Arbitrator ordered Respondent on 26 May 2015 to submit the original executed copies of both the Employment Agreement dated 30 April 2014 and the original of Agreement 2, the Respondent informed the Arbitrator that it was unable to do so because “ currently, they are required by a Russian Court regarding an action Sport-Expo filed against the Claimant. This action has been recently brought by Sport- Expo against the Claimant as his acting is in the eyes of the Respondent and Sport- Expo unlawful .” Respondent did not advise the Arbitrator where and before what court the proceeding was pending, nor did it indicate when the court proceeding had been filed and what it was about.

135. Following the procedural order dated 23 June 2015, Respondent submitted an affidavit by Dmitry Gerasimenko that refers to “ a lawsuit ” between “ Sport-Expo and Mr. Antanas Linartas ”. Furthermore, the affidavit states that the “ original Employment Contract dated 30 April 2014 … [is] required by and being used in the proceedings … before the court .” The affidavit does not address the issue of whether or not the original of Agreement 2 was being used in the court proceedings. On 26 August 2015, the Arbitrator ordered the Respondent – inter alia – to provide the statement of claim relating to the lawsuit before the courts of Volgograd and the Employment Agreement for the season 2013/2014. In addition, the Respondent was advised that the affidavit by Mr. Dmitry Gerasimenko referred to a person other than the Claimant.

136. In response to this procedural order Respondent submitted that there are in total three “proceedings against the Claimant concerning the labour relationship between the parties before the Central District Court of Volgograd City ”. In addition, Respondent submitted an amended affidavit from Mr. Dmitry Gerasimenko. Contrary to the first affidavit, the new one refers to pending “lawsuits” and, in addition, states that also the original of Agreement 2 has been submitted to the state court and cannot, therefore, be

Arbitral Award 47/54 (BAT 0660/15)

produced in these arbitration proceedings. Respondent also failed to provide a copy of the statement of claims as ordered by the Arbitrator. However, the Respondent submitted a copy of the operative part of the default judgment (reference no. 2-116- 1132/2015) dated 20 July 2015 and, moreover, filed a “ statement on pendency of the original documents in court ” by Mr. Minizhiner, who represents the Respondent in the proceedings before the Central District Court in Volgograd City. The statement provides that “ on 17.05.2015 Sport-Expo sent all the original documents for their further delivery on trial ”. Furthermore, the statement provides that “ after delivering the judgment by court, the original documents were returned to the applicant Sport-Expo ”, but that these originals were then again filed together with a statement of claim in a separate procedure for “ debt recovery from Linartas Marius. ”

137. With procedural order dated 14 October 2015, the Arbitrator reiterated his request that Respondent produce the Employment Agreement between Sport-Expo and the Claimant for the season 2013/2014. Furthermore, the order provided as follows:

“In his procedural order dated 26 August 2015 the Arbitrator invited Respondent further to submit ‘the statement of claim and all documents (with an English translation) relating to the lawsuit between JSC Sport-Expo and the Claimant … pending before the Central Court of Volgograd city …”. Respondent in response to this order filed on 9 September 2015 a copy of a ‘Default Decision’. However, the respective statement of claim was not filed. Furthermore, in its letter dated 9 September 2015 to the BAT the Respondent stated – for the first time – that JSC Sport-Expo was and still is not involved in one, but ‘involved in three proceedings against the Claimant concerning the labor relationship between the parties before the Central District Court Volgograd City.’ Accordingly, the Respondent is invited to submit the statement of claim … relating to the ‘three proceedings’ pending before the Central Court Volgograd City …”

138. In response to this procedural order, Respondent filed a copy of the Employment Agreement for the season 2013/2014 and the copy of a default judgment dated 1 October 2015 issued by the District Court of Volgograd. However, whereas the Arbitrator’s procedural order had requested that Respondent produce the statements of claim of all three proceedings pending against Claimant before the Russian Courts until

Arbitral Award 48/54 (BAT 0660/15)

13 November 2015, Respondent in its letter to the BAT dated 13 November 2015 filed only one statement of claim, which relates to the same proceeding as the default judgment ref. no. 2-116-1132/2015. The said statement of claim is dated 18 May 2015 (not 17 May 2015) and refers to an alleged failure of the Claimant to return a laptop computer, Apple MacBook Pro, to Sport-Expo after the termination of the contractual relationship. In addition, the Respondent’s letter of 13 November 2015 states that “unfortunately, at present the Respondent is not able to provide the BAT with the requested statements of claims relating to the other proceedings. The Respondent will do its best efforts to submit these as soon as possible .”

(4) Claimant’s submissions conclusive

139. Unlike Respondent’s submissions in these proceedings, Claimant’s account of facts is without contradiction, straightforward and conclusive. The payments received in the Siauliu Bank account for the season 2014/2015 are in line with the Respondent’s contractual obligations pursuant to Agreement 2 (see supra no. 5). The same is – basically – true for the payments received on the Siauliu Bank account during the term of the Agreement 1. The Arbitrator notes that, towards the end of the season 2013/2014, a difference in payment of USD 9,000.00 results from a comparison between the amounts due under the Agreement 1 and the amounts that were actually paid. However, Claimant gave a conclusive and logical explanation for this difference. According thereto the president of the Respondent had agreed to increase Claimant’s salary for the last four instalments (under the Agreement 1) from USD 3,000 to USD 4,500 (see Claimant’s submissions dated 8 July 2015). Furthermore, the Claimant’s submissions are corroborated by the detailed witness statement of Claimant’s Agent and by documentary evidence. Particular reference is made to the Agent’s emails of 13 and 24 September 2013, in which the Agent provided Dmitry Gerasimenko (the president of Respondent) with Claimant’s bank details with Siauliu Bank [bank details]. Furthermore, Claimant provided an email by Respondent in which the salary payment for the month of September 2013 (under the Agreement 1) is confirmed. The email not

Arbitral Award 49/54 (BAT 0660/15)

only proves that the said payment was transferred to Claimant’s bank account with Siauliu Bank but, in addition, that it was being processed through TYNBEX CORPORATION DRAKE CHAMBERS. This company is consistently referenced in the payment details for the various transfers made to Claimant’s bank account with Siauliu Bank.

(5) Conclusion

140. In view of all of the above, the Arbitrator is convinced that, at the time when Agreement 2 was terminated, the Respondent was in default of payment for the salary for October and November 2014 in the total amount of USD 9,600. In particular, the Arbitrator considers the evidence before him sufficient to deny any need to stay these proceedings and wait for the outcome of whatever possible investigations of ALFA- Bank, as has been requested by the Respondent.

6.2.4. Damages for the remaining salaries under the Agreement 1

141. Claimant seeks compensation for the remaining salaries under Agreement 2 that would have become due had Agreement 2 not been terminated on 1 December 2014. The compensation requested by the Claimant amounts to USD 28,800.00.

142. As stated above, the Arbitrator has determined that the Claimant terminated the Agreement 2 with just cause and, furthermore, that the transfers executed by the Respondent to the Salary Account cannot be credited to the Claimant. It follows from standing BAT jurisprudence that in case of justified early termination of an employment contract the respective party can claim the remaining entitlements under the contract (in casu, salaries) as compensation. Thus, the Claimant is entitled to claim USD 28,800.00. The Arbitrator finds that this amount should not be reduced on account of Claimant’s duty to mitigate a possible damage. The fact that Claimant made sufficient efforts to find employment with a new club for the remainder of the 2014/2015 season

Arbitral Award 50/54 (BAT 0660/15)

is not contested by Respondent.

6.2.5 Compensation for the airplane ticket in the amount of RUB 4,268.00

143. According to Art. III. B “Club shall pay for the following airplane tickets from Assistant Coach’s residence or other Assistant Coach designated location during the season: 3 round-trip economy class airline tickets Lithuania to Russia.“

144. Claimant submits that Respondent failed to provide him with an airplane ticket to fly from Volgograd to Vilnius. Therefore, Claimant himself bought a ticket for a flight on 1 December 2014 from Volgograd to Moscow and further from Moscow to Vilnius. The amount spent was RUB 4,268.00. Given that the Agreement provided for three round- trip airline tickets for traveling between Lithuania and Russia, and that Respondent did not contest the respective factual allegations of Claimant, the Arbitrator concludes that Claimant is entitled to reimbursement in the amount of RUB 4,268.00.

6.2.5 Is Claimant entitled to interest?

145. Claimant requests interest on the outstanding compensation. According to BAT jurisprudence, default interest can be awarded even if the underlying agreement does not explicitly provide for an obligation to pay interest on overdue salaries. 5 This is a generally accepted principle, which is embodied in most legal systems. Therefore, the Arbitrator, deciding ex aequo et bono , considers that, although Agreement 2 does not provide for a default interest obligation, interest at a rate of 5% p.a. is fair and equitable in the present case. The starting date for the calculation of the interest shall be the day after the date Respondent fell in default of the outstanding payments under the Agreement. Therefore, the Arbitrator accords interest payments of 5% p. a.:

5 See, ex multis, the following BAT awards: 0092/10, Ronci, Coelho vs. WBC Mizo Pecs 2010; 0069/09, Ivezic, Draskicevic vs. Basketball Club Pecsi Noi Kosariabda Kft; 0056/09, Branzova vs. Basketball Club Nadezhda.

Arbitral Award 51/54 (BAT 0660/15)

˗ on the amount of USD 4,800.00, from 1 November 2014 (salary for the month of October 2014 due on 30 October 2014),

˗ on the amount of USD 4,800.00, from 1 December 2014 (salary for the month of November 2014 due on 30 November 2014);

˗ on the amount of USD 28,800.00, from 2 December 2014 (day following the termination of Agreement 2); and

˗ on the amount of RUB 4,268.00, from 2 December 2014.

6. Costs

146. 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.

147. On 8 March 2016, 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 11,000.00.

148. Furthermore, Article 17.3 of the BAT Rules states that the award shall grant the prevailing party a contribution towards its reasonable legal fees and expenses incurred in connection with the proceedings.

Arbitral Award 52/54 (BAT 0660/15)

149. Considering that the Claimant prevailed with nearly all of his claims, 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 the Claimant, the latter being reasonable in amount.

150. The value in dispute at the time when the Request for Arbitration was filed (February 2015) was above EUR 30,000. Claimant requests the reimbursement of EUR 10,200.00 (non-reimbursable handling fee EUR 2,000.00 plus legal expenses in the amount of EUR 8,200.00). This amount exceeds the maximum amount provided for in Art. 17.4 of the BAT Rules, which provides that, for a value in dispute between EUR 30,000 and EUR 100,000, the maximum contribution to a party’s reasonable legal fees and other expenses (including the non-reimbursable handling fee) shall not exceed EUR 7,500. Considering that the present case was unusually complex, that Claimant had to undertake major investigations on his own in order to contest Respondent’s allegations, and in light of the fact that Respondent was rather reluctant to cooperate in establishing the facts and the truth of the case, the Arbitrator determines that the maximum amount shall be awarded to the Claimant, i.e. EUR 7,500.00 as a contribution towards Claimant’s fees and expenses.

Arbitral Award 53/54 (BAT 0660/15)

7. AWARD

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

1. Basketball Club Krasny Octyabr is ordered to pay to Mr. Marius Linartas the amount of USD 9,600.00 net for outstanding salary for the months of October and November 2014, plus interest at a rate of 5% p.a. as follows:

a. on the amount of USD 4,800.00 from 1 November 2014, b. on the amount of USD 4,800.00 from 1 December 2014.

2. Basketball Club Krasny Octyabr is ordered to pay to Mr. Marius Linartas the amount of USD 28,800.00 net for damages, plus interest at a rate of 5% p.a. from 2 December 2014.

3. Basketball Club Krasny Octyabr is ordered to pay to Mr. Marius Linartas the amount of EUR 7,500.00 as a contribution towards his legal fees and expenses. Basketball Club Krasny Octyabr shall bear its own legal fees and expenses.

4. Basketball Club Krasny Octyabr is ordered to pay to Mr. Marius Linartas the amount of EUR 5,500.00 as reimbursement for the advance on costs paid by him.

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

Geneva, seat of the arbitration 15 March 2016

Ulrich Haas (Arbitrator)

Arbitral Award 54/54 (BAT 0660/15)