0562 Zouros Vs. BC Zalgiris Kaunas (Public Version)
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ARBITRAL AWARD (BAT 0562/14) by the BASKETBALL ARBITRAL TRIBUNAL (BAT) Mr. Raj Parker in the arbitration proceedings between Mr. Ilias Zouros - Claimant - represented by Mr. Pantelis Dedes, attorney at law, Patriarchou Ioakim Str. 20, 10675 Athens, Greece vs. BC Zalgiris Kaunas Karaliaus Mindaugo Avenue 49, 44333 Kaunas, Lithuania - Respondent - represented by Ms. Jolanta Spakauskaite, attorney at law, Maironio g. 40-1, 44248 Kaunas, Lithuania 1. The Parties 1.1 The Claimant 1. The Claimant is a professional basketball coach of Greek nationality. 1.2 The Respondent 2. The Respondent is a professional basketball club based in Lithuania. 2. The Arbitrator 3. On 9 June 2014, Prof. Richard H. McLaren, the President of the Basketball Arbitral Tribunal (the “BAT”), appointed Mr. Raj Parker as arbitrator (the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (the “BAT Rules”). None of the Parties has raised objections to the Arbitrator’s appointment or to his declaration of independence. 3. Facts and Proceedings 3.1 Background Facts 4. On 10 June 2011, the Claimant signed an employment contract with the Respondent as head coach for the 2011/12 season (“2011 Contract”). On 19 October 2011, the Respondent terminated the 2011 Contract without explanation. The Claimant disputed the termination and referred the matter to BAT for arbitration (BAT 0230/11). Arbitral Award 2/33 BAT 0562/14 5. In an award dated 9 July 2012, the BAT arbitrator found for the Claimant and ordered the Respondent to pay EUR 144,000.00 plus interest to the Claimant for wrongful termination. After the award, the parties entered into a compromise agreement under which the award was to be paid in one down-payment and four subsequent instalments. 6. On 21 June 2013, the Claimant and the Respondent entered into a new contract under which the Claimant was appointed coach of the Respondent for the 2013/14 and 2014/15 basketball seasons (the “Contract”). The Contract contains, amongst others, the following provisions: (i) the term of the Contract was from 21 June 2013 until the last official game of the 2014/2015 season (Art. 1); (ii) the Claimant’s salary was to be EUR 180,000.00 net for the 2013/14 season, and EUR 220,000.00 net for the 2014/15 season. (Art. 3); (iii) the Claimant’s duties included: “(1) arranging for, conducting and supervising the Team’s practices/training; (2) coaching the Team in all team games, games of regular season and playoff games in Lithuanian League, Lithuanian Cup, Euro League, VTB United League, Baltic Basketball League and any other competition or performances that may be required; (3) coaching and operating the Team’s training camp; (4) developing game strategies and scouting opposing teams; (5) consulting, advising with respect to the Team’s roster and player signings; (6) to be an example for the players on and off the court in all respects; Arbitral Award 3/33 BAT 0562/14 (7) to participate in all activities of the Club with a positive outlook and professional manner; (8) to keep up to date with the most recent developments in the sport of basketball with the intention of providing his talents at the service of the Club in order to assure a good performance of the Team; (9) to make his best effort to fully implement all the instructions provided by the administration, the Board of the Club or any authorized person. For the sake of clarity, such instructions may not relate to sporting matters falling within the Head Coach’s duties under this article such as, but not limited to, selection of game strategy, coaching, training etc.” (Art. 2B); (iv) detailed provisions about early termination by the Respondent: “5. Premature Termination by the Club: A. In the event that the Coach commits one of the violations set out in this Article, the Club may terminate the Agreement at any time (but if the violation is remediable, only after giving a 7- day notice following which the violation persists) and without further obligation or liability to Head Coach, if Head Coach: (1) refuses to perform his obligations as Head Coach hereunder or otherwise materially breaches this Agreement; (2) engages in proven dishonest or fraudulent conduct; (3) is convicted for criminal conduct or is the subject of a formal charge of a serious criminal act; (4) misappropriates Club’s funds; (5) abuses alcohol or drugs, which renders him incapable of fully performing any or all of his obligations hereunder to the satisfaction of the Club; (6) engages in grossly unethical business conduct (e.g. match fixing); (7) for any reason directly or indirectly induce[s] or solicit[s] any of the Team players to leave the Club and/or make any Arbitral Award 4/33 BAT 0562/14 actions or attempt or influence in order to induce or solicit any of the player away to leave the Club; B. If the Club terminates this Agreement pursuant to Section 5 A then Club shall have no further obligation or liability to Head Coach, including, but not limited to, no further obligation or liability to provide Basic Salary for termination of the Agreement, or any other compensation or benefits to Head Coach.” (Art. 5); (vii) a non-disparagement clause: “9. Non-disparagement The Head Coach shall not make any disparaging comments concerning Club, any of its employees, its shareholders, sponsors, partners during the Term of this Agreement and thereafter.” (Art. 9); (v) a governing law and dispute resolution clause: “1.1 Governing Law: This Agreement is made and must be construed in accordance with the laws of the Republic of Lithuania. Any dispute arising from or related to the present contract shall be submitted to the Basketball Arbitral Tribunal (BAT) in Geneva, Switzerland and shall be resolved in accordance with the BAT Arbitration Rules by a single arbitrator appointed by the BAT President. The seat of the arbitration shall be Geneva, Switzerland. The arbitration shall be governed by Chapter 12 of the Swiss Act on Private International Law, irrespective of the parties’ domicile. The language of the arbitration shall be English. The arbitrator shall decide the dispute ex aequo et bono.” (Art. “1.1” positioned between Articles 8 and 9); and Arbitral Award 5/33 BAT 0562/14 (ix) the following provision in relation to failure to pay: “12. Club’s failure to pay If any of the Club’s payment to Head Coach is more than 45 days late of payment due date, Head Coach shall give at least 15 (fifteen) days written notice to the Club. In case the Club does not perform all of its outstanding payment obligations within the period indicated in the notice, Head Coach may terminate this Agreement for just cause, leave the Club and pursue other coaching opportunities without surrendering his right to collect all remaining salaries under this Agreement.” (Art. 12) 7. On 28 October 2013, the Respondent served a termination notice on the Claimant pursuant to article 5 of the Contract (“Termination Notice”) because of “ material breaches of the Agreement due to [the Claimant’s] failure to fulfil obligations under the Agreement ”. The Termination Notice stated inter alia that: “In the opinion of the Board, even after a series of discussions and lost games, most instructions were simply ignored, young and promising basketball players were categorically rejected by you, as the Head Coach, despite of [sic] the Club’s policy of young player development.” 8. On the same day, the Claimant rejected the validity of the Termination Notice in writing but ceased acting as Head Coach of the Respondent. 3.2 The Proceedings before the BAT 9. The Claimant filed the Request for Arbitration on 23 April 2014, having paid the non- reimbursable handling fee of EUR 4,000.00 on 17 April 2014. The Arbitrator was appointed on 9 June 2014. 10. On 24 June 2014, the Advance on Costs was fixed at EUR 10,000.00 payable by the Arbitral Award 6/33 BAT 0562/14 Claimant (EUR 5,000.00) and the Respondent (EUR 5,000.00). The Claimant paid his share of the Advance on Costs on 30 June 2014, in advance of the set deadline of 4 July 2014. The Respondent failed to pay its share of his Advance on Costs by the deadline. On 18 July 2014, the Claimant was given until 29 July 2014 to pay the Respondent’s share of the Advance on Costs. On 28 July 2014, the Claimant paid EUR 5,020.00 in respect of the Respondent’s share of the Advance on Costs. 11. On 18 July 2014, at its request, the Respondent was given an extension of time to file its Answer to the Request for Arbitration until 14 August 2014. On 11 August, the Respondent requested a further extension and, on 13 August, the Arbitrator granted a further and final extension for the Respondent to file its Answer by 29 August 2014. The Respondent filed an Answer on 29 August 2014. 12. On 14 October 2014, the Arbitrator asked questions of the Parties (the “First Procedural Order”) and requested responses by 28 October 2014. The Claimant replied in part on 26 October 2014. On the same day, the Claimant’s representative requested an extension to file the remainder of the Claimant’s response. On 28 October 2014, the Arbitrator granted an extension to 7 November 2014 for both Parties. 13. The Claimant filed the remainder of its response on 7 November 2014. The Respondent submitted its response on the same day. 14. On 12 November 2014, the Arbitrator asked further questions of the Parties (“The Second Procedural Order”).