Arbitral Award Basketball Arbitral Tribunal (Bat)

ARBITRAL AWARD

(BAT 1280/18)

by the

BASKETBALL ARBITRAL TRIBUNAL (BAT)

Mr. Stephan Netzle

in the arbitration proceedings between

Mr. Edo Murić - Claimant- represented by Mr. Blaz Bolcar, attorney at law, Cesta IX. Korpusa 46, 5250 Solkan, Slovenia

vs.

Basketball Club Zielona Gora (Grono Spotowa Spolka Akcyjna) 22 Szosa Kiselinska St., 65-247 Zielona Gora, Poland - Respondent - represented by Mr. Alexander Engelhard, attorney at law, Hamburger Allee 4, 60486 Frankfurt am Main, Germany

1. The Parties

1.1. The Claimants

1. Mr. Edo Murić (hereinafter the “Player”) is a Slovenian professional basketball player.

1.2. The Respondent

2. Basketball Club Zielona Gora (hereinafter the “Club”) is a professional basketball club located in Poland.

2. The Arbitrator

3. On 8 November 2018, the Vice-President of the Basketball Arbitral Tribunal (the "BAT"), Prof. Ulrich Haas, appointed Dr. Stephan Netzle as arbitrator (the “Arbitrator”) pursuant to Articles 0.4 and 8.1 of the Rules of the Basketball Arbitral Tribunal (the "BAT Rules"). Neither of the Parties has raised any objections to the appointment of the Arbitrator or to his declaration of independence.

3. Facts and Proceedings

3.1. Summary of the dispute between Player and Club

4. On 30 December 2017, the Player and the Club signed an employment agreement for the rest of the 2017-2018 and the full 2018-2019 basketball seasons (the “Player Con- tract”).

5. On 2 January 2018, the Player assigned his image rights to OROTAVA Sports & Mar- keting SA (“OROTAVA”).

6. On 11 January 2018, the Club entered into an Image Rights Agreement (the “IR Agreement”) with OROTAVA by which the Club obtained a worldwide and exclusive right to use the Player’s image rights for commercial purposes.

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7. By notice titled “Unilateral Contract Termination” dated 3 September 2018, the Club unilaterally terminated the Player Contract. By the same notice, the Club also commu- nicated the unilateral termination of the IR Agreement (the “Termination Notice”).

8. This arbitration is mainly revolving around the question whether the Club had the right to terminate the Player Contract and the IR Agreement based on (i) the Player refusing to follow the Club’s order that he undergo surgery, and/or (ii) the Player allowing a third party to use his picture for commercial purposes, in violation of the exclusive rights granted to the Club.

3.2. The Proceedings before the BAT

9. On 24 October 2018, the Claimant filed a Request for Arbitration in accordance with the BAT Rules, which was received by the BAT on the same date. A non-reimbursable handling fee of EUR 3,000.00 was received in the BAT bank account on 23 October 2018.

10. By Procedural Order of 9 November 2018, the BAT Secretariat confirmed receipt of the Request for Arbitration and informed the Parties about the appointment of the Arbitra- tor. A time limit was fixed for the Club to file its Answer in accordance with Article 11.2 of the BAT Rules by no later than 30 November 2018. The BAT Secretariat also requested that the Parties pay the following amounts as Advance on Costs by no later than 19 November 2018:

“Claimant (Mr. Edo Muric) EUR 6,000.00 Respondent (Basketball Club Zielona Gora EUR 6,000.00”

11. The Respondent filed the Answer by the extended time limit of 7 December 2018.

12. By Procedural Order of 10 January 2019, the BAT Secretariat acknowledged receipt of the full Advance on Costs entirely paid by the Claimant, and the answer to the Request for Arbitration from the Club. The Claimant was granted a time limit to comment on the Respondent’s answer until 24 January 2019.

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13. The Claimant filed his comments on the Respondent’s answer within the extended time limit of 29 January 2019 and requested an “oral hearing” of his medical expert at least by video-conferencing. The Respondent submitted its comments on the Claimant’s further submission on 13 February 2019 and informed the BAT Secretariat that It wished to call three persons to testify in an “envisaged hearing”. By letter of 12 March 2019, the Claimant opposed to the “proposed hearings” of these three persons.

14. By Procedural Order of 13 March 2019, the Arbitrator informed the Parties that he did not find it necessary to hold a hearing but would consult with an independent sports doctor, if considered necessary. Both Parties were explicitly ordered not to make any unsolicited submissions.

15. By Procedural Order of 14 May 2019, the Arbitrator informed the Parties of his final decision not to hold a hearing (in accordance with Article 13.1 of the BAT Rules) and not to consult with an independent sports doctor (in accordance with Article 3.1 of the BAT Rules). Moreover, the Arbitrator declared that the exchange of documents was completed (in accordance with Article 12.1 of the BAT Rules) and requested the submission of cost accounts by 21 May 2019.

16. Both parties filed their accounts of costs on 21 May 2019.

4. The Positions of the Parties

4.1. The Claimant’s Position

17. The Player submits that he suffered ______during an official game of the Club against BC Anwil Wlovlawek on 3 January 2018. He was side-lined until 17 January 2018 when he returned to the team for the official game against BC Sidigas Avellino. On 14 February 2018, the Player underwent an MRI examination.

18. Since then, the Player played in all official games of the Club until the end of the 2017- 2018 season. He also played in all official games of the Slovenian National Team in the FIBA Wold Cup Qualification Window in June and September 2018.

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19. After the summer break, the Player returned to the Club on 12 August 2018. Soon thereafter, he was side-lined and forbidden to participate in the training sessions of the team. On 16 August 2018, the Club requested the Player to have _____ examined. On the same day, the Club notified the Player’s agent about the “Club Doctor’s official con- clusions and recommendations following Edo’s preseason clinical examinations”, namely that “[t]here is a high possibility of further ______in the future. Consideration of the surgical treatment (ATFL) is recommended.”

20. On 21 August 2018, on the Club’s request, the Player was then examined by Dr. Yves Touré, a French expert in foot surgery. In his medical report dated 26 August 2018, Dr. Touré recommended that the Player return to basketball training and that he then be subsequently checked whether “he ______. If so, I will recommend a surgical procedure to repair the ______.”

21. By email of 28 August 2018, the Club advised the Player inter alia that “it has decided that the Player Edo Murić will undergo surgery to repair the injured _____. The procedure shall be carried out within the next few days.”

22. By email of the same day, the Player’s agent made it clear to the Club that the Player had not suffered from any recent ______since the incident of 3 January 2017 and that he was back to training and played since 17 January 2018. The Player’s agent also advised that the Club’s order was not in line with Dr. Touré’s recommendation. Also, Mr. Marko Macura, MD, a member of the medical staff of the Slovenian National Team (“Dr. Macura”), who had examined the Player during the summer, had concluded that there was no indication for surgical treatment. The Player should therefore not stop practicing.

23. The Club replied, on 29 August 2018, that it was in “the Club’s best sport interest for this coming season (that) we cannot afford ourselves to wait for the bad to happen, and to lose your Client at anytime inside the season.”

24. By email of 31 August 2018, the Club sent two documents to the Player, namely the medical opinion of the Club’s doctor Maciej Siankowski and a draft agreement titled

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“Player-Agent Declaration”. In the medical opinion, Dr. Siankowski concluded: “In the current situation, I see only one solution. I suggest leaving the decision to performed or not performed the surgery to the player himself.”

25. By the “Player-Agent Declaration”, the Club requested the Player to accept that any aggravation of his injury would entitle the Club to unilaterally and immediately terminate the Player Contract and the IR Agreement. If the Player would not sign the Player- Agent Declaration, he would “stay aside from the team’s practices and games of the 2018-19 season and preseason and [would] be considered as non-present during practices and games.” The Player and the Agent did not sign the Player-Agent Declaration.

26. There was further communication between the Club and the Player’s agent, which cul- minated in the Club’s “Notification of the possibility of the Agreement Termination” of 3 September 2018, by which the Club declared that considering the Player’s refusal not to undergo surgery and not to sign the Player-Agent Declaration, “the Club will have no other choice than to terminate the Agreement.”

27. When the Player rejected the Club’s allegations, the latter terminated the Player Con- tract and the IR Agreement by the Termination Notice of the same day.

28. The Player was not injured and fit to play, as the following circumstances confirm:

a. The Player was not injured when he joined the Club in December 2017. He suffered a ______on 3 January 2018, but returned to practice and playing matches on 17 January 2018 for both the Club and the Slovenian National Team. The finding of Dr Tourné made on 14 August 2018 according to which the Player “has ______” is wrong. It is probably based on false information provided from the Club. The two alleged injuries in February and March 2018 were nothing more than ______which required a break from sports activities and medical treatment.

b. The Club never sent the Player to any orthopaedic consultation after the MRI scan on 14 February 2018 and/or ultrasound examination on 26 March 2018.

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c. It is not true that the Player had a ______. He played all games after 26 March 2018, i.e. 16 games with the Club in the Polish league and several matches with the Slovenian National Team.

d. After the Player was sent back home, he underwent a medical examination of his ______on 5 September 2018. This examination by Dr. Macura confirmed “the same ______in question as the MRI performed on June 10th 2018 in Slovenia and the one performed in Poland on Aug 16th 2018.” Therefore, ______were without evident pathology, and the Player was given clearance to play the games with the Slovenian National Team.

e. Dr Tourné, who had been mandated by the Club, recommended, after having examined the Player, that the latter should start with basketball training, and only if the health condition would deteriorate, to consider surgery. The Club did not follow Dr. Tourné’s recommendation but insisted on immediate surgery.

f. The Club did not request the Player to undergo surgery right after the end of the 2017/18 season but only upon his return to the Club for the start of the 2018/19 season.

g. The Player did not breach his contractual obligation to undergo medical examination in case he suffered from any injury, as requested by Article 7 para. 2 of the Player Contract. He did not suffer any injury except the one on 3 January 2018, after which he followed the requested medical examination and treatment and returned to practice and play.

29. The Club forced the Player to undergo surgery. Later, indirect force was used when the Club urged the Player to sign the “Player-Agent Declaration” by which he would have assumed full responsibility for his health condition and accepted that any aggravation of his injury would entitle the Club to terminate the Player Contract and the IR Agree- ment. If the Player would not sign the Player-Agent Declaration, he would no longer participate in the team’s practices and games of the 2018-2019 season and preseason.

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Forced medical treatment constitutes a violation of Article 8 of the European Human Rights Convention.

30. The Player assigned his image rights to OROTAVA, which then granted the Club an exclusive, worldwide license to use these rights. However, the IR Agreement was concluded only because of tax considerations and not for actually licensing the Player’s IP rights to the Club. Hence, the payments under the IR Agreement are subject to the same conditions as those under the Player Contract.

a. The Player was entitled to EUR 200,000 as a guaranteed net base salary for the 2018-2019 season.

b. It was agreed that EUR 190,000 would be paid to the Player in 10 instalments by OROTAVA and the rest directly by the Club.

c. The Club was obliged to pay to OROTAVA EUR 84,000 plus a service fee of 6% for the 2017/18 season and EUR 190,000 plus a service fee of 6% for the 2018/19 season. OROTAVA then undertook to forward the salary share to the Player.

d. If the Club would have had to pay the entire salary directly to the Player, its total costs would have amounted to EUR 345,717.35 gross. By diverting the payments through OROTAVA and declaring these payments as compensation for the image rights, the total costs for the Club were only EUR 215,679, namely EUR 201,400 to OROTAVA and EUR 14,270 as costs for the direct payment of the salary. Thus, the Club benefitted of approximately EUR 130,000 in the 2018- 2019 season and of approximately EUR 31,510 in the 2017-2018 season.

e. The Club was never genuinely interested in the Player’s image rights and it never used them with the exception of some social media posts. In particular, the Club did not market the Player’s image rights, e.g. with sponsors or suppliers.

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31. The Player acknowledges having entered into a separate endorsement agreement with the sports nutrition company Polleo Sport, which is not present in Poland or any other market where the Club operates. Polleo Sport was therefore not a competitor of any of the Club’s sponsors or suppliers and the Player had not been in breach of the IR Agreement.

32. After the termination of the Player Contract, the Player contacted many clubs all over Europe to find a new employment. He eventually signed a new player agreement for the rest of the 2018/19 season with BC Cedevita in Zagreb, Croatia.

4.2. The Claimants’ Request for Relief

33. The Request for Arbitration of 24 October 2018 contains the following Request for Re- lief:

“Claimant requests

 All monies according to the Agreement – salary for the 2018/19 season in the amount of EUR 200.000,00 net

 Interests running from 13 September 2018 at 5% per annum  All costs related to the BAT proceedings (non-reimbursable handling fee, advance on costs, etc.),

 Legal fees and expenses in relation to BAT proceedings.”

34. In his Reply of 29 January 2019, the Player accepted that his actual salary of EUR 72,000 net which he agreed with his new club BC Cedevita may be deducted from the compensation claimed from the Club.

35. In addition, the Player requested that Dr. Marko Macura be heard on the issue of the medical reports presented in this proceeding and the status of Claimant’s ______.

4.3. The Respondent’s Position

36. The Respondent submits that the Player was unfit to play basketball at the highest level for most of the 2017/2018 season after he sustained a ______in January 2019

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and further ______in the following months. He missed several important matches and averaged a mere 13 minutes per game or even less during this time. A star like the Player is expected to play an average of 30+ minutes per game. It is wrong of the Player to assert that he played on all and any official games of the Club until the end of the season 2017/2018, that the injury was not severe, that he never had a ______, that since his return to the team on 17 January 2018 he did not suffer from any further _____ and that he never sustained a ______. The Player also confirmed in media in- terviews that he had constant problems with injuries and was not hundred percent ready to play at his best level.

37. The Player omits his ______in February and March 2018. The ultrasound examination of 4 January 2018 showed that an ______. Further medical examinations, including an MRI, followed. Based on the MRI and the ultrasound examination results, the aggravation of the injury and the poor self-healing of the ______, the Club’s doctor Siankowski suggested to the Player to consider surgical treatment in the off-season, which the Player refused.

38. The Club relies on the medical examinations and reports from Dr. Tourné and Dr. Siankowski and the reports from the various medical examinations, including ultrasound and MRI between 4 January and 26 August 2018. The clear conclusion was that the Player should undergo surgery of his _____. The Player was however stubbornly refusing surgery which could have meant that his career would come to an end. With- out the surgery, the Club concluded that the risk of the Player getting injured again was too high, especially as both Parties were warned by the doctors that another injury could have long term consequences for the Player.

39. Also the medical examinations that the Player underwent after the termination of the Player Contract in Slovenia did not render any of the advice or recommendation given by the Club’s doctor unreasonable.

40. When the Player returned to the Club for the 2018/19 season, he failed to pass the medical entry test.

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41. When the Player continued to refuse to undergo surgery, the Club urged the Player to sign the Player-Agent Declaration by which the Player had to assume responsibility for the consequences not to follow the reasonable medical advice of Dr. Tourné and Dr. Siankowski.

42. Furthermore, the Player breached the IR Agreement with the Club, which exposed the Club to damage claims from two of its sponsors. The Club notified the Player on 1 Sep- tember 2018 about the multiple violations of the IR Agreement, when the Player signed an endorsement deal with Polleo Sport, appearing in various marketing campaigns of that company. The Club therefore reserves the right to claim damages against the Player for any future financial losses it may incur because of such breach due to claims by its sponsors.

43. The Club does not dispute that the Player’s entire monthly salary was EUR 20,000 covering both, the compensation for his services as a player with the Club’s team and the transfer of his image rights to the Club.

44. The Player was given the opportunity to remedy the breaches but chose not to collabo- rate with the Club, ultimately leaving the Club with no other option but to terminate the Player Contract.

45. The Player has violated several provisions of the Player Contract, namely Article 5.2 c) (“The Player shall comply with reasonable advices of the Club’s doctor”), Article 7.2 (“Should the Player suffer any injury, he shall submit himself to a medical examination and treatment by a physician designated by the Club”), Article 9.1 (“The Agent of the Player yields the image rights of the Player to the Club and Intermarche-Burza sp. z. o.o.”), Article 5.2, lit. d) (“The Player shall give (…) his loyalty to the Club”) and Article 5.2, lit. g) (“The Player shall not intentionally do anything which is materially detrimental to the best interests of the Club”). While the Player Contract contains no explicit termination right as a consequence of any of the above violations, BAT jurisprudence has recognised that a club might still be entitled to an immediate termination if the breach to

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be sanctioned was substantial and the player was given a chance to remedy the alleged breach (BAT 0154/11, para. 88).

46. Even if the Sole Arbitrator came to the conclusion that the Player Contract was terminated without just cause, the Player’s violations of his contractual obligations must be taken into consideration. The Player was predominantly responsible for the deteriora- tion of the Parties’ employment relationship and ultimately the termination of the Player Contract. The Player’s damage claim must therefore be considerably reduced.

47. The Player also failed to mitigate his damages since he did not sign for a new club after the termination of the Player Contract although having ample time to do so. The poten- tial alternative income which the Player failed to earn after the termination of the Player Contract must also be deducted from any compensation awarded to the Player. When the Player eventually signed a new player agreement, he accepted a salary which was not reflecting his actual market value.

48. The Club also rejects any allegations made by the Player that the Club did not secure an apartment for the Player because it planned to terminate the Player Contract. It was the Player himself who decided not to stay in the same apartment in the 2018/19 season in which he was staying during the 2017/18 season. The Club made several offers but the Player rejected all of them.

4.4. The Respondent’s Request for Relief

49. In its submission of 13 February 2019, the Respondent requests the following:

“1. The Player’s claims shall be dismissed in their entirety. 2. The Player shall pay the costs of the arbitration proceeding as well as the maximum contribution under the BAT Rules towards the Club’s legal fees and expenses, which will be submitted to the BAT at a later stage of the proceedings.”

50. The Respondent considers a hearing unnecessary. However, if a hearing is held, the Respondent offers Dr. Maciej Siankowski as a witness to explain his medical reports and comment on why he advised the Player to undergo surgery. In its rebuttal, the Club

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also offers the team captain Mr. Lukasz Koszarek and the assistant coach Mr. Arkadi- usz Miloszewski as witnesses to confirm that the Player missed some training sessions and matches in the 2018/19 season.

5. Jurisdiction

51. 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).

52. The jurisdiction of the BAT presupposes the arbitrability of the dispute and the exist- ence of a valid arbitration agreement between the Parties.

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

54. The jurisdiction of the BAT over the dispute results from the arbitration clause con- tained in Article 15 of the Player Contract. It provides for the standard BAT arbitration clause with the following wording:

“Any dispute arising from or related to the present contract shall be submitted to the Basket- ball Arbitral Tribunal (BAT) in Geneva, Switzerland and shall be resolved in accordance with the BAT Arbitration Rules by a single arbitrator appointed by the BAT President. The seat of the arbitration shall be Geneva, Switzerland. The arbitration shall be governed by Chapter 12 of the Swiss Act on Private International Law [PIL], irrespective of the parties’ domicile. The language of the arbitration shall be [in] English. The arbitrator shall decide the dispute ex aequo et bono.”

55. The Player Contract is in written form and thus the arbitration agreement fulfils the for- mal requirements of Article 178(1) PILA.

56. The Arbitrator considers that there is no indication in the file which could cast doubt on the validity of the arbitration agreement under Swiss law (referred to by Article 178(2) PILA). In particular, the wording “[a]ny dispute arising from or related to the present

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contract” in the above-mentioned articles of the respective contracts cover the present dispute. In addition, the Club explicitly accepted the jurisdiction of the BAT.

57. For the above reasons, the Arbitrator finds that he has jurisdiction to adjudicate Claim- ant’s claims.

6. Applicable Law – ex aequo et bono

58. With respect to the law governing the merits of the dispute, Article 187(1) PILA provides that the arbitral tribunal must decide the case according to the rules of law chosen by the Parties or, in the absence of a choice, according to the rules of law with which the case has the closest connection. Article 187(2) PILA adds that the Parties may authorize the Arbitrators to decide “en équité” instead of choosing the application of rules of law. Article 187(2) PILA is generally translated into English as follows:

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

59. 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.”

60. In all relevant contracts, the Parties have explicitly directed and empowered the Arbitra- tor to decide this dispute ex aequo et bono. Consequently, the Arbitrator will decide the issues submitted to him ex aequo et bono.

61. 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 of 19691 (Concordat),2 under

1 That is the Swiss statute that governed international and domestic arbitration before the enactment of the PILA (governing international arbitration) and, most recently, the Swiss Code of Civil Procedure (governing domestic).

2 KARRER, in: Basel commentary to the PILA, 3rd ed., Basel 2013, Article 187 PILA N 290.

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which Swiss courts have held that “arbitrage en équité” is fundamentally different from “arbitrage en droit”:

“When deciding ex aequo et bono, the arbitrators pursue a conception of justice which is not inspired by the rules of law which are in force and which might even be contrary to those rules.”3

62. In substance, it is generally considered that the arbitrator deciding ex aequo et bono receives

“the mandate to give a decision based exclusively on equity, without regard to legal rules. Instead of applying general and abstract rules, he must stick to the circumstances of the case at hand”.4

7. The Claimant’s request to hold a hearing

63. The Player requested a hearing and that Dr. Macura, who examined him at least twice, be called as a witness. The Club did not object to this request and offered the testimo- ny of its team doctor, the team captain and the assistant coach as witnesses, in case a hearing would be held.

64. Having carefully considered the Player’s request as well as the record before him, in accordance with Article 13.1 of the BAT Rules, the Arbitrator finds that there is no need to hold a hearing since the medical reports on the Player’s medical status are compre- hensive. The main questions are of a legal rather than medical nature, namely whether the Player’s refusal to undergo surgery must be considered as a breach of the Player Contract, which entitled the Club, together with the asserted violation of the IR Agree- ment, to unilaterally terminate the Player Contract and the IR Agreement. The Arbitra- tor also does not find it necessary to hear the team captain and the assistant coach about the Player’s participation in the matches of the Club’s team since this is docu- mented in the publicly available team statistics.

3 JdT (Journal des Tribunaux), III. Droit cantonal, 3/1981, p. 93 (free translation).

4 POUDRET/BESSON, Comparative Law of International Arbitration, London 2007, N 717, pp. 625-626.

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65. In light of the foregoing, the Arbitrator makes the following findings:

8. Findings

8.1. The issue

66. The main issue in this arbitration is whether the Club was entitled to unilaterally terminate the contractual relationship with the Player because of the Player’s refusal to undergo surgery of his ______and to sign the Player-Agent Declaration, and his breach of the exclusivity clause in the IR Agreement.

8.2. The relevant facts concerning the Player’s injury

67. The following facts result from the written evidence submitted by the parties:

a. On 30 December 2017, the Player and the Club signed the Player Contract covering the rest of the season 2017/18 and the full season 2018/19.

b. On 3 January 2018, the Player suffered a _____ during an official game against BC Anwil Wloclawek. Due to this injury, he was sidelined for the next two weeks, i.e. until 17 January 2018. He continued participating in the team’s practice sessions and games thereafter.5

c. On 4 January 2018, the Player underwent an ultrasound examination which showed that an ______.

d. During a practice on or before 14 February 2018, the Player ______, which he reported to the Club doctor, Dr. Maciej Slankowski. On 14 February 2018, he

5 The Player did not participate in three games of the Club on 17 February, 1 May and 3 May 2018. The Club asserts that he was not playing because of the ______, while the Player submits that the coach had not fielded him for other reasons which had nothing to do with his physical condition.

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underwent an MRI which showed a ______. The Player asserts that he never received the respective medical report.

e. On or before 26 March 2018, the Player ______. He underwent another ultrasound examination on 26 March 2018, which showed a ______. The Player asserts that he did not receive the respective medical report either. He continued training and playing with the Club’s team and the Slovenian Na- tional Team.

f. Between 3 January and 29 May 2018, the Player participated in 23 games in the Polish league (including the final games) and 6 games of the Basketball Champi- ons League. In addition, he played four times with the Slovenian National Team between 23 February and 1 July 2018. According to Dr. Macura, prior to the Player’s engagement in the Slovenian National Team, an MRI was performed on his ______which showed a ______. The Player performed normally without reported problems through preparations and also in both qualifying games against Spain (28 June 2018) and Montenegro (1 July 2018).

g. On 14 August 2018, before the start of the 2018/19 season, the Player underwent a routine medical examination like all other players of the Club’s team prior to the start of the new season. Team doctor Dr. Siankowsky diagnosed the Play- er with “______”, and concluded that “[t]here is a high possibility of further ______in the future. Consideration of the surgical ______is recommended.”

h. The Club then solicited a second opinion from Dr. Tourné, who examined the Player on 21 August 2018. He reported “______” and recommended to start training basketball again. “An interview with him will appreciate if his _____ is going well or if he has ______. If so, I will recommend a surgical procedure to repair the ______. (…)” The Player denies having suffered any ______recently, i.e. after those addressed in para. b, d and e before.

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i. On 28 August 2018, the Club’s supervisory board discussed the Player’s case and concluded that it was best for the Club and the Player to undergo surgery of the _____ immediately. On the same day, the Player’s agent rejected the Club’s proposal. The exchange of emails continued on the next day. The surgery date was set on 5 September 2018, with a prior medical consultation on the day before.

j. On 30 August 2018, the Club’s doctor submitted another medical report on the physical condition of the Player, based on the documents available but not on another medical examination. Again, he advised considering surgery, but also stated that “(…) I am aware that the decision about treatment must be voluntary and conscious, and as a doctor, I can only express my doubts and opinions.” This still did not convince the Player, who refused surgery again.

k. On 31 August 2018, the Club then requested the Player to sign the Player-Agent Declaration by which the Player and the Agent would take the full responsibility of consequences of any aggravation of injury to his _____ suffered during the course of the Player Contract. The Player did not sign the Player-Agent Declara- tion.

l. On 3 September 2018, the Club warned the Player by a letter titled “Notification of the possibility of Agreement Termination” and announced that it would have to terminate the Player Contract if the Player would continue to refuse the recommended surgery or to sign the Player-Agent Declaration. On the same day, the Player’s agent replied that the Player would not give in.

m. Later on 3 September 2018, the Club sent a termination notice (“Unilateral Con- tract Termination”) to the Player, which states, inter alia:

“Pursuant to Article 13, paragraph 2 of the Agreement (hereinafter the “Agreement”) between Mr. Edo Murić (hereinafter the “Player”) and Grono Sportowa Spólka Akcyjna (hereinafter “the Club”), dated December 30th, 2017, I hereby terminate the said Agreement, on Player’s fault, due to repeated breach of the following provisions of the agreement by the Player:

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1. Article 5.2, paragraph c) The Player shall comply with reasonable advices of the Club’s doctor.

2. Article 7, paragraph 2 Should the Player suffer any injury, he shall submit himself to a medical examination and treatment administered by a physician designated by the Club. […] 3. Article 9, paragraph 1 The Agent of the Player yields the image rights of the Player to the Club and Intermarche - Burza sp. z. oo..

4. Article 9, paragraph 2 The Club and Intermarche - Burza sp. z. oo. get the right to use in exclusive on their benefit or grant the image rights of the Player to thirds during the period of this contract.

5. Article 5.2, paragraph d) The Player shall give (…) his loyalty to the Club. 6. Article 5.2, paragraph g) The Player shall not intentionally do anything which is materially detrimental to the best interests of the Club. […]

Pursuant to Article 6, paragraph b) and c) of the Image Rights Agreement (hereinafter the “Image Agreement”) between Grono Sportowa Spólka Akcyjna and Orotava Sports & Marketing SA, dated January 11th, 2018, I also hereby terminate the said Im- age Agreement, on Player’s fault, due to repeated breach of the following provisions of the Image Agreement by the Player: 1. Article 1, paragraph A [Worldwide and exclusive license of the Player’s image rights by OROTAVA to the Club; use of name, voice and image of the Player by various ways] 2. Article 1, paragraph B [Worldwide and exclusive license of the Player’s image rights by OROTAVA to the Club; placing any kind of advertising, signs, anagrams, logo- types and/or distinctive marks of commercial firms on sportswear used by the Play- er in sports events, training sessions or social events] 3. Article 1, paragraph C [Worldwide and exclusive license of the Player’s image rights by OROTAVA to the Club; right to enter into any kind of agreement with third parties and collecting as the Club’s own any image right income stemming from any contracts, covering movies, advertising, commercials, videoclips etc.] 4. Article 3 The present agreement will become effective on 11th January 2018 and will remain in force until 30th June 2019. […]”

In the Termination Notice, the Club also speculated that the Player had created troubles with the Club on purpose, with the goal to provoke an early termination of the Player Contract by the Club, to collect the full value of the contract and to move to another club.

n. On 4 September 2018, the Player responded to the Termination Notice, to which the Club did not reply anymore.

Arbitral Award 19/38 (BAT 1280/18)

o. On 5 September 2018, the Player underwent another MRI examination and, on 11 September 2018, a further medical examination by Dr. Macura, who concluded that he saw “no indication for surgical reconstruction of ______and the player is ready to practice.”

p. On 14 December 2018, the Player (through his agent) signed a player contract with Basketball Club Cedevita, Zagreb, Croatia, for the rest of the season 2018/2019. From 22 December 2018 until 7 April 2019, he played 14 games in the ABA League and, from 14 September 2018 until 25 February 2019, 6 games with the Slovenian National Team.6

68. The Arbitrator summarizes that on 3 January 2018, the Player was indeed affected by an injury of his ____. After a recovery break of 14 days in January 2018, he was suffi- ciently fit to resume practicing and playing matches for the Club and also the Slovenian National Team throughout the season 2017/18. In February and March 2018, the Play- er ______twice, but both ultrasound examination and MRI did not reveal an injury which required medical immediate intervention or a timeout. No further incidents have been reported, except two or more _____, but no injury which required further medical intervention.

69. It was in the context of the pre-season routine medical examination of all team members in the second week of August 2018 when the Player’s ______was given closer attention, which led to concerns at the Club that the Player’s ______would not be stable enough to last the entire upcoming season 2018/19. After some rather cautious medical recommendations to take surgery into consideration if and when the Player felt unstable, the Club concluded that it was mandatory that surgery was carried out before the start of the new season, because it wanted to minimize the risk that the Player would suffer another injury under the pressure of hard training and demanding games and would then be out for a longer time or even for the rest of the season 2018/19. When the Player refused to undergo surgery of the _____, which he believed was not

6 https://basketball.eurobasket.com/player/Edo_Muric/Croatia/KK-Cedevita-Zagreb

Arbitral Award 20/38 (BAT 1280/18)

seriously injured, and also refused to accept full responsibility for all possible consequences if his _____ got worse, the Club terminated his employment. The Player eventually found a new club (BC Cedevita Zagreb) for which he continued to play in the season 2018/19, as well as with the Slovenian National Team.

8.3. The relevant facts concerning the Player’s alleged breach of the IR Agreement

70. Undisputedly, the Player entered into an endorsement agreement with sports nutrition company Polleo Sport while his image rights were still exclusively controlled by the Club. The Player does not dispute that during the term of the Player Contract and the IR Agreement, he appeared in some advertising material of Polleo Sport. This was no- ticed by two of the Club’s sponsors, who lodged complaints with the Club.

8.4. Termination of the Player Contract

71. Article 13 of the Player Contract provides the following:

“Article 13. Ending of the Agreement 1. This Agreement shall be deemed ended upon expiration of its term or termination. 2. This Agreement can be terminated prior to its term by the mutual consent of the parties, or unilaterally by any of the parties in cases stipulated in this Agreement. Unilat- eral termination of the Agreement shall become effective 7 (seven) days after the written notice of such termination was delivered to the other party, provided that the prem- ises of the agreement’s termination will not be removed during that period. 3. The Club agrees that at the conclusion of the term of this Agreement, or if this Agree- ment is terminated earlier by either of the parties, all of the Player’s rights shall revert back to Player and Club shall not receive any remuneration for these rights from Player or any other professional basketball club. In addition, Player shall be free to sign with another Club and play anywhere in the world. Club will provide Player with an uncondi- tional release at the conclusion of this Agreement.”

72. The Player Contract lists only a few duties and obligations of the Player which may explicitly be sanctioned by the unilateral termination of the Player Contract in case of non-compliance, namely alcohol abuse and the use of prohibited substances (Article 5.3), four or more sanctions in a row because of unsportsmanlike behaviour by the Polish Basketball Federation, the Polish Basketball League, FIBA, FIBA Basketball Champions League or Euroleague Basketball or arrest of the Player for delinquent acts

Arbitral Award 21/38 (BAT 1280/18)

or the use and/or trafficking of illegal substances (Article 5.4), and the Player’s inability to provide his service because he engaged in sports endangering his health or safety (including, but not limited to, snow and water skiing, professional boxing or wrestling, motorcycling, moped riding, auto racing, sky-diving and gliding) without a prior consent of the Club (Article 8).

73. While according to Article 5.2 of the Player Contract, the Player is also obliged to “(a) report at the time and place fixed by the Club in good physical condition; (b) keeping himself in good physical condition throughout the season; (c) comply with reasonable advices of the Club’s doctor; (d) give his best services, as well as his loyalty to the Club; (…) (g) not intentionally do anything which is materially detrimental to the best interest of the Club”, failure to do so does not explicitly entitle the Club to unilaterally terminate the Player Contract.

74. Hence, neither the violation of the Player’s obligation to comply with the recommendations of the team doctor nor the violation of the provisions on the Image Rights (Article 9) are reasons which justify a unilateral termination according to the Player Contract.

75. The Club submits that the list of reasons which would justify a unilateral termination of the Player Contract is not exhaustive but exemplary only. It followed from general principles of law that a party may unilaterally terminate an agreement at any time for cause, “if under the given circumstances the terminating party cannot reasonably be expected to continue the employment relationships.” The Club also refers to BAT 0154/11 which allegedly supports the principle of termination of a player contract for cause at any time, even if the specific reason for the termination was not mentioned in the contract. In BAT 0154/11, the club unilaterally terminated the player contract because the player had refused “to see a trauma doctor in order to undergo a medical re- vision.” The BAT held, that it was unclear whether the club’s termination right was limited to the reasons explicitly mentioned in the player contract, which did not include the obligation to follow the club’s orders relating to medical issues: “In any event, the immediate termination of the Player Contract is the ultimate sanction reserved to the Club: the principle of proportionality requires that the breach to be sanctioned must be

Arbitral Award 22/38 (BAT 1280/18)

substantial and the Player must have been given a chance to remedy the alleged breach before the Club is taking recourse to the right to terminate the Player Contract.” In that case, the BAT found that these requirements had not been met.

76. The Arbitrator does not rule out that the Club may take recourse to unilateral termination of the Player Contract for cause, even if the respective grounds are not explicitly mentioned in the Player Contract. However, considering the principle of pacta sunt servanda and the principle of proportionality, the respective threshold is very high and the reasons for unilateral and immediate termination must be truly exceptional.

77. It is also not enough for the Club to accumulate two or more reasons which would not justify an early termination if considered alone, except where there is a behavioural pat- tern of the Player which objectively makes cooperation impossible.

78. The Club justifies the unilateral termination by three grounds: (1) the Player’s refusal to undergo surgery of his ______, (2) the Player’s refusal to sign the Player-Agent Declaration, and (3) the Player’s violation of the exclusivity rights of the IR Agreement.

8.4.1. The Player’s refusal to undergo surgery of his ______

79. The Club explicitly refers to Article 5.2 para. c) (“The Player shall comply with reasonable advices of the Club’s doctor”) and Article 7 para. 2 of the Player Contract (“Should the Player suffer any injury, he shall submit himself to a medical examination and treatment administered by a physician designated by the Club”). Again, none of these provisions explicitly entitle the Club to unilaterally terminate the Player Contract, if violated.

80. When the Player ______on 3 January 2018, he submitted himself to medical examination and treatment. Two weeks later, he was considered fit to play again and returned to the Club’s team and played for the rest of the 2017/18 season. There is no evidence on record that surgery was even considered at the time of the injury of 3 Jan- uary 2018 or during the rest of the 2017/18 season.

Arbitral Award 23/38 (BAT 1280/18)

81. The option of a surgery was raised only in the context of the routine medical examination of all team members after the summer break and before the beginning of the 2018/19 season. However, also then, neither the team doctor Dr. Maciej Siankowsky nor external expert Dr. Yves Tourné unconditionally advised to immediately undergo surgery. Their recommendations were rather cautious. Dr. Siankowsky stated that “[t]here is a high possibility of further ______in the future. Consideration of the surgical treatment ______is recommended”. On 30 August 2018, Dr. Siankowsky’s position was even more cautious. He stated, inter alia: “In light of the above facts, I think that making the right decision is very difficult. Considering the medical history of the player from last season (…) I’m afraid that the decision to return to full training is associated with a high risk of re-injury _____. (…) I want to notice, however, that I care only about the health and safety of the player, and therefore insist on considering once again the option of surgical treatment. At the same time, I am aware that the decision about treatment must be voluntary and conscious, and as a doctor I can only express my doubts and opinions. In the current situation, I see only one solution. I suggest leaving the decision to performed or not performed the surgery to the player himself. (…) As a doctor I will fully accept the decision of the player and I assure readiness to help and treat regardless of the decision of the player Edo Murica.” In a similar way, Dr. Tourné wrote on 26 August 2018: “For the moment I recommend he starts again basket-ball training. An interview with him will appreciate if his ______is going well or if he has ______. If so, I will recommend a surgical procedure to repair the ______(…) I am fully open to for discussion. I totally agree with you that a recurrent ______will lead to surgery to protect the outcome at the ______.”

82. It was rather the Club’s management and not the Club’s doctor that ultimately requested the Player to undergo surgery, for which a date had already been fixed. In its email of 29 August 2018, the Club makes clear that it requests surgery not as an urgent medical measure to restore the Player's state of health, but as a precautionary measure to reduce the risk of a later injury and the associated absence of the Player from the team. The Arbitrator has little understanding for the Club’s demand, since the Player Contract already addresses the risk of the Player’s absence due to injury, namely by a

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salary decrease depending on the duration of the absence (Article 4, last paragraph on p. 9):

“In case of an injury incurred by the Player and coming from executing this Agreement which will make the Player unable to execute this agreement for longer than 14 days, the Club will keep paying his salary decreased according to the percentage below, related to monthly instalments in proportion to the period of being unable to perform the Agreement: - in the first two months Player will receive 100% of the contractual remuneration

- in the next two months Player will receive 75% of the contractual remuneration - in the fifth and following months Player will receive 50% of the contractual remuneration.”

83. Any surgery comes with certain risks. That is why doctors have a strict duty to inform the patient before the latter takes a (learned) decision. It is rather naïve to believe that a surgery of an ______is as risk-free as tightening a lose screw on a bicycle. Also here, the facts in BAT 0154/11 may serve as an illustrative example of such risks because it deals with medical issues appearing following the surgery of a player’s knee. Hence, it is understandable why the Player was reluctant to undergo surgery while he was considered fit to play, and why all doctors involved provided differentiated opinions and recommended surgery only upon worsening of the Player’s health status.

84. The Arbitrator, therefore, finds that the Player did not violate Article 5.2 para. c) and/or Article 7 para. 2 of the Player Contract, since he never refused to undergo medical examination and treatment when he ______on 3 January 2018 and since the Club’s order of 29 August 2018 to undergo surgery of his ______was not a “reasonable advice by the Club’s doctor” but a precautionary demand by the Club’s management for business reasons without immediate medical urgency, which did not necessarily comply with the medical opinions, even of the Club’s own advisors.

8.4.2. The Player’s refusal to sign the Player-Agent Declaration

85. The Club also accuses the Player of not having signed the Player-Agent Declaration when he continued to refuse to undergo surgery. The Player-Agent Declaration was not a general assumption of risks by the Player but restricted to those risks that related to the worsening of his injured ______.

Arbitral Award 25/38 (BAT 1280/18)

86. The Player-Agent Declaration proposed by the Club reads as follows:

“Whereas: 1. The Basketball Club Stelmet Enea Zielona Góra, operated by "Grono Sportowa Spólka Akcyjna" Company (hereinafter the "Club"), has completed all formalities and requirements in helping the Player Edo Murić (hereinafter the "Player") in a full recovery of his ___; 2. The Club has arranged all the necessary medical examinations & consultations;

3. The Club has secured all ambulatory and hospital treatment options; 4. The Player and his Agent Nikša Tarle (hereinafter the "Agent") decline to answer the Club's communication dated August 29th, 2018 in which Club requests the Player's position regarding the surgery and it's date;

5. The Player declines to comply with Article 2, paragraph C of the agreement dated De- cember 30th, 2017, signed between him and Grono Sportowa Spólka Akcyjna;

Article 1. 1. The Club agrees for the Player to return to practicing with the team and to leave to play for the National Team of Slovenia during the 4th FIBA World Cup Qualifiers' Window upon signing the hereby declaration by the Player and his Agent, stating that the Player and the Agent take the full responsibility of consequences of any aggravation of injury to ______suffered during the course of the agreement signed between the Player and the Club, dated December 30th, 2017. 2. The declaration shall be fully signed and delivered to the Club by 16:30 CET on Friday, August 31st, 2018.

Article 2. 1. If the Player and his Agent fail to sign the hereby declaration, the Player will stay aside for the team's practices and games of the 2018-19 basketball season and preseason, and will be considered as non-present during practices and games.

Article 3. 1. Any aggravation of the injury on the Player's _____ before or during the 2018-19 basketball season will entitle the Club to a unilateral termination of all the agreements signed with the Player, the Agent, and the Player's Image Company Orotava Sports & Marketing S.A., with no compensation towards the Player, Agent nor Player's Image Company, that - in the respective agreements - is set after the reported day of the injury aggravation. 2. In case of the injury aggravation the Player will be fully responsible for treatment and rehabilitation costs.”

87. The Player-Agent Declaration constituted a proposal to amend the Player Contract: It seeks to shift the risk that the injury of the ______might worsen to the Player. While under the existing Player Contract, the Player’s absence due to injury entitled the Club at least to a reduction of the salary, the Player-Agent Declaration would have allowed

Arbitral Award 26/38 (BAT 1280/18)

the Club to immediately terminate the Player Contract and the IP-Agreement (Article 3). The Player also had to accept that he had to bear the medical costs for the treatment of his ______while under the existing Player Contract, such costs had to be borne by the Club. There is no obligation of a party to accept such a change of the terms agreed to. Objecting to a proposed amendment of the Player Contract does not by itself constitute a breach of contract, which would entitle the Club to exclude the Player from practice and matches. Without the Player’s signature, Article 2 of the Player-Agent Declaration is simply invalid and unenforceable.

88. As a result, the Player’s refusal to accept an amendment to the Player Contract in the form of the Player-Agent Declaration cannot be considered a breach of the Player Con- tract. The Arbitrator also finds that the Player’s refusal does not constitute a breach of his duty of loyalty to the Club. It is a known fact that professional players risk to get injured. When the Parties signed the Player Contract, they addressed this risk and agreed on a solution which is comparably beneficial to the Club. Instead of a fully guaranteed contract which ensures full payment of the salary also when the player cannot play due to injury as it is common in professional basketball, the Club and the Player agreed on deductions, depending on the length of his absence from training and matches. It is not a sign of disloyalty when the Player refused to accept an amendment of the Player Contract that was beneficial to the Club only, just because the latter was afraid that the injury risk had increased because of an earlier injury during a match with the Club’s team.

8.4.3. The Player’s violation of the exclusivity rights of the IR Agreement

89. According to Article II of the IR Agreement, which remained undisputed, OROTAVA was the holder of the Player’s image rights, as agreed separately between OROTAVA and the Player on 2 January 2018. The Club paid a substantial share of the Player’s salary (i.e. 85.7% of the 2016/17 salary and 95% of the 2017/18 salary) plus a com- mission fee to OROTAVA, who then forwarded the salary part to the Player. The re- maining share (i.e. 14.3% of the 2016/17 salary and 5% of the 2017/18 salary) was

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paid by the Club directly to the Player. By this scheme, the Club was able to optimize its tax duties.

90. By the Notice of Termination of 3 September 2018, the Club also terminated the IR Agreement to stop its payment obligation to OROTAVA.

91. By allowing Slovenian sport nutrition company Polleo Sport to use the Player’s image rights for commercial purposes, the Player violated Article 9.2 of the Player Agreement according to which the Club and the marketing company Intermarche – Burza sp.z.oo held the exclusive right to use and license the Player’s image rights during the term of the Player Contract.

92. While Article 1 of the IR Agreement states that OROTAVA holds the worldwide image rights of the Player, Article 9 of the Player Contract does not define the geographical scope of the image rights license. Still, the Arbitrator does not agree with the Player who submits that a contract with a Slovenian sponsor was of no interest of the Club and its sponsors who conducted their business mainly in Poland. The Player is known not only in the country of the club for which he is playing but even more in Slovenia where he is regularly playing with the national team. His marketing value may therefore be even higher in Slovenia than in Poland. It would have been the obligation of the Player to call the Club’s attention to this business opportunity, and the Club could then have entered into an agreement with the Polleo Sport. If the Player intended to carve out Slovenia from the transfer of his image rights, it would have been up to him to ne- gotiate such an exclusion. He has not done so.

93. When it comes to the consequences of the breach, the Arbitrator finds that the Player’s violation of Article 9 did not entitle the Club to terminate the Player Contract. Neither does the Player Contract provide for termination as a sanction for any breach of Article 9, nor does the acknowledged violation constitute a breach of the Player Contract so serious that it can be cured only by termination. It is yet true that the Player was notified of this breach on 1 September 2018, but he was not granted a reasonable period of time to cure the breach: Instead, two days later, the Club terminated the Player Con-

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tract and the IR Agreement. The proper sanction of such breach would be damages to compensate the Club for the lost profit from the missed opportunity to enter into a sponsor contract with Polleo Sport, or from losing existing sponsors provided they could terminate their sponsorship agreement with the Club because of the Player’s advertising for Polleo Sport.

94. The Club also submits that the Player’s unauthorized contracting with Polleo Sport constituted a breach of the IR Agreement. The Player is not a party to the IR Agree- ment. The latter was concluded between the Club and OROTAVA only. However, OROTAVA warranted being the exclusive and worldwide owner of the Player’s image rights and guaranteed the Club the unrestricted use of these rights. This guarantee was violated. It would have been OROTAVA’s obligation to make sure that the Player did not sell his image rights twice.

95. When it comes to the consequences of such breach by OROTAVA, the Club refers to Article 6 (b) and (c) of the IR Agreement according to which “[t]he agreement may be terminated (…) (b) Unilaterally by one of the Parties in the event of failure by the other to comply with any of its contractual duties. (c) Unilaterally by one of the parties in the event of termination the professional contract executed by the player and THE CLUB.”

96. While OROTAVA failed to comply with one of its contractual duties, namely to make sure that the Player’s image rights would not be used by a third party, the Arbitrator does not agree with the Club that such failure was sufficient to trigger the Club’s right of unilateral termination. Although the wording of lit. (b) refers to “any” failure by a party which would entitle the other party to terminate the IR Agreement, such reference must be understood in the context of the purpose of the IR Agreement, whose primary purpose was the reduction of the Club’s tax burden and not the exploitation of the Player’s image rights with a rather limited prospect of profit. It would lead to inconsistent and un- fair results if a circumstance which was not sufficient to terminate the Player Contract, could bring the IR Agreement to an end. In addition, it would not be compatible with the overarching principles of pacta sunt servanda and proportionality if a minor violation which was not even caused by OROTAVA and which could easily be repaired would

Arbitral Award 29/38 (BAT 1280/18)

entitle the Club to terminate the IR Agreement. Hence, the Arbitrator finds that the termination of the IR Agreement by the Club’s Termination Notice was unjustified.

97. Further, according to Article 6 (c), the IR Agreement could unilaterally be terminated “by one of the parties in the event of the termination of the professional contract between the player and THE CLUB.” The Player Contract was indeed terminated by the Club’s Termination Notice, albeit unjustified.

98. Article 6 (c) of the IR Agreement demonstrates that both, the IR Agreement and the Player Contract were closely intertwined and none of these agreements could survive on its own. This also means that an unjustified termination of the Player Contract must have similar consequences also for the IR Agreement, which predominantly served as a vehicle for the payment of the Player’s services under the Player Contract, namely the compensation of the loss which resulted from such unjustified termination.

8.4.4. The Player’s failure to remedy the breaches

99. The Club submits that although the refusal to undergo surgery, to sign the Player- Agent Declaration or his contracting with Polleo Sport despite his image rights had exclusively been licensed to the Club might not be sufficient to entitle the Club to unilaterally terminate the Player Contract and the IR Agreement, his failure to remedy these breaches were the straw which broke the camel’s neck and gave the Club no other choice but to part with the Player.

100. The Arbitrator disagrees: He held before that the refusals to undergo surgery or to sign the Player-Agent Declaration cannot be regarded as breaches and the Player had no obligation to come back to his decisions. The Arbitrator also held that allowing Polleo Sport using the Player’s image was indeed a breach of Article 9 of the Player Contract and, though indirectly, of the IR Agreement. However, the Club notified the Player only on 1 September 2018. It did not set a reasonable deadline to fix the problem but terminated the Player Contract and the IR Agreement two days later, without giving him a real chance to cure the breach. The Player cannot therefore be accused of having failed to remedy the breach of the Club’s exclusivity rights.

Arbitral Award 30/38 (BAT 1280/18)

8.5. Conclusion

101. The Player did not breach the Player Contract when he refused the Club’s order to undergo surgery of his ____ on 29 August 2018. Neither did he breach the Player Con- tract, when he did not sign the Player-Agent Declaration proposed by the Club.

102. The Player did however breach the Player Contract when he allowed Polleo Sport to use his image for advertising purposes. However, this breach did not entitle the Club to unilaterally terminate the Player Contract and the IR Agreement. Hence, the Club’s unilateral termination of the Player Contract and the IR Agreement of 3 September 2018 was unjustified.

8.6. The consequences of the unjustified termination

103. As a consequence of the unjustified termination of the Player Contract and the IR Agreement, the Club must position the Player as if it had not terminated the Player Contract and the IR Agreement and these agreements would have continued to run to their agreed end, which means that the Player is entitled to the full contractual salary for the 2018/19 season. Any alternative income that the Player earned or should have earned during this period may be deducted from the payment due.

104. According to the Player Contract, the Player was entitled to a payment from the Club of EUR 10,000 (net), payable in 10 instalments. He also became entitled to EUR 190,000 plus 6% tax to be paid through the image rights company OROTAVA. However, OROTAVA is not a party to this arbitration and the question arises, whether the Player may still request payment of the entire compensation from the Club or whether the Club is liable only for the payment of the salary.

105. The Arbitrator finds that the Player may request payment of both shares of his remuneration from the Club, namely the salary and the compensation for the image rights. The Player Contract which serves as the legal basis for the Player’s entire remuneration has been concluded between the Player and the Club only. OROTAVA was not a party to the Player Contract. It was the Club’s contractual obligation to pay a part of the

Arbitral Award 31/38 (BAT 1280/18)

Player’s compensation to OROTAVA which is described in the Player Contract as the “Player’s Image Company”. However, for the purpose of the payment of the remuneration, the Arbitrator considers OROTAVA as payment agent of the Player and not as a separate party. Altogether, the Player was the legitimate beneficiary of the entire compensation of EUR 200,000 for the 2018/2019 season. On the other hand, the Club was the legitimate beneficiary of both the Player’s services and his image rights.

106. A creditor may always revoke the power of a payment agent and request direct payment of the due amounts. According to his Request for Arbitration, the Player has decided that not only the “salary part” of his remuneration but also the amount of EUR 190,000 shall be paid to him directly, instead of using OROTAVA as an intermediary. This result is further supported by Article 11 of the Player Contract, according to which the Player may file a “written payment demand to the Club”, if any of the scheduled payments are not made by the Club. This provision does not distinguish between the payments made to the Player directly or to “his Image Company” OROTAVA. It is obvi- ous that the parties considered the Club to be liable for the payment of the entire remuneration, whether it was paid directly to the Player or indirectly, through “his Image Company” OROTAVA. Hence, when the Club alleged the Player was in breach of his contractual duties, the Club terminated not only the Player Contract but also the IR Agreement with OROTAVA, albeit unjustifiably.

107. On the other hand, the Player’s revocation of OROTAVA’s function as a payment agent may not result in the Club making a double payment. However, no such argument has been raised in this arbitration.

108. While the salary part of the Player’s compensation is due net of any taxes payable on the respective amount, the detour through OROTRAVA was chosen for tax reasons. The Club undertook to pay to OROTAVA EUR 201,400 (i.e. EUR 190,000 + 6% tax) for the 2018/19 season. The tax on the amount of EUR 190,000 is considerably higher than 6%, if paid directly to the Player as a salary. However, this additional tax burden shall not be borne by the Club because it is a result of the Player’s decision to request direct payment.

Arbitral Award 32/38 (BAT 1280/18)

109. The Arbitrator therefore decides ex aequo et bono that the Player shall be entitled to the remuneration as follows:

- EUR 10,000 (net of all taxes payable on this amount in Poland); and

- EUR 201,400 (gross, including the taxes payable on this amount in Poland).

8.7. Mitigation of Damages

110. The Player accepts that his salary of EUR 72,000, which he agreed on with his new club, BC Cedevita, for the 2018/19 season, must be deducted from his claim against the Club. The Arbitrator specifies that the amount of EUR 72,000 shall be deducted from the second partial payment of EUR 201,400 (gross).

111. The Club argues that the Player could have made a substantially higher income than the one which he allegedly earns from BC Cedevita. It is the Player’s market value which must be deducted, and it is the Player’s own risk when he contracted for a lower salary.

112. The Arbitrator does not agree. The duty of the creditor to mitigate damages is primarily an obligation to accept a deduction of any alternative income effectively earned. This duty may be extended to the income which the creditor failed to earn, e.g. because he accepted a job offer although there were better offers available, or if he simply refused to search for a new employment. The duty to mitigate damages does however not require the deduction of a potentially higher income, based on market value considerations, if no such offer is available. It is the burden of the debtor to demonstrate that the creditor had rejected a better paid job, or failed to use sufficient efforts to find such better paid job.

113. It is not easy for a Player to find a new club shortly before the beginning of a new season. To make things worse, an early termination of the previous employment because of an alleged breach of contract does not improve a player’s chances of getting a high- paid job. Under the circumstances, the Arbitrator finds that the Player met his obligation

Arbitral Award 33/38 (BAT 1280/18)

to mitigate the damage when he accepted the offer from BC Cedevita in December 2018, i.e. three months after the termination of his employment with the Club. The Club failed to submit any concrete indications that would convince the Arbitrator that the Player could realistically have found a better paid job.

114. In addition, the fact that the Player’s image had been used for advertising with Polleo Sport, cannot be disregarded. Although the income from Polleo Sport has not been disclosed in these proceedings, the Arbitrator finds it fair under the circumstances to deduct a further amount of EUR 10,000 from the otherwise payable compensation.

8.8. Contributory fault

115. The Club also claims that the Player’s violations of his contractual obligations must be taken into consideration when calculating the compensation payable to him. The Club claims a deduction of 75%. There is however no evidence of a breach of contract other than the Player’s activities for Polleo Sport. There is no indication that he acted in bad faith or behaved in any way which left the Club no other way than to dissolve the contractual relationship. To the contrary: The Player was regularly fielded in matches of the Club’s team and there is no evidence that he looked out for another club, as was asserted in the Termination Notice. The Arbitrator therefore finds any claim based on the Player’s alleged contributory fault without any merits.

8.9. Amount awarded does not constitute “ultra petita”

116. The Player requested payment of EUR 200,000 net which was later reduced to EUR 128,000 because of the alternative income. This request does not differentiate between the salary (i.e. EUR 10,000) which is due “net”, and the “image right compensation” (i.e. EUR 128,000). The Player did however not request the payment of the 6% tax compensation, which is also due according to Article 4 of the Player Contract. This may raise the issue of whether the award does not comply with the principle of ultra petita,

Arbitral Award 34/38 (BAT 1280/18)

i.e., Article 190(2)(c) PILS, which provides that the award may be annulled if “the arbitral tribunal went beyond the claims or did not answer all of the claims submitted to it.”7

117. To determine whether the Player has been awarded an amount which is “ultra petita”, the actual decision (“Award”) counts. An award does not violate the principle of ultra petita if, without granting more or something else than has been asked for, it is based on different legal reasons than those argued by the parties.8 Hence, the fact that the Player asked for a net amount but did not include the 6% tax surcharge, but was awarded only a gross amount subject to a substantially higher tax burden does not violate the principle of “ultra petita”. Eventually, the Arbitrator awarded the Player EUR 10,000 net and EUR 116,000 gross, which is considerably less than the requested amount of EUR 128,000 net and does therefore not constitute “ultra petita”.

8.10. Interest

118. The Player is requesting default interest on the awarded amounts at 5% p.a. since 13 September 2018.

119. No contractual provision in any of the contracts stipulates the obligation to pay interest on overdue amounts to the Player. Nevertheless, according to standing BAT jurisprudence, default interest can be awarded even if the underlying agreement does not explicitly provide for an obligation to pay interest. This is a generally accepted principle which is embodied in most legal systems. However, it is also generally accepted that the obligee has to request payment of interest from the obligor if not agreed in the underlying agreement in advance or where the contract makes it clear that the parties intended that performance take place at or before a precise point in time. To the extent default interest is awarded, the Arbitrator, deciding ex aequo et bono, follows con- sistent BAT jurisprudence and considers interest at 5% p.a. to be fair and equitable also in the present case.

7 BERGER/KELLERHALS, International and Domestic Arbitration in Switzerland, Berne 2015, N 1731.

8 BERGER/KELLERHALS, Op. cit., N 1736.

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120. In line with constant BAT jurisprudence, interests are due from the first day after the due date of the payment until the effective date of payment. The entire compensation became due on the day following termination of the Player Contract and the IR Agree- ment. The Termination Notice was issued with immediate effect on 3 September 2018. However, interest is requested only since 13 September 2018 and the Arbitrator is not entitled to date the starting date back.

8.11. Summary

121. The Club owes the Player an amount of EUR 200,000 from which the alternative salary of EUR 72,000 and a flat amount of EUR 10,000 as compensation for the commercial use of the Player’s image rights shall be deducted.

122. The Club shall therefore pay an amount of EUR 10,000 (net) and an amount of EUR 118,000 (gross) to the Player. Net means that the Club shall bear and pay all taxes (including social security duties) which are claimed by the Polish authorities. Gross means that the respective amount includes all taxes (including social security duties) which are claimed by the Polish authorities and which may be deducted by the Club if paid by the Club.

9. Costs

123. 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.

124. On 7 June 2019 – 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 “[t]he fees of the Arbitrator shall be calculated on

Arbitral Award 36/38 (BAT 1280/18)

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, the procedural questions raised and the en- deavours of the parties and their representatives to proceed efficiently – in accordance with Article 0.4 of the BAT Rules the BAT Vice-President determined the arbitration costs in the present matter to be EUR 12,000.

125. Considering the circumstances and the outcome of this arbitration, i.e. that the Claim- ant nearly succeeded with all his requests, the Arbitrator finds it fair that the Respond- ent shall bear the entirety of the arbitration costs. Given that the Advance on Costs of EUR 12,000 was paid entirely by the Claimant, in application of Articles 17.3 of the BAT Rules the Arbitrator decides that the Respondent shall reimburse EUR 12,000 to the Claimants.

126. In addition, the Arbitrator finds that the Respondent shall reimburse the Claimant for his legal fees and expenses in the amount of EUR 12,000.00 including the handling fee.

Arbitral Award 37/38 (BAT 1280/18)

10. AWARD

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

1. Basketball Club Zielona Gora (Grono Spotowa Spolka Akcyjna) is ordered to pay to Mr. Edo Murić the amount of EUR 10,000 net and EUR 118,000 (gross) plus interest of 5% p.a. on both amounts since 13 September 2018 until payment.

2. Basketball Club Zielona Gora (Grono Spotowa Spolka Akcyjna) is ordered to pay to Mr. Edo Murić the amount of EUR 12,000 as a reim- bursement of his advance on arbitration costs.

3. Basketball Club Zielona Gora (Grono Spotowa Spolka Akcyjna) is ordered to pay to Mr. Edo Murić the amount of EUR 12,000.00 as a reim- bursement for his legal costs and expenses.

4. Any other or further-reaching claims for relief are dismissed.

Geneva, seat of the arbitration, 13 June 2019

Stephan Netzle (Arbitrator)

Arbitral Award 38/38 (BAT 1280/18)