Friday, 21 March 2014

What next for Anelka and West Brom?

Nicholas Anelka’s career with West Bromwich Albion ended in disputed circumstances on the 14 March 2014 after both parties claimed to have terminated Anelka’s contract of employment.

In addition to the five match ban handed down by The FA’s Independent Regulatory Commission following Anelka’s controversial quenelle gesture, Anelka was suspended by West Brom and forced to train alone while the club carried out its own internal inquiry, which was due to be concluded this week.

However, Anelka issued a statement via Twitter on the 14 March 2014 confirming that:

Following discussions between the club and myself, proposals have been made to me that I rejoined the group under certain conditions that I cannot accept. Wishing to preserve my integrity, I decided to free myself and to terminate the contract binding me with West Bromwich Albion until 2014, and now.

The conditions referred to in Anelka’s statement were to apologise to the club, supporters, sponsors and wider community as well as to accept a substantial fine.

West Brom later issued two statements firstly denying receiving any formal notice of termination from Anelka and later confirming that "The club considers the conduct of Nicolas Anelka on 28 December, coupled with his purported termination on Social Media, to be gross misconduct. As a result the Club has tonight written to Nicolas Anelka giving him 14 days’ notice of termination as required under his contract.


West Brom have the option of seeking compensation from Anelka under Article 17 of FIFA’s Regulations on the Status and Transfer of Players (“RSTP”) on the basis that Anelka’s gross misconduct amounted to a unilateral breach of his employment contract without just cause that entitled the club to treat the contract as at an end. Article 17 of the RSTP confirms that any party who terminates a contract without just cause must pay compensation to the innocent party.

The Anelka case has similarities with the case involving Adrian Mutu and Chelsea. Mutu tested positive for cocaine in 2004 and Chelsea considered Mutu’s actions to amount to gross misconduct. Chelsea, therefore, terminated Mutu’s contract and sought compensation from the player under Article 17 of the RSTP (previously Article 22) on the basis that Mutu breached his contract without just cause. CAS initially held in December 2005 that Mutu had breached his contract with Chelsea without just cause and that compensation was payable even though the player did not actually terminate the contract. CAS eventually ordered Mutu to pay Chelsea £14.5m in compensation in 20096 and FIFA’s Dispute Resolution Chamber has recently held that Mutu’s subsequent clubs, Juventus and Livorno, were jointly and severally liable to pay Chelsea that compensation under Article 17.2 of the RSTP. For more detail on the Mutu case, please see my previous blog Initial considerations from the latest Adrian Mutu compensation ruling.

There are, however, some critical differences between the two cases. Under Article 17 of the RSTP, compensation for any breach of contract without just cause is calculated by taking into account the following factors:

a)  the national law applicable;
b)  the specificity of sport; and
c)  other objective criteria, which include:
  • the remuneration and other benefits due to the player under the existing contract and/or the new contract;
  • the length of time remaining on the existing contract;
  • the fees and expenses paid or incurred by the former club, amortised over the length of the contract, and
  • whether the breach occurred in the Protected Period.

Chelsea spent £15.8m in acquiring Mutu from Parma in 2003 and he signed a 5 year contract that was due to expire on 30 June 2008. There was, therefore, over 3 years (44 months in total) remaining on the contract when Mutu committed his breach and the contract was terminated. When calculating the compensation payable, FIFA’s Dispute Resolution Chamber assessed compensation based on the unamortised costs that Chelsea incurred in purchasing the player from Parma i.e. the amount of the transfer fee, signing on fee and agent’s fee that Chelsea were unable to amortise during the remaining 44 months of the contract. This approach was subsequently endorsed by the CAS. In contrast, however, West Brom have incurred no acquisition costs because Anelka was signed on a free transfer last summer and Anelka’s contract only had a few months remaining so compensation based on the objective criteria listed under Article 17 of the RSTP will be minimal. It is, therefore, unlikely to be worthwhile for West Brom to pursue a claim against Anelka for compensation.

As for Anelka’s options, he is unlikely to take any action against West Brom in order challenge his dismissal as it seems pretty clear that he is happy to leave the club. He will probably struggle to find a new club until next season though given that his five match ban may be extended to have worldwide effect by FIFA’s Disciplinary Committee under Article 12.2 of the RSTP and whilst any action by West Brom to recover compensation is unlikely, other clubs may still be put off signing Anelka in case they are jointly and severally liable for any compensation payable under Article 17.2 of the RSTP.