UK: Not To Be Sniffed At: Lessons From The Mutu Affair

Last Updated: 15 March 2010
Article by Chris Evans

Regarded as the "next Gianfranco Zola" and nicknamed "Brilliant", Adrian Mutu's arrival at Stamford Bridge in 2003 formed part of the revolution that was designed to transform Chelsea into a club capable of challenging the world football's elite. Six years on, and Chelsea only just look to be concluding what became a hellish relationship with Mutu.

Mutu was a £15m purchase from Parma in August 2003. After a promising start to his Chelsea career, Mutu's form and relationship with his new club plummeted when he tested positive for cocaine during a drugs test in September 2004.

Within weeks, Chelsea had terminated Mutu's employment contract for gross misconduct, a decision that came under much scrutiny. Mutu was underperforming on the pitch, and Chelsea may have considered that they had more to gain financially by pursuing a claim for compensation through the courts than on the transfer market. An alternative, more positive, view is that Chelsea were taking a stand against drug users, adverse behaviour affecting the reputation of football and the fact that their employee wilfully disrupted their plans for footballing dominance. A well-drafted athlete's contract will contain clauses that deal with bringing their sport or club into disrepute, or specific drug-related obligations, and provisions allowing the club to terminate in such circumstances. General legal principles and governing bodies' rules may be invoked where necessary, but a clearly drafted contract is always preferable for legal certainty.

It should be remembered that Chelsea were under no obligation to terminate Mutu's contract; indeed, there were those, including the PFA who were disappointed with Chelsea's stance and felt that the club had failed in its duty of care towards its employee. Chelsea could have reversed the damage done to the club's reputation by recognising that Mutu had a problem, and by providing the support and assistance that the player needed. Chelsea also assumed the 'risk' of Mutu when they signed him, and it could be argued that they ought to have been more careful when undertaking their due diligence on the man behind the player. Finally, of course, they could have sold Mutu (inevitably at a sum less than the £15m paid for him).

In any event, and for whatever reason, Chelsea terminated Mutu's employment contract, and the legal debate commenced. In the meantime, Mutu received a seven month ban from The Football Association. Having served his ban, he was signed by Juventus and then bought by Fiorentina.

Mutu appealed his sacking to the FA Premier League Appeal Committee. The Committee upheld the termination of his contract, ruling that Mutu's behaviour constituted a unilateral breach of contract. The Committee permitted Chelsea to bring a claim for damages and/or a sporting penalty before the FIFA Dispute Resolution Chamber. Mutu's appeal to the Court of Arbitration for Sport was rejected. The FIFA DRC then decided that it did not have jurisdiction to hear Chelsea's claim, but jurisdiction was confirmed after a further appeal to CAS. Chelsea claimed over £22.5m, calculated by reference to the cost of replacing Mutu as a player, as well as legal costs and compensation for the damage that his behaviour had caused to the Chelsea brand. After months of deliberation, FIFA partly accepted Chelsea's claim and awarded Chelsea approximately £13.5m. The compensation figure is made up of Mutu's unamortised transfer fee, together with the unamortised portion of Mutu's signing-on and agent's fee. Mutu appealed FIFA's decision, but it was upheld by CAS. The latest in the long-running saga is that Mutu has appealed to the Swiss Federal Court, his final route of appeal, who have ruled that payment of any compensation is to be delayed pending their ruling.

So should Mutu be paying this compensation, and is this a trend that is likely to grow in sport? After all, Mutu had no say in the value of his transfer from Parma to Chelsea, which formed the basis of the compensatory award. Yes, Mutu benefited financially, but not to the tune of £15m. He may be a multi-millionaire yet enforcement of this financial reward will almost certainly bankrupt him. One option open to Mutu is retirement, thereby testing FIFA's jurisdiction further. In other fields, it remains rare for an employer to sue an employee; the effect on employee relations, together with the limited finances of most employees, prevents employers seriously considering such action. However, with sport now being awash with money and athletes having substantial revenue streams outside of their salaries, clubs will increasingly start to consider attempting to recover sums from athletes who breach their contracts. As an example, in recent weeks, Dave Whelan, Chairman of Wigan Athletic FC, has stated that Wigan are considering legal action against Marlon King, who the club immediately sacked following his conviction for sexual assault and actual bodily harm.

If the Swiss Federal Court uphold the decision of the DRC, the implications of the Mutu case may be profound for sport. From a legal perspective, Mutu does have a case to answer. A contracting party's liability for the other party's loss flowing naturally and foreseeable from his breach of contract is a basic tenet of English law. There seems no obvious reason why sportsmen should have immunity from this. The moral argument - that Mutu had no say in the transfer fee that made up the majority of the compensatory award – may present a different conclusion. It is possible, therefore, that athletes found guilty of doping offences, and other serious indiscretions, may not only lose their employment and face a ban from their sport, but may also face a huge compensation claim from their former employers. If the previous incentives for professional sportsmen to keep on the right side of the law and their employers were not sufficiently strong, perhaps Mutu's plight will be.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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