Editor’s note: Josep F. Vandellos Alamilla is an
international sports lawyer and academic based in Valencia (Spain) and a member
of the Editorial Board of the publication Football Legal. Since 2017 he is the
Director of the Global Master in Sports
Management and Legal Skills FC Barcelona – ISDE.
I think we would all agree that the reputation of
players’ agents, nowadays called intermediaries, has never been a good one for
plenty of reasons. But the truth is their presence in the football industry is
much needed and probably most of the transfers would never take place if these
outcast members of the self-proclaimed football
family were not there to ensure a fluid and smooth communication between all
For us, sports lawyers, intermediaries are also
important clients as they often need our advice to structure the deals in which
they take part. One of the most recurrent situations faced by intermediaries and
agents operating off-the-radar (i.e. not registered in any football association
member of FIFA) is the risk of entering in a so-called multiparty or dual representation
and the potential risks associated with such a situation.
The representation of the interests of multiple
parties in football intermediation can take place for instance when the agent represents
the selling club, the buying club and/or the player in the same transfer, or when
the agent is remunerated by multiple parties, and in general when the agent incurs
the risk of jeopardizing the trust deposited upon him/her by the principal. The
situations are multiple and can manifest in different manners.
This article will briefly outline the regulatory
framework regarding multiparty representation applicable to registered
intermediaries. It will then focus on provisions of Swiss law and the
identification of the limits of dual representation in the light of the CAS
jurisprudence and some relevant decisions of the Swiss Federal Tribunal.
Those agents acting in the market as registered
intermediaries will necessarily be subjected to the specific football
regulations enacted by FIFA and the national associations in which they
operate. The answer as to the possibility to represent more than one party to a
deal will therefore, be necessarily found in internal rules of each association.
As opposed to the obsolete FIFA
Players’ Agent Regulations,
Regulations on Working with Intermediaries (RWWI) allow intermediaries to
represent more than one party in a transaction. Pursuant to the definition of
combination with Article 8 RWWI, the only substantive requirement to intermediaries
willing to act for multiple parties is that they obtain prior written consent
and confirmation in writing on which party (i.e. the player and/or the club)
will remunerate the services of the intermediary. The regulations, therefore, prioritize
transparency over the question of who pays for the services of the intermediary.
Consequently, it is not forbidden for an intermediary to represent and be paid
by multiple parties to a transaction, as long as they all know and agree to it
At a national level, most FIFA member associations
have followed the solution adopted in the RWWI and have transposed ad literam the right of intermediaries
to multiparty representation as long as the transparency and information
requirements are met (i.e. any potential conflict of interest is disclosed to
the parties in advance, and subject to the prior written consent of the parties
to the transaction).
However, there are still many agents that prefer to
operate off-the-radar of organized football and its regulations. For these ‘rogue’ agents, the scenario is different
and the question of the legality of multiparty representation will ultimately
depend on the applicable law chosen by the parties.
Based on my personal experience, off-the-radar agents often end up acting
through very rudimentary authorizations subject to the ordinary jurisdiction of
the CAS. For this reason, I chose to dissect in this paper the limits of
multiparty representation according to Swiss law, for based on article XY of
Code of Sports Arbitration it represents the applicable law to ordinary
disputes before the CAS when parties fail to make a particular choice of law.
The provisions of the contract of brokerage (“contrat de courtage”) in Articles 412-418
of the Swiss
Code of Obligations (CO) are of relevance in this regard. The cornerstone
provision concerning conflict of interest
is found in Article 415 CO
whose English translation reads as follows:
the broker acts in the interests of a third party in breach of the contract or
procures a promise of remuneration from such party in circumstances tantamount
to bad faith, he forfeits his right to a fee and to any reimbursement of
The article differentiates between two non-cumulative
hypothetical situations where the broker (i.e. agent) may be in a position of conflict
the broker “Acts in the interest of a
third party in breach of the contract”.
the broker “Procures a promise of
remuneration from such party in bad faith”.
The first hypothesis establishes the prohibition of the broker to act in
the interest of a third party if the obligations towards his client are
breached. Accordingly, an agent representing a player is prevented from assisting
the players’ contracting club to negotiate the terms of his employment contract,
as he would be defending irreconcilable interests (i.e. the interest of the
club to pay the lowest salary possible v/ the interest of the player to obtain
the highest possible salary). Conversely, the same agent could be hired by the club
in a different transaction without incurring a conflict of interest with the
player. The condition triggering this first hypothesis will be thus, whether
the agent acting for the third party is in breach of his contractual
It is important to note that the published English
translation of the CO differs slightly from the original text of the code.
While the English translation refers to the breach of the “contract”, the original French version refers instead to a breach
of the “obligations” which has
obviously a broader scope, covering a wider range of situations than a contract
This linguistic difference can be misleading as the
obligations emanating from the CO may go beyond the obligations set forth in a
simple authorization or a brokerage contract. By way of example, think of a
very simple “Authorization” that does
not explicitly prohibit the agent of the player to simultaneously act for the
club. Sticking to literal text of the English translation, one could be tempted
to believe that the agent was not acting in breach of the contract. However, the
same situation seen under the lens of the legal obligations would imply that the
agent could still be infringing the obligation of loyalty and trust stemming
from the CO.
In view of the above, a correct evaluation of the
first hypothesis will necessarily account for the legal obligations inherent to
the brokerage contract, the scope of which might go beyond the obligations
stipulated in the contract. Amongst these, the obligation of loyalty, the
obligation to safeguard the interest of the client by not entering into conflictive
situations, and the obligation of transparency and information.
The second hypothesis covers the prohibition in Swiss law of dual
representation by procuring a promise of payment from third parties to the relationship
broker/principal, if such a promise amounts to bad faith.
It needs to be underlined that this provision does not
exclude dual payment, but subjects it to a certain limit, i.e. not incurring in bad faith. Delineating
bad faith can turn out to be a difficult task as the concept itself has an inevitable
component of subjectivity and, as opposed to good faith which is legally presumed (cf. Article 3 of the Swiss
Civil Code), bad faith must
always be proven by the party claiming it, who ultimately bears the burden of
Applied to football agents, it can be safely assumed
that an agent acting in good faith towards his client would necessarily act in
a transparent way and inform his client that he is simultaneously acting for
the other contracting party. Not disclosing such information in the context of
negotiations can serve as indication of bad faith when combined with other
elements. However, to prove the presence of bad faith will still require
sufficient material evidence in order to discharge the burden of proof, since
the simple negligence of the broker would not be sufficient to fall under the
scope of the article.
The consequence for a broker (i.e. football agent) infringing the
prohibition of dual representation in he hypotheses described in article 415 CO
is the nullity of the contract and the forfeiture of the right to be
remunerated, or the obligation to reimburse the amounts received if the
infringement is ascertained after the realization of the contract and payment
of the fee (“quod nullum est nullum
With the above premises in mind, a detailed look into
the CAS and the Swiss Federal Tribunal jurisprudence regarding Article 415 CO will
help identifying the scope of the legal obligations of a football agent towards
his client (i.e. club and/or player), as well as the mechanisms used by the
decision-making bodies to determine the existence of bad faith.
One of the very few CAS cases dealing with Article 415
CO in the context of football agents' relationships with clubs is the CAS award 2012/A/2988 PFC CSKA Sofia v. Loic Bensaid.
In short, the dispute opposed the flagship Bulgarian
football club CSKA Sofia against a French football agent and revolved around
the right of the latter to be remunerated by the club, considering he had acted
simultaneously in representation of the player in the signature of the
One of the many arguments used by the club in support
of its alleged right not to pay the agent was based on Article 415 CO. The club
asserted that the agent acted in violation of his obligations for having
represented both parties. On the merits, the Sole Arbitrator concluded, nevertheless,
that the agent had fulfilled the obligations of transparency and information as
the Club was aware at all times that the agent also acted for the player and
knew about the existence of the representation contract with the player.
The full knowledge and acceptance of the situation impeded the club to contend,
at a later stage, the violation of the duty of loyalty and transparency.
Secondly, adhering to the grounds of the supporting
FIFA decision, the Sole Arbitrator also remarked that the mandate between the
Agent and the player did not contain any obligation to remunerate the services
of the agent. The prohibition of agents to be remunerated twice for their
services has been traditionally a key element in previous FIFA decisions where
dual representation was at the center of the dispute.
This fact possibly led the Sole Arbitrator to also highlight this circumstance when
assessing the behavior of the agent. However, the Sole Arbitrator further
stated that, even if the mandate would have provided for a remuneration in
favor of the agent (quod non), Article
415 CO would still not have been violated as the club failed to discharge the
burden of proof as to the existence of bad
faith, reinforcing with it that dual representation is only forbidden to
the extent the agent acts in bad faith.
This final remark of the Sole Arbitrator is crucial
as it evidences, in my view, that whether the player and the agent agreed upon a
remuneration, remains in the end irrelevant for the evaluation of a possible violation
of Article 415 CO. Indeed, pursuant to the CAS arbitrator’s interpretation of
the article, the agent can be remunerated twice, as it is the disregard of the
obligations inherent to the contract and in particular for the second hypothesis
acting in bad faith that determines compliance with Article 415 CO.
To better illustrate the irrelevance of the “double remuneration” discussion, think
for a moment of a brokerage contract where there is no explicit reference to
the remuneration. Does such a lacuna in
the contract imply that the brokerage is necessarily, pro bono? The answer
is no, for as a general rule, mandates given in the context of professional
relationships are presumed to be lucrative (see Art. 394(3) CO). That is
precisely the case of football agents when they contract with players or clubs.
This circumstance renders the reference to a remuneration in the contract a
secondary element, or at least not an essential one. The former FIFA PAR (Ed.
followed this ratio legis when explicitly
providing for a default remuneration of 3% of the players’ basic income where
the parties cannot agree on the remuneration.
Beyond the specific CAS
awards, some decisions of the Swiss Tribunal Federal help getting the full
perspective on dual representation in the context of disputes subject to Swiss
law. Although these do not refer to football agents, the similarities that
exist with real estate and/or corporate brokers allow to derive important
conclusions that can be applied to football agents.
first decision worth mentioning is no. 4A_214/2014
of 15 December 2014. The case concerned a classic real estate intermediation
where the agent agreed a commission from both the seller and the buyer involved
in the transaction. The agent also failed to inform the seller of the existence
of a better buying offer from a third potential buyer. In this context, after
concluding the deal, the buyer refused to pay the agent, invoking Article 415
This case is important because
it reveals the existence of two types of brokerage contracts under Swiss law
(i.e. “courtage de negotiation” and
the “courtage d’indication”). Whereas in a brokerage
of negotiation the broker is entrusted by his client to negotiate the
conditions of the transaction, in a brokerage
of indication, the broker is simply
called to indicate the possibility to conclude a transaction, with no
negotiation duties involved. Furthermore, according to the doctrine cited
in the decision, both types of contract are treated differently under Article
casu, the Federal Tribunal qualified the contracts signed by the agent with
the buyer and the seller as “courtage de
negotiation” as he was entrusted with conducting all aspects related to the
transaction. The agent was required to obtain the best possible conditions for
his clients (e.g. the best buying and selling price respectively) and this
circumstance directly generated an irremediable conflict of interest (i.e. the
negotiation was either benefitting the financial interests of seller or the
buyer) infringing the obligation of loyalty inherent to the brokerage contracts
with the parties.
All in all, the Federal
Tribunal rejected the appeal submitted by the real estate agent and confirmed the
nullity of both contracts for violating Article 415 CO. The Federal Tribunal followed
a strict interpretation of Article 415 CO according to which “no one can serve two masters” and thus, dual
representation would only be possible (if so) in simple intermediations where
no negotiation from the broker is required, in
other words in “courtage d’indication”. In addition, in this case
the agent also acted in bad faith for failing to disclose the existence of a
more favorable offer to the detriment of the seller.
The main lesson that can be
learnt from this decision is that Article 415 CO must be interpreted restrictively
and that it has to be distinguished between those intermediation contracts that
imply an active involvement of the agent
(i.e. the agent is contractually required to negotiate the terms of a
transaction for the player and/or the club) and those contracts of
intermediation where the agent is called
to simply indicate the possible opportunity for his client to conclude a deal
with no other involvement in the transaction. In this last case, dual
representation could be allowed for there would be no conflict of interests,
and therefore, no infringement of the obligations under the brokerage contract.
The specific contractual clauses are therefore crucial as they ultimately
reveal the extent of the role assumed by the agent.
second important decision by the SFT
is more recent, no. 4A_529/2015
of 4 March 2016. The factual background of this dispute is extremely
complex. In brief, the case revolved around the selling and buying of the
shares of a company exploiting a luxurious Hotel located in Switzerland. The
seller and the broker entered into a negotiation
brokerage contract whereby the latter was entrusted to find a buyer of the
company against the payment of remuneration. The principal had to agree with
the final potential buyer. In the end, it was proved that the broker misled the
principal about the true identity of the final buyer (to whom the principal expressly
refused to sell), with whom the broker had also agreed remuneration. On the
basis of these facts, the principal refused to pay the broker.
The Federal Tribunal confirmed
again that Article 415 CO is always interpreted strictly, and considered that
by allowing the banned buyer to indirectly
acquire the company, the broker acted in
the interest of a third party against the obligation of loyalty. What is most
significant about this decision is that the court delimitates very clearly the scope
of the obligation of loyalty. It is described as a double-edged sword, implying
on the one side: a positive obligation
consisting of actively safeguarding and defending the interest of the principal;
and on the other side: a negative
obligation, consisting of abstaining from any conduct that could harm the
interests of the client.
In particular, the fact
that the principal had not objected to a previous e-mail sent by the broker
where he expressly indicated that the potential buyer was “C or any company indicated by it” was also irrelevant for the
principal could not expect in ‘good faith’
that the buyer would make use of this substitution prerogative in favor of the
real buyer. The arguments of the broker according to which it was not important
for the principal to know who the buyer was and that he suffered no damage,
were also dismissed.
Finally, the argument of
the broker according to which the remuneration to be received from the buyer was
agreed after the transaction took place was also irrelevant in the eyes of the
With these cases in mind, when
applying the holding of the SFT above to football agents' professional relationships,
it follows that the scope of the obligation of loyalty will be significantly
wider for football agents entrusted with negotiations than for agents simply tasked
with identifying possible opportunities to close a deal.
Likewise, in order to
determine the existence of a violation of the obligations assumed by the agent,
it will not be enough to demonstrate that there has been no threat to the
interests of the client or that the agent has not actively engaged in a conduct
against those interests. Indeed, a simple passive conduct with the potential of
jeopardizing the interests of the principal, such as failing to disclose
relevant information, can be sufficient to violate the obligation of loyalty
and deprive the agent from the right to be remunerated.
To this effect, the correct
identification of the interest pursued by the client will ultimately determine
the infringement by the agent of his obligations under the representation
contract. In the end, the agent will only violate his obligation of loyalty as
long as his behavior damages the interests of his client. These interests will
vary depending on whether the principal is a football club or a player. If a
club is trying to transfer or recruit a player, the interests will in most
cases be of a financial nature. If instead, the principal is a football player
terminating or signing a contract with a club, he might have non-economic
interests (e.g. willing to play in a different championship, lack of
integration of the family in the country etc.). Furthermore, the moment in
which the remuneration is agreed is not relevant to establish the violation of
the obligation of loyalty.
In conclusion, the contract
of representation and its clauses in combination with the particular
circumstances of each case will be fundamental to establish compliance with Article
415 CO when multiple representation takes place. Football agents pretending to be remunerated
by both contracting parties simultaneously without risking to violate their
obligations must either enter into simple brokerage contracts with no negotiation
attributions, or, when acting through a negotiation brokerage, always inform
all parties in complete transparency.
 “Definition of an intermediary
A natural or legal person
who, for a fee or free of charge, represents players and/or clubs in
negotiations with a view to concluding an employment contract or represents
clubs in negotiations with a view to concluding a transfer agreement.”
courtier perd son droit au salaire et au remboursement de ses dépenses, s'il
agit dans l'intérêt du tiers contractant au
mépris de ses obligations, ou s'il se fait promettre par lui une
rémunération dans des circonstances où les règles de la bonne foi s'y
 See. Decision of the SFT 131 III 511 para. 3.2.2 of http://relevancy.bger.ch/php/clir/http/index.php?highlight_docid=atf%3A%2F%2F131-III-511%3Ade&lang=de&type=show_document