Labor Dispute (Tel Aviv) 5658-02-24 BATTOCCHIO CRISTIAN DAMIAN – Maccabi Tel Aviv Football Club

Decision

We have before us the defendant's motion to order the dismissal of the claim in limine due to lack of substantive jurisdiction and alternatively to order a stay of proceedings due to the existence of an arbitration clause.

Background to the application

1. The plaintiff is a soccer player, a citizen of Italy and Argentina, employed by the defendant who operates the senior team of the Maccabi Tel Aviv football club (hereinafter - the defendant).
2. An agreement was signed between the parties on July 10, 2017, whereby the plaintiff would play for the team for two seasons (2017-2018 and 2018-2019) with an option to extend the agreement for another season (hereinafter - the agreement, Appendix 1 to the application).
3. Clause 7 of the agreement stipulates that disagreements between the parties will be discussed in the internal arbitration institution of the Israel Football Association (hereinafter - the Association).
4. Towards the end of the first half of the 2018-2019 season, in January 2019, the plaintiff terminated his position and the parties signed a termination agreement and a waiver (hereinafter - the waiver, Appendix 2 to the application). As part of the waiver, the defendant paid the plaintiff approximately ₪148,750 (approximately ILS 624,000), against which the plaintiff undertook to refrain from lawsuits against the defendant and declared that he had no additional demands against him.
5. On February 4, 2024, the plaintiff filed his claim against the defendant for payment of various rights for breach of the agreement as well as for non-payment of social rights under the protective laws in the total amount of approximately ILS 900,000.
6. To complete the picture, it should be noted that the defendant filed a lawsuit against the plaintiff with the Association's arbitration institution. As part of the lawsuit, he petitioned to oblige the plaintiff to return the money he received in return for his signature on the waiver, due to the alleged breaches of the agreement, as well as compensation for damage to his good name due to the breach of his obligations in the total amount of approximately ILS 1 million (Appendix 3 to the application).

The parties' arguments please

7. The defendant petitioned to dismiss the claim in limine due to the lack of substantive jurisdiction in view of the provision of section 11(a) of the Sports Law, 5748-1988 (hereinafter: the Sports Law) and since the exclusive authority to hear the dispute between the parties is vested in the arbitration institutions of the Association. According to him, the Sports Law prevails over the Labor Court Law, 5729-1969 (hereinafter - the Labor Court Law), since it was enacted later and does not include a clause for the protection of laws, but explicitly establishes the exclusive authority of the Association's internal judicial institutions.
8. The defendant further argued that in the framework of the waiver, the plaintiff undertook not to take proceedings against the defendant, and therefore, the court must dismiss his claim according to its authority by virtue of sections 44 and 45 of the Labor Court Regulations (Procedures), 5752-1991.
9. Alternatively, the defendant requested that the court delay theproceeding until the conclusion of the arbitration proceeding at the Association's arbitration institution, by virtue of section 5 of the Arbitration Law, 5728-1968 (hereinafter - the Arbitration Law).
10. In the event that the court does not grant the aforesaid, the defendant requested that the proceeding be delayed until a decision is made on two pending proceedings that were consolidated in the National Labor Court (Application for Leave to Appeal 44937-01-21 Hapoel Ra'anana - Babayev et al. [Nevo] andRequest for Leave to Appeal 19063-02-21 Ben Shushan - A.G.  Beitar Jerusalem Football Club (2001) in Tax Appeal et al.  [Nevo] (hereinafter - the pending proceeding)).
11. In his response, the plaintiff referred to the ruling of the National Court in the application for leave to appeal 1504/02 Hapoel Be'er Sheva v. Ephraim Zvi [Nevo] (05 November 2002) (hereinafter - the Zvi case), in which it was held that even where it is a matter of mandatory arbitration by virtue of the Sports Law, the decision regarding rights by virtue of protective legislation is not subject to arbitration and therefore the exclusive authority is vested in the Labor Court.
12. He further argued that the arbitration clause is an invalid clause in a uniform contract under the Uniform Contracts Law, 5743-1982.
13. Regarding the pending proceeding in the National Court, the plaintiff argued that the proceeding should not be ordered to be delayed until a decision is made, since the pending proceeding has been going on for more than 3 years and is not close to a decision or a compromise, and in any event, the opinion given in the proceeding on behalf of the Attorney General states that the appropriate forum for clarifying claims whose cause is based on rights by virtue of the protective labor law is, as a rule, The Labor Court.

Discussion and Decision

14. At the outset, we note that after considering the arguments of the parties and reviewing all the documents submitted to the Tribunal's file, we have reached the conclusion that the application should be rejected.
15. Section 10(a) of the Sports Law states that "an association or association shall enact bylaws that will regulate the proper management of the sport or of the sports that they are a center, including regulations regarding discipline, internal judgment, including the internal judicial institutions and the procedures according to which they will discuss - subject to section 11, the transfer of athletes - subject to section 11a, as well as regarding salaries and payments to athletes, coaches and other officials."
16. Section 11(a) of the Sports Law further states: "The exclusive authority to discuss and decide matters related to activity within the framework of an association or association will be in the hands of the internal judicial institutions set out in the bylaws under section 10, and in accordance with the provisions set out in the regulations under that section; The decisions of the highest internal court of justice in disciplinary matters shall be final and shall not be appealed before a court."
17. The Arbitration Institute of the Association operates by virtue of the provision of Section 10 of the Sports Law. As ruled, the legislature's intention was to concentrate and regulate the disputes that arise in sports within the framework of an internal judicial system, by applying "mandatory arbitration" (Bara (National) 1020/00 Avraham (Avi) Cohen v.  Maccabi Tel Aviv Football Department [Nevo] (18.06.2020)).
18. Section 5(a) of the Arbitration Law states that a court to which a claim is filed in a matter that has been agreed between the parties to be transferred to arbitration will delay the proceedings in the action at the request of a party who is a party to the arbitration agreement. However, section 5(c) of the law qualifies and states that "the court may not delay the proceedings if it sees a special reason that the dispute should not be heard in arbitration."
19. Alongside these provisions, section 3 of the Arbitration Law states that "an arbitration agreement is invalid in a matter that cannot serve as the subject of an agreement between the parties." In the Zvi case, it was held that "the law of arbitration under the Sports Law is the same as the law of arbitration under the Arbitration Law, with the changes required by the unique provisions of the Sports Law and the articles thereof enacted pursuant thereto."
20. Due to the aforesaid and despite the unique characteristics of the Sports Law, the National Court ruled that rights granted to an employee by virtue of the protective labor law cannot be waived and therefore should not be transferred to an arbitrator's decision, but rather to be clarified within the framework of the labor courts (Application for Leave to Appeal (National) 575/09 Hapoel Jerusalem Football Club - Shweig [Nevo] (December 15, 2009)).

This ruling was recently reiterated by the Tribunal in a request for leave to appeal (national) 47057-06-23 Hod Hasharon Athletes Association for Gymnastics - David Ben Baruch [Nevo] (01.08.23) with reference to the pending proceeding as follows: