The case before the Court of Arbitration for Sport (CAS) involved a dispute between X., a coach and player, and HC Y., a hockey club, regarding the termination of their employment contract. The arbitration panel, composed of three Swiss arbitrators, resolved the conflict under Swiss law, with proceedings based in Lausanne. The dispute arose after the 1986/1987 season, primarily concerning the duration of the contractual relationship. X. claimed he had been hired for at least two years, while HC Y. argued the engagement was only for one season, with renewal contingent on financial and sporting results.
The background revealed that HC Y. sought to revitalize the club in 1986 and approached X., who had previously been associated with the team. Financial constraints led the club to secure additional funding through loans, sponsorships, and public campaigns to afford X.’s employment. While an oral agreement was reached in spring 1986, its exact terms were disputed. X. asserted a two-year commitment, supported by witness testimonies from players and club members who recalled the club president mentioning a long-term plan. HC Y., however, maintained that no formal multi-year agreement existed, emphasizing the conditional nature of any extension.
X. began working in April 1986 and received regular payments. During a club meeting in May 1986, the president reportedly confirmed X.’s engagement for at least two years, though he later clarified that his optimistic statements were not intended as a binding commitment. X. also took steps suggesting long-term involvement, such as renting an apartment and seeking supplementary employment, which he agreed would offset his salary from HC Y. Despite these actions, no written contract was ever signed, though draft versions were exchanged.
The arbitration panel applied the principle of trust, which holds that a party is bound by declarations interpreted reasonably and in good faith by the recipient. Given the conflicting accounts, the tribunal weighed the evidence, including witness statements and contextual actions, to determine the parties' true intentions. The case underscored the importance of clear contractual terms and the challenges of oral agreements in employment disputes. The final ruling addressed X.’s financial claims, including salary and interest, while considering deductions for his secondary income and social security contributions. The decision highlighted the need for mutual clarity in contractual relationships to prevent such conflicts.
The court concluded that the club was bound by a two-year contract with X., given the objective interpretation of the president’s statements, the draft contracts, and the parties’ conduct. The club’s realization of financial risk did not absolve it of its commitments. The decision underscores the importance of good faith and the principle that apparent declarations of intent can create binding obligations when reasonably relied upon by the other party. The total damages awarded to the claimant amounted to CHF 45,336.75, with 5% interest from January 29, 1988. The final ruling ordered the defendant to pay the specified sum with interest and dismissed other claims.