The case involves a legal dispute between Chiapas Fútbol Club, S.A. de C.V. and Ulsan Hyundai Football Club over the termination of an employment contract with player Reinaldo de Souza. Chiapas Fútbol Club claimed that the player unlawfully terminated his contract with them and joined Ulsan Hyundai, seeking compensation for the $400,000 paid to the player’s former club and an additional $3,000,000 penalty for alleged enticement by Ulsan Hyundai. The player had signed a contract with Chiapas in August 2004 but terminated it in February 2005, citing the club’s failure to meet payment obligations, including unpaid salaries and a canceled return airline ticket. He also claimed Chiapas had informed his former club in December 2004 that they no longer wanted his services. After terminating the contract, the player signed with Ulsan Hyundai, which was provisionally approved by FIFA.
Chiapas argued the player was still bound to them, while Ulsan Hyundai countered that the termination was justified due to Chiapas’s breaches and that their agreement with the player was valid. FIFA’s Players’ Status Committee rejected Chiapas’s claims, prompting an appeal to the Court of Arbitration for Sport (CAS). The CAS upheld FIFA’s decision, ruling the player had just cause to terminate the contract due to Chiapas’s admitted failures and found no evidence Ulsan Hyundai had enticed the player. The CAS dismissed the appeal, confirming Chiapas was solely responsible for unpaid obligations and Ulsan Hyundai was not liable for compensation or penalties.
The CAS reinforced that penalties for contract breaches require clear evidence of wrongdoing, which was absent in this case. The decision upheld the legitimacy of the player’s contract with Ulsan Hyundai and dismissed Chiapas’s appeal, maintaining the FIFA committee’s ruling from November 2005. The outcome underscores the importance of contractual obligations and the need for substantiated claims in disputes over player transfers.