The case involves a dispute between a professional football coach, S., and the Bulgarian football club PFC Litex Lovech, stemming from the early termination of an employment contract signed on November 18, 2004. The contract appointed S. as Head Coach until May 30, 2006, with specific financial terms, including a signing-on fee and monthly salaries. Clause 8 stipulated that if the club terminated the contract prematurely, it would owe S. all remaining salary and bonuses. On May 7, 2005, the club asked S. to resign, which he refused. Subsequent negotiations on May 9, 2005, involved the club offering subordinate roles, which S. rejected, leading to the contract's termination. The club cited the Bulgarian FA's refusal to register S. as Head Coach due to a lack of a work permit, while S. argued the decision was due to the club president's lack of confidence in him.
S. filed a claim with FIFA on May 18, 2005, seeking €605,000 for unpaid salary, signing-on fees, and bonuses. On September 26, 2006, FIFA’s Single Judge ruled in S.'s favor but awarded only €150,000, reducing the compensation based on S.'s "behavior." S. appealed to the Court of Arbitration for Sport (CAS), arguing the reduction was unjustified. The CAS panel, composed of arbitrators from the Netherlands, the UK, and Switzerland, reviewed the case de novo. It found the club breached the contract without just cause, as the lack of a work permit did not justify termination, nor could S. be forced into a subordinate role. The panel also determined that neither FIFA regulations nor Swiss law permitted mitigating compensation in cases of clear breach.
The CAS ruled that S. was entitled to full compensation as per the original contract terms, overturning the FIFA Single Judge’s reduced award. The decision emphasized the club’s unilateral termination without valid grounds constituted a clear breach, warranting full financial redress. On June 6, 2007, the CAS issued its final ruling, allowing S.'s appeal and ordering the club to pay €555,000, plus 5% interest from January 22, 2007, within 30 days. The claim for bonuses was rejected due to insufficient evidence. The ruling resolved the dispute in S.'s favor, upholding the principles of contractual obligations under Swiss law and FIFA regulations. All other claims were dismissed, and the decision was binding on both parties.