The Court of Arbitration for Sport (CAS) case 2007/A/1210 involved a dispute between Sergio Dario Herrera, a Colombian professional football player, and Ittihad Club, a Saudi Arabian football club, regarding the termination of Herrera's employment contract. The case was governed by Swiss law, which stipulates that fixed-term employment contracts can only be terminated early for "valid reasons" or by mutual agreement. A "valid reason" is determined by the severity of the breach, such as a serious violation of trust or failure to meet essential contractual obligations. The dispute centered on Ittihad's failure to pay Herrera's salaries for three months and its refusal to allow him to play for the first team as agreed. Despite written notices, the club's excuses for non-payment, including claims that Herrera did not collect cheques and closed his bank account, were deemed insufficient. Herrera formally terminated the contract on 23 January 2006, citing Ittihad's unilateral breach, and filed a complaint with FIFA seeking unpaid salaries, bonuses, and compensation for the remaining contract value.
FIFA's Dispute Resolution Chamber partially accepted Herrera's claims, ordering Ittihad to pay outstanding salaries and bonuses but rejecting compensation for the remaining contract value. The case was appealed to CAS, which examined whether Herrera had just cause to terminate the contract and the appropriate compensation. CAS upheld the termination, ruling that Ittihad's non-payment and exclusion of Herrera from the first team constituted severe breaches justifying termination. The tribunal emphasized the principle of "positive interest," which aims to place the injured party in the position they would have been in had the contract been properly performed. Compensation included the remaining contract value, adjusted for any savings or earnings Herrera obtained due to the early termination. The panel awarded Herrera unpaid salaries for October 2005 to January 2006 (totaling USD 133,332) and a USD 20,000 bonus for winning the Arab Cup. Additionally, Herrera was entitled to "positive damages" for the remaining contract value, initially calculated at USD 633,331 but adjusted to USD 200,000 by the DRC, considering mitigating factors such as Herrera's subsequent employment with another club.
The CAS panel rejected Ittihad's counterclaims, including allegations that Herrera breached the contract by failing to remain fit or delaying his return to Saudi Arabia, due to lack of evidence. The panel also dismissed Ittihad's request for reimbursement of transfer costs, citing insufficient substantiation. The ruling confirmed the DRC's decision in full, including the imposition of 5% annual interest on outstanding payments from the expiration of a 30-day period following the DRC's decision. The case underscores key principles in employment contract disputes, particularly the necessity of timely payment and adherence to agreed terms. It also highlights the role of arbitration in resolving international sports disputes, ensuring fairness and contractual compliance. The ruling reinforced the importance of mutual obligations in employment contracts and the consequences of unilateral breaches, ultimately dismissing Ittihad's appeal and upholding the DRC's decision.