The case involves a complex arbitration dispute before the Court of Arbitration for Sport (CAS) between FC Pyunik Yerevan, a football club from Armenia, and E., a professional football player, along with AFC Rapid Bucaresti and FIFA. The dispute arose from the unilateral termination of the player's employment contract with FC Pyunik during the protected period, leading to legal and financial consequences under FIFA regulations. The panel addressed several key legal issues, including FIFA's standing to be sued, the interpretation of time limits under FIFA regulations, and the calculation of compensation for breach of contract. FIFA's standing was affirmed as it defended its disciplinary decision, and the panel clarified that time limits under Article 25 of the FIFA Regulations must be distinguished from disciplinary matters governed by the FIFA Disciplinary Code. The panel emphasized that Article 17 of the FIFA Regulations requires examining contractual provisions addressing unilateral breaches, treating such clauses as liquidated damages. Compensation must consider all specific circumstances, with guidelines under Article 17 ensuring fairness. The player's salary from his former club at the time of breach is relevant, but the salary from the new club better reflects his market value.
The factual background reveals that the player, originally from Cameroon, signed a three-year contract with FC Pyunik in 2003 at age 16. He left the club in 2005 without permission, leading to disputes over his naturalization as an Armenian citizen and disciplinary sanctions. AFC Rapid Bucaresti later signed the player through an agreement with a Cameroonian club, raising further issues about the validity of his transfer and registration. The player contested his naturalization and the sanctions imposed by the Armenian Football Federation, seeking release from his contract without compensation. FIFA's Dispute Resolution Chamber (DRC) initially ruled on the matter, prompting FC Pyunik to appeal to CAS. The DRC found the contract valid, as it complied with Armenian law, and concluded the player breached it without just cause, holding AFC Rapid jointly liable for compensation. The DRC awarded FC Pyunik $15,000 but rejected a transfer ban on AFC Rapid due to insufficient evidence of direct inducement. The player’s claims of coercion regarding his naturalization were dismissed for lack of proof.
The CAS panel's award, issued on 26 May 2008, addressed these issues, providing clarity on contractual breaches, compensation, and the application of FIFA regulations. The panel confirmed its jurisdiction under FIFA Statutes and the CAS Code, with Swiss law and FIFA regulations deemed applicable. FC Pyunik sought to include FIFA as a respondent to ensure sporting sanctions could be imposed, but FIFA argued it should not be a party. The panel sided with FC Pyunik, noting FIFA's involvement in the proceedings. The appeal challenged the DRC's decision on compensation, joint liability, and the absence of sporting sanctions. The panel examined the legality of the player’s registration, concluding the 2005 FIFA Regulations applied. It also considered whether the claim was time-barred under the two-year limitation period but noted nullity claims could bypass this. The panel fixed compensation at USD 60,000, with 5% interest from the breach date, and upheld AFC Rapid's joint liability. However, it dismissed requests for additional sanctions, citing the player’s young age and the controversy surrounding his registration. The panel acknowledged FIFA's consistent practice of case-by-case decisions and suggested clarifying Article 17's wording to avoid ambiguity.
Regarding inducement, the panel found AFC Rapid successfully rebutted the presumption, as the player had previously attempted to join another club before moving to AFC Rapid, indicating his dissatisfaction with FC Pyunik was independent. AFC Rapid did not register the player before his prior contract expired, and FIFA did not challenge the registration process. The panel concluded the player's decision to leave FC Pyunik was his own, not induced by AFC Rapid, and dismissed the request for sporting sanctions. The final ruling partially upheld FC Pyunik's appeal, ordering the player to pay USD 60,000 plus interest, while dismissing all other claims and counterclaims. The case highlights the complexities of contract breaches in football, balancing contractual obligations, regulatory compliance, and the unique dynamics of the sport. The decision underscores the importance of substantiating financial losses and the interplay between legal principles and sports-specific regulations.