The case involves a contractual dispute between Viesoji Istaiga Kauno "Zalgirio" Remejas, a Lithuanian basketball club, and Ratko Varda, a Serbian professional basketball player, along with his agent, Obrad Fimic. The dispute arose from the club's failure to meet its financial obligations under the contract signed in August 2008, which guaranteed Varda a net salary of €900,000 over two seasons, payable in monthly installments of €45,000, and an agent’s fee of €45,000 for Fimic. After receiving only one payment in October 2008, Varda terminated the contract in November 2008 due to the club's breach of financial terms. The case was brought before the FIBA Arbitral Tribunal (FAT), which ruled in favor of Varda and Fimic, awarding Varda €254,374.50 in damages after deducting payments received and earnings from a subsequent contract with BC Khimki, and Fimic €29,937.50 for the agent’s fee. The club appealed to the Court of Arbitration for Sport (CAS), arguing that the FAT failed to properly assess the facts and apply the law.
The CAS confirmed its jurisdiction and upheld the FAT’s decision, applying the principle of ex aequo et bono (fairness and equity) as agreed by the parties. The panel found the club in breach of contract for failing to make timely payments, rejecting claims that Varda had breached the contract by arriving late or faking injuries. The panel emphasized that the club’s non-payment entitled Varda to terminate the contract and seek damages. The damages calculation focused on restoring Varda to the economic position he would have been in had the breach not occurred, while considering mitigation principles. The panel awarded Varda the remaining salary for the 2008/09 season, minus earnings from his new contract, and granted Fimic the full agent’s fee, plus interest. Additional claims for moral and physical stress were dismissed due to lack of substantiation.
The CAS ruling underscores the importance of adhering to contractual obligations in sports agreements and the legal recourse available for breaches. It clarifies that agent fees are not damages but contractual obligations payable upon fulfillment of specific conditions. The decision also highlights CAS’s authority to award interest and its role in resolving disputes based on fairness and equity. The case serves as a reminder of the consequences of financial disputes in professional sports and the need for parties to fulfill their contractual commitments or face legal consequences. The panel’s decision was based on written submissions, adhering to procedural timelines and the agreed-upon arbitration rules, and it ultimately reinforced the validity of the FAT’s award while adjusting the agent’s fee to reflect the full contractual amount.