The case involves a dispute between Serbian football club FK Crvena Zvezda and Ecuadorian player Segundo Alejandro Castillo Nazareno over unpaid salaries. The parties had signed an employment contract in July 2007, valid until July 2010, stipulating a total payment of EUR 150,000 for the 2007/2008 season. The player was loaned to Everton FC at the end of the season. In January 2009, the player filed a claim with FIFA's Dispute Resolution Chamber (DRC), alleging unpaid salaries for March to June 2008, totaling EUR 62,500, plus interest. He also sought contract termination and sporting sanctions against the club, claiming he had only received salaries for January and February 2008 and lacked a copy of the contract. The club contested these claims, asserting it had fulfilled all financial obligations and provided the contract and annexes, along with tax receipts showing payments from September 2007 to June 2008. The DRC found the club had only proven tax payments of EUR 16,034, leaving an outstanding amount of EUR 33,966, and ordered the club to pay this plus 5% interest from June 2008.
The club appealed to the Court of Arbitration for Sport (CAS) in July 2010, requesting a stay of execution, which CAS deemed unnecessary as FIFA's financial decisions are not enforceable during appeals. The case proceeded with written submissions, and both parties agreed to resolve the dispute without a hearing. The sole arbitrator, Lars Hilliger, confirmed CAS's jurisdiction and reviewed the case file, focusing on whether the club had met its burden of proof regarding salary payments. The DRC had ruled the club failed to provide sufficient evidence of direct payments, only proving tax payments. The arbitrator upheld this decision, emphasizing the club's evidence did not conclusively demonstrate full salary payments.
However, in a subsequent review, the arbitrator examined additional documentation, including tax forms and bank statements, which showed the club had transferred approximately EUR 174,329 to the player between July 2007 and July 2008, covering salaries and a bonus. The arbitrator found these payments aligned with the agreed remuneration and noted the player had not contested the authenticity of the documents. Consequently, the arbitrator ruled the club had met its burden of proof, confirming payments were made as agreed, including for the disputed months. The CAS upheld the appeal, overturned the DRC's decision, and dismissed all further claims. The case underscores the importance of clear documentation in contractual disputes and the adversarial nature of arbitration, where parties must actively prove their claims with credible evidence. The ruling highlights the procedural rigor in sports arbitration and the necessity for clubs to maintain transparent financial records to avoid disputes.