The Court of Arbitration for Sport (CAS) resolved a contractual dispute between Steel Azin Club and football coach Ljubisa Tumbakovic, stemming from a breach of contract involving unpaid signing fees and subsequent termination. The contract, signed on July 5, 2010, required the club to pay Tumbakovic $1.2 million over twelve months, including an initial signing fee of $480,000. However, the club only paid $100,000 by September 14, 2010, despite the contract not specifying a payment deadline. The CAS panel, composed of José Juan Pintó, Jahangir Baglari, and Hans Nater, ruled that under Swiss law, the signing fee was immediately claimable upon contract signing. The club's failure to pay a substantial portion of the fee, despite the coach's demands, constituted a breach of contract. The panel clarified that while not every breach justifies termination, a serious breach—such as non-payment of a significant sum over an extended period—can constitute "just cause" if the injured party provides warnings and a reasonable opportunity to remedy the breach. Tumbakovic had warned the club and given it time to fulfill its obligations, establishing just cause for termination.
The case also addressed compensation, with the panel emphasizing the principle of "positive interest," aiming to restore the injured party to the position they would have been in had the contract been properly performed. The coach sought unpaid fees, bonuses, and other contractual benefits, while the club counterclaimed, alleging breaches by the coach, including unauthorized absences and media interviews. FIFA’s Players’ Status Committee initially ruled in favor of the coach on April 24, 2012, ordering the club to pay $365,000 plus interest, while dismissing the club’s counterclaim. A subsequent settlement agreement in September 2012 required the club to pay $600,000 in installments, but after paying only $200,000, the agreement was nullified, and the coach retained the right to enforce the original FIFA decision. The club appealed to CAS, which upheld the FIFA decision with minor adjustments, reducing the outstanding amount to $165,000 and modifying interest accrual dates. The panel concluded that the coach’s termination was justified due to the club’s non-payment, a fundamental breach under Swiss law, and dismissed the club’s counterclaims for lack of evidence. The final ruling ordered the club to pay $165,000 plus interest from September 12, 2012, and $705,000 plus interest from April 24, 2012, reinforcing the importance of contractual adherence in professional sports. The case serves as a precedent for disputes involving breaches of employment contracts in sports, particularly where financial obligations are not met.