The case before the Court of Arbitration for Sport (CAS) involved a dispute between BC VEF Riga, a Latvian basketball club, and professional basketball player Kaspars Berzins, along with his sports agency, Bill A. Duffy International Inc. The conflict arose from the termination of an employment contract and the withholding of the player's salary. The contract, signed in July 2012, required Berzins to play for the club for three seasons with specified salaries and agency fees. A contentious clause in the contract mandated that Berzins sign the club's Internal Rules, which the club claimed were integral to the agreement. Despite repeated requests, Berzins did not sign these rules, prompting the club to suspend his salary payments in March 2013. In response, Berzins and his agency initiated arbitration proceedings before the Basketball Arbitral Tribunal (BAT), arguing that the club's withholding of salary constituted a breach of contract. The BAT ruled in favor of Berzins, ordering the club to pay outstanding salaries, agency fees, and arbitration costs. The club appealed this decision to CAS, which upheld the BAT's ruling but clarified key legal principles. The CAS panel emphasized that decisions made ex aequo et bono (based on equity rather than strict legal rules) allow arbitrators to consider fairness and justice, though they cannot disregard contractual terms entirely. The panel found that while the club's suspension of salary payments was a fundamental breach of contract, Berzins' refusal to sign the Internal Rules without justification constituted a minor breach. This minor breach could reduce the compensation owed to him. The CAS affirmed that the club's actions justified Berzins' termination of the contract with just cause but adjusted the compensation to reflect his partial responsibility. The club argued that the Internal Rules were essential and binding for all players, while Berzins and his agency contended that these rules were not part of the original contract and could not be enforced retroactively. The CAS panel examined the admissibility of the appeal, confirming it was filed within the required timeframe and that jurisdiction was established based on the contract's arbitration clause, which provided for appeals to CAS under Swiss law. The panel concluded that the club's unilateral suspension of payments was a fundamental breach, justifying the player's termination, but also acknowledged the player's minor breach regarding the Internal Rules. The Panel partially upheld the club's appeal, reducing the compensation by up to 25% for the latter two seasons of the contract due to the player's lack of good-faith engagement. For the first season, no reduction was applied as the player had fulfilled his obligations. The club was ordered to pay the player €301,250 in total and €44,500 to the agency. The case highlights the complexities of contractual disputes in sports, particularly regarding the enforcement of internal rules and financial obligations, and underscores the importance of good faith in contractual negotiations. The ruling demonstrates the Panel's discretion to adjust compensation based on equitable principles while balancing contractual obligations and fairness.