The case involves a dispute between Khazar Lankaran Football Club (the Club) and Eder Jose Oliveira Bonfim (the Player) regarding the termination of an employment contract signed on 20 April 2012, valid until 30 June 2014. The contract stipulated a total remuneration of $600,000, payable in installments, and required the Player to comply with the Club's rules and Azerbaijani football regulations. In July 2013, the Club allowed the Player to be absent until 31 August 2013 to negotiate with other teams, later extending this absence until 25 September 2013. However, the Club failed to pay the Player's salaries for July and August 2013 ($50,000) and did not reintegrate him into the main squad. Additionally, the Club did not renew his visa, which expired on 19 September 2013, leaving him unable to work legally in Azerbaijan and at risk of deportation. On 23 September 2013, after sending two unanswered faxes requesting payment and visa renewal, the Player terminated the contract, citing the Club's breach of obligations.
The dispute was brought before the Court of Arbitration for Sport (CAS), which addressed three key issues. First, it determined that the contract's governing law clause, referencing Azerbaijani football regulations, did not explicitly submit the contract to any specific law. Due to FIFA's hierarchical structure, FIFA regulations and Swiss law were deemed applicable. Second, under Article 17 of FIFA Regulations, a party terminating a contract with just cause is entitled to compensation for damages. The CAS panel considered the Club's failure to pay salaries and renew the visa as grounds for the Player's termination and compensation. Third, the panel rejected the Club's arguments for reducing the compensation, as its behavior demonstrated tacit acceptance of the termination and no justification for its breach of contractual obligations.
The Club argued that the termination was due to a "personnel cutback" under Azerbaijani labor law, but the panel dismissed this claim, noting the terminations were based on the coach's decisions rather than organizational restructuring. The panel upheld the FIFA Dispute Resolution Chamber's decision, awarding the Player $275,000 in compensation for the early termination of his contract, plus interest. The Club sought to deduct $31,815 from the Player's claim, alleging it had deposited funds in a local bank account, but the panel found the account was controlled by the Club, not the Player, and the funds were never effectively paid to him. The parties agreed to deduct $5,369.28 for two withdrawals made by the Player in August and September 2013, reducing the outstanding salaries to $44,630.72.
The CAS emphasized the principle of pacta sunt servanda (agreements must be kept) under Article 17 of FIFA Regulations, concluding that the Player had just cause to terminate the contract and was entitled to full compensation without reduction. The final ruling required the Club to pay the Player $275,000 plus interest from 4 October 2013, $19,630.72 with specified interest calculations, and $25,000 with interest from 1 September 2013. The decision reinforced the importance of contractual adherence in professional football and the precedence of FIFA's regulatory framework in resolving such disputes.