The case involves a dispute between Brazilian football player Charles Fernando Basílio da Silva and Russian club FC Lokomotiv Moscow regarding the termination of the player's employment contract. The dispute was brought before the Court of Arbitration for Sport (CAS), which issued an award on 25 April 2016. The conflict arose when the player, after being loaned to Santos Futebol Clube and sub-loaned to Cruzeiro Esporte Clube, failed to return to Lokomotiv Moscow upon the loan's expiration. Instead, he communicated his intention to terminate the contract, citing personal reasons. The original contract, signed in 2008, included a clause allowing unilateral termination by the player with one month's notice but required a compensation fee of 25 million euros. Lokomotiv argued the player breached this clause by not returning or paying the fee, while the player contested the clause's validity and proportionality.
The parties later signed a Termination Agreement, modifying the compensation terms: USD 300,000 if paid within 20 days, USD 1,000,000 if paid within 60 days, and 10% annual interest for late payment. The player issued a cheque for USD 300,000, but it was delivered late and later returned unpaid due to issues with the intermediary bank. Lokomotiv demanded the higher amount, citing the player's failure to meet the deadline, and escalated the matter to FIFA’s Dispute Resolution Chamber (DRC). The DRC ruled in favor of Lokomotiv, ordering the player to pay USD 1,000,000 plus interest. The player appealed to CAS, arguing the compensation was punitive and disproportionate under Swiss law, which governed the contract.
The CAS panel upheld the DRC's decision, emphasizing the principle of pacta sunt servanda (agreements must be kept). It found the Termination Agreement clear and enforceable, with the player failing to meet the payment deadlines. The panel rejected the player's claim that the compensation was excessive, noting it was mutually agreed and proportionate given the circumstances, including Lokomotiv's initial investment in the player. The panel also dismissed arguments about procedural flaws in the DRC's decision, asserting its full power to review facts and law. Ultimately, the CAS confirmed the player’s obligation to pay USD 1,000,000 plus 10% annual interest from 25 March 2012, reinforcing the enforceability of contractual terms in professional sports and the limited grounds for moderating agreed penalties. The case underscores the complexities of international football contracts and the importance of adhering to contractual obligations.