The case involves a complex legal dispute between Club X and Player Z, revolving around the termination of their employment contract and subsequent agreements. The initial contract, signed in January 2013 and valid until December 2014, included terms on salary, bonuses, and image rights. Due to Player Z's injuries and desire to leave, the parties negotiated a Mutual Termination Agreement in February 2014, which stipulated compensation for the player and was conditional upon two prerequisites: signing a new contract with Club Y and registering with the relevant football federation. Player Z signed with Club Y on February 13, 2014, though the contract was backdated to January 1, 2014. Club X claimed ignorance of this signing, while Player Z argued it resulted from tripartite negotiations. Club X later paid Player Z an amount exceeding the agreed compensation, citing additional performance bonuses. The football federation provisionally approved the transfer but later suspended it due to missing documentation, which Player Z did not disclose to Club X.
In April 2014, Player Z demanded unpaid salaries and part of an extraordinary award, threatening to terminate the original contract if payments were not made. Club X referenced the Mutual Termination Agreement and the earlier payment, but Player Z contended that the registration condition remained unfulfilled, rendering the original contract valid. On April 28, 2014, Player Z unilaterally terminated the contract, citing unpaid dues as just cause. The football federation later informed Club X of the registration suspension and initiated disciplinary proceedings. Player Z filed a claim with FIFA, leading Club X to seek clarification from the federation, which confirmed the registration files but noted the suspension. The dispute centered on whether the Mutual Termination Agreement's conditions were met and whether Player Z's termination was justified.
The case proceeded to the Court of Arbitration for Sport (CAS) after FIFA's Dispute Resolution Chamber partially accepted Player Z's claim, ordering Club X to pay outstanding remuneration and compensation. Club X appealed, arguing that Player Z breached the contract by signing with Club Y and failing to fulfill the registration condition. Player Z countered that Club X had just cause for termination due to non-payment and breach of personality rights, as Club X had already hired a replacement. The CAS panel examined the Mutual Termination Agreement under Swiss law, particularly Article 152.1 of the Swiss Code of Obligations, which imposes duties on parties to ensure condition fulfillment. The panel found that while Player Z signed with Club Y, his registration was not completed due to his failure to provide valid documentation, rendering the termination agreement ineffective. However, the panel noted that Player Z's contract with Club X was terminated by his signing with Club Y, as FIFA regulations prohibit simultaneous employment contracts.
Ultimately, the CAS ruled in favor of Club X, overturning FIFA's decision and absolving Club X of any financial obligation to Player Z. The panel emphasized that Player Z's failure to finalize his registration was due to his own actions, undermining his claim for additional compensation. The ruling highlighted the importance of fulfilling contractual conditions and acting in good faith, providing a clear resolution to the dispute.