The case involves a legal dispute between professional football player Nilmar Honorato da Silva and El Jaish FC, along with FIFA, concerning the termination of an employment contract and the validity of a settlement agreement. The Court of Arbitration for Sport (CAS) issued an award on 23 August 2017, addressing key legal issues such as the invalidation of the settlement agreement due to duress, the validity of liquidated damages clauses, the applicable interest rate, and FIFA's exclusive authority to impose sporting sanctions under Article 17 of the FIFA Regulations on the Status and Transfer of Players (RSTP). The dispute arose after the club terminated the player's contract in 2014, leading to complications in his transfer to Internacional due to delays in issuing his International Transfer Certificate (ITC). The player alleged that the club coerced him into signing a settlement agreement waiving his financial claims in exchange for the ITC, which he argued was invalid under Swiss law due to his straitened circumstances and the club's exploitation of his vulnerability.
The CAS panel examined the settlement agreement under Article 21 of the Swiss Code of Obligations, which allows contracts to be invalidated if one party exploits the other's straitened circumstances, inexperience, or thoughtlessness, provided there is a clear disparity between performance and consideration. The panel found that the player was indeed in a vulnerable position, facing financial and sporting pressures, including the risk of being unable to play for three months if not registered with the Brazilian Football Confederation (CBF). The club's refusal to issue the ITC unless the player signed the settlement was deemed an act of bad faith, violating FIFA regulations that prohibit conditional issuance of ITCs. The panel ruled the settlement invalid due to duress and unfair advantage, emphasizing the club's misconduct and the player's lack of alternative options.
Regarding compensation, the panel upheld the player's claim for damages arising from the club's unjustified termination of his contract during the protected period under FIFA RSTP. The club argued that a liquidated damages clause in the contract limited compensation to two months' salary, but the player contested this as disproportionate. The panel found the clause valid, noting that disparities in damages for players and clubs are inherent due to differing financial impacts of contract breaches. The player was awarded €300,000 as compensation for breach of contract, plus interest at 5% per annum from the date of termination. Additionally, the panel ruled that the player was entitled to a €100,000 bonus for the club's victory in the Crown Prince Cup, as this claim was separate from the termination damages.
The player also sought sporting sanctions against the club for breaching the contract and misusing FIFA's Transfer Matching System (TMS). However, the panel ruled that only FIFA has the authority to impose such sanctions, and the player lacked standing to request them. The CAS decision set aside the earlier FIFA Dispute Resolution Chamber ruling, ordering the club to pay the specified amounts with interest and dismissing all other claims. The case highlights the complexities of football contract disputes, the importance of fair treatment in player transfers, and the regulatory role of FIFA in enforcing contractual and procedural obligations. The ruling underscores the need for clubs to act in good faith and adhere to FIFA regulations, ensuring players' rights are protected in contractual and transfer processes.