The case revolves around a contractual dispute between Liaoning Football Club and professional football player Erik Cosmin Bicfalvi, adjudicated by the Court of Arbitration for Sport (CAS). The employment contract, signed on 7 July 2015, was valid until 31 December 2016 and included clauses on salary, bonuses, housing, and termination conditions. Article 18 of the contract allowed the club to terminate the agreement unilaterally without compensation if it decided not to increase investment for the 2016 season, provided written notice was given by 31 December 2015. On 30 December 2015, the club invoked this clause, terminating the contract and declaring the player free to transfer without financial obligations for the 2016 season.
The player contested the termination, arguing that Article 18 was an unfair unilateral clause favoring the club, and filed a claim with FIFA’s Dispute Resolution Chamber (DRC), seeking over USD 2.6 million in unpaid salaries, signing fees, and damages. The DRC ruled that FIFA regulations, not national law, governed the dispute, deeming Article 18 invalid due to its one-sided nature. It concluded the club had unlawfully terminated the contract and awarded the player compensation of USD 1,599,992 for the remaining contract value, minus USD 210,000 earned from subsequent contracts, resulting in a net award of USD 1,389,992 plus 5% annual interest. The DRC also ordered the player to reimburse the club CNY 28,000 for overpaid rent expenses.
Dissatisfied with the DRC’s decision, the club appealed to CAS, arguing that Chinese law should apply and that the termination was valid under the contract’s terms. The CAS panel examined the applicable law, noting the absence of an explicit choice of law clause in the contract. It ruled that FIFA regulations took precedence, with Swiss law as a subsidiary framework. The panel found Article 18 disproportionately favored the club, granting it unilateral termination rights while imposing severe penalties on the player for early termination, as outlined in Article 19. The panel deemed Article 18 null and void, violating principles of contractual stability and fairness under Swiss labor law.
The panel upheld the DRC’s compensation calculation, emphasizing the "positive interest" principle to restore the player to his position had the contract been fulfilled. It rejected the club’s arguments about tacit acceptance of termination and the applicability of Chinese law. The panel also confirmed the rent reimbursement order and the 5% interest rate. Ultimately, the CAS dismissed the club’s appeal, fully endorsing the DRC’s decision and underscoring the importance of balanced contractual terms and adherence to FIFA regulations in resolving sports labor disputes. The ruling highlights the enforceability of contractual obligations and the need for fair treatment of both parties in professional football agreements.