The case involves a dispute between professional football player Anouar Kali and Al-Arabi Sports Club, adjudicated by the Court of Arbitration for Sport (CAS). The conflict arose from breaches of an employment contract signed on 11 February 2015, which guaranteed Kali a net salary of EUR 2,150,000, housing, a car, flight tickets, and performance bonuses until 30 June 2019. Kali alleged that the club failed to fulfill these obligations, including unpaid salaries and benefits, leading him to terminate the contract on 12 August 2015, citing just cause due to repeated non-payment. Subsequent negotiations resulted in an Amended Settlement Agreement in February 2016, stipulating a reduced payment of EUR 950,000 by 1 March 2016. However, the club failed to meet this obligation, prompting Kali to seek legal recourse.
Kali filed a complaint with FIFA's Dispute Resolution Chamber (DRC), which partially accepted his claim, ordering the club to pay EUR 950,000 plus 10% annual interest. Dissatisfied, Kali appealed to CAS, arguing that the settlement agreement was invalid under English law due to lack of independent legal advice. The CAS Sole Arbitrator dismissed this argument, ruling that the agreement was governed by FIFA regulations and Swiss law, not English law. The arbitrator emphasized procedural rules, noting Kali's late introduction of the English law argument violated CAS Code Article R56 and the principle of venire contra factum proprium.
The central legal issue was whether the Amended Settlement Agreement constituted a novation under Swiss law, replacing the original employment contract. The arbitrator concluded it did, citing the parties' clear intent to settle the dispute with a new obligation. The agreement's clauses releasing all claims and prohibiting further legal action supported this interpretation. The arbitrator also upheld the 10% annual interest penalty for non-payment, finding it proportionate and enforceable under Swiss law. Kali's request to dissolve the settlement and revert to the original contract terms was denied, as the parties had not agreed to such consequences for breach.
Ultimately, the CAS upheld the FIFA DRC's decision, affirming the club's liability for the settlement amount plus interest. Kali's additional claims for unpaid salaries and sporting sanctions were dismissed due to procedural violations and lack of merit. The ruling underscores the importance of adhering to procedural rules and the binding nature of settlement agreements in sports disputes. It also highlights the complexities of international football contracts, jurisdictional conflicts, and the role of arbitration in resolving such disputes. The case reaffirms the principle of pacta sunt servanda, requiring parties to honor their contractual agreements.