The case involves a legal dispute between Czech professional footballer Martin Fenin and the French football club FC Istres Ouest Provence (FCIOP), managed by SASP FCIOP, regarding the termination of Fenin’s employment contract. Signed in August 2014, the contract was terminated in January 2015, prompting Fenin to file a claim with FIFA’s Dispute Resolution Chamber (DRC) for breach of contract, seeking compensation for unpaid salary and other expenses totaling EUR 39,200. FCIOP countered by alleging Fenin breached his contractual obligations due to health concerns related to alcohol consumption, supported by medical tests showing elevated CDT levels. The FIFA DRC rejected Fenin’s claim in November 2016, leading him to appeal to the Court of Arbitration for Sport (CAS).
The CAS proceedings, overseen by Sole Arbitrator Prof. Ulrich Haas, addressed several legal issues, including the recognition of foreign insolvency proceedings, the validity of arbitration agreements during insolvency, and the admissibility of claims. The arbitrator determined that Swiss law governed procedural aspects, as CAS is based in Switzerland, and concluded that French insolvency proceedings did not automatically invalidate the arbitration agreement. However, the arbitrator noted that Fenin lacked a legal interest in continuing the claim due to the club’s liquidation and the unlikelihood of recovering funds. The ruling emphasized the impracticality of enforcing any award against a bankrupt entity, as French law restricts individual enforcement once insolvency proceedings begin.
Fenin argued that Istres FC, a successor to FCIOP, should be held liable for the club’s obligations, but the arbitrator dismissed this claim, ruling the appeal against Istres FC inadmissible. The case proceeded solely against FCIOP, though the arbitrator confirmed jurisdiction under FIFA statutes and the CAS Code. The arbitrator also considered FIFA’s disciplinary enforcement mechanism, noting that Article 107 of the FIFA Disciplinary Code allows proceedings to be closed in insolvency cases, as sanctions require fault attribution, which is impossible when a liquidator controls the debtor’s assets.
Ultimately, the CAS upheld the FIFA DRC’s decision, dismissing Fenin’s appeal due to the futility of enforcement and the absence of a legal interest. The case highlights the challenges of pursuing claims against insolvent clubs and the limitations of arbitration in such contexts, underscoring the importance of assessing legal interest and enforceability in disputes involving financially distressed entities. The ruling also clarifies the interplay between insolvency law and sports arbitration, particularly the recognition of foreign insolvency effects and the validity of arbitration agreements during liquidation. The decision serves as a precedent for similar cases, reinforcing the principle that claims against insolvent parties must align with insolvency proceedings to be viable.