The case involves a dispute between Bulgarian professional football player Vladimir Gadzhev and Russian football club FC Kuban regarding the termination of an employment contract. The Court of Arbitration for Sport (CAS) was tasked with determining whether a valid contract existed and whether its termination was justified. The dispute originated from a "Labor Agreement" signed on 31 August 2015, which was contingent on Gadzhev's registration with the Russian Football Premier League by a specified deadline. When FC Kuban failed to meet this condition, they proposed a revised contract starting on 1 January 2016, with improved terms, including a salary structure and an unchanged signing-on fee. Gadzhev accepted this offer on 18 September 2015, confirming his commitment to the club until 30 June 2018. Subsequent correspondence between the parties affirmed the contractual relationship, with FC Kuban acknowledging Gadzhev’s acceptance and outlining administrative steps for finalizing the contract, such as visa processing and medical examinations. However, the club also raised concerns about ongoing financial difficulties and a potential ban on player registrations, offering Gadzhev the option to withdraw without penalty or proceed under the condition that the ban be lifted by 10 February 2016. Gadzhev’s representative maintained that the contract was already binding and insisted on the club’s obligations, including payment of the signing-on fee and travel arrangements.
The CAS panel, led by Prof. Jack Anderson, determined that the exchange of correspondence containing the essential terms of the employment relationship constituted a valid contract, even if formalities remained incomplete. The tribunal emphasized that the termination of the contract by FC Kuban lacked just cause, as the club acted prematurely without allowing sufficient time to assess the situation, particularly given the impending player registration period. The decision underscored the importance of objectively evaluating the factual circumstances surrounding contract terminations in employment disputes. The ruling affirmed that parties are bound by agreements containing the fundamental elements of a contract, regardless of pending formalities, and highlighted the need for fair and measured actions in contractual relationships.
Gadzhev sought compensation under Article 17 of the FIFA Regulations on the Status and Transfer of Players (RSTP), which mandates payment of outstanding salaries and damages for breach of contract. He calculated his damages as the total salary due until the contract's end (€1,810,342), minus earnings from a subsequent contract with Coventry FC (€160,000), resulting in a claim of €1,650,342. Additionally, he requested 5% annual interest on this amount from the termination date until payment. FC Kuban denied the existence of a valid binding contract, arguing that under the RSTP and Swiss law, employment contracts must be in writing and signed by both parties to be enforceable. They contended that the exchanged drafts never formed a complete, legally binding agreement.
The CAS found the appeal admissible, as it was filed within the stipulated deadlines and complied with procedural requirements. The applicable law included FIFA regulations, with Swiss law serving as a subsidiary reference. The Sole Arbitrator agreed with the DRC's assessment that the Appellant's interpretation of the events was hasty and unjustified. While the Appellant subjectively believed the Respondent would not fulfill its contractual obligations, the arbitrator found no objective evidence supporting this claim. The arbitrator noted that the Respondent had not been given a reasonable opportunity to address the registration issue before the Appellant terminated the contract. The arbitrator concluded that the Appellant's actions in issuing the default notices were premature and did not constitute a valid termination of the contract.
Ultimately, the CAS upheld the DRC's decision, dismissing Gadzhev's appeal and confirming the original ruling. The Sole Arbitrator ruled that compensation under Article 17 of the RSTP was unnecessary, as Gadzhev's claim of unjust termination was not substantiated. However, the Arbitrator agreed with the DRC that Gadzhev was entitled to salary for the period from 1 January to 19 January 2016, amounting to EUR 28,179, plus interest. The case underscores the importance of adhering to contractual and procedural requirements in employment disputes within football.