The case involves a complex legal dispute between a football player (Player X), his former club (Club A), and subsequent clubs (Club B and Club D) regarding the termination of an employment contract and related financial obligations. The dispute centered on whether Player X had just cause to terminate his contract with Club A due to the club's failure to meet its financial obligations, specifically unpaid salaries for several months. The Court of Arbitration for Sport (CAS) panel, composed of members from Bulgaria, Germany, and the United Kingdom, addressed key legal issues, including the definition of a material breach of contract, the qualification of contractual down payments, and the calculation of compensation.
The employment contract, signed in 2014, stipulated specific salary payments and down payments, which Club A failed to honor starting in October 2014. The non-payment coincided with managerial changes at Club A and its attempt to sign another player, leading to pressure on Player X to leave. Player X was loaned to Club C in February 2015 under an agreement that Club A would continue paying his salary, but he claimed he did not receive payments for February, March, and April 2015, totaling EUR 150,000. After multiple warnings, Player X terminated the contract in May 2015, citing non-payment as just cause under FIFA regulations and Swiss law. He subsequently signed with Club B and later transferred to Club D.
The FIFA Dispute Resolution Chamber (DRC) ruled in favor of Player X, ordering Club A to pay outstanding remuneration and compensation for breach of contract, totaling EUR 1,051,665, plus interest. The DRC rejected Club A's counterclaim, emphasizing that the club's failure to pay salaries constituted a material breach justifying termination. Club A appealed to CAS, arguing that the termination was wrongful and that the employment contract was suspended during the loan period. The CAS panel dismissed these arguments, concluding that the non-payment of salaries was a material breach and that Player X had provided sufficient warning before termination.
The panel applied the principle of "positive interest" to calculate compensation, aiming to place Player X in the financial position he would have been in had the contract been fulfilled. The compensation was based on his hypothetical earnings under the original contract, adjusted for his subsequent earnings with new clubs. The panel upheld the DRC's decision, noting that the calculation was fair and transparent, even though the exact reasoning behind the DRC's figure was not detailed.
The case underscores the importance of contractual adherence in professional sports and the legal consequences of unilateral breaches. It highlights the role of CAS in resolving disputes under FIFA regulations and Swiss law, emphasizing the principles of contractual stability and fair compensation. The final ruling dismissed Club A's appeal, upheld the DRC's decision, and rejected all other motions, reinforcing the player's right to terminate a contract with just cause due to unpaid salaries. The decision serves as a precedent for similar disputes, clarifying the legal standards for contract termination and compensation in football.