The case involves a contractual dispute between professional football player Ivan Temnikov and FC Dynamo Moscow, along with the Football Union of Russia (FUR), adjudicated by the Court of Arbitration for Sport (CAS). The dispute centered on the termination of Temnikov’s employment contract and the validity of a buyout clause (Clause 12.3) that allowed either party to terminate the agreement unilaterally upon payment of predetermined compensation. The sole arbitrator, Mr. Vladimir Novak, issued an award on 16 October 2020, addressing key legal principles and procedural matters.
The arbitrator emphasized the importance of consistent CAS jurisprudence to ensure predictability in sports law while balancing procedural efficiency. He noted that relevant CAS awards, even if unpublished, should be considered if they come to the panel’s attention, provided the parties have the opportunity to comment. This approach maintains fairness without unduly delaying proceedings. The case also examined the nature of buyout clauses in employment contracts, which function as liquidated damages provisions, reflecting the parties' intent to predetermine compensation for breach or early termination.
The arbitrator highlighted that contractual freedom and stability, as outlined in Article 17 of FIFA’s Regulations on the Status and Transfer of Players, are fundamental to football’s functioning. However, this freedom is not absolute. For a buyout clause to be valid, it must meet three criteria: clear and unequivocal drafting, absence of coercion, and no excessive commitment favoring one party. The arbitrator stressed that buyout clauses must be drafted clearly to ensure parties understand their rights and obligations. Interference with such clauses should be rare, limited to cases of excessive disproportionality where one party gains undue control.
The factual background revealed that Temnikov signed a contract with Dynamo Moscow in 2018, which included the buyout clause. The club terminated the contract early, leading to the dispute. The arbitrator analyzed the clause’s validity and the parties’ obligations, ultimately ruling on the enforceability of the termination terms. The arbitrator found the clause valid, emphasizing that reciprocity in contractual obligations is not a requirement under Article 17(1) of the FIFA Regulations. The consequences of contract termination differ for players and clubs—players lose income, while clubs lose the value of the player’s services, which includes transfer costs and training expenses.
The compensation stipulated in the contract (three average monthly earnings of the player) was deemed consistent with the FUR RSTP's default provisions for unilateral termination without just cause. The arbitrator also rejected the player's argument that the clause violated the Russian Labour Code, citing Articles 77(1) and 78, which permit termination by mutual agreement. The clause was transparently incorporated into the contract, with no evidence of duress or coercion, and the option to terminate was mutual.
Additionally, the arbitrator dismissed claims that the club's delayed payment (by one day) invalidated the clause, noting that the payment order was issued on the termination date and processed the next day, well within the contractual and legal deadlines. Any delay could only warrant interest payments, not nullification of the clause. The arbitrator also addressed Temnikov’s claims for additional payments, such as leave allowance and per diem travel expenses, finding that the club had fulfilled its obligations under the contract and applicable laws.
The award reinforced the principles of contractual freedom and stability in football while ensuring fairness and proportionality in buyout clauses. It underscored the need for clear contractual terms and balanced the interests of players and clubs in employment disputes. The decision serves as a significant reference for future cases involving unilateral termination clauses in sports contracts, upholding the enforceability of such clauses when they comply with relevant regulations and labor laws. The appeal was dismissed in its entirety, and the earlier decision by the FUR Dispute Resolution Chamber was upheld.