The Court of Arbitration for Sport (CAS) ruled on a dispute between FC Istra 1961 and professional football player Filipe Gabriel Goncalves Ferreira regarding the termination of an employment contract. The player signed a contract with FC Istra in August 2017, which included a monthly net salary of €3,000, accommodation, and travel benefits. However, the club failed to pay his salary for several months and did not provide the agreed-upon travel expenses. After multiple warnings, the player terminated the contract in January 2018, citing unpaid wages and breach of contractual obligations. He later signed a new contract with Norwegian club Notodden Fotballklubb, which offered a lower salary.
The key legal issue was whether the player’s new contract, which provided a lower salary, should automatically reduce the compensation owed by FC Istra for breaching the original contract. The CAS panel ruled that the mere fact the player’s new contract paid less did not justify an automatic deduction in compensation. The decision emphasized that compensation should be based on the original contract’s terms and the actual circumstances at the time of termination, not hypothetical future earnings. The panel referenced Article 17 of FIFA’s Regulations on the Status and Transfer of Players (RSTP), which states that if a player signs a new contract, only the value of the new contract for the remaining period of the terminated contract should be deducted from the compensation. The ruling clarified that the club’s failure to pay salaries constituted a material breach, justifying the player’s termination with just cause.
The FIFA Dispute Resolution Chamber (DRC) initially ruled that the club must pay the player €58,000 in compensation for breach of contract, plus 5% annual interest from March 6, 2018, until the date of payment. The club appealed to CAS, arguing that the player failed to mitigate damages by accepting a lower salary and not securing comparable employment after the new contract expired. The CAS upheld the DRC’s decision, reinforcing the principle that clubs must fulfill financial obligations to players or face legal consequences. The arbitrator rejected the club’s request to delay proceedings, noting that potential future earnings were irrelevant to the compensation determination. The decision underscored the importance of contractual compliance in professional football and affirmed the player’s right to terminate a contract when a club fails to meet financial obligations.
The CAS emphasized that the burden of proof lay with the club to demonstrate the player’s failure to mitigate damages, which it did not substantiate. The ruling dismissed the club’s appeal, upheld the DRC’s compensation calculation, and rejected all other motions. The case provides clarity on how compensation should be calculated when a player terminates a contract with just cause and signs a new agreement under different terms, reinforcing the legal protections afforded to players in cases of breach. The final decision highlighted the adversarial system’s requirement for parties to substantiate their claims with convincing evidence, concluding that the club’s failure to meet this burden justified the original compensation award.