The case involves a dispute between Club X and Coach C, along with FIFA, regarding the termination of the coach's employment contract, adjudicated by the Court of Arbitration for Sport (CAS). The arbitration was conducted by a sole arbitrator, Mr. Alain Zahlan de Cayetti, who issued the award on 31 May 2021. The central issues revolved around whether the coach had just cause to terminate his contract and whether FIFA's Regulations on the Status and Transfer of Players (RSTP) applied to coaches. The arbitrator ruled that the RSTP does not directly apply to coaches, as its scope is limited to players, their eligibility, and transfers between clubs.
The dispute stemmed from an employment contract signed on 1 July 2019, valid until 1 July 2020, which stipulated a total salary of USD 140,000, payable in installments, along with bonuses for achievements like league championships and cup wins. The club terminated the contract mid-season, citing just cause, but the coach contested this, arguing the termination was unjust. The arbitrator emphasized that only a material breach of contract constitutes just cause for termination, meaning the main terms of the contract must no longer be upheld, making continuation untenable under good faith principles. The term "mid-season" was defined with reference to FIFA's RSTP, specifically Article 6.2, which refers to the second registration period, typically occurring in the middle of the season. The arbitrator noted that the parties intended payments due in December 2019 to be made by 31 December 2019 and highlighted the necessity of a warning before termination, allowing the other party an opportunity to rectify any breaches.
The club, based in Country Y, filed appeals against the coach and FIFA, alongside two other related cases involving members of the coaching team. While the club paid the advance of costs for two cases, it failed to do so for the third, leading to its withdrawal. The arbitrator clarified that the cases could not be consolidated, requiring separate awards. The background facts detailed the contractual terms, including salary payments, bonuses, and termination clauses, with specific notes outlining financial obligations in case of mid-season termination by either party.
The coach alleged unpaid salaries and bonuses, issuing default notices on October 21 and December 21, 2019, demanding payment of outstanding dues, including salaries, air ticket costs, and bonuses. The club claimed all payments had been made and stated the second mid-season would begin on February 1, 2020, with salaries paid accordingly. The coach disputed this, insisting on payment by December 31, 2019, and later extended the deadline to January 3, 2020. When the club failed to pay, the coach terminated the contract on January 5, 2020, citing unpaid amounts exceeding $50,000. The coach filed a claim with FIFA on February 4, 2020, seeking payment of outstanding salary, bonuses, reimbursement for a flight ticket, and compensation for breach of contract. The club countered, denying most claims and arguing the coach violated contractual obligations, requesting the coach repay 50% or 30% of received amounts per the contract and forfeit the final installment.
On 30 June 2020, the FIFA Players’ Status Committee partially accepted the coach's claim and rejected the club's counterclaim. The club was ordered to pay the coach USD 55,380.70 in outstanding remuneration, plus interest, and USD 40,000 as compensation for breach of contract, with 5% annual interest. The club appealed the decision to CAS on 12 August 2020. The CAS process involved multiple procedural steps, including the club's request for a sole arbitrator and objections to excluding FIFA as a party. The parties agreed to English as the arbitration language and to consolidate related cases under the same arbitrator.
The arbitrator found that the coach had just cause to terminate the contract due to the club's material breach in failing to meet payment obligations. The club's arguments, including financial sanctions on its country and claims that the coach accepted progressive payments, were dismissed due to lack of evidence. The arbitrator ruled that the club was liable for breaching the employment agreement by failing to pay substantial parts of the coach's remuneration on time. The consequences of the termination included the club being ordered to pay the outstanding USD 50,000 salary plus 5% annual interest, a USD 5,000