The FIFA Regulations on the Status and Transfer of Players (RSTP) establish that in cases where there is a termination of contract by one party without just cause, the injured party is entitled to compensation1. Still, as can be seen in some recent cases, the Court of Arbitration for Sport (CAS) on some occasions tend to mitigate the amounts of compensation that FIFA Chambers decide by considering the provisions of Article 44 of the Swiss Code of Obligations (SCO) and the peculiarities of each case in hand. Article 44 SCO determines that:
1. “Where the person suffering damage consented to the harmful act or circumstances attributable to him helped give rise to or compound the damage or otherwise exacerbated the position of the party liable for it, the court may reduce the compensation due or even dispense with it entirely.
2. The court may also reduce the compensation award in cases in which the damage was caused neither willfully not by gross negligence and where payment of such compensation would leave the liable party in financial hardship.”
Our firm in the recent CAS case, CAS 2020/A/6927 (May 2021), in search of a compensation reduction, successfully argued that the other Party contributed into his damages since he failed to provide the relevant documentation for the registration of the Employment Contract, consequently meaning that the injured party had influence on the Termination of the Contract from our clients. In addition, the injured Party failed to mitigate his damage since he changed his status from non-amateur player to an amateur player immediately after the termination of the employment agreement with the breaching Party, since he did not sign any professional Employment Agreement with his new Club and he accepted to play there as an amateur without receiving any salary.
The Panel examined our attorneys’ arguments in light with the provisions of Article 44 SCO and the case CAS 2014/A/3647 & 3648, finding that Article 44 SCO is applicable to the matter-at-hand as circumstances attributable to the injured party exacerbated the position of our client. Taking all the above into consideration, the Panel explained the extent which the injured party was liable and ordered a 30% reduction in favour of our client on the amount first decided by the FIFA Dispute Resolution Chamber. The correct approach on calculating compensations for breach of contract in football have caused a lot of controversary and debates within football stakeholders. Undoubtedly, after the recent amendments on Article 17 of FIFA’s RSTP in 2018, there has been more clarity on the compensation payable in cases of termination of contract without just cause.
This clarity eventually limited FIFA’s and CAS’ discretion on calculating the amounts of compensation based on the facts of each case, meaning that the compensation of the injured parties is more secured and precise. Arguably though, this clarity extinct any possible defense for the liable parties in cases where there has been an influence by the injured party on the damage suffered by the termination of the contract. In fact, Players, who most of the times are the injured party in such cases, enjoy the security of compensation according to FIFA’s Regulations, whereas Clubs can be economically exposed to this strict approach from FIFA Chambers, even in cases where they were not totally liable for the damage occurred. Yet, as previously discussed, the ability of the CAS Panel to follow the provisions of the Swiss Code of Obligations in matters of Sports, unties the arbitration’s Panel hands, giving them the flexibility to order compensation reduction where it is fare and possible according to the matters in hand.
Despite the narrow provisions of the art. 17 of FIFA’s RSTP, the CAS confirms the obligation of every injured Party to mitigate his damages in relation to Contracts in Football.
1 FIFA Regulations on the Status and Transfer of Players, Article 17(1).