The Discretion of CAS in Awarding Compensation after the Termination of a Contract between Professionals and Clubs for Overdue Payables

The Discretion of CAS in Awarding Compensation after the Termination of a Contract between Professionals and Clubs for Overdue Payables

Whenever it is found that a player terminated an employment contract for just cause due to overdue payables in accordance with Article 14bis of the Regulations on the Status and Transfer of the Players of FIFA (RSTP), the club shall pay compensation in accordance with Article 17, par.1, lit. ii, of the RSTP. The case under analysis shows how the Court of Arbitration for Sport (CAS) considered and calculated the different entries composing the compensation due to the damaged party.

In particular, CAS ruled that, on the one hand, “Additional Compensation” (i.e. an amount corresponding to three monthly salaries that may be increased up to a maximum of six monthly salaries in case of “egregious circumstances”) shall always be awarded whenever a contract is terminated for just cause due to overdue payables. On the other hand, “Mitigated Compensation” (i.e. the difference between the value of the new contract and the value of the contract that was terminated early, for the overlapping period of them) is awarded on a discretionary basis, CAS being entitled to reduce it to zero whenever it finds that the damaged party gave rise to or compounded the damage, all this in line with Article 44 of the Swiss Code of...