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CAS 2021 A 7781 (CAS)

Why it matters

This case is significant for clarifying the application of force majeure (specifically COVID-19) in international football employment contracts. The Court of Arbitration for Sport (CAS) reaffirmed that such disputes are sports-related, establishing the primacy of FIFA regulations and subsidiarily Swiss law over national contract law in CAS proceedings for these matters. It underscores the principle of contractual stability in football, ruling that a pandemic generally allows for temporary suspension of obligations rather than unilateral termination without just cause, thereby setting a precedent for similar future disputes.

Summary

Quess East Bengal FC, an Indian football club, appealed a decision by the FIFA Dispute Resolution Chamber (DRC) that had ordered it to pay its former Spanish assistant coach, Carlos Nodar, outstanding remuneration and compensation for breach of contract. The club had unilaterally terminated Nodar's employment agreement in April 2020, citing the COVID-19 pandemic as a force majeure event. The club argued that this made the dispute "non-football related" and thus subject to Indian contract law, as stipulated in their agreement. Nodar and FIFA, however, contended that the dispute was sports-related and therefore governed by FIFA regulations and subsidiarily Swiss law. The CAS Sole Arbitrator first addressed jurisdiction and applicable law. It was determined that the dispute, involving an international football club and coach regarding an employment contract, was inherently sports-related, regardless of the club's force majeure argument. Consequently, the CAS applied FIFA Regulations (specifically the Regulations on the Status and Transfer of Players and FIFA Procedural Rules) and subsidiarily Swiss law, overriding the club's contractual choice of Indian law for "non-football related disputes." The Arbitrator found that the club's arbitration clause was pathological and did not displace FIFA's jurisdiction. Regarding the force majeure claim, the Arbitrator concluded that COVID-19 did not constitute a force majeure event that justified the unilateral termination of the employment agreement. The contract's force majeure clause allowed for temporary suspension of obligations or delay in performance, not outright termination. CAS jurisprudence defines force majeure as an objective, unforeseeable, irresistible impediment rendering performance impossible, which the pandemic did not achieve in this context, as the club could have continued payments or negotiated. The club's termination was deemed to be without just cause, violating the principle of contractual stability in football. The CAS partially upheld the appeal by amending the quantum slightly. It confirmed that Quess East Bengal FC must pay Carlos Nodar USD 6,250 for outstanding remuneration for April 2020 and USD 73,902.05 as compensation for breach of contract, covering the period from May 2020 until May 2021, both amounts accruing 5% interest per annum. This compensation was reduced from the original FIFA DRC award to account for Nodar's mitigation of damages by securing new employment with a Chinese club from March 2021. Quess East Bengal FC was also ordered to bear the arbitration costs and pay CHF 5,000 towards Nodar's legal fees.

The detail

Parties: Quess East Bengal FC v. Carlos Nodar and FIFA

Case number: CAS 2021 A 7781

Outcome: The appeal by Quess East Bengal FC was partially upheld. The club was ordered to pay Carlos Nodar USD 6,250 as outstanding remuneration and USD 73,902.05 as compensation for breach of contract, both with 5% interest. The club was also ordered to pay CHF 5,000 towards Carlos Nodar's legal fees.

Quantum: USD 6,250 (outstanding remuneration) + USD 73,902.05 (compensation) + 5% interest p.a. on both amounts; CHF 5,000 (legal fees)

Applicable law: FIFA Regulations (specifically RSTP and FIFA Procedural Rules) and subsidiarily Swiss law

Issues in play: The primary legal collision was between the club's argument for Indian law and force majeure (COVID-19) as a non-football related dispute, versus the CAS's application of FIFA regulations and Swiss law, deeming it a sports-related dispute. The interpretation of force majeure clauses in employment contracts during a pandemic was central.

Read the full decision at Court of Arbitration for Sport (football, via FIFA) ↗

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