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Termination of Contractual Obligations and Football Law: The Legal Consequences**

Updated: Jul 18, 2023

This is, perhaps, one of the most exciting and fascinating areas in the discipline of sports law. In many ways, it highlights the fast pace of the continuous development of football law and, more often than not, it identifies the perennial battle between self regulation and external regulation.

Termination of a contract of employment is not a new concept in FIFA's regulatory framework. Although its wording and drafting reflects, in many ways, the decision of the European Court of Justice in the case of Bosman (Case C-415/93 Union Royale Belge des Societies de Football Association ASBL v Jean-Marc Bosman [1996] 1 CMLR 645), its continuous development suggests a remarkable 'battle' between the main stakeholders in this area: players and clubs, or, in the more appropriate legal terms: employees and employers. In the last six years, we advised and successfully represented several players and clubs around Europe, in matters which focused on termination of contractual obligations with either 'just cause' or 'without just cause' and we are in a position to appreciate the dynamics operating in this discipline. The concluding remarks for such applications tend to clearly demonstrate that each case must be decided upon according to its individual characteristics and, consequently, each claim becomes a fact/evidence based exercise.

FIFA's regulations on the Status & Transfer of Players make it clear that the parties to a football contract must respect and observe such contract. Rule 13, in particular, identifies that parties must observe the maintenance of contractual stability. As FIFA’s Commentary of Article 13 states, “unilateral termination of a contract without just cause, especially during the so called protected period, is to be vehemently discouraged.”

However, the principle of respect for the contract of employment is not an absolute one. Article 14 allows for the unilateral termination of the contract with ‘just cause’, as long as there is a valid reason. There is no standard definition of ‘just cause’ and the application of such principle depends on the merits and the particular circumstances of each case. As the FIFA Commentary on the Regulations on the Status and Transfer of Players explains: “However, should the violation persist for a long time or should many violations be accumulated over a certain period of time, then it is most probable that the breach of contract has reached such a level that the party suffering the breach is entitled to terminate the contract unilaterally.”

Although in a non-football contract situation, the liable party may have to face, depending on the facts and the remedy sought, damages for breach of contract and/or specific remedies against them, in a football contract of employment, the party found to have breached such contract, may also have to face additional sporting sanctions, pursuant to Article 17 on the Status & Transfer of Players. Caution, therefore, must be exercised when one advises clients in relation to a possible termination of the contract of employment. Although the issue of compensation now appears to have been settled by CAS in the matters of FC Shakhtar Donetsk (Ukraine) v Matuzalem (Brazil) & Real Zaragoza SAD (Spain) and FIFA, CAS/A/1519 & 1520, and Udineze Calcio SpA v De Sanctis & Sevilla FC SAD CAS/A/2145, 2146 & 2147 (both discouraging the application of Heart of Midlothian plc v Andy Webster and Wigan Athletic AFC Limited, CAS/A/1298, 1299 and 1300), nevertheless, one must not dismiss at face value the danger of additional sporting sanctions. Where a player is found to have breached a contract without 'just cause' (and/or the purchasing club encouraged/incited such breach), a sporting penalty (in addition to a remedy for monetary compensation) could be enforced, in the form of a lengthy match ban (2-6 months).

Similarly, advisers must also consider (very carefully) any procedural requirements that may force them to choose between an application to the appropriate national disciplinary tribunal, or before the national courts. FIFA is very clear when it comes to applications before the national courts: they must be discouraged and avoided and instead the relevant disciplinary/arbitration process before national fora must be followed and applied (FIFA and CAS may act as appellate levels, if national regulations allow, unless the dispute is of an international nature, in which case it may be submitted before FIFA). In this light, advisers will be forced to battle between FIFA's instruction for arbitration, and contractual provisions in countries where national courts enjoy exclusivity (see Spain for example). This is a procedural matter which tends to cause an unavoidable friction between self regulation and external regulation.

Finally, the various obligatory terms set out in the relevant Regulations, and referred to above, are fundamental to FIFA’s regulatory system and ability to control and have jurisdiction over the contractual stability of such system. The failure of the contracting parties to follow and apply such obligatory provisions and to comply with these fundamental requirements means that the agreement, which the parties signed, has been breached. Consequently, such situation would force advocates, acting for either party, to argue that such breaches may allow parties to escape their contractual responsibilities and such situation, therefore, would wholly undermine FIFA’s regulatory regime.

Dr Gregory Ioannidis*

* Gregory Ioannidis is a sports lawyer and an anti-doping litigation expert. He has represented over 100 athletes on allegations of anti-doping rule violations. He is also a former The FA registered lawyer and has acted for and represented many players and clubs around Europe, Africa and Asia on matters of football law. He is currently the Course Leader of the Master's Programme LLM International Sports Law in Practice at Sheffield Hallam University and an academic associate at Kings Chambers in Manchester.

** The views and opinions expressed on this site are those of its author. Nothing on this site should be construed as constituting legal advice, nor should it be relied upon in place of legal advice properly obtained. The reproduction of or reference to any material contained within this site should be attributed to the author and, where possible, a link to this site should be provided.

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