Court of Arbitration for Sport on coach terminations under FIFA regulations – Martin Palmer acts for successful Appellant

The Court of Arbitration for Sport has given useful, practical guidance about the unilateral termination of a football coach’s contract under the relatively new provisions covering coaches in the FIFA Regulations on the Status and Transfer of Players (‘RSTP’).

The award will be especially relevant for manager and coach contracts expressly subject to the RSTP or of an ‘international dimension’ (i.e. not with two purely domestic parties), thereby covered by the RSTP in any event.

In Elnur Chodarov v. Sumgayit Football LLC & FA of Azerbaijan CAS 2002/A/8905, in which John Mehrzad KC and Martin Palmer acted for the successful appellant, the sole arbitrator (Espen Auberg) noted that (at paragraphs 105-115 in particular):

• On 5 February 2021 FIFA included in the RSTP provisions regulating a club’s ability to unilaterally terminate employment contracts with a ‘coach’.
• A ‘coach’ is widely defined in the RSTP to include those employed by a professional football club whose:

‘employment duties consist of one or more of the following: training and coaching players, selecting players for matches and competitions; making tactical choices during matches and competitions, and/or employment requires the holding of a coaching licence in accordance with a domestic or continental licensing regulation’.

• Annex 8, Article 4 of the RSTP provides that a coach’s contract can only be terminated if there is ‘just cause’ – a corresponding provision for players being found in Article 13 of the RSTP.

• CAS jurisprudence regarding contractual stability between a player and club therefore applies by analogy to contractual stability between a coach and club.

• A contractual breach must be material, persist for a long time or be cumulated with other violations over a certain period of time to justify termination with ‘just cause’.

• A party may only terminate an employment contract if it has previously warned the other party in order for the latter to have the chance to comply with the obligations.

• The consequence of a termination without ‘just cause’ is damages pursuant to Annex 8 Article 6 of the RSTP, reflecting the coach’s financial loss as a result of termination.

Applying the principles above to the facts of the case, the club materially breached the coach’s employment contract without ‘just cause’ since it did not clarify the situation following the head coach’s termination and there was no evidence of the Appellant being warned prior to receiving a termination letter.  Accordingly, by way of damages, the coach was entitled to the residual value of his employment contract with the club.

Further, on the issue of jurisdiction, the sole arbitrator found that the Appellant had exhausted all internal remedies prior to filing his appeal to the CAS since the FA of Azerbaijan’s Appeal Arbitration Tribunal did not remit the original decision prior to the CAS appeal being filed and, in any event, no information had been provided to the Appellant concerning its remission to its first instance domestic tribunal (paragraphs 61-62).

Moreover, on the issue of the AFFA’s standing to be sued, the proper respondent was the club, not the local federation, since the only horizontal contract in existence was between the Appellant and the club (paragraph 93).