Swiss Federal Supreme Court Judgment of 27 March 2025, FC A v. B
Motion to set aside a CAS Award CAS 2021/A/8268 of 31 October 2024
FC A (the Club) and Portuguese Coach B (the Coach) signed an employment contract in 2020 (the Contract). Article 5 of this Contract provided that “If any party for what so ever reason terminates the contract before the end of the contract, the terminating party will pay the other party an amount of EUR 204,000 […] NET of any taxes.” In March 2021, the Club dismissed the Coach, and later that year, in August 2021, the Club won the national championship. Following his dismissal, the Coach filed a claim before the FIFA Players’ Status Chamber (PSC) in April 2021 seeking salaries and compensation. The PSC partially upheld his claim, prompting him to appeal to the CAS. The CAS confirmed the PSC’s findings regarding the salaries and bonus owed and reformed the decision by granting additional compensation for breach of contract and a bonus linked to the Club winning the championship.
The Club filed a motion to the Swiss Federal Tribunal (SFT), invoking solely a violation of public policy under Art. 190 para. 2 (e) PILA and, more specifically, a breach of the principle of pacta sunt servanda. The Club argued that the CAS improperly disregarded Article 5 of the Contract of Employment, which, in its view, clearly governed the compensation due in case of early termination.
The SFT recalled its very limited scope of review under Art. 190 para. 2 (e) PILA and reiterated that public policy is only violated when the result of the award – not its reasoning – contradicts fundamental legal principles. In the present case, the CAS Panel had concluded that the Club had terminated the employment contract without just cause, applying both FIFA regulations and Swiss law. As to the consequences of this breach, the Panel held that Article 5 of the contract was null and void because it contravened Art. 337c para. 1 CO, a mandatory provision, leading the Panel to award a higher compensation The SFT found no inconsistency in the Panel’s reasoning: although the Panel initially acknowledged that the contractual clause could potentially be valid, it correctly held that, under Art. 341 para. 1 and Art. 362 CO, an employee cannot waive rights arising from mandatory legal provisions during the employment relationship or within one month after its end, and that Art. 337c CO is one such mandatory rule.
Overall, the SFT held that the CAS acted consistently and within the framework of Swiss mandatory employment law when it declined to apply Article 5 of the contract and instead applied Art. 337 para. C (1) CO. Since the result of the award did not violate public policy, the complaint based on pacta sunt servanda was dismissed, reaffirming the limited scope of this principle.
