On 8 November 2019, the FIFA Dispute Resolution Chamber notified the parties a decision, rejecting the claim lodged by a foreign player ("Player") against a Chinese club ("Club"), in relation to the execution by the Club of a buy-out clause set out in the employment contract between the parties. This decision signifies the victory of the Chinese club, and the successful support provided by Llinks Lawyers in the case.

By means of the buy-out clause set out in the employment contract, both parties had the right to terminate the employment contract during a specified period and under the payment of a pre-established amount of money. Dispute arised when the club triggered this clause, terminating the employment contract with a comparatively lower amount.

The player argued in its claim that the buy-out clause was invalid since, inter alia:

(i)it was not a proper buy-out clause,

(ii)it was not reciprocal nor provided balanced rights among the parties, and

(iii)the amount to be paid for its execution by the Club was not proportional to the value of the remaining contract.

In essence, buy-out clauses are mainly used in the world of football to grant players (rather than clubs) the right to early terminate employment contracts, by simply noticing the club and paying a stipulated amount. This is in line with the FIFA and CAS jurisprudence on the matter which, in fact, establish certain strict requirements in order to determine such clauses as valid.

In contrast, there is very limited FIFA and CAS case law determining that clubs can validly execute such clauses, due to their sensitive nature and high protection provided by these bodies to players and/or coaches. Therefore, the club's victory in this case sets an important precedent for similar scenarios in the future.

With reference to this case, we strongly recommend all football stakeholders to be legally assisted by experts in the draft of employment contracts, to have then a stronger position in the case of a potential dispute between the parties. Due to the specific nature of football and its legal system, as well as the high risks the parties may face in case of not being properly assisted in the draft of such documents, we strongly recommend all parties to count on the assistance of expert legal consultants.

The Sports Law Team of Llinks Law Offices remains at the disposal of any party that might be interested in counting with our services or advise in the field of sports.