CAS Case Digest · Verified against the full award text

CAS 2021/A/8268 — Jaime Moreira Pacheco v. El Zamalek Sporting Club

"Pacheco v. Zamalek" · CAS voided a EUR 204,000 liquidated-damages clause as incompatible with mandatory Swiss CO protections, awarding a Portuguese coach the full residual value of his contract plus a proportionate league-title bonus.

Award date	31 October 2024
Panel	President: Ivaylo Dermendjiev; Arbitrators: Olivier Carrard, Jan Brodec
Outcome	Appeal partially upheld: Zamalek ordered to pay EUR 244,800 and EGP 40,000 in outstanding remuneration (with 5% p.a. interest from respective due dates), EUR 469,200 as residual-value compensation for unjustified termination (5% p.a. from 12 March 2021), and EUR 102,000 as partial league-title bonus (5% p.a. from 29 August 2021); claims for additional Article 337c(3) CO compensation and other bonuses dismissed.
Provisions	Art. 337c para. 1 Swiss CO Art. 337c para. 2 Swiss CO Art. 337c para. 3 Swiss CO Art. 337 para. 3 Swiss CO Art. 341 para. 1 Swiss CO Art. 362 Swiss CO Art. 334 Swiss CO Art. 151 et ff. Swiss CO Art. 156 Swiss CO Art. 6.2(a) Annexe 8 FIFA RSTP Art. 17 FIFA RSTP Art. 57 FIFA Statutes Art. 58 FIFA Statutes Art. R47 CAS Code Art. R48 CAS Code Art. R49 CAS Code Art. R51 CAS Code Art. R54 CAS Code Art. R55 CAS Code Art. R56 CAS Code Art. R57 CAS Code Art. R58 CAS Code

What happened in Pacheco v. Zamalek

Portuguese coach Jaime Moreira Pacheco signed a ten-month employment contract with Egyptian club El Zamalek on 23 September 2020, earning EUR 1,020,000 net in ten monthly instalments plus performance bonuses. On 12 March 2021, Zamalek terminated the contract without just cause, citing vague 'special circumstances'. The FIFA PSC Single Judge found unjustified termination but capped compensation at EUR 204,000 under Article 5 of the contract — a reciprocal liquidated-damages clause — plus EUR 244,800 and EGP 40,000 in outstanding remuneration. Pacheco appealed to CAS, arguing Article 5 was void under mandatory Swiss law and that he was entitled to the contract's full residual value plus bonuses and additional compensation under Article 337c CO. CAS partially upheld the appeal. The panel held Article 5 null and void because it derogated from the mandatory protections of Article 337c(1) CO to the employee's detriment, contrary to Articles 341(1) and 362 CO. CAS awarded EUR 469,200 as residual-value compensation, plus EUR 102,000 as 50% of the Egyptian league-title bonus (Zamalek won the title on 24 August 2021), while rejecting claims for bonuses on other competitions and for additional Article 337c(3) CO compensation. The case is significant for confirming that contractual liquidated-damages clauses in coach contracts cannot waive mandatory Swiss employment-law protections, even when reciprocal and proportionate.

Procedural history of CAS 2021/A/8268

On 12 April 2021, Pacheco filed a claim before the FIFA PSC Single Judge seeking outstanding salaries, match bonuses, and compensation totalling over EUR 1.7 million. On 30 June 2021 (grounds notified 6 August 2021), the Single Judge partially accepted the claim, awarding EUR 244,800 and EGP 40,000 in outstanding remuneration plus EUR 204,000 as contractual termination compensation under Article 5, and imposing CHF 5,000 costs on the Appellant. Pacheco filed his CAS Statement of Appeal on 27 August 2021 and his Appeal Brief on 27 September 2021. Zamalek's Answer, filed on 7 November 2021, was ruled untimely and excluded from the file. A hearing was held on 28 March 2022 in Lausanne. CAS was asked to set aside the Article 5 cap, award the full residual value under Article 337c(1) CO (EUR 1,353,065.50), grant six months' additional compensation under Article 337c(3) CO (EUR 612,000), and reverse the cost order.

Key holdings in CAS 2021/A/8268

The Respondent terminated the Employment Contract unilaterally and without just cause on 12 March 2021, entitling the Appellant to compensation.
Article 5 of the Employment Contract, capping termination compensation at EUR 204,000 regardless of fault, is null and void as it derogates from the mandatory protections of Article 337c(1) CO to the detriment of the employee, contrary to Articles 341(1) and 362 of the Swiss CO.
The applicable compensation for unjustified termination is the residual value of the Employment Contract under Article 337c(1) CO, amounting to EUR 469,200, without reduction for failure to mitigate given the mid-season termination in a foreign country.
Where a coach contributed significantly to a title won after his dismissal but was absent for roughly half the season, a proportionate 50% share of the contractually agreed title bonus (EUR 102,000 of EUR 204,000) is appropriate under the pacta sunt servanda principle.
Additional compensation under Article 337c(3) CO was rejected because the Appellant failed to support allegations of the employer's bad faith with clear and convincing evidence, and the overall compensation package was considered adequate.

How the CAS panel reasoned

The panel applied a de novo review under Article R57 of the CAS Code. On applicable law, it rejected Zamalek's argument for Egyptian law, holding that Article 9 of the Employment Contract and Article 57 of the FIFA Statutes mandated FIFA regulations primarily and Swiss law subsidiarily. On just cause, the panel applied the standard from CAS 2020/A/7175 and CAS 2009/A/1956, finding Zamalek's vague justifications insufficient to discharge its burden of proof. On Article 5, the panel acknowledged the clause was reciprocal and proportionate but held that, under Articles 341(1) and 362 CO, an employee cannot waive Article 337c(1) CO rights during or within one month after employment — a position confirmed in CAS 2017/A/5125 and CAS 2017/A/5402 and by the Swiss Federal Tribunal in 4A_608/2010. The panel rejected the Appellant's 'buy-out clause' argument as unsupported by the plain wording. On bonuses, it declined to apply Article 156 CO (deemed condition fulfilled) because bad faith was not proven, but awarded 50% of the Egyptian league bonus on equitable grounds given the coach's contribution to a title won after his dismissal. The Article 337c(3) claim was dismissed as speculative, noting the overall compensation was already adequate.

Why Pacheco v. Zamalek matters in CAS jurisprudence

This award reinforces that contractual liquidated-damages clauses in coach employment contracts — even when reciprocal, proportionate, and freely negotiated — cannot override the mandatory protections of Article 337c(1) CO under Swiss law. Citing CAS 2017/A/5125, CAS 2017/A/5402, and the Swiss Federal Tribunal's 4A_608/2010, the panel confirms that Articles 341(1) and 362 CO render any such waiver null and void. The case also establishes a proportionate approach to performance bonuses where a coach is dismissed mid-season but the club subsequently achieves the bonus-triggering objective.

Decision: Appeal partially upheld: Zamalek ordered to pay EUR 244,800 and EGP 40,000 in outstanding remuneration (with 5% p.a. interest from respective due dates), EUR 469,200 as residual-value compensation for unjustified termination (5% p.a. from 12 March 2021), and EUR 102,000 as partial league-title bonus (5% p.a. from 29 August 2021); claims for additional Article 337c(3) CO compensation and other bonuses dismissed.

Cases cited in this award

CAS 2009/A/1956 CAS 2020/A/7175 CAS 2016/A/4550 CAS 2016/A/4576 CAS 2008/A/1519 CAS 2016/A/4605

Frequently asked questions about Pacheco v. Zamalek

Was the EUR 204,000 termination clause in Pacheco's Zamalek contract enforceable?

No. CAS held Article 5 null and void because it capped the coach's compensation at roughly two months' salary, derogating from the mandatory protections of Article 337c(1) of the Swiss CO to the employee's detriment. Under Articles 341(1) and 362 CO, an employee cannot waive such rights during or within one month after the employment relationship, regardless of whether the clause is reciprocal and proportionate.

How did CAS calculate the compensation owed to Pacheco after Zamalek's unjustified termination?

The panel applied Article 337c(1) CO and awarded the residual value of the Employment Contract: the remainder of March 2021 (18 days as requested) plus salaries for April through July 2021, totalling EUR 469,200, with 5% per annum interest from 12 March 2021. The panel declined to reduce this amount for failure to mitigate, noting it is harder for a coach to find mid-season employment abroad than it is for a player.

Did Pacheco receive the Egyptian league-title bonus even though Zamalek won the title after he was fired?

Yes, but only partially. CAS awarded 50% of the contractually agreed EUR 204,000 bonus — EUR 102,000 — because Pacheco contributed significantly to the title won on 24 August 2021 but was absent for roughly half the season after his dismissal on 12 March 2021. The panel rejected the Article 156 CO 'deemed fulfilled condition' argument because bad faith by Zamalek was not proven with clear and convincing evidence.

Was Pacheco awarded additional compensation under Article 337c(3) CO on top of the residual value?

No. The panel rejected the claim for up to six months' additional salary (EUR 612,000) under Article 337c(3) CO, finding the allegations of the employer's bad faith speculative and unsupported by clear evidence. The panel also noted that the overall compensation package — including a EUR 120,000 signing bonus already received, the EUR 469,200 residual value, and the EUR 102,000 partial bonus — was adequate and fair given the ten-month duration of the contract.

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Topics: Art. 17 RSTP & contract termination at CAS

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