CAS Case Digest · Verified against the full award text

CAS 2024/A/10571 — UTA Arad Football Club Association v. Marko Roganovic and FIFA

"UTA Arad v. Roganovic" · CAS upheld RON 320,000 award, ruling the termination agreement's fallback clause was an alternative obligation, not a reducible penalty.

What happened in UTA Arad v. Roganovic

UTA Arad and Montenegrin player Marko Roganovic entered an employment contract on 22 June 2023 at RON 32,000 net per month, valid until 30 June 2024. On 30 November 2023 the parties mutually terminated early, with the club agreeing to pay RON 128,000 by 25 January 2024. Article 5 of the Termination Agreement provided that failure to pay by that deadline entitled the player to the 'residual value' of the employment contract — RON 320,000. The club missed the deadline; the player filed before the FIFA DRC on 29 January 2024. The FIFA DRC Single Judge, noting the club's answer was out of time, awarded RON 320,000 plus 5% p.a. interest from 26 January 2024. The club paid RON 128,000 on 11 April 2024 and appealed to CAS, arguing Article 5 was an excessive penalty clause reducible under Article 163 SCO. The Sole Arbitrator dismissed the appeal, holding that Article 5 was an alternative obligation — not a penalty clause — under Swiss law and the principle of pacta sunt servanda. The balance of RON 192,000 remained due with 5% interest from 12 April 2024. The case matters because it clarifies that a contractual fallback to a pre-defined 'residual value' can be characterised as an alternative obligation immune from penalty-reduction rules.

Procedural history of CAS 2024/A/10571

On 29 January 2024 Marko Roganovic filed a claim before the FIFA Dispute Resolution Chamber (DRC) for RON 320,000 plus 5% p.a. interest, invoking Article 5 of the Termination Agreement after UTA Arad failed to pay RON 128,000 by 25 January 2024. UTA requested a 48-hour extension on 18 March 2024; FIFA refused on 19 March 2024, treating the club's answer as out of time. On 26 March 2024 the Single Judge of the FIFA DRC partially upheld the claim, ordering UTA to pay RON 320,000 plus 5% p.a. from 26 January 2024, with registration-ban consequences if unpaid within 45 days. The club paid RON 128,000 on 11 April 2024. On 13 May 2024 UTA filed a Statement of Appeal with CAS, seeking annulment of the DRC decision and reduction of the amount to either 5% p.a. interest or the residual contract value for the delay period only. FIFA declined to participate. The First Respondent filed his Answer on 11 November 2024. No hearing was held; the Sole Arbitrator decided on written submissions.

Key holdings in CAS 2024/A/10571

• Article 5 of the Termination Agreement constitutes an alternative obligation under Swiss law, not a penalty clause, because it grants the player a right to a pre-defined residual contract value triggered by non-payment rather than imposing a punitive sanction.
• Because Article 5 is an alternative obligation and not a penalty clause, Article 163 SCO — which permits reduction of excessive penalties — does not apply, and the amount of RON 320,000 is not subject to reduction.
• The principle of pacta sunt servanda requires enforcement of the agreed alternative obligation in full; reducing it would violate the parties' freedom of contract and undermine the negotiated terms of the Termination Agreement.
• The player's letter of 20 May 2024 reserving acceptance of the partial payment did not constitute a waiver of the RON 320,000 entitlement.
• Interest on the outstanding balance of RON 192,000 runs at 5% p.a. from 12 April 2024 pursuant to Article 104(1) SCO, Swiss law applying subsidiarily in the absence of specific FIFA regulations on interest calculation.

How the CAS panel reasoned

The Sole Arbitrator applied Article 18 SCO and CAS jurisprudence (CAS 2017/A/5219) to ascertain the true and common intention of the parties. He noted that the Termination Agreement conspicuously avoided terms such as 'penalty', 'fine' or 'sanction', and that the sum of RON 320,000 was not an arbitrary figure but the pre-calculated residual value of the employment contract as defined in Article 3 of the Termination Agreement. The clause gave the player 'the right to the residual value' — language indicating a predetermined entitlement triggered by a specific event rather than a punitive measure. The Arbitrator found that the RON 128,000 represented a compromise accepted by the player in exchange for swift resolution and his ITC, with RON 320,000 as his guaranteed fallback. The club benefited from a clean break, creating a reciprocal structure consistent with an alternative obligation. He rejected the unjust-enrichment argument because the amount merely restored the player's original contractual entitlement minus sums already paid. He also rejected the Article 17 RSTP comparison as irrelevant, since the clause was not designed to penalise non-payment but to define an alternative performance. No impossibility or consent defect was raised, so no basis for reduction of the alternative obligation existed.

Why UTA Arad v. Roganovic matters in CAS jurisprudence

This award clarifies the distinction between a penalty clause and an alternative obligation in the context of football termination agreements. By characterising a 'residual value' fallback clause as an alternative obligation rather than a penalty, the Sole Arbitrator placed it outside the reach of Article 163 SCO's reduction mechanism, reinforcing that freely negotiated contractual fallback amounts tied to pre-existing contract values will be enforced in full under the pacta sunt servanda principle, with significant implications for how clubs and players draft early-termination agreements.

Cases cited in this award

CAS 2017/A/5219 Gaetano Marotta v. Al Ain FC Decision of the Swiss Federal Tribunal, 4A_155/2017, 12 October 2017 ATF 132 III 268 ATF 131 III 606 ATF 129 III 664 ATF 118 II 365

Frequently asked questions about UTA Arad v. Roganovic

What did CAS decide in UTA Arad v. Roganovic about the penalty clause reduction argument?

CAS rejected the club's argument that Article 5 of the Termination Agreement was a penalty clause reducible under Article 163 SCO. The Sole Arbitrator held it was an alternative obligation — a pre-defined right to the employment contract's residual value of RON 320,000 triggered by non-payment of RON 128,000 by 25 January 2024. Because it was not a penalty clause, no reduction was available.

How did CAS distinguish an alternative obligation from a penalty clause in the UTA Arad case?

The Sole Arbitrator noted that the Termination Agreement avoided terms like 'penalty', 'fine' or 'sanction', and that RON 320,000 was not an arbitrary punitive sum but the pre-calculated residual value of the employment contract as defined in Article 3 of the Termination Agreement. The clause gave the player 'the right to the residual value' — language indicating a predetermined entitlement upon a specific triggering event, not a sanction for breach.

What interest rate applied to the outstanding balance in UTA Arad v. Roganovic, and from when?

The Sole Arbitrator applied Article 104(1) SCO subsidiarily, in the absence of specific FIFA regulations on interest calculation, and ordered 5% p.a. interest on the outstanding balance of RON 192,000 from 12 April 2024 — the day after the club's partial payment of RON 128,000 on 11 April 2024 — until the date of effective payment.

Did the player's acceptance of the partial RON 128,000 payment waive his right to the full RON 320,000 in the UTA Arad case?

No. The Sole Arbitrator found that the player's letter of 20 May 2024 constituted a reservation as to acceptance of the partial payment, not a waiver of the RON 320,000 entitlement. The player explicitly acknowledged the payment but demanded the outstanding balance of RON 192,588 plus corresponding interest within seven days.

Topics: Art. 17 RSTP & contract termination at CAS

Source: official award. This digest was generated by LexXi from the full award text and machine-verified against it — every figure, article and citation above appears in the source. It is an editorial summary, not legal advice. See how ElevenLex verification works.