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CAS 2024/A/10666 — Vedran Naglić v. Al Shabab Football Club

"Naglić" · CAS invalidated a three-month salary compensation clause and awarded an assistant coach EUR 419,676.40 for unjust dismissal.

What happened in Naglić

Vedran Naglić, a Croatian assistant coach, signed a fixed-term employment contract with Saudi club Al Shabab on 15 October 2023, valid until 30 June 2026, at EUR 17,500 per month. On 25 December 2023, the Club terminated the contract without just cause, citing poor results, simultaneously dismissing the entire coaching staff. The Club invoked a contractual Compensation Clause (Annexe 1, Art. 7.2) limiting its liability to three monthly salaries. The FIFA Players' Status Chamber (PSC), in its decision of 23 April 2024, upheld the Compensation Clause as reciprocal and proportionate, awarding the Coach EUR 39,375 in compensation (three months at EUR 13,125 net of advance deductions) plus outstanding remuneration. Naglić appealed to CAS, arguing the Clause was null and void under mandatory Swiss law and that full residual-value compensation was owed under Art. 6(2) of Annexe 2 of the RSTP. The Sole Arbitrator agreed, finding the Clause failed the requirement of reciprocal and equivalent concessions under Art. 341 and 337c SCO, and awarded EUR 419,676.40 (residual value minus mitigation from a subsequent Qatari contract) plus 5% interest from 25 December 2023. The case matters because it applies Swiss mandatory employment law to invalidate a pre-agreed liquidated damages clause in a football coaching contract, reinforcing that contractual freedom cannot override Art. 337c(1) SCO to the employee's detriment.

Procedural history of CAS 2024/A/10666

On 21 January 2024, Naglić filed a claim before the FIFA Players' Status Chamber (PSC) seeking outstanding remuneration of EUR 35,153.47, compensation of EUR 506,512.00 for unjust termination, default interest at 5% p.a., tax certificates, and sporting sanctions against Al Shabab. The PSC, in its decision dated 23 April 2024 (notified 29 May 2024), confirmed the Club terminated without just cause, found the Compensation Clause valid as reciprocal and proportionate, and awarded outstanding remuneration totalling the deducted amount (broken into items a–d) plus EUR 39,375 compensation (three months' net salary), with 5% interest. All further claims were rejected. On 12 June 2024, Naglić lodged a Statement of Appeal with CAS under Art. R47 of the CAS Code, challenging only the compensation quantum (item 2.e of the PSC decision) and seeking EUR 506,512.00 in total compensation. The Club requested the appeal be dismissed and, subsidiarily, that mitigation be applied. Proceedings were suspended for settlement discussions from June to September 2024, then resumed. The Coach was granted Legal Aid by the ICAS Athletes' Commission in May 2025. The matter was decided on written submissions alone.

Key holdings in CAS 2024/A/10666

• The Compensation Clause, limiting the Club's liability to three monthly salaries upon unjust termination of a 32-month residual contract, is null and void as it fails to satisfy the requirement of reciprocal and equivalent concessions under Articles 341 and 337c(1) SCO.
• A contractual clause regulating the financial consequences of wrongful termination constitutes a settlement on termination terms, not a mutual termination agreement, and is therefore subject to the mandatory protections of Art. 341 SCO, which the employee cannot waive without equivalent consideration.
• Where a liquidated damages clause is null and void, compensation for unjust termination of a coaching contract is governed by Art. 6(2) of Annexe 2 of the RSTP, with the residual value of the contract as the baseline, reduced by earnings from subsequent employment.
• The Club's selective invocation of pacta sunt servanda to enforce a compensation clause favourable to itself, after having breached the same contract by terminating without just cause, is paradoxical and does not preclude the Coach from challenging the clause's validity.
• The principle of venire contra factum proprium does not bar an employee from challenging a contractual clause under mandatory Swiss law, since Art. 341(1) SCO would be rendered meaningless if employees could be estopped from invoking it.

How the CAS panel reasoned

The Sole Arbitrator first identified the applicable law as FIFA Regulations primarily and Swiss law additionally, per Art. R58 of the CAS Code and Art. 56(2) FIFA Statutes, noting that contractual clauses 31 and 33 placed Swiss law on equal footing with FIFA Regulations. He surveyed two competing lines of CAS jurisprudence on liquidated damages clauses: a strict proportionality/reciprocity line (CAS 2020/A/6961; CAS 2018/A/5771 & 5772; CAS 2021/A/8471; CAS 2023/A/9701) and a more deferential contractual-freedom line (CAS 2016/A/4826; CAS 2020/A/6994). He then applied Swiss law, distinguishing between a mutual termination agreement (not subject to Art. 341 SCO) and a settlement on termination consequences (subject to Art. 341 SCO). He characterised the Compensation Clause as the latter, triggering Art. 337c(1) SCO as a mandatory provision. He found the concessions non-equivalent: the Coach waived over EUR 525,000 in residual salary in exchange for only three months' pay, a ratio of approximately 10:1. He further noted the clause was likely a standard term imposed by the Club, the structural vulnerability of an assistant coach whose fate is tied to the head coach, the asymmetry with Clause 29 (which entitled the Club to the full contract value if the Coach was absent over 15 days), and the implausibility of the Club's argument that coaches enjoy unrestricted labour mobility. Arguments based on venire contra factum proprium and contractual freedom were rejected as incompatible with mandatory Swiss law.

Why Naglić matters in CAS jurisprudence

Naglić establishes that a pre-agreed liquidated damages clause in a football coaching contract that limits the club's liability to three monthly salaries — representing approximately 10% of the residual contract value — is null and void under mandatory Swiss law (Art. 337c(1) and 341 SCO), regardless of its facial reciprocity. The award clarifies that such clauses constitute settlements on termination consequences (not mutual termination agreements) and must satisfy the equivalence-of-concessions test. It also applies the Art. 6(2) Annexe 2 RSTP mitigation framework to assistant coaches, deducting subsequent earnings from a Qatari club.

Cases cited in this award

CAS 2023/A/9701 CAS 2021/A/8471 CAS 2020/A/6961 CAS 2020/A/6994 CAS 2022/A/9165 CAS 2019/A/6514

Frequently asked questions about Naglić

Why did CAS invalidate the three-month salary compensation clause in Naglić v Al Shabab?

The Sole Arbitrator found that the Compensation Clause was a settlement on termination consequences, not a mutual termination agreement, and therefore subject to Art. 341(1) SCO. Because the Coach waived over EUR 525,000 in residual salary in exchange for only three months' pay (approximately 10% of the residual value), the concessions were not of equivalent value as required by Swiss mandatory law. The clause was accordingly declared null and void under Art. 337c(1) SCO.

How much compensation did Naglić ultimately receive from Al Shabab for unjust dismissal?

The CAS awarded Naglić EUR 419,676.40 net of taxes in Saudi Arabia as compensation for breach of contract without just cause, plus 5% interest per annum from 25 December 2023 until effective payment. This replaced the PSC's award of EUR 39,375, calculated as the residual value of the contract minus earnings from his subsequent contract with Qatari club Al-Ahli Sport Club (his subsequent earnings).

Can a football club rely on venire contra factum proprium to prevent a coach from challenging a compensation clause the coach originally signed?

No, according to the Naglić award. The Sole Arbitrator held that the principle of venire contra factum proprium cannot bar an employee from invoking Art. 341(1) SCO, because that provision is mandatory and would be rendered meaningless if employees could be estopped from relying on it. The Swiss Federal Tribunal has confirmed that an employee does not commit an abuse of rights by raising such claims, even at the end of the employment relationship.

How did CAS calculate the mitigation deduction for Naglić's new contract with Al-Ahli Sport Club?

The Sole Arbitrator deducted the salary Naglić earned from Al-Ahli Sport Club (signed 18 August 2024 at QR 20,600 per month gross, converted at EUR 4,842 per month) for the period overlapping with the remaining term of the Al Shabab contract (to 30 June 2026). The deductions totalled EUR 2,186.70 for August 2024, EUR 53,262 for the 2024–2025 season, and EUR 53,262 for the 2025–2026 season, for a combined mitigation of his subsequent earnings.

Topics: Art. 17 RSTP & contract termination at CAS

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