CAS Case Digest · Verified against the full award text

CAS 2024/A/11078 & CAS 2024/A/11079 & CAS 2024/A/11081 — Alvaro Adriano Teixeira Pacheco, José Miguel Carvalho Teixeira & Pedro Valdemar Vasconcelos Pinto da Cunha Teixeira v. Vasco da Gama Sociedade Anônima Do Futebol

"Pacheco v. Vasco da Gama" · CAS partially upheld three Portuguese coaches' appeals, rejecting the 'group contract' finding and awarding the head coach EUR 551,095.80.

What happened in Pacheco v. Vasco da Gama

Three Portuguese coaches — head coach Álvaro Pacheco and assistant coaches José Teixeira and Pedro Teixeira — were hired by Brazilian club Vasco da Gama in May 2024 and dismissed without just cause on 21 June 2024, barely a month into their contracts. Each had signed individual employment contracts running to 31 December 2024. The coaches filed claims before FIFA's Players' Status Chamber (PSC), which denied meaningful compensation by characterising the contractual arrangements as prohibited 'group contracts' under Article 2(1) of Annex 2 to the RSTP and then applying full mitigation based on the coaches' subsequent contracts with Saudi club Al-Orobah. The coaches appealed to CAS. Sole Arbitrator Giulio Palermo reversed the PSC's 'group contract' finding, holding that the three individually signed contracts with separate remuneration terms were 'executed on an individual basis' as required by the RSTP. For the head coach, the termination clause was characterised as a liquidated damages arrangement under Swiss law, subject to reduction under Article 163(3) CO but not mitigation; CAS awarded EUR 551,095.80 plus 5% simple annual interest from 9 August 2024. For the two assistant coaches, whose contracts contained buy-out clauses with no fixed liquidated sum, the PSC's mitigated figures of EUR 4,660.58 and EUR 2,132.50 respectively were confirmed, but interest was corrected to run from 9 August 2024. The case matters because it clarifies the boundary between permissible coordinated coach-team negotiations and prohibited 'group contracts', and distinguishes liquidated damages from penalty clauses under Swiss employment law in the RSTP context.

Procedural history of CAS 2024/A/11078

On 12 August 2024 (1st Appellant) and 19 August 2024 (2nd and 3rd Appellants), the coaches filed claims before FIFA's Players' Status Chamber seeking compensation for termination without just cause. On 29 October 2024 the PSC issued three decisions (FPSD-15559, FPSD-15627, FPSD-15626): it found the contracts constituted prohibited 'group contracts' under Article 2(1) of Annex 2 to the RSTP, declared the contractual termination clauses unenforceable, applied the default RSTP regime, and then applied full mitigation based on the coaches' Al-Orobah contracts — awarding the head coach nothing, the 2nd Appellant EUR 4,660.58, and the 3rd Appellant EUR 2,132.50. Grounds were notified on 29–30 November 2024. All three coaches filed Statements of Appeal to CAS on 17 December 2024 and Appeal Briefs on 9 January 2025. Two related appeals were subsequently withdrawn. The Respondent filed its Answers on 16 April 2025. An online hearing took place on 24 June 2025. The Sole Arbitrator issued a single award on 4 November 2025.

Key holdings in CAS 2024/A/11078

• Three individually signed employment contracts with separate remuneration terms, even if negotiated through a common agent and containing automatic termination links to the head coach's contract, are 'executed on an individual basis' and do not constitute prohibited 'group contracts' under Article 2(1) of Annex 2 to the RSTP.
• Where a coach's employment contract contains a specific compensation mechanism, Article 6 of Annex 2 to the RSTP is displaced and Swiss law governs the characterisation and consequences of the termination clause.
• A termination clause using compensatory language and pro-rated fixed amounts constitutes a liquidated damages arrangement under Swiss law, subject to reduction under Article 163(3) CO if the agreed amount is substantially higher than the salary the employee would have earned, but not subject to mitigation under Article 337c(2) CO.
• A termination clause that grants a reciprocal right of immediate termination without cause but fixes no liquidated sum constitutes a buy-out clause governed by the general statutory rules of Articles 337c(1) and 337c(2) CO, making the resulting damages subject to mitigation.
• New claims not raised before the first-instance body and not arising from the challenged decision exceed the scope of CAS de novo review and are inadmissible, absent legitimate reasons for the omission.

How the CAS panel reasoned

The Sole Arbitrator first addressed the 'group contract' issue by consulting FIFA's RSTP Commentary, which defines such contracts as a single agreement between a club and a head coach covering payment for the whole coaching team, with staff acting as sub-contractors. Since each Employment Contract was individually signed, contained individual salary terms, and there was no evidence of an internal redistribution arrangement, the contracts did not meet this definition. The automatic termination link to the head coach's contract was expressly endorsed by FIFA's own Commentary as compatible with individual execution. The Arbitrator then applied Swiss law to characterise the termination clauses. For the head coach, the clause's compensatory language, reference to 'indemnified prior notice', and pro-rated fixed amount pointed to liquidated damages rather than a penalty or dédit consensuel. Because the agreed EUR 850,000 was 45.55% higher than the total salary of EUR 584,000, reduction under Article 163(3) CO was warranted; the Arbitrator set the reference figure at EUR 584,000 plus 10%, yielding EUR 642,400, and calculated pro-rated damages of EUR 551,095.80 for the 194 remaining days. Mitigation was rejected because the liquidated damages clause displaced Article 337c(2) CO and Article 6.2 of Annex 2 to the RSTP. For the assistant coaches, whose clauses fixed no amount and expressly stated 'no fine or indemnity shall be due', the general statutory regime applied, making mitigation mandatory; the PSC's mitigated figures were confirmed. The EUR 50,000 advance salary claim was dismissed as inadmissible for not having been raised before the PSC.

Why Pacheco v. Vasco da Gama matters in CAS jurisprudence

This award provides the first detailed CAS analysis of the boundary between permissible coordinated coach-team negotiations and prohibited 'group contracts' under Article 2(1) of Annex 2 to the RSTP, confirming that automatic termination links between head coach and assistant coach contracts do not render those contracts 'collective'. It also establishes a Swiss-law framework for distinguishing liquidated damages clauses from penalty clauses in coach contracts, clarifying when mitigation can and cannot be applied to contractually agreed termination fees.

Cases cited in this award

CAS 2016/A/4648 CAS 2020/A/6988 CAS 2019/A/6533 CAS 2022/A/8963 CAS 2022/A/8754 CAS 2012/A/2875

Frequently asked questions about Pacheco v. Vasco da Gama

Did CAS find that Álvaro Pacheco's coaching staff contracts with Vasco da Gama were illegal 'group contracts'?

No. The Sole Arbitrator reversed the PSC's finding. He held that the three individually signed Employment Contracts, each with separate salary terms and individual reference numbers, were 'executed on an individual basis' under Article 2(1) of Annex 2 to the RSTP. The fact that the assistant coaches' contracts were automatically terminated when the head coach's contract ended did not make them a prohibited 'group contract', a position expressly supported by FIFA's own RSTP Commentary.

How much compensation did Álvaro Pacheco receive from Vasco da Gama after CAS reduced the termination clause amount?

CAS awarded Pacheco EUR 551,095.80, plus 5% simple annual interest from 9 August 2024 until full payment. The Sole Arbitrator reduced the contractual reference figure from EUR 850,000 to EUR 642,400 (EUR 584,000 total remuneration plus 10%) under Article 163(3) CO, then applied a pro-rata calculation for the 194 remaining days of the contract at EUR 2,840.70 per day.

Was Álvaro Pacheco required to mitigate his damages by deducting his Al-Orobah salary from the compensation owed by Vasco da Gama?

No. The Sole Arbitrator held that the termination clause in Employment Contract 1 constituted a liquidated damages arrangement under Swiss law, which displaced both Article 337c(2) CO (the statutory mitigation rule) and Article 6.2 of Annex 2 to the RSTP. Because the parties had agreed in advance on a fixed compensation mechanism, Pacheco was not required to deduct his subsequent earnings with Al-Orobah from the amount owed.

Why did the assistant coaches receive much smaller awards than the head coach in the Pacheco v. Vasco da Gama case?

Unlike Employment Contract 1, the assistant coaches' contracts (Employment Contracts 2 and 3) contained buy-out clauses that expressly stated 'no fine or indemnity shall be due from Party to Party' when the head coach was no longer employed. This meant the general statutory regime of Articles 337c(1) and 337c(2) CO applied, making their damages subject to mitigation. After deducting their Al-Orobah earnings, the 2nd Appellant (José Teixeira) received EUR 4,660.58 and the 3rd Appellant (Pedro Teixeira) received EUR 2,132.50, both with 5% simple annual interest from 9 August 2024.

Topics: Doping, ethics & governance at CAS

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