Breach of contract saga
Chelsea started to seek compensation from Mutu in early 2005.[4][6] The Football Association Premier League Appeals Committee decided that the player had committed a breach of his contract without just cause [4] which made Chelsea eligible to claim the compensation.[7] Mutu started his first appeal to the Court of Arbitration for Sport (CAS) but the case was dismissed.[4]
On 11 May 2006, Chelsea FC applied to FIFA for an award of compensation against Mutu. In particular, the club requested that the FIFA Dispute Resolution Chamber (DRC) should award an amount of compensation in favour of the club following the established breach of the Employment Contract committed by the Player without just cause.[4]
But on 26 October 2006, the DRC decided that it did not have jurisdiction to make a decision in the dispute between the Club and the Player and that the claim by the Club was therefore not admissible.[4]
On 22 December 2006, Chelsea FC lodged a new appeal before the CAS seeking the annulment of the DRC’s decision. On 21 May 2007, a CAS panel upheld the Club’s appeal, set aside the DRC’s decision, and referred the matter back to the DRC, “which does have jurisdiction to determine and impose the appropriate sporting sanction and/or order for compensation, if any, arising out of the dispute†between the Club and the Player,"[4]
On 6 August 2007, Chelsea FC, on the basis of the Second CAS Award, filed with the DRC a “Re-amended application for an award of compensationâ€, seeking damages, to be determined on the basis of various factors, “including the wasted costs of acquiring the Player (£ 13,814,000), the cost of replacing the Player (£22,661,641), the unearned portion of signing bonus (£ 44,000) and other benefits received by the Player from the Club (£ 3,128,566.03) as well as from his new club, Juventus (unknown), the substantial legal costs that the Club has been forced to incur (£ 391,049.03) and the unquantifiable but undeniable cost in playing terms and in terms of the Club’s commercial brand valuesâ€, but “at least equivalent to the replacement cost of £ 22,661,641â€.[4]
On 14 September 2007, Mutu submitted to the DRC a brief stating the “Position of Player Mutu regarding Chelsea FC’s petition for an award of compensationâ€, requesting its rejection, and asking FIFA to open an investigation against the Club for having used and/or dealt with unlicensed agents.[4] But Mutu failed to suspend the arbitration and his claim for unlicensed agent was found no such violation emerged.
On 7 May 2008, FIFA Dispute Resolution Chamber ordered Mutu to pay €17,173,990 in compensation to his former club, Chelsea FC, for breach of contract.[8][9] It included € 16,500,000 for unamortised portion of the transfer fee paid to Parma, €307,340 for unamortised portion of the sign-on fee (received by Mutu), and €366,650 for unamortised portion of the fee to the Agent, but already not to take into account for the determination of the damages the amounts already paid by the Club to the Player (being the consideration for the services rendered) or the remaining value of the Employment Contract (valued for €10,858,500). Mutu have to pay within 30 days after informed the decision in August 2008.[4]
Mutu lodged an appeal to the Court of Arbitration for Sport for the second time,[10] On 31 July 2009, the Court of Arbitration for Sport dismissed an appeal filed by Mutu regarding his fine,[8] Mutu is ordered to pay to Chelsea FC the amount, plus interest of 5% p.a. starting on 12 September 2008 until the effective date of payment, and the matter will be submitted to the FIFA Disciplinary Committee for its. In addition, Mutu had to pay the costs of the arbitration of both parties, and have to pay CHF 50,000 to Chelsea FC contribution towards the legal and other costs incurred in connection with these arbitration proceedings.[4] The fine was the highest ever levied by FIFA.[11]
Mutu may be banned from football, forcing him to retire if he does not pay the compensation,[12] although some lawyers have disputed this.[13] Mutu started his third appeal, this time to the Swiss Federal Court in October 2009.[14]