GENEVA (AP) -- Switzerland's supreme court has dismissed FIFA's "fundamentally unlawful" threat to ban Brazilian midfielder Matuzalem from any football activity if he fails to pay €11.86 million ($15.8 million) compensation owed to former club Shakhtar Donetsk.
The Swiss Federal Tribunal said Thursday it upheld Matuzalem's appeal because of a "manifest and serious attack on his rights" by FIFA and the Court of Arbitration for Sport.
The federal court objected to FIFA's disciplinary panel giving Shakhtar authority to request Matuzalem's ban if he missed payments.
Matuzalem "would be delivered to the arbitrary power of his former employer, and his economic freedom would be limited to such an extent that the basis of its economic existence would be put in danger," the federal court said in a statement.
FIFA said in a statement to the Associated Press it would not comment on the verdict.
Matuzalem, who now plays for Lazio, and previous club Zaragoza are still liable for all the compensation, plus five percent annual interest. Zaragoza has entered bankruptcy protection with debts of more than €110 million ($147 million), and is last in the Spanish league.
A CAS panel ordered the eight-figure compensation after Matuzalem broke his Shakhtar contract in July 2007 to join Zaragoza, increasing the amount previously awarded by FIFA.
That CAS decision in May 2009 was hailed as a victory for clubs and contractual stability against the growing trend of player power.
Thursday's ruling offered a rare victory for Matuzalem in his five-year legal case that has been processed twice by each of FIFA, CAS and Switzerland's supreme court.
The latest verdict focused on Article 64 of FIFA's disciplinary code relating to "failure to respect decisions."
FIFA used that text to warn of a ban after Matuzalem and Zaragoza said in 2010 that they could not afford to pay.
When the player went back to CAS last year to challenge the threat, sport's highest court sided with FIFA because the governing body had adhered to its own judicial rules.
The federal court acknowledged Thursday that it had "extremely" limited powers to intervene in CAS sentencing powers.
"In exceptional cases, a sentence can be annulled for violation of the essential principles of the judicial system, named 'the public order'," the federal court said.
In 2007, Matuzalem was captain at Shakhtar but wished to join Zaragoza despite the two clubs being unable to agree a transfer fee.
Because he had served three years of his five-year contract, Matuzalem was able to force through the move by invoking the so-called "Webster Ruling" in FIFA's transfer regulations.