Barcelona must pay 7.7 million euros ($8.2 million) compensation to Brazilian midfielder Matheus Fernandes for unfair dismissal, the Superior Court of Catalonia ruled on Tuesday.
Barcelona immediately appealed the ruling.
The court however rejected the 24-year-old player's claim of an additional 5 million euros for "moral and reputation damages".
The midfielder joined Barca from Palmeiras at the end of the 2020 winter transfer window and was immediately loaned out to Real Valladolid.
He made one Barcelona appearance as a substitute against Dynamo Kyiv in a Champions League group match in 2020.
In June 2021, three months after Joan Laporta returned as president, Barcelona announced the termination of the player's five-year contract.
Barca argued his poor performances justified their decision.
The judge rejected this argument saying that the club had not provided "evidence of inadequate performance of the player in training".
The magistrate also said there was no record of Barcelona telling the player "to improve his performance" before they sacked him.
"The real reason for the termination was the unilateral business decision to dispense with and not keep on its payroll a player signed by the previous board," the judge said.
In August 2021, Laporta announced an audit of the club's finances showed Barca faced an estimated debt of 1.35 billion euros.
The club moved to cut their wage bill to avoid breaking Liga salary rules.
They allowed Lionel Messi to leave for Paris Saint-Germain in 2021 because they could not afford to keep the Argentine star, even on a reduced salary.
The player returned to Palmeiras who have since loaned him out.
