The case involves a legal dispute between Sociedade Esportiva Palmeiras (Palmeiras) and Clube Desportivo Nacional (Nacional) over the transfer of a football player, adjudicated by the Court of Arbitration for Sport (CAS). The conflict arose from agreements related to the player's transfer from Palmeiras to Nacional in 2002 and later from Nacional to Futebol Clube do Porto (Porto) in 2004. The initial contract stipulated a fixed transfer fee of USD 410,000 and a variable component, entitling Palmeiras to 10% of any future transfer fee exceeding this amount if the player was sold again. When the player moved to Porto for EUR 1,500,000, Palmeiras claimed it was owed 10% of the difference between this amount and the initial USD 410,000. Nacional argued for deductions, including payments to a mediation agency and the player, but failed to provide sufficient evidence.
The dispute was first brought before FIFA’s Player’s Status Committee (PSC), which ruled in favor of Palmeiras, rejecting Nacional’s deductions and clarifying that the player’s rights were fully transferred to Porto, not partially as Nacional claimed. The PSC calculated the amount due to Palmeiras as 10% of the difference between EUR 1,500,000 and USD 410,000, converted to EUR at the exchange rate on the payment due date (1 July 2004), resulting in EUR 34,015.70 plus 5% annual interest from 1 October 2004. Palmeiras appealed to CAS, seeking additional compensation, while Nacional counterclaimed for expense deductions.
The CAS panel, applying FIFA regulations and Swiss law, conducted a de novo review based on written submissions. It upheld the PSC’s decision, confirming the legality of variable transfer fees under Swiss law and rejecting Nacional’s deductions due to lack of contractual basis and evidence. The panel emphasized that the player’s economic rights were fully transferred to Porto, dismissing Palmeiras’ argument for additional compensation based on a partial transfer. The final ruling ordered Nacional to pay Palmeiras the outstanding EUR 34,015.70 plus interest and affirmed Palmeiras’ entitlement to 10% of any future profit if Porto transferred the player again. The case underscores the importance of clear contractual terms in player transfers and the enforceability of agreed financial obligations. The CAS dismissed all other claims, ensuring the original contract terms were upheld.