The Court of Arbitration for Sport (CAS) resolved a dispute between FC Metz and Galatasaray SK concerning a sell-on clause in a player transfer agreement. The case involved the transfer of a French player, F., from FC Metz to Galatasaray in January 2005. The original agreement included a sell-on clause entitling FC Metz to 20% of any future transfer fee exceeding €2 million, later reduced to 11% in an addendum contingent on Galatasaray providing a bank guarantee. The dispute arose when the player terminated his contract with Galatasaray in June 2005 due to unpaid salaries and later joined another club, eventually transferring for €25 million in 2007. FC Metz claimed entitlement to a percentage of this fee, arguing Galatasaray’s breach of contract deprived them of the opportunity to benefit from a future transfer.
The CAS panel ruled that the sell-on clause was conditional on the player being transferred and a fee being paid, but emphasized the principle of good faith under Swiss law (Art. 156 CO). It found that Galatasaray’s failure to pay the player constituted a breach preventing the condition’s fulfillment, thus deeming the condition fulfilled and entitling FC Metz to compensation. The panel also addressed the burden of proof in assessing damages, noting that strict evidence is not always required under Swiss law (Art. 42(2) CO). It rejected the notion of linear player valuation, recognizing exponential growth based on experience and exposure.
The panel determined the player’s value in June 2005 by examining transfer fees from January 2005 (€2 million) and June 2007 (€25 million), accounting for his rising reputation, including his performance in the 2006 FIFA World Cup. It estimated his June 2005 value at €4 million, resulting in an excess of €2 million over the initial fee. FC Metz was awarded 11% of this excess, totaling €220,000. The panel partially upheld FC Metz’s appeal, ordering Galatasaray to pay this amount but denied interest as it was not requested. The decision reinforced the importance of good faith in contractual obligations and clarified legal principles governing sell-on clauses and player valuations in football transfers. The ruling also highlighted the applicability of Swiss law in FIFA-related disputes and the CAS’s role in resolving such conflicts. The appeal was partially granted, reforming the FIFA Player’s Status Committee’s decision.