The case involves a dispute between Kuwait Sporting Club and FC Flora Tallinn, with FIFA also participating as a respondent, concerning the breach of a loan agreement for a professional football player. The Court of Arbitration for Sport (CAS) panel, composed of Lars Hilliger, Michele Bernasconi, and Rui Botica Santos, issued an award on 14 June 2010. The central issues revolved around the interpretation of contractual clauses, the player's health, allegations of deceptive conduct, and compensation for breach of contract. The loan agreement between FC Flora Tallinn and Kuwait Sporting Club included a clause stating the player was fit and free from chronic injuries. However, the panel ruled this clause did not absolve Kuwait Sporting Club from conducting its own thorough medical examination. The club's failure to do so and its subsequent acceptance of the player through a labor agreement meant it could not later shift responsibility for the player's health issues to FC Flora Tallinn. The panel noted Kuwait Sporting Club's negligence in this regard was its own fault.
Regarding allegations of deceptive conduct, the panel referenced Swiss law, which defines "wilful fraud" as intentional deception leading a party to enter a contract based on false information. The burden of proof lay with Kuwait Sporting Club, which failed to substantiate its claim that FC Flora Tallinn misrepresented the player's health. The loan agreement was deemed legally binding, and Kuwait Sporting Club's unilateral attempt to rescind it was unjustified. The panel concluded FC Flora Tallinn, having fulfilled its obligations, was entitled to compensation placing it in the position it would have been in had the contract been properly performed. The player, after passing an initial medical examination, was later diagnosed with chronic knee issues, but this did not invalidate the loan agreement. Kuwait Sporting Club's subsequent actions, including pressuring the player to sign a new contract and declaring the original agreements null and void, were found unjustified.
The FIFA Single Judge of the Players’ Status Committee ruled on 25 June 2009 that Kuwait Sporting Club was contractually bound to FC Flora Tallinn under the valid Loan Agreement. The judge determined the player had passed the medical examination arranged by Kuwait Sporting Club, confirming his good health at the time of signing the Labor Agreement. The judge rejected Kuwait Sporting Club’s claim of deception and ordered the club to pay FC Flora Tallinn USD 280,000 plus 5% annual interest and CHF 20,000 in procedural costs. Kuwait Sporting Club appealed to CAS on 5 November 2009, challenging the ruling and seeking relief on multiple grounds, including breach of contract and reimbursement of payments. FC Flora Tallinn requested confirmation of the FIFA decision, payment of CAS costs, and additional interest. FIFA sought exclusion from the proceedings but was retained as a respondent due to its active participation.
A hearing was held on 4 May 2010 at CAS in Lausanne. The panel confirmed its jurisdiction based on FIFA Statutes and the Code of Sports-Related Arbitration, with applicable law being FIFA regulations supplemented by Swiss law. The appeal was deemed admissible as it met procedural deadlines. The panel emphasized the need to determine the parties’ true intentions and interpret the contract in good faith. Key undisputed facts included the sequence of agreements, the player’s successful initial medical examination, and his participation in training and matches without issues. The panel noted Kuwait Sporting Club had ample time to conduct further medical tests before the registration deadline but failed to do so. The MRI test revealing the injury was conducted 13 days after the agreements were signed, with no explanation for the delay. The panel concluded Kuwait Sporting Club’s interpretation of the clause was unreasonable, as it did not demonstrate intent to conduct additional medical examinations promptly.
The CAS upheld the FIFA decision, reinforcing the validity of the Loan Agreement and the financial obligations imposed on Kuwait Sporting Club. The panel dismissed all other claims and prayers for relief, issuing the final award on 14 June 2010. The ruling underscored the importance of clear contractual terms, the responsibilities of clubs in ensuring player fitness, and the need for objective interpretation of contracts. It reaffirmed that contractual obligations must be understood in good faith, with parties held accountable for their actions or inactions. The case highlights the legal complexities surrounding player transfers, medical examinations, and contractual obligations in football.