The case involves a dispute between Romanian football clubs C.S. Chimia Brazi and S.C. C.S. Unirea Urziceni S.A. over the late payment of a transfer fee for a player. The parties had signed a Transfer Agreement on 16 July 2009, stipulating that Urziceni would pay Brazi €200,000 plus VAT (totaling €238,000) by 30 September 2009, with a penalty of 1% per day for late payment. Urziceni failed to meet the deadline, and Brazi issued an invoice on 1 December 2009, which Urziceni rejected, citing missing legal requirements under Romanian tax law. Brazi escalated the matter to the Romanian Football Federation (RFF) Resolution Chamber, which ruled in Brazi’s favor, ordering Urziceni to pay the transfer fee and the daily penalty from 1 December 2009. Urziceni appealed to the RFF Appeal Committee, which upheld the transfer fee obligation but invalidated the penalty clause, deeming it excessive and abusive.
The dispute was then brought before the Court of Arbitration for Sport (CAS). The CAS panel confirmed its jurisdiction under the Transfer Agreement and RFF Regulations, applying Romanian law for substantive matters and the CAS Code for procedural issues. The panel addressed three key questions: whether Urziceni had justified grounds for non-payment, whether interest was due, and the applicable interest rate. The panel found that Urziceni’s objections to the invoice were unfounded, as it complied with Romanian tax laws, and noted that Urziceni had paid the fee without receiving a corrected invoice, undermining its justification for delay. On the issue of interest, the panel rejected Urziceni’s claim that no interest was owed, ruling that the contractual penalty clause was enforceable. However, the panel agreed that the 1% daily interest rate (equivalent to 365% annually) was excessive under both Romanian law and Swiss public policy, where the arbitration was seated.
Under Swiss law, interest rates above 18–20% annually are considered usurious, and consumer loans are capped at 15%. The panel adjusted the penalty to a maximum annual rate of 17%, balancing contractual obligations with legal fairness. The CAS partially upheld Brazi’s appeal, ordering Urziceni to pay default interest at 17% per annum on the unpaid amount from 1 December 2009 until 16 June 2010, when the fee was paid. The decision emphasized the importance of proportionality in penalty clauses and adherence to legal standards, reinforcing the limits of contractual freedom in the face of usurious terms. The case highlights the role of arbitration in resolving disputes while upholding fundamental legal principles.