The case revolves around a dispute between Real Betis Balompié SAD (Betis) and PSV Eindhoven (PSV) concerning the transfer of a Brazilian player, R., under a loan agreement signed on December 22, 2005. The agreement granted Betis an option to purchase the player’s federative rights for €3,250,000, payable in installments, provided Betis exercised the option by April 30, 2007, and provided a bank guarantee. Betis exercised the option but failed to secure the bank guarantee, leading PSV to withhold the player’s transfer. Betis argued that the inability to obtain the guarantee constituted force majeure, while PSV maintained that Betis breached the contract. The FIFA Players’ Status Committee ruled in favor of PSV, prompting Betis to appeal to the Court of Arbitration for Sport (CAS).
The CAS addressed several legal issues, including the admissibility of new evidence, the enforceability of contractual obligations, and the applicability of force majeure. It ruled that Betis’s failure to secure the bank guarantee did not qualify as force majeure, as the event was not beyond Betis’s control or unavoidable. The CAS emphasized the principle of pacta sunt servanda (agreements must be kept) and rejected Betis’s claim that the player’s refusal to sign an employment contract absolved them of their obligations. The panel noted that clubs typically mitigate such risks by including clauses making transfers contingent on player consent.
Under Swiss law, a party breaching a contract without just cause must compensate the other party. The CAS determined that PSV was entitled to compensation but adjusted the amount to reflect PSV’s failure to mitigate damages by not accepting the player back promptly. The panel concluded that a fair compensation would cover the first two installments of the transfer fee (€1,562,500), corresponding to the period during which PSV could have negotiated a transfer. The remaining installments were dismissed, as PSV’s inaction aggravated its losses. Interest was set at 5% annually from August 1, 2007, the date of Betis’s breach.
The CAS partially upheld Betis’s appeal, modifying the FIFA decision and ordering Betis to pay PSV €1,562,500 plus interest, while dismissing all other claims. The ruling reinforced the importance of contractual obligations in football transfers and the limited applicability of force majeure in such contexts. The case underscores the need for clubs to clearly define terms and protect themselves against risks, such as a player’s refusal to consent, in transfer agreements. The final decision was issued on December 10, 2010.