The case involves a dispute between FC Dynamo Kyiv (Dynamo) and AS Nancy-Lorraine (Nancy) over the interpretation of two contracts signed in July 2007 for the transfer of a football player, P. The first contract, the Agreement, involved Dynamo, Nancy, and Newport Management Ltd (the Firm), setting a fixed transfer fee of €4,000,000 with additional bonuses tied to Dynamo's performance in the UEFA Champions League and the Ukrainian league, as well as a 20% share of any future transfer fee. The second contract, the Convention, signed the next day, was between Dynamo and Nancy and included similar terms but added obligations such as payments to a Senegalese club, Entente SOTRAC OUAKAM, and a 5% solidarity mechanism under FIFA regulations.
The central dispute was whether the Convention replaced the Agreement through novation. The Court of Arbitration for Sport (CAS) ruled that novation did not occur because the parties to the two contracts were not identical (the Firm was absent from the Convention), there was no mutual consent to replace the Agreement, and the parties' conduct indicated both contracts remained valid. The CAS emphasized that the Convention did not explicitly nullify the Agreement and could coexist as complementary agreements.
Dynamo argued that the Convention's French law clause should prevail, but the CAS found this did not invalidate the Agreement, as the contracts addressed overlapping but distinct obligations. The ruling clarified that multiple contracts on the same subject do not imply novation unless all parties explicitly agree to replace the original. The decision reinforced the importance of parties' intentions and conduct in contractual relationships.
A key issue was whether Dynamo owed Nancy €750,000 for winning the 2008/2009 Ukrainian Championship, as stipulated in the Convention but not the Agreement. The CAS ruled Dynamo was bound by the Convention, as its president had signed it and subsequent correspondence acknowledged its terms. Dynamo's attempts to dispute the payment, including claims of misunderstanding, were dismissed. The panel noted Dynamo had proposed settlements referencing the Convention, further validating its acceptance of the obligation.
FIFA’s Single Judge had initially ruled in favor of Nancy, ordering Dynamo to pay €750,000 plus interest. Dynamo appealed to CAS, which upheld the decision, dismissing Dynamo's arguments and confirming the enforceability of the Convention. The case highlights the complexities of football transfer agreements, the role of FIFA and CAS in resolving disputes, and the necessity of clear contractual drafting to avoid conflicts over overlapping obligations. The final ruling upheld the FIFA decision, closing the case without further recourse.