The case involves a legal dispute between Racing Club, an Argentine football club, and Genoa Cricket and Football Club, an Italian football club, brought before the Court of Arbitration for Sport (CAS). The central issue revolved around the validity and enforceability of a transfer agreement signed by Blanquiceleste SA, a company managing Racing Club's football-related activities during its bankruptcy proceedings, and whether Racing Club was directly bound by this agreement. The CAS panel ruled that the principle of lis pendens did not apply, as the parties in the national court dispute differed from those in the CAS arbitration. The panel determined that Blanquiceleste SA acted as an agent for Racing Club, not in its own name, given its role in managing the club's football activities under Argentine bankruptcy law and the AFA-approved Rescue Plan. Under Swiss law, which governed the arbitration, direct representation was established because Blanquiceleste SA acted within its authority and disclosed its capacity as Racing Club's manager when signing the transfer agreement with Genoa. Consequently, the rights and obligations from the transfer agreement accrued directly to Racing Club.
The dispute stemmed from a transfer agreement involving a player, where Blanquiceleste signed the agreement with Genoa, transferring 100% of the player's federative rights and 75% of his economic rights for €1,602,500. The agreement included a clause stipulating that Genoa would pay Blanquiceleste 25% of any future transfer fee if the player was sold. The player was later transferred to Real Zaragoza for €5,000,000, triggering the 25% clause. Blanquiceleste initiated proceedings with FIFA for non-payment, but by 2008, it was declared bankrupt, and Racing Club sought to replace it as the claimant. FIFA initially rejected Racing Club's claim, ruling it was not a party to the agreement. Racing Club appealed to CAS, arguing that Blanquiceleste acted on its behalf.
The CAS panel concluded that Blanquiceleste had the authority to act on Racing Club's behalf, as evidenced by the Management Agreement, which granted Blanquiceleste broad powers over player transfers. The panel found that the requirements of direct representation under Swiss law were met, meaning Racing Club was directly bound by the transfer agreement's terms. The panel ruled that Genoa owed Racing Club 25% of the €5,000,000 transfer fee, amounting to €1,250,000, plus 5% annual interest from June 19, 2007. The decision overturned FIFA's earlier ruling and dismissed all other claims, leaving open the possibility for Blanquiceleste's liquidators to seek a portion of the sum under Argentinean law. The case highlighted the legal complexities of football club management during bankruptcy and reinforced the principle that clubs remain bound by agreements signed by their authorized representatives, even during financial restructuring.