The case involves a contractual dispute between Grêmio Foot-ball Porto Alegrense and Argentinean footballer Maximiliano Gastón López, adjudicated by the Court of Arbitration for Sport (CAS) in 2014. The dispute originated from an employment agreement signed in 2009, which included an addendum granting Grêmio a unilateral option to extend López's contract for three years. The central issues revolved around the validity of this unilateral option clause, the timing of Grêmio's decision to exercise it, and claims for moral and financial damages. The CAS panel, composed of Rui Botica Santos, Prof. Massimo Coccia, and Efraim Barak, examined the case following an appeal against a FIFA Dispute Resolution Chamber decision from January 2013.
The panel ruled that while FIFA regulations do not explicitly prohibit unilateral contract extensions, such clauses must be evaluated on a case-by-case basis, considering factors like the maximum duration of the labor relationship, the timing of the option's exercise, predefined salary terms, clarity of the clause, proportionality of the extension period, and limiting the number of extensions to one. The panel emphasized that it is unreasonable for a club to delay exercising an extension option until just before the transfer period, as this deprives the player of time to seek alternative employment.
Grêmio attempted to exercise the option on December 29, 2009, just two days before López's contract expired, by depositing a sum in a Brazilian court and notifying López and his then-club, FC Moscow. López contested the validity of the addendum, arguing it was an invalid unilateral clause that restricted his freedom of contract. He also accused Grêmio of acting in bad faith by enforcing the clause at the last minute, knowing he was bound to return to FC Moscow. The panel found that Grêmio had formally complied with its obligations by depositing the funds and notifying the parties, but López's refusal to sign the new contract constituted a breach.
Regarding damages, Grêmio sought compensation for financial, moral, and sporting losses but failed to substantiate its claims with evidence. The panel ruled that under Swiss law, Grêmio had to prove actual damages to claim compensation, which it did not. Moral damages for legal entities like football clubs are limited to reputational harm, and Grêmio provided no evidence of such damage. Sporting damages were also dismissed due to lack of proof that López's absence negatively impacted the team's performance.
The CAS panel ultimately dismissed Grêmio's appeal, upholding the FIFA DRC's decision but for different legal reasons. The ruling reinforced the importance of fairness and transparency in unilateral option clauses, ensuring players are not disadvantaged by delayed or unclear contractual terms. The case serves as a precedent for evaluating the validity of unilateral extensions in football contracts while balancing the interests of clubs and players. The decision underscores the necessity of proving actual damages in contractual disputes and reaffirms the binding nature of valid contractual clauses when properly executed.