The case revolves around a contractual dispute between Clube Desportivo Nacional (a Portuguese club) and Clube de Regatas Brasil (a Brazilian club) concerning a loan agreement for a Brazilian player, R. The agreement, signed on 25 August 2008, transferred the player’s rights to the Brazilian club until 31 December 2008 without a transfer fee. The Brazilian club was responsible for the player’s salary, insurance, travel, and accommodation during the loan period, with a penalty clause of EUR 250,000 for breaches such as unauthorized transfers or failure to meet obligations. The Portuguese club alleged that the Brazilian club failed to pay the player’s salaries and other expenses, forcing them to cover these costs to prevent the player from terminating his contract. They sought compensation for breach of contract, reimbursement of salaries (EUR 30,154.56), travel and accommodation expenses, interest, and procedural costs. The Brazilian club denied signing the loan agreement, claiming a separate employment contract with the player offering a lower salary.
FIFA’s Players’ Status Committee (PSC) initially rejected the Portuguese club’s claims, leading to an appeal to the Court of Arbitration for Sport (CAS). The CAS panel, composed of arbitrators from Italy, Portugal, and Israel, examined the loan agreement’s validity and the principle of unjust enrichment under Swiss law. The panel confirmed the agreement’s validity, as it bore all parties’ signatures, and found the Brazilian club had breached its financial obligations, causing the Portuguese club to incur costs. The panel ruled that the Brazilian club was liable for unjust enrichment but rejected the penalty clause claim, as it only applied to unauthorized transfers or planned transfers, which were not demonstrated.
The CAS panel partially upheld the appeal, ordering the Brazilian club to reimburse the Portuguese club for documented expenses totaling EUR 37,173.50, plus 5% annual interest from the date of FIFA’s original decision. The decision emphasized the binding nature of properly executed contracts and the obligation to prevent unjust enrichment in contractual disputes. It highlighted the importance of clear contractual terms and enforcement of financial obligations in international football transfers. The case underscores the complexities of loan agreements in sports and the legal recourse available when contractual obligations are unmet. The final ruling reinforced the Portuguese club’s right to reimbursement while clarifying the limitations of penalty clauses in such agreements.