The Court of Arbitration for Sport (CAS) issued a ruling on 20 January 2016 in the dispute between Al Nassr Saudi Club and Trabzonspor FC, concerning a player transfer agreement dated 12 June 2014. The agreement stipulated that Al Nassr would pay Trabzonspor a net transfer fee of €3.2 million in two installments, with the second installment due by 31 December 2014. A bank guarantee was required by 1 July 2014, and failure to comply would trigger a penalty of €500,000, plus an additional €50,000 for each 30-day delay. The term "net" in the agreement meant Trabzonspor would receive the full amount without deductions, including solidarity contributions. Al Nassr paid the first installment on time but attempted to deduct 5% from the second installment, citing solidarity contributions, which Trabzonspor rejected. The dispute escalated, leading to a FIFA Single Judge ruling in favor of Trabzonspor, ordering Al Nassr to pay the full second installment plus the penalty. Al Nassr appealed to CAS, arguing the penalty was excessive.
The CAS panel, applying Swiss law, upheld the principle of contractual freedom, stating that parties are bound by their agreements unless penalties are grossly unfair. The panel considered factors such as the creditor's interest in performance, the severity of the breach, the parties' business experience, and the debtor's financial situation. It found the penalty justified, serving both compensatory and punitive purposes, and noted Al Nassr's experience in international transfers meant it should have understood the terms. The panel dismissed Al Nassr's appeal, affirming FIFA's decision and ordering payment of the outstanding amount plus interest. The ruling reinforced the enforceability of penalty clauses in transfer agreements, provided they are not grossly unfair, and highlighted the importance of contractual certainty in football transfers.
The case also addressed procedural aspects, including Al Nassr's request to participate via Skype due to logistical issues, which was granted despite Trabzonspor's objections. Technical issues arose during the hearing, but Al Nassr's representative participated via telephone, confirming procedural fairness. Both parties presented arguments, with Al Nassr seeking annulment of FIFA's decision and a penalty reduction, while Trabzonspor defended the original ruling. The CAS panel carefully evaluated all submissions, including written and oral arguments, and the transfer agreement's terms. It concluded that Al Nassr failed to justify the deduction or prove the penalty was excessive, upholding FIFA's decision. The ruling emphasized adherence to contractual obligations in player transfers and the role of arbitration in resolving such disputes.
The panel also addressed Al Nassr's claim of financial hardship, finding no evidence to support a penalty reduction under Swiss law. It reiterated that financial difficulties alone do not justify reducing penalties unless extreme disproportionality or usury is proven. The decision underscored the importance of clear contractual terms and the accountability of experienced parties in international sports transactions. Ultimately, the CAS dismissed Al Nassr's appeal in its entirety, confirming the FIFA ruling and rejecting all additional relief requests. The case serves as a precedent for the enforceability of penalty clauses and the binding nature of contractual agreements in football transfers.