The case involves a legal dispute between Clube Atlético Mineiro (CAM), a Brazilian football club, and Udinese Calcio S.p.A., an Italian football club, over unpaid installments related to a player transfer agreement. The Fédération Internationale de Football Association (FIFA) and the Court of Arbitration for Sport (CAS) were also involved in resolving the conflict. The dispute stemmed from a 2014 contract where Udinese loaned a player to CAM, with an option for CAM to purchase the player permanently for €2,858,820, payable in five installments. CAM exercised the purchase option in 2015 but failed to meet payment deadlines for the first two installments. Udinese initiated proceedings before FIFA’s Single Judge, which ruled in Udinese’s favor, ordering CAM to pay the overdue amounts plus interest and legal costs. CAM appealed to CAS, but the rulings were upheld, confirming CAM’s obligation to pay the installments, interest, and legal fees.
The core issue revolved around the allocation of a payment made by CAM on 10 May 2017, totaling EUR 591,397.17. CAM claimed this payment was for the third installment, while Udinese allocated it to the first installment, arguing that CAM had not explicitly communicated its intent. The case hinged on the interpretation of Swiss law, specifically Articles 86 and 87 of the Swiss Code of Obligations, which govern payment allocations when multiple debts exist. Article 86 grants the debtor the right to specify which debt a payment covers, while Article 87 dictates that if neither party specifies, the payment is allocated to the earliest due debt. The CAS panel found that CAM’s payment details, including an interest amount matching the third installment’s timeline, clearly indicated its intent. Udinese’s refusal to accept this allocation was deemed overly formalistic.
The CAS partially upheld CAM’s appeal, ruling that the payment validly settled the third installment and related interest. However, it dismissed other claims, noting that no transfer ban had been imposed by FIFA and thus could not be canceled. The decision emphasized the importance of contextual interpretation in payment allocations and rejected rigid formalities when the debtor’s intent was reasonably clear. The case highlights the complexities of enforcing financial obligations in international football transfers and the role of arbitration in resolving such disputes. It also underscores the principle of pacta sunt servanda (agreements must be kept) and the need for clear communication in financial transactions. The CAS’s ruling reinforced CAM’s compliance with the third installment but left broader issues unresolved, concluding the matter within the narrow scope of the dispute.