The case revolves around a dispute between Ittihad FC, a Saudi Arabian football club, and Etoile Sportive du Sahel, a Tunisian club, concerning the transfer of player Ahmed Akaichi. The initial transfer agreement, signed on 27 July 2016, required Ittihad FC to pay EUR 2,000,000 in two installments. However, Ittihad FC failed to meet these payments, leading to a revised agreement on 14 September 2016, which outlined five installments and included a late payment penalty of EUR 100,000 for each delayed installment beyond seven days. Etoile Sportive du Sahel filed a claim with FIFA on 30 November 2016, seeking unpaid installments, late penalties, and additional costs. The FIFA Players’ Status Committee (PSC) ruled in favor of Etoile Sportive du Sahel, ordering Ittihad FC to pay EUR 2,050,000, though it dismissed the travel cost claim due to lack of evidence.
Ittihad FC appealed to the Court of Arbitration for Sport (CAS), arguing the late payment penalties were excessive under Swiss law, which governs the contract. The CAS panel, comprising Prof. Philippe Sands, Prof. Petros Mavroidis, and Prof. Luigi Fumagalli, examined whether the penalties were abusive. Swiss law permits penalty clauses but limits them to reasonable amounts. The panel found the penalties were contractually agreed and not excessive, upholding the PSC’s decision. Procedural disputes arose during the CAS proceedings, including the language of submissions and panel composition. Etoile Sportive du Sahel requested a three-member panel and French as the procedural language, while Ittihad FC sought a sole arbitrator and an extension for filing its appeal brief. The CAS Court Office mediated these issues, ultimately proceeding with a three-member panel and allowing submissions in English.
The CAS award, issued on 22 December 2017, confirmed the PSC’s decision, requiring Ittihad FC to pay the outstanding amounts and penalties. The panel emphasized contractual freedom under Swiss law while ensuring penalties remained reasonable. Ittihad FC argued the penalties were disproportionately high, citing Swiss law (Article 163 of the Swiss Code of Obligations) and precedents where penalties were reduced. However, the panel found no evidence the penalties were abusive, noting the fees were significantly lower than the installments themselves and comparable to upheld penalties in other cases. The panel also dismissed Ittihad FC’s claim of financial hardship due to lack of evidence.
The case highlights the importance of adhering to contractual obligations in international football transfers and the role of arbitration in resolving disputes. It underscores the balance between contractual freedom and equitable relief, with the CAS tasked to ensure penalties are not excessive. The final ruling upheld the enforceability of freely negotiated terms, particularly in professional sports transactions, and dismissed Ittihad FC’s appeal, confirming the PSC’s decision in full.