The case involves a dispute between Sporting Lokeren Oost-Vlaanderen (Lokeren), a Belgian football club, and Clube Atlético Monte Azul (Monte Azul), a Brazilian football club, regarding the payment of a transfer fee for a player loaned from Monte Azul to Lokeren. The dispute was brought before the Court of Arbitration for Sport (CAS), with the panel consisting of Prof. Luigi Fumagalli, Mr. Bernard Hanotiau, and Mr. Stefan Geir Thorisson. The key issue revolved around the timing of the payment obligation under the loan agreement between the clubs. On 15 January 2013, the parties entered into a loan agreement for the transfer of a player, S., from Monte Azul to Lokeren. The agreement included provisions for a potential transfer of the player to a third club during the loan period. Specifically, if the player was transferred to another club, Lokeren would receive 50% of the transfer fee, with Monte Azul entitled to the remaining 50%. The agreement stipulated that Monte Azul would receive its share "after receiving" the transfer amount from the third club.
In February 2015, Lokeren negotiated a transfer of the player to Al-Arabi Sports Club for €2.5 million, payable in two instalments: €1 million within 24 hours of receiving the International Transfer Certificate (ITC) and €1.5 million by 22 February 2016. Lokeren received the first instalment in May 2015 and subsequently paid Monte Azul its 50% share (€500,000) in January 2016. However, when Monte Azul demanded payment of the second share (€750,000) in September 2016, Lokeren refused, arguing that its obligation to pay arose only after receiving the full transfer amount from Al-Arabi. Monte Azul filed a claim with FIFA's Players' Status Committee, which ruled in its favor, ordering Lokeren to pay the outstanding amount. Lokeren appealed to CAS.
The CAS panel examined the loan agreement and concluded that Lokeren's obligation to pay Monte Azul its share of the transfer fee was contingent on Lokeren receiving the corresponding instalments from Al-Arabi. Since the second instalment had not yet been paid by Al-Arabi at the time of the dispute, Lokeren was not obligated to pay Monte Azul. The panel also addressed procedural matters, confirming that Lokeren's appeal was not withdrawn despite its payment of the advance of costs, as permitted under the CAS Code. The panel ultimately upheld Lokeren's position, ruling that the payment obligation only arose upon receipt of the instalments from the third club. The decision clarified the interpretation of contractual terms in loan agreements and reinforced the principle that payment obligations are tied to the receipt of funds in such transactions.
The case proceeded with various procedural challenges, including objections to the arbitrators' independence and delays in the proceedings. The Respondent, Monte Azul, raised concerns about the arbitrators' declarations of independence and nationality, but these were dismissed by CAS. The panel also rejected Monte Azul's request to terminate proceedings, noting that Lokeren had complied with cost obligations. During the arbitration, Lokeren confirmed receiving the second instalment from Al-Arabi, which included the disputed amount, interest, and defense costs. Despite this, Lokeren maintained its appeal, citing economic implications. The Respondent argued that the only remaining issue was the FIFA proceedings' costs, as Lokeren had acknowledged its debt.
The CAS panel ultimately dismissed Lokeren's appeal, upholding the FIFA Players’ Status Committee’s decision. The panel found that even if the PSC’s reasoning were flawed, the outcome would remain unchanged, as the payment obligation was now indisputable. The ruling emphasized that the appeal lacked substantive legal interest since the financial outcome was inevitable. The CAS affirmed the original decision in its entirety, confirming Lokeren’s obligation to pay Monte Azul €750,000 plus interest and associated costs. The case underscores the enforceability of contractual obligations and the role of judicial bodies in resolving disputes within football transfers.