The case involves a dispute between Cruzeiro E.C. and C.A. Independiente over unpaid instalments of a transfer fee for a football player. On 11 January 2016, the parties signed an agreement for the player's transfer, with Cruzeiro agreeing to pay USD 1,050,000 in three instalments. Cruzeiro paid the first instalment but failed to pay the remaining two, totaling USD 500,000. Independiente filed a claim with FIFA on 30 September 2016, seeking the unpaid amount plus a 10% penalty and 5% annual interest. FIFA’s Single Judge ruled in favor of Independiente on 23 January 2018, ordering Cruzeiro to pay the outstanding amount and a USD 50,000 penalty within 30 days, with 5% annual interest if unpaid. Cruzeiro appealed to the Court of Arbitration for Sport (CAS) on 11 April 2018, arguing procedural defects and contesting the penalty's fairness. The case was assigned to a sole arbitrator, Prof. Gustavo Albano Abreu.
Cruzeiro claimed it was not obligated to pay the instalments because Independiente failed to provide invoices with bank details as stipulated in the contract. However, the arbitrator found this argument unconvincing, noting that Independiente’s bank details were available in the FIFA Transfer Matching System (TMS) and that Cruzeiro had previously paid the first instalment without an invoice. The contract did not specify consequences for the lack of an invoice, and Cruzeiro, as the drafter, could not claim misunderstanding. The arbitrator emphasized that Cruzeiro’s primary obligation was to pay, while Independiente’s main duty was to transfer the player, making secondary obligations irrelevant to Cruzeiro’s non-performance.
The arbitrator upheld FIFA’s decision, confirming Cruzeiro’s obligation to pay the outstanding amount and the 10% penalty. The penalty was deemed valid under Swiss law, as it was contractually agreed and not excessive. The arbitrator rejected Cruzeiro’s procedural objections, stating the CAS appeal process allowed for a full review of the facts and law, curing any prior defects. The decision underscored the importance of contractual compliance and the limited scope for judicial intervention in agreed penalties.
The case concluded with the dismissal of Cruzeiro’s appeal, affirming the original FIFA decision. The arbitrator ruled that Cruzeiro’s failure to pay was unjustified and not contingent on receiving invoices. The penalty clause was upheld, and Cruzeiro was ordered to pay the outstanding amount plus the penalty and legal costs. The decision reinforced the principle of "pacta sunt servanda" (agreements must be kept) and highlighted the debtor’s responsibility to ensure timely payment. The CAS decision reaffirmed the validity of contractual obligations and the minimal grounds for judicial interference in such cases.