The case involves a legal dispute between Cruzeiro Esporte Clube (Cruzeiro) and Defensor Sporting Club (Defensor) over unpaid transfer fees and penalties related to a player transfer agreement signed on January 17, 2015. The agreement stipulated that Cruzeiro would pay Defensor €4,030,000 in installments, with a 5% penalty for late payments and a clause allowing Defensor to demand immediate payment of all remaining debt if Cruzeiro delayed payments for over three months or missed three installments. Cruzeiro failed to meet some payment deadlines, prompting Defensor to file a claim with FIFA's Players' Status Committee (PSC) on November 19, 2015, seeking unpaid amounts, penalties, and interest. Despite partial payments made by Cruzeiro between November 2015 and March 2016, Defensor amended its claim in July 2017, requesting €1,050,000 in outstanding fees, €101,500 in penalties, and 5% annual interest on late payments. On August 29, 2017, the FIFA PSC partially accepted Defensor's claims, ordering Cruzeiro to pay the outstanding amount and penalties within 30 days, along with procedural costs.
Cruzeiro appealed to the Court of Arbitration for Sport (CAS), arguing that the penalty was disproportionate and that new legal submissions made during the hearing were inadmissible under Article R56 of the CAS Code. The CAS panel, comprising Mark Hovell, Margarita Echeverria, and Manfred Nan, rejected Cruzeiro's arguments, ruling that the 5% penalty was contractually agreed and reasonable. The panel emphasized that the penalty was a one-time fine, not cumulative interest, and upheld the FIFA PSC's decision. Cruzeiro also contended that Defensor acted in bad faith by not disputing late payments initially and later claiming penalties, citing mitigating factors like Brazil's economic crisis and FIFA's ban on third-party ownership. However, the panel found these arguments unconvincing, noting that the transfer agreement clearly stipulated the penalty terms.
Defensor maintained that the agreement's terms were unambiguous, with payments due on the 18th of each month, and invoked the principle of in dubio contra stipulatorem, arguing that any ambiguity should be interpreted against Cruzeiro, the drafter of the agreement. The CAS panel confirmed that all 29 installments were either paid late or unpaid, justifying the penalty. The panel also addressed procedural matters, confirming its jurisdiction and the admissibility of the appeal, which was filed within the 21-day limit under FIFA Statutes. The applicable law was determined to be FIFA regulations, supplemented by Swiss law where necessary.
Ultimately, the CAS panel dismissed Cruzeiro's appeal, upholding the FIFA PSC's decision in its entirety. The ruling affirmed the original penalty calculation and rejected all additional claims or requests for relief by Cruzeiro, bringing the matter to a close. The case highlights the enforceability of contractual penalties in football transfers and the procedural limits on introducing new arguments in arbitration. It also underscores the importance of adhering to contractual obligations and the role of arbitration in resolving sports-related disputes.