The case involves a dispute between Al Nassr FC and Fenerbahçe Futbol AS regarding unpaid transfer fees and penalties related to a football player transfer agreement. The dispute was initially ruled upon by FIFA's Players’ Status Committee (PSC), which ordered Al Nassr to pay Fenerbahçe EUR 3,500,000 plus 5% annual interest and an additional EUR 600,000, with a potential ban on registering new players if payment was not made within 45 days. Al Nassr appealed this decision to the Court of Arbitration for Sport (CAS), raising procedural and substantive objections.
Al Nassr argued that the PSC's Single Judge lacked impartiality due to his association with the European Club Association (ECA), where Fenerbahçe’s president held a board position. The CAS clarified that the PSC, as an organ of FIFA, does not operate under the same standards of impartiality as judicial bodies, and any procedural irregularities could be remedied through the CAS appeal process. Al Nassr also contested FIFA's requirement to pay procedural costs to receive the decision's reasoning, claiming it hindered their right to a fair hearing. The CAS dismissed these procedural objections, noting that the appeal process addressed any prior concerns.
On the merits, the dispute centered on payment obligations under the transfer agreement, including a second installment of EUR 3,500,000 and an additional EUR 250,000 tied to the player's performance. Al Nassr acknowledged the principal debt but contested the EUR 250,000 claim and a EUR 350,000 penalty, arguing the latter was excessive under Swiss law. Fenerbahçe maintained that all payments were due and unpaid, except for the first installment, and had sent multiple default notices. The CAS confirmed that Fenerbahçe complied with contractual and regulatory formalities, upholding the penalty clause while ensuring fairness.
The CAS examined whether the EUR 350,000 penalty was excessive under Swiss law, which allows judicial reduction if penalties are unjust or unfair. Factors considered included the ratio between the penalty and the creditor's interest, the seriousness of the breach, and the debtor's financial situation. The CAS found the penalty proportionate, noting it represented 3.33% of the total transfer fee and rejecting Al Nassr's claims of financial hardship or disproportionate COVID-19 impact. The default interest rate of 5% was also upheld, as it aligns with Swiss law and cannot be reduced judicially.
Ultimately, the CAS dismissed Al Nassr's appeal, affirming the PSC's decision in full. The ruling emphasized the enforceability of contractual obligations and the limited grounds for reducing penalties under Swiss law. The case highlights the importance of procedural compliance in football transfers and the role of CAS in resolving disputes while balancing contractual freedom with fairness. The decision reinforces the binding nature of contractual terms and the principle that agreements must be honored.