The Court of Arbitration for Sport (CAS) issued an award on 27 May 2021 in a dispute involving MKS Cracovia SSA, Miroslav Covilo, and FC Lugano SA, centered on a football transfer and contractual obligations. The case examined whether a valid transfer agreement existed despite the absence of a signed contract and whether the player had just cause to terminate his employment with Cracovia. The FIFA Dispute Resolution Chamber (DRC) initially ruled that the clubs had agreed on transfer terms and that the player acted in good faith when terminating his contract, rejecting Cracovia’s claim for compensation. Cracovia appealed to CAS, arguing that their representative, Mr. Tomasz Baldys, lacked authority to finalize the agreement and that the DRC’s decision lacked proper reasoning.
The CAS panel, composed of Prof. Stephan Breidenbach, Mr. Efraim Barak, and Mrs. Raphaëlle Favre Schnyder, reviewed the case de novo, assessing both procedural and substantive issues. It found that while the DRC’s decision did not explicitly cite legal principles, it complied with procedural rules, as FIFA bodies are not held to the same standards as state courts. The panel emphasized the importance of good faith in negotiations and examined Swiss law principles, particularly authorization by appearance and acquiescence, which allow a representative’s actions to bind a party if the party fails to intervene or clarify authority.
The factual background revealed that Cracovia had authorized Covilo to negotiate with FC Lugano in 2018. Email exchanges showed mutual agreement on a transfer fee of €50,000, payable in installments, before Cracovia withdrew its consent. The panel concluded that a binding oral agreement had been formed, as the correspondence demonstrated consensus on essential terms. It rejected Cracovia’s claim that Mr. Baldys lacked authority, noting his consistent use of the club’s official email and involvement of other officials, which created apparent authority. The panel also dismissed Cracovia’s argument that the player terminated his contract without just cause, upholding the DRC’s finding that the termination was lawful.
Ultimately, the CAS panel partially upheld the DRC’s decision, ruling that FC Lugano owed Cracovia the agreed transfer fee of €50,000 plus 5% annual interest from the claim’s filing date. All other claims, including compensation for breach of contract, were dismissed. The case highlights the complexities of football transfers, the binding nature of tacit agreements under Swiss law, and the role of CAS in ensuring fair dispute resolution in sports. It underscores the importance of clear communication, due diligence in verifying representation authority, and adherence to contractual principles in international sports transactions. The decision reaffirms that oral agreements and conduct can create enforceable obligations, even in the absence of formal documentation.