The case revolves around a dispute between Clube Atlético Mineiro (Appellant) and Club Atlético Rentistas (Respondent) concerning a transfer agreement for a player, signed on 15 July 2018. The agreement stipulated a transfer fee of USD 1,600,000, payable in installments, and included an acceleration clause (Clause 1.3) allowing the Respondent to demand full payment if the Appellant missed any installment deadline, along with a penalty clause (Clause 8.2) imposing a 20% penalty on overdue amounts. The Appellant paid the first two installments but only partially paid the third, prompting the Respondent to issue a default notice on 8 October 2019. The Respondent then filed a claim with FIFA, seeking full payment of outstanding installments, the 20% penalty, and legal fees. FIFA's Single Judge partially accepted the claim, ordering the Appellant to pay USD 828,000 and imposing a registration ban if payment was not made within 45 days.
The Appellant appealed to the Court of Arbitration for Sport (CAS), arguing the penalty was excessive and violated the principle of non bis in idem (double jeopardy). The CAS upheld the principle of pacta sunt servanda, emphasizing that parties are bound by their contractual terms unless they are impossible, unlawful, or immoral. It noted that acceleration and penalty clauses are common in transfer agreements and legally valid under Swiss law (Article 160 of the Swiss Code of Obligations). While Swiss law allows courts to reduce excessive penalties, the CAS found the 20% penalty reasonable, considering the creditor's interest, the debtor's fault, and the parties' financial situations. The CAS also dismissed the Appellant's claim of bad faith, noting the Respondent acted within its contractual rights and attempted negotiations before filing the claim.
The Sole Arbitrator further clarified that the principle of non bis in idem applies only to criminal or disciplinary matters, not contractual disputes, and thus was irrelevant in this case. The arbitrator concluded that both clauses were valid and enforceable, as they were freely agreed upon and served distinct purposes—the acceleration clause addressed payment deadlines, while the penalty clause compensated for non-performance. The CAS affirmed the FIFA decision, reinforcing the importance of contractual liberty and the enforceability of agreed terms. The ruling dismissed the appeal, upheld the FIFA decision, and rejected all further claims, underscoring the legal validity of acceleration and penalty clauses in football transfers, provided they are not deemed excessive or unreasonable. The case highlights the distinction between contractual disputes and disciplinary matters in applying legal principles like non bis in idem.