The case involves a legal dispute between Gil Vicente Futebol Clube, a Portuguese football club, and FK Rad, a Serbian football club, concerning a player transfer agreement signed on August 2, 2019. The agreement stipulated a transfer fee of €80,000, payable in two installments: €50,000 upon signing and €30,000 by August 31, 2019. The validity of the agreement was conditional on the player passing a medical examination and signing an employment contract with Gil Vicente. The player underwent medical examinations on August 8 and October 22, 2019, with the latter revealing a chronic femoral patellar instability. Despite this, Gil Vicente signed an employment contract with the player on August 5, 2019, before completing the medical examination. Communication between the clubs included conflicting payment instructions, leading Gil Vicente to pay the first installment of €50,000 on August 21, 2019, to an account specified in a revised invoice from FK Rad.
FK Rad later claimed the remaining €30,000, arguing the transfer agreement was valid, while Gil Vicente sought repayment of the €50,000, contending the agreement was invalid due to the failed medical examination. The FIFA Players’ Status Committee ruled in favor of FK Rad, ordering Gil Vicente to pay both installments plus interest and issuing a warning. Gil Vicente appealed to the Court of Arbitration for Sport (CAS), which examined the case under Swiss law. The CAS emphasized that conditional contracts impose obligations on both parties to act in good faith to fulfill the conditions. It ruled that the medical examination was Gil Vicente's responsibility and should have been conducted before signing the employment contract. The court also clarified that payment obligations under Swiss law are fulfilled at the creditor’s bank location, with the risk of transfer loss borne by the obligor.
The CAS found that Gil Vicente failed to act diligently by conducting the medical examination after signing the employment contract, undermining the conditional nature of the agreement. Additionally, the CAS determined that Gil Vicente did not verify the correctness of the revised invoice, which contained discrepancies in layout and bank details, and thus failed to discharge its contractual obligation for the first installment. The tribunal concluded that Gil Vicente breached its duty of good faith and upheld FIFA’s decision, requiring Gil Vicente to pay the outstanding transfer fees and interest. The CAS dismissed Gil Vicente’s counterclaim for repayment, emphasizing the importance of adhering to contractual conditions and acting in good faith. The final award, issued on January 11, 2022, confirmed the FIFA decision and rejected all other requests, underscoring the legal ramifications of failing to meet contractual obligations in player transfers.