The dispute between Leeds United Football Club (LUFC) and RB Leipzig centered on the interpretation of a loan agreement involving the transfer of a player, specifically the triggering of a purchase obligation clause. The agreement, signed in January 2020, included a purchase option allowing LUFC to buy the player permanently by May 2020 and a purchase obligation if LUFC was promoted to the Premier League by the end of the 2019/2020 season. Due to the COVID-19 pandemic, the season was delayed, and LUFC achieved promotion on July 22, 2020, rather than the initially anticipated date of July 1, 2020. This delay led to a dispute over whether the purchase obligation was still valid.
RB Leipzig argued that the obligation was tied to promotion at the season's end, regardless of the delay, while LUFC contended that the specific dates in the agreement (June 30 or July 1, 2020) were binding and that the pandemic constituted a force majeure event excusing performance. The case was first adjudicated by FIFA’s Players’ Status Committee, which ruled in favor of RB Leipzig, ordering LUFC to pay a transfer fee of €21 million in installments, with the first installment set at €6,740,174 plus 5% annual interest. LUFC appealed this decision to the Court of Arbitration for Sport (CAS).
The CAS panel, applying Swiss and German law, focused on the parties' intent rather than the literal wording of the agreement. It concluded that the purchase obligation was triggered by promotion, not the specific dates, as the primary purpose was to secure the player for the 2020/2021 Premier League season. The panel applied the principle of complementary contractual interpretation, finding that the parties would have adjusted the terms to account for the pandemic had they foreseen it. The panel dismissed LUFC’s force majeure argument, noting that the pandemic did not make performance impossible and that LUFC had previously proposed extending the loan without renegotiating the fee.
The CAS upheld the FIFA decision, ruling that LUFC was obligated to pay the transfer fee. It also confirmed the 5% interest rate, citing FIFA precedent and Swiss law. The panel rejected LUFC’s claims regarding RB Leipzig’s delayed response to negotiations and the player’s subsequent transfer to FC Nantes, emphasizing that the purchase obligation was clear and enforceable. The final decision dismissed LUFC’s appeal, requiring payment of the first installment plus interest and closing the case. The ruling underscored the importance of contractual clarity and the enforceability of obligations tied to sporting outcomes, even amid unforeseen disruptions like the pandemic.