The case involves a legal dispute between Fulham Football Club (1987) Limited (Fulham) and FC Metz concerning the interpretation and enforcement of a sell-on clause in a transfer agreement for the player L. The original transfer agreement, dated 5 June 2000, stipulated that FC Metz would receive 15% of any net transfer fee Fulham received above the initial transfer fee of 20,100,000 French Francs if L. was subsequently transferred. In 2004, Fulham transferred L. to Manchester United for £11,500,000, prompting FC Metz to claim its share under the sell-on clause. The disagreement centered on the definition of "net fee" and whether certain costs, such as agent fees, wages, and bonuses, should be deducted before calculating the 15% payment.
The dispute was brought before the Court of Arbitration for Sport (CAS), which addressed several key issues. First, the Panel determined the applicable law, ruling that FIFA's statutes and regulations took precedence, with Swiss law serving as a subsidiary. Second, the Panel interpreted the sell-on clause, emphasizing the need to consider the parties' intent and the agreement's context. It concluded that "net fee" referred only to the transfer fee minus direct costs like agent fees, excluding other expenses such as wages or bonuses. The Panel rejected Fulham's argument that all costs related to L.'s employment should be deducted, clarifying that the clause was intended to share the profit from the player's subsequent transfer, not to account for all expenses incurred during his tenure.
Fulham also argued that the sell-on clause only applied if the player was transferred before 15 July 2001, when the second installment of the transfer fee was paid. The Panel found this interpretation unlikely, as it would mean FC Metz agreed to reduce the clause's validity without compensation, which contradicted the parties' intentions at the time of signing. The Panel also dismissed Fulham's claim that the clause referred only to the first employment contract, noting it was unreasonable to assume FC Metz would leave such a decision entirely to Fulham's discretion.
Regarding the calculation of the sell-on fee, the Panel accepted FC Metz's method, which considered the £11,500,000 received by Fulham as the net fee, leading to a 15% payment of €2,013,273. Fulham's contention that the player's extended contract inflated his transfer value was deemed speculative due to lack of evidence. FC Metz's request for €200,000 in supplementary damages was denied for insufficient proof of harm. The Panel ruled that default interest of 5% per annum would apply from 16 April 2004, the day after the payment deadline specified in FC Metz's invoice.
Ultimately, the CAS upheld the FIFA decision, ordering Fulham to pay FC Metz €2,013,273 plus interest, while dismissing all other claims and counterclaims. The case highlights the complexities of football transfer agreements and the importance of clear contractual language. It also underscores the role of arbitration in resolving such disputes, ensuring compliance with established legal and regulatory standards. The ruling provides clarity on the interpretation of "net fee" in transfer agreements and emphasizes the need for substantiated evidence in claims for damages.