The case involves a dispute between Feyenoord Rotterdam N.V. and Cruzeiro Esporte Club regarding the interpretation of a contractual clause in a transfer agreement for the football player Fréderico Chavez Guedes (Fred). The agreement, dated July 2004, stipulated that Feyenoord retained 10% of Fred's economic rights, entitling them to 10% of any future transfer fee. In August 2005, Cruzeiro transferred Fred to Olympique Lyonnais for a fee initially reported as €15 million, though Feyenoord claimed it was €20 million based on a side letter and additional payments. The Court of Arbitration for Sport (CAS) ruled that the transfer fee was €15 million, as evidenced by the official transfer agreement, and dismissed Feyenoord's claim for a higher amount due to lack of supporting evidence.
The central dispute revolved around whether Feyenoord's 10% entitlement should be calculated from the full transfer fee or after deductions for solidarity contributions, agent fees, taxes, and payments to Fred. Applying Swiss law, the CAS emphasized interpreting the contract based on the parties' common intentions and, where unclear, an objective assessment in good faith. The panel concluded that the clause explicitly referred to the "full transfer sum," indicating no deductions were intended. Consequently, the CAS rejected Cruzeiro's arguments for deductions, including a €750,000 solidarity contribution, €3 million paid to Fred for his economic rights, and €510,913 for income taxes, as these did not diminish the player's economic value. The panel also dismissed Cruzeiro's attempt to deduct €1.4 million paid to Olympique Lyonnais' agent, finding no evidence linking this payment to the transfer agreement.
Regarding additional claims, Feyenoord sought interest for late payment, which the CAS granted at the Swiss statutory rate of 5% per annum from 10 October 2005, the date Feyenoord requested payment. However, the panel dismissed Feyenoord's claim for €20,000 in extra-judicial costs due to lack of evidence. The final award ordered Cruzeiro to pay Feyenoord €1.5 million (10% of the €15 million transfer fee) plus interest, while rejecting all other claims. The decision underscores the importance of clear contractual language and the enforcement of agreed terms as written. It also highlights the CAS's role in resolving sports-related disputes through objective interpretation of contractual obligations, prioritizing the reasonable expectations of the parties involved. The award was made public with the parties' consent, concluding the legal proceedings.