CAS 2024 A 10477
CAS · Football (FIFA / CAS) · Switzerland · 28 Feb 2025
Why it matters
This case clarifies the CAS approach to contractual penalty clauses in football transfer agreements, particularly where the penalty rate is extremely high (60% per annum). The tribunal reduced the penalty to a level it considered proportionate, applying Swiss law principles. It also reaffirms the strict application of FIFA's Article 12bis sanctions for overdue payables, especially against repeat offenders, and the tribunal's willingness to uphold significant fines even where the principal has been paid.
Summary
Al-Ahli Saudi FC appealed a FIFA Players' Status Chamber decision ordering it to pay Jeonbuk Hyundai Motors FC USD 49,172.20 as a contractual penalty and a USD 100,000 fine to FIFA for overdue transfer fees. The dispute arose from the transfer of player Modou Barrow in January 2023. The agreement required Al-Ahli to pay USD 800,000 in two instalments plus a conditional USD 200,000 if promoted. Al-Ahli paid the first instalment late and the second instalment only after multiple default notices. The conditional fee was also paid late. Clause 4.3 of the agreement provided for 5% per month interest (60% per annum) on overdue amounts, with amounts exceeding 18% per annum deemed a penalty. The FIFA PSC reduced the penalty to a maximum of 42% per annum (60% minus 18% interest), calculating a total penalty of USD 49,172.20. It also imposed a USD 100,000 fine under Article 12bis RSTP for overdue payables, noting Al-Ahli's history as a repeat offender with eight prior sanctions. At CAS, the sole arbitrator applied Swiss law principles on penalty reduction, finding that the penalty clause was disproportionate. The arbitrator recalculated the penalty by applying only the 18% per annum interest rate (1.5% per month) and removing the additional penalty component, resulting in a reduced penalty of USD 26,566.16. The arbitrator confirmed the USD 100,000 fine, noting Al-Ahli's repeated defaults and lack of explanation. The appeal was partially upheld, with costs allocated 80% to Al-Ahli and 20% to Jeonbuk.
The detail
Parties: Al Ahli Saudi FC v. Jeonbuk Hyundai Motors FC & FIFA
Case number: CAS 2024 A 10477
Outcome: The appeal was partially upheld; the contractual penalty was reduced from USD 49,172.20 to USD 26,566.16, and the fine of USD 100,000 to FIFA was confirmed.
Quantum: USD 26,566.16
Applicable law: FIFA Regulations on the Status and Transfer of Players (RSTP), particularly Article 12bis; Swiss law as the law of FIFA's seat; the transfer agreement between the clubs.
Issues in play: The case involved the interpretation of a contractual penalty clause (Clause 4.3) providing for 5% per month interest (60% per annum) on overdue amounts, and whether such penalty was disproportionate under Swiss law and FIFA regulations. The tribunal also considered the application of Article 12bis RSTP for overdue payables and the definition of a 'repeat offender'.
Read the full decision at Court of Arbitration for Sport (football, via FIFA) ↗
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