Club A. v. Club B. [The Brazilian Football Player in Mexico] No. 4A_4/2010 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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November, 2013

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Court Decisions

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Originally from:

Swiss International Arbitration Law Reports 2010 Vol. 4 Nos. 1 and 2

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No. 13

Club A. v. Club B.

[The Brazilian Football Player in Mexico]

No. 4A_4/2010

Headnote

■ An award will run counter to public policy when, both due to its

reasons and the result to which it gives rise, it disregards essential

and generally accepted values underlying any and all systems of law

according to the prevailing conceptions in Switzerland (confirmation

of previous decisions).

■ The principle pacta sunt servanda, which is part of substantive

public policy, is breached only where an arbitrator refuses to enforce

a contract term while finding that such term is binding on the parties

or, conversely, where an arbitrator orders the parties to comply with

a contract term while finding that such term is not binding on them

(confirmation of previous decisions).

■ There is no breach of the rules of good faith or the principle pacta

sunt servanda where a tribunal, having dealt with all the arguments

made by the parties, allows a contracting party to make claims

against the other under a binding contract based on a finding that

the parties are bound by such contract.

Summary of the Decision

B., a Uruguayan football club, and A., a Mexican football club, entered

into an agreement for the transfer of the Brazilian football player C. from

B. to A. (“the transfer agreement”). The parties agreed on a transfer

indemnity payable in three equal instalments. A. paid the first

instalment, but the player failed to adapt to the living conditions in

Mexico, so the two clubs discussed a possible cancellation of the transfer

agreement and a possible return of the player to the Uruguayan football

club. B. wrote to A. to communicate its agreement in principle with the

offer made by A. to the effect that the transfer agreement should be

cancelled. However, B. made its agreement subject to a number of

conditions, including the payment by A. of an amount of USD

150,000.00 and the transfer of the player free of charge. A. refused to

pay the amount of USD 150,000.00, asserting that the first instalment

which had already been paid under the terms of the transfer agreement

represented a sufficient indemnity for the Uruguayan club. B. sued A.

before the Fédération Internationale de Football Association (FIFA)