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International Arbitration Forum

Al Ahli Saudi Club v. Alexandru Mitrita

Case summary

At a glance

Parties
Al Ahli Saudi Football Club (Saudi Arabia) v. Alexandru Mitrita (Romania)
Case no.
CAS 2022/A/8671
Forum and rules
Court of Arbitration for Sport, appeals procedure under the Code of Sports-related Arbitration; appeal against a decision of the FIFA Dispute Resolution Chamber
Treaty
None. The claim arose under the 17 August 2021 Termination Agreement; FIFA Regulations apply, with Swiss law as the subsidiary law
Tribunal
João Nogueira da Rocha (Sole Arbitrator)
Sector
Football; player contracts
Outcome
Appeal dismissed (14 November 2022). The FIFA DRC decision of 16 December 2021 was confirmed.
Amount
The DRC awarded USD 1,292,625 in outstanding remuneration, plus 5% interest from 2 September 2021, and USD 129,262.5 as a contractual penalty. Only the penalty was under appeal, and it was upheld. The published award omits the costs rulings.

The dispute

Al Ahli, a football club based in Jeddah, signed the Romanian player Alexandru Mitrita on an employment contract running from 5 October 2020 to 31 January 2022. On 17 August 2021 the parties ended the contract early by a Termination Agreement. Under it the club was to pay the player USD 1,292,625 in instalments between 1 September and 1 December 2021. If any deadline was missed, the whole outstanding amount became due at once, together with a 10% penalty on the total. The club missed the first payment. The FIFA Dispute Resolution Chamber ordered it to pay the full amount with interest, plus a penalty of USD 129,262.5. On appeal the club challenged only the penalty. It argued that the penalty was excessive and disproportionate under Swiss law because: (i) the club was in financial difficulty due to COVID-19; (ii) the penalty amounted to an annual interest rate of 71% (76% when the 5% interest was added); and (iii) the player had signed with PAOK Thessaloniki on 31 August 2021.

Key holdings

  1. Under Articles 160–163 of the Swiss Code of Obligations, a contractual penalty is due once the agreed breach occurs, whether or not the creditor proves any damage. A court may reduce a grossly excessive penalty only in exceptional cases. The debtor who asks for the reduction must prove that the penalty is excessive. ¶¶ 40–49
  2. COVID-19 did not justify the club's default. FIFA's Circular No. 1714 and its FAQ did not declare COVID-19 a force majeure situation. The club gave no evidence of its financial difficulties, and in any event financial difficulty is generally not a valid reason for a club to fail to pay its debts. ¶¶ 51–57
  3. The club's comparison of the penalty with an annual interest rate was rejected. A penalty and interest are different concepts. The penalty is a fixed amount with no link to how long the default lasts. The parties agreed the clause freely, and a penalty of 10% of the principal is not excessive. ¶¶ 58–63
  4. The mitigation rule in Article 17 of the FIFA RSTP (deducting the value of a new contract) applies only to compensation for breach of an employment contract without just cause. It does not apply to a penalty clause in a termination agreement. The club's reliance on the player's contract with PAOK was also unsupported by evidence. ¶¶ 64–67
  5. The appeal is dismissed and the DRC decision of 16 December 2021 is confirmed. All other prayers for relief are dismissed. ¶ 68; operative part

Procedural history

  1. 17 August 2021The club and the player sign the Termination Agreement.
  2. 17 September 2021The player files a claim with FIFA for USD 1,421,888 plus interest.
  3. 16 December 2021The FIFA DRC orders the club to pay USD 1,292,625 plus 5% interest and a penalty of USD 129,262.5. The grounds are notified on 24 January 2022.
  4. 14 February 2022The club files its Statement of Appeal with CAS. Its Appeal Brief follows on 14 March 2022.
  5. 3 May 2022Sole Arbitrator confirmed.
  6. 7 July 2022Hearing held by video-conference.
  7. 14 November 2022Award: appeal dismissed and DRC decision confirmed.

Tribunal, counsel and experts

Decided by
For the claimant
Chagtmi Mustapha
For the respondent
Josep F. Vandellos

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Case ID
CAS 2022/A/8671
Claimant
Al Ahli Saudi Club
Respondent
Alexandru Mitrita
Documents

Procedure: Appeal
Sport: Football
Matter: Contractual litigations (except transfer)
Outcome: Dismissed
Panel: João Nogueira Da Rocha
Source: Court of Arbitration for Sport case database.