Leeds United FC v. RasenBallsport Leipzig GmbH

At a glance

Parties

Leeds United Football Club Limited (England) v. RasenBallsport Leipzig GmbH (Germany)

Case no.

CAS 2021/A/8229

Forum and rules

Court of Arbitration for Sport, appeals procedure (CAS Code 2021); appeal against a decision of the Single Judge of the FIFA Players' Status Committee

Treaty

Loan Agreement of 25 January 2020 (FIFA regulations, German law subsidiarily); FIFA Statutes Art. 57(2) (Swiss law additionally)

Tribunal

Manfred Nan (President), Mark Hovell, Ulrich Haas

Sector

Football; player loan and transfer

Outcome

Appeal dismissed. The FIFA PSC decision ordering Leeds to pay the first transfer-fee instalment is confirmed in full.

Amount

Transfer fee EUR 21,000,000 in three instalments of EUR 7,000,000. In dispute: the first instalment, EUR 6,740,174 (EUR 7,000,000 less EUR 259,826 solidarity contribution), plus 5% interest p.a. from 1 October 2020. The cost orders are redacted in the published award.

The dispute

On 25 January 2020 RB Leipzig loaned a French player to Leeds United until 30 June 2020. Clause 10 of the Loan Agreement contained a Purchase Obligation: if Leeds was promoted to the Premier League "at the end of the 2019/2020 season", the player would transfer permanently "with effect as of July 1, 2020" for EUR 21,000,000. Because of the COVID-19 pandemic the EFL Championship finished late. Leeds came top on 22 July 2020 and was promoted on 6 August 2020. Leeds argued that the obligation lapsed because promotion did not happen before 1 July 2020. In the alternative it relied on contra proferentem, force majeure, rebus sic stantibus and venire contra factum proprium. RB Leipzig argued that promotion at the end of the season was the only condition, and that any gap in the contract had to be filled by complementary contractual interpretation. The FIFA PSC Single Judge upheld RB Leipzig's claim for the first instalment, and Leeds appealed to CAS.

Key holdings

1. The dispute is governed primarily by the FIFA regulations, in particular the FIFA RSTP, with Swiss law applying additionally as an interpretative tool. RB Leipzig's submission that German law does not materially differ from Swiss law was not disputed. ¶ 85
2. The condition precedent in clause 10 does not mention 1 July 2020, although other clauses assume the season would end before that date. Its purpose was to let Leeds field the player in the 2020/21 Premier League season. Reading 1 July 2020 into the condition would defeat the raison d'être of the Purchase Obligation. ¶¶ 93–110
3. Under complementary contractual interpretation (ergänzende Vertragsauslegung), which is recognised in both German and Swiss law, the parties would have referred to around 22 July 2020 if they had foreseen the three-week COVID-19 delay. The high threshold for this principle is met. Leeds gave no convincing reason why 1 July 2020 mattered to it. The Bremen Judgment supports this reasoning. ¶¶ 111–121
4. Leeds's claim that it would not have agreed to extend the deadline is unconvincing. On 24 April 2020 it had itself proposed extending the loan and the Purchase Obligation for the same EUR 21,000,000 fee, asking only for later payments. Its real reason was loss of interest in the player, and COVID-19 is not a 'get out of jail free card'. The Purchase Obligation survived the end of the loan. ¶¶ 124–130
5. Contra proferentem does not help Leeds: Leeds wrote the original wording of the Purchase Obligation, so the rule would apply against it. Force majeure and rebus sic stantibus do not apply because Leeds proved no financial impossibility or undue burden. RB Leipzig's two-month delay in replying did not suggest it accepted that the obligation had expired. ¶¶ 132–136
6. The Purchase Obligation was triggered. Leeds must pay EUR 6,740,174 as the first instalment, with 5% interest p.a. from 1 October 2020 under Article 104(1) of the Swiss Code of Obligations, because Leeds did not establish the rate under English or German law. The appeal is dismissed. ¶¶ 137–149; operative part

Procedural history

1. 25 January 2020RB Leipzig, Leeds and the player conclude the Loan Agreement, which includes a Purchase Option and a Purchase Obligation.
2. 13 March 2020The EFL Championship is suspended because of COVID-19. It resumes on 20 June 2020.
3. 13 June 2020Leeds tells RB Leipzig that it will not extend the loan and that the purchase obligation has fallen away.
4. 6 August 2020Leeds is promoted to the Premier League, having finished first in the Championship on 22 July 2020.
5. 11 November 2020RB Leipzig files a claim before the FIFA Players' Status Committee.
6. 1 June 2021The FIFA PSC Single Judge orders Leeds to pay EUR 6,740,174 plus 5% interest. The grounds are notified on 23 July 2021.
7. 13 August 2021Leeds files its Statement of Appeal with CAS. The Panel is constituted on 5 October 2021.
8. 15 March 2022Hybrid hearing in Lausanne.
9. 4 November 2022Award: appeal dismissed and the FIFA decision confirmed.

Tribunal, counsel and experts

Decided by

• Manfred Nan President, Panel — appointed by the institution
• Mark Hovell Co-arbitrator, Panel — appointed by the claimant
• Ulrich Haas Co-arbitrator, Panel — appointed by the respondent

For the claimant

Paul Harris · Fiona Banks · James Hill · Oliver Hunt

For the respondent

RB Leipzig in-house legal · Jan Kleiner · Joachim Rain · Lukas Stocker

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Keywords

• Leeds United
• RB Leipzig
• football
• loan agreement
• purchase obligation
• buy obligation
• condition precedent
• Premier League promotion
• COVID-19
• complementary contractual interpretation
• ergänzende Vertragsauslegung
• contract interpretation
• contra proferentem
• force majeure
• rebus sic stantibus
• FIFA Players' Status Committee
• FIFA RSTP
• default interest

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