CAS Case Digest · Verified against the full award text

CAS 2009/A/1756 — FC Metz v. Galatasaray SK

"FC Metz v. Galatasaray" · CAS applied Art. 156 Swiss CO to deem a sell-on clause condition fulfilled after Galatasaray's bad-faith breach caused Ribery's departure.

What happened in FC Metz v. Galatasaray

In January 2005, FC Metz transferred Franck Ribery to Galatasaray SK for EUR 2,000,000, with a sell-on clause entitling Metz to 20% (later reduced to 11% by April 2005 addendum) of any future transfer fee exceeding EUR 2,000,000. Galatasaray failed to pay Ribery's salary and premiums for four months, prompting Ribery to terminate his contract for just cause in June 2005 and join Olympique de Marseille as a free agent. Ribery was subsequently transferred to FC Bayern München in June 2007 for EUR 25,000,000. Metz claimed EUR 1,100,000 from Galatasaray under the sell-on clause. The FIFA Single Judge rejected the claim on 2 September 2008, finding the two contracts independent and the sell-on clause merely speculative. CAS partially upheld Metz's appeal, applying Art. 156 of the Swiss Code of Obligations: because Galatasaray's bad-faith non-payment of wages prevented the condition precedent (a paid transfer) from occurring, that condition was deemed fulfilled. The Panel assessed Ribery's June 2005 value at EUR 4,000,000 using Art. 42 para. 2 CO, yielding 11% of EUR 2,000,000 excess = EUR 220,000. The case is significant for establishing that a club holding a sell-on clause can invoke Art. 156 CO when the selling club's own contractual breach causes the condition to fail.

Procedural history of CAS 2009/A/1756

On 12 October 2007, FC Metz lodged a claim with FIFA against Galatasaray SK seeking EUR 1,100,000 under the sell-on clause in their 31 January 2005 transfer agreement. On 2 September 2008, the Single Judge of the FIFA Players' Status Committee rejected the claim in its entirety, finding the transfer contract and the employment contract independent, that Metz had merely gambled on a hypothetical gain, and that Galatasaray's breach of the employment contract had no consequence on the transfer contract. The Single Judge also ordered Metz to pay CHF 2,500 in proceedings costs. On 17 December 2008, FC Metz filed its Statement of Appeal and Appeal Brief with CAS. Galatasaray filed its Answer on 16 March 2009. A hearing was held in Lausanne on 21 August 2009. CAS confirmed jurisdiction under Art. 62 et seq. of the FIFA Statutes 2008 and applied FIFA regulations primarily and Swiss law subsidiarily.

Key holdings in CAS 2009/A/1756

• The sell-on clause in Art. 4 of the 31 January 2005 agreement constitutes a condition precedent under Art. 151 CO, dependent on the Player's transfer to a third club for a fee exceeding EUR 2,000,000.
• Under Art. 156 CO, a condition precedent is deemed fulfilled where one party's bad-faith conduct prevents its occurrence; Galatasaray's systematic non-payment of Ribery's salary and premiums constituted such bad-faith prevention.
• The good-faith obligation implicit in a sell-on clause requires the obligor club to make its best efforts to preserve the validity of the underlying employment contract with the player.
• Where precise evidence of a player's transfer market value is impossible to obtain, Art. 42 para. 2 CO permits the Panel to assess damages in its discretion based on the ordinary course of events, including known transfer fees and the exponential nature of player value growth.
• The unsolicited Complementary Brief filed by the Appellant after the Appeal Brief and Answer, without party agreement or Panel order, was inadmissible under Art. R56 of the CAS Code.

How the CAS panel reasoned

The Panel first characterised the sell-on clause as a condition precedent under Art. 151 CO. It then turned to Art. 156 CO, which deems a condition fulfilled if its occurrence was prevented by a party acting in bad faith. Applying the five cumulative requirements identified in Swiss doctrine (Commentaire romand, Pichonnaz), the Panel found all satisfied: there was a condition; its occurrence was prevented; Galatasaray's conduct (non-payment of wages) was reprehensible; it violated good faith; and there was a reasonable causal link between that conduct and the non-transfer. The Panel rejected Galatasaray's argument that it would have welcomed a transfer fee, holding that the Art. 156 CO test focuses solely on whether good faith was violated in preventing the condition, not on the consequences for either party. Citing DTF 117 II 273, the Panel confirmed no intention to prevent is required. On quantum, the Panel rejected Metz's EUR 10,000,000 valuation (based on Galatasaray's contractual penalty clause against Ribery, characterised in CAS 2006/A/1180 as a contract penalty, not a market valuation) and instead compared the EUR 2,000,000 paid in January 2005 with the EUR 25,000,000 paid by Bayern in June 2007, reasoning that player value growth is exponential rather than linear and that Ribery's international profile only emerged at the 2006 FIFA World Cup. The Panel assessed June 2005 value at EUR 4,000,000 under Art. 42 para. 2 CO.

Why FC Metz v. Galatasaray matters in CAS jurisprudence

This award establishes that Art. 156 of the Swiss Code of Obligations applies to sell-on clauses in football transfer agreements: a club that breaches its employment contract with a player, thereby causing the player to leave as a free agent and extinguishing the condition precedent for a sell-on payment, cannot rely on the non-occurrence of that condition to escape liability to the selling club. The case also demonstrates CAS's use of Art. 42 para. 2 CO to assess hypothetical transfer values where direct evidence is unavailable, and its recognition that player value growth is exponential rather than linear.

Cases cited in this award

CAS 2006/A/1180 Galatasaray SK v/ Ribery and Olympique de Marseille DTF 135 III 295 (Swiss Supreme Court, 20 March 2009) DTF 117 II 273 (Swiss Supreme Court) DTF 122 III 61 (Swiss Supreme Court)

Frequently asked questions about FC Metz v. Galatasaray

What did CAS decide about FC Metz's sell-on clause after Ribery left Galatasaray for free?

CAS held that Galatasaray's bad-faith non-payment of Ribery's salary prevented the sell-on clause condition precedent from occurring, so under Art. 156 of the Swiss Code of Obligations the condition was deemed fulfilled. The Panel assessed Ribery's June 2005 value at EUR 4,000,000 and awarded FC Metz EUR 220,000, representing 11% of the EUR 2,000,000 excess over the EUR 2,000,000 threshold.

How did CAS calculate the EUR 220,000 awarded to FC Metz in the Ribery sell-on clause case?

The Panel used Art. 42 para. 2 of the Swiss Code of Obligations to assess Ribery's hypothetical transfer value in June 2005 at EUR 4,000,000, reasoning that player value growth is exponential and that Ribery's international profile only emerged at the 2006 FIFA World Cup. Applying the 11% sell-on rate (as reduced by the 15 April 2005 addendum) to the EUR 2,000,000 excess above the EUR 2,000,000 threshold produced EUR 220,000.

Can a club invoke Art. 156 Swiss CO to enforce a sell-on clause when the buying club's own breach caused the player to leave for free?

Yes, according to this award. CAS found that the sell-on clause imposed on Galatasaray an implicit good-faith obligation to preserve the validity of Ribery's employment contract, since that contract was the prerequisite for any future paid transfer. Because Galatasaray's systematic non-payment of wages caused Ribery to terminate for just cause, the five conditions for Art. 156 CO were met and the condition precedent was deemed accomplished.

Why did CAS reject FC Metz's claim that Ribery's value in June 2005 was EUR 10,000,000?

The Panel rejected this figure because it was derived from the EUR 10,000,000 contractual penalty clause in Ribery's employment contract with Galatasaray, which CAS 2006/A/1180 had already characterised as a contract penalty rather than a market valuation. The Panel instead compared the EUR 2,000,000 paid in January 2005 with the EUR 25,000,000 paid by Bayern München in June 2007, applied an exponential growth model, and set the June 2005 value at EUR 4,000,000.

Topics: Transfers, agents, TPO & sell-on clauses at CAS

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