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CAS 2017/A/5202 — Clube Atlético Mineiro v. Udinese Calcio S.p.A. & Fédération Internationale de Football Association (FIFA)

"Atlético Mineiro v. Udinese" · CAS held that CAM's payment of EUR 897,451.50 validly discharged the fourth transfer instalment under Swiss law on allocation of payments.

What happened in Atlético Mineiro v. Udinese

Clube Atlético Mineiro (CAM) agreed in May 2014 to pay Udinese Calcio EUR 3,315,000 in four instalments for the permanent transfer of a Brazilian player. CAM repeatedly defaulted, generating two prior FIFA/CAS proceedings covering the first three instalments. When the fourth instalment of EUR 825,000 fell due on 15 July 2016, CAM again failed to pay promptly. Udinese filed a new FIFA claim; the Bureau of the Players' Status Committee on 12 May 2017 ordered CAM to pay EUR 825,000 plus 10% p.a. interest from 16 July 2016, with a registration ban threatened for non-compliance. On 4 June 2017 CAM wrote to FIFA (not Udinese) referencing case 16-01637/ssa, and on 5 June 2017 transferred EUR 825,000 and EUR 72,451.50 to Udinese. Udinese, however, claimed those funds settled the third instalment (EUR 830,000 plus interest), not the fourth. CAM appealed to CAS. The panel applied Articles 86–87 of the Swiss Code of Obligations and found that the payment of exactly EUR 825,000 — the unique amount of the fourth instalment — unambiguously identified which debt CAM intended to redeem. CAM's filing with the appeal on 19 June 2017 also constituted an immediate objection under Art. 86 para. 2 CO to Udinese's attempted reallocation. The appeal was partially upheld and CAM was declared to have satisfied the fourth instalment obligation. The case matters because it clarifies how a debtor's allocation declaration under Swiss law operates in multi-debt football transfer disputes.

Procedural history of CAS 2017/A/5202

Udinese filed a claim before the FIFA Players' Status Committee on 27 August 2016 seeking payment of the fourth transfer instalment of EUR 825,000 plus 10% p.a. interest from 16 July 2016. The Bureau of the Players' Status Committee issued its decision on 12 May 2017 (case ref. 16-01637/ssa), partially accepting Udinese's claim and ordering CAM to pay EUR 825,000 plus 10% p.a. interest from 16 July 2016, imposing FIFA proceedings costs of CHF 25,000 on CAM, and threatening a registration ban for non-compliance. The decision was notified to the parties on 6 June 2017. CAM lodged its statement of appeal with CAS on 19 June 2017 under Article R47 of the CAS Code. The President of the CAS Appeals Arbitration Division granted a stay of the Appealed Decision on 6 July 2017. A hearing was held on 19 December 2017 in Lausanne. The parties were unable to reach a settlement, and the panel proceeded to render its award.

Key holdings in CAS 2017/A/5202

• Under Article 86 para. 1 CO, a debtor with multiple debts to the same creditor may designate which debt a payment is intended to redeem, and that designation is binding on the creditor.
• A debtor's allocation declaration need not be communicated directly to the creditor; notifying the adjudicating body (FIFA) one day before payment, with express reference to the relevant case number, can satisfy the declaration requirement where the creditor is promptly informed.
• Where the amount paid (EUR 825,000) coincides exactly with the contractually agreed amount of one specific instalment — and differs from all other outstanding instalments (EUR 830,000) — the creditor cannot reasonably misidentify which debt is being redeemed.
• Under Article 86 para. 2 CO, an immediate objection to the creditor's reallocation does not have to be made directly to the creditor; filing a CAS appeal on the same day the creditor communicated its allocation decision constitutes a valid immediate objection.
• CAM's payment of EUR 825,000 and EUR 72,451.50 on 5 June 2017 validly discharged the fourth instalment obligation under the Transfer Agreement, rendering Udinese's FIFA claim (case ref. 16-01637/ssa) settled.

How the CAS panel reasoned

The panel identified the sole issue as which instalment the payment of EUR 897,451.50 discharged. It applied Articles 86–87 CO as the governing Swiss law framework, noting that FIFA regulations did not address payment allocation. The panel reasoned that the payment of exactly EUR 825,000 — the unique amount of the fourth instalment, distinct from the EUR 830,000 of all other instalments — constituted an unambiguous implicit declaration of allocation that Udinese could not have misunderstood. Although CAM notified FIFA rather than Udinese directly, the panel rejected the Respondents' formalistic objection: given that CAM and Udinese were opposing parties in FIFA proceedings, it was logical for CAM to inform the adjudicating body first, and FIFA forwarded the letter to Udinese within two days. The panel further found that even if Udinese had been entitled to reallocate the payment, CAM objected immediately within the meaning of Art. 86 para. 2 CO by filing its CAS appeal on 19 June 2017 — the same day Udinese first communicated its reallocation to FIFA. The panel expressly rejected the argument that an immediate objection must be directed to the creditor. CAM's requests to remand the matter to FIFA and to cancel an already-imposed ban were dismissed as procedurally unfounded or moot.

Why Atlético Mineiro v. Udinese matters in CAS jurisprudence

This award provides authoritative CAS guidance on the application of Articles 86–87 of the Swiss Code of Obligations in multi-instalment football transfer disputes. It establishes that a debtor's allocation declaration may be made implicitly through the amount paid, need not be communicated directly to the creditor when an adjudicating body is involved, and that an immediate objection under Art. 86 para. 2 CO can be effected by filing a CAS appeal rather than by direct notice to the creditor.

Cases cited in this award

CAS 2017/A/4981 CAS 2016/A/4718 CAS 2017/A/5203 Swiss Federal Tribunal 4A_71 of 25 March 2009 Swiss Federal Tribunal 4A_321 of 16 October 2017 Swiss Federal Tribunal B_132/06 of 21 August 2007

Frequently asked questions about Atlético Mineiro v. Udinese

Did Atlético Mineiro successfully prove it paid the fourth instalment to Udinese in the CAS 2017/A/5202 case?

Yes. The CAS panel found that CAM's payment of exactly EUR 825,000 on 5 June 2017 — the unique amount of the fourth instalment under the Transfer Agreement, distinct from the EUR 830,000 of all other instalments — constituted an unambiguous allocation declaration under Article 86 para. 1 CO. The panel declared that CAM had complied with the Bureau of the Players' Status Committee's decision of 12 May 2017 and that Udinese's FIFA claim (case ref. 16-01637/ssa) was settled.

Can a debtor's payment allocation declaration under Swiss law be sent to FIFA rather than directly to the creditor club?

According to CAS 2017/A/5202, yes. The panel held that because CAM and Udinese were opposing parties in FIFA proceedings, it was logical for CAM to notify FIFA (which it did on 4 June 2017, referencing case 16-01637/ssa) rather than Udinese directly. FIFA forwarded the letter to Udinese within two days, and the panel characterised the Respondents' insistence on direct notification as 'overly formalistic' given those circumstances.

Does an immediate objection to a creditor's payment reallocation under Art. 86 para. 2 CO have to be made directly to the creditor?

No, according to this award. The panel held that Article 86 para. 2 CO does not require the objection to be made directly to the creditor. CAM's filing of its CAS appeal on 19 June 2017 — the same day Udinese first communicated its reallocation decision to FIFA — was treated as a valid and immediate objection, even though it was not addressed to Udinese itself.

What was the background of the Atlético Mineiro v. Udinese transfer dispute and how many FIFA/CAS proceedings did it generate?

The dispute arose from a Transfer Agreement signed on 1 May 2014 under which CAM agreed to pay Udinese EUR 3,315,000 in four instalments for the permanent transfer of a Brazilian player born in 1986. CAM defaulted on all four instalments, generating three separate FIFA/CAS proceedings: CAS 2017/A/4981 (first two instalments, appeal dismissed 10 August 2017), CAS 2016/A/4718 (third instalment, confirmed 31 March 2017), and CAS 2017/A/5202 (fourth instalment of EUR 825,000, partially upheld in CAM's favour on 20 June 2018).

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

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