CAS Case Digest · Verified against the full award text

CAS 2024/A/10477 — Al-Ahli Saudi Football Club v Jeonbuk Hyundai Motors Football Club and Fédération Internationale de Football Association

"Al-Ahli v Jeonbuk" · CAS partially upheld Al-Ahli's appeal, reducing the contractual penalty from USD 49,172.20 to USD 26,566.16 due to a calculation error, while confirming the USD 100,000 FIFA fine.

What happened in Al-Ahli v Jeonbuk

Al-Ahli Saudi Football Club appealed a FIFA Players' Status Chamber decision of 5 March 2024 ordering it to pay Jeonbuk Hyundai Motors USD 49,172.20 as a contractual penalty and FIFA USD 100,000 as a fine for overdue payables. The dispute arose from a 10 January 2023 permanent transfer agreement for player Modou Barrow, under which Al-Ahli failed to pay the second instalment of the transfer fee (USD 360,030, due 15 March 2023) and a conditional transfer fee (USD 190,000, triggered by promotion to the Saudi Pro League, due 30 May 2023). Clause 4.3 of the agreement, drafted by Al-Ahli itself, provided for 5% per month interest on outstanding amounts, with any amount exceeding 18% per annum deemed a contractual penalty. CAS confirmed that Clause 4.3 was clear, unambiguous, and did not constitute 'hidden interest,' and that the penalty was valid and proportionate given Al-Ahli's history of non-compliance (sanctioned at least eight times for overdue payables between February 2022 and April 2023, and subject to forty-nine registration bans). However, CAS identified a calculation error: the FIFA PSC had used USD 380,000 instead of the correct USD 360,030 as the base for the second instalment. Correcting this, CAS reduced the penalty to USD 26,566.16. The USD 100,000 fine was confirmed as not evidently and grossly disproportionate given Al-Ahli's repeat-offender status.

Procedural history of CAS 2024/A/10477

On 30 November 2023, Jeonbuk lodged a claim with the FIFA Football Tribunal after Al-Ahli repeatedly failed to pay the second instalment of the transfer fee (due 15 March 2023) and the conditional transfer fee (due 30 May 2023) despite five default notices. On 5 March 2024, the FIFA Players' Status Chamber issued its decision, ordering Al-Ahli to pay Jeonbuk USD 49,172.20 as a contractual penalty, imposing a USD 100,000 fine payable to FIFA, and splitting proceedings costs of USD 25,000 (Al-Ahli's share: USD 12,500). The FIFA PSC rejected the balance of Jeonbuk's claims. Al-Ahli filed its Statement of Appeal with CAS on 7 April 2024, within the 21-day limit under Article R49 of the CAS Code and Article 57 para. 1 of the FIFA Statutes. Al-Ahli sought to set aside the penalty entirely and eliminate or substantially reduce the fine. Both respondents agreed to a sole arbitrator. The parties agreed to proceed on written submissions only, without a hearing.

Key holdings in CAS 2024/A/10477

• Clause 4.3 of the transfer agreement, which was drafted by Al-Ahli itself, was clear and unambiguous: interest accrued at 5% per month to a maximum of 18% per annum, with any excess deemed a contractual penalty, and did not constitute 'hidden interest.'
• The contractual penalty in Clause 4.3 was valid and enforceable under Swiss law as it identified the parties, the type of penalty, the triggering conditions, and its measure, and Jeonbuk had not waived its rights.
• Al-Ahli failed to establish an exceptional case for reduction of the penalty under Article 163 SCO, given the severity and intentional nature of the breach, the parties' commercial sophistication, and the penalty amounting to less than 5% of the secured debt.
• The FIFA PSC committed a calculation error by using USD 380,000 instead of USD 360,030 as the base for the second instalment of the transfer fee, reducing the correct penalty to USD 26,566.16.
• The USD 100,000 fine imposed under Article 12bis para. 4 of the RSTP was not evidently and grossly disproportionate given Al-Ahli's status as a repeat offender sanctioned at least eight times for overdue payables within the preceding two years, representing only 14% of the total financial obligations disrespected.

How the CAS panel reasoned

The Sole Arbitrator conducted a de novo review. On contract interpretation, he applied Article 18 SCO and Swiss Federal Tribunal principles: first seeking the true mutual intention of the parties subjectively, then objectively assessing how a reasonable party would understand the clause. Finding no evidence of a shared subjective intent, he held Clause 4.3 was objectively clear — interest at 5% per month capped at 18% per annum, with excess deemed a penalty. Because Al-Ahli itself proposed the final wording of Clause 4.3 on 4 January 2023, the principles of in dubio contra stipulatorem and in dubio mitius were inapplicable. On penalty proportionality under Article 163 SCO, the arbitrator applied the five-factor CAS test (creditor's interest, severity of breach, intentionality, business experience, financial situation), finding all factors weighed against reduction: Al-Ahli had a documented history of non-compliance, offered no explanation for its defaults, and the penalty was less than 5% of the secured debt. On the fine, the arbitrator rejected Al-Ahli's argument that the fine should be measured against the residual penalty amount (USD 49,172.20), holding instead that proportionality must be assessed against the total disrespected financial obligations (USD 713,494.65), making the fine 14%. Al-Ahli's repeat-offender status — eight sanctions in two years and forty-nine registration bans in three years — was an aggravating circumstance under Article 12bis para. 6 RSTP. Settlement attempts were noted as a mitigating factor but insufficient to reduce the fine.

Why Al-Ahli v Jeonbuk matters in CAS jurisprudence

This award clarifies that a penalty clause drafted by the debtor itself cannot be recharacterised as 'hidden interest' when its terms are clear and unambiguous, even if the effective annual rate exceeds 18%. It also confirms that proportionality of an Art. 12bis RSTP fine must be measured against the total disrespected financial obligations, not merely the residual penalty amount ordered, and that a repeat offender's history of forty-nine registration bans and eight prior sanctions within two years constitutes a strong aggravating circumstance justifying substantial fines.

Cases cited in this award

CAS 2005/O/985 CAS 2018/A/6023 CAS 2015/A/3909 CAS 2010/A/2128 CAS 2020/A/6809 & 6843 CAS 2021/A/7673 & 7699

Frequently asked questions about Al-Ahli v Jeonbuk

Did CAS reduce the penalty in Al-Ahli v Jeonbuk and why?

Yes, CAS reduced the contractual penalty from USD 49,172.20 to USD 26,566.16, but solely because the FIFA PSC had used the wrong base amount of USD 380,000 instead of the correct USD 360,030 for the second instalment of the transfer fee. The reduction was purely arithmetical; CAS upheld the validity and proportionality of the penalty clause itself.

Was Clause 4.3 of the Al-Ahli/Jeonbuk transfer agreement treated as 'hidden interest' by CAS?

No. CAS held that Clause 4.3 — providing for 5% per month interest capped at 18% per annum with any excess deemed a penalty — was clear and unambiguous and did not constitute hidden interest. Critically, the Sole Arbitrator found that Al-Ahli itself had proposed the final wording of Clause 4.3 on 4 January 2023, making it the author of the clause, which precluded reliance on in dubio contra stipulatorem.

Why was Al-Ahli's USD 100,000 FIFA fine upheld in the Jeonbuk case despite partial payment efforts?

CAS confirmed the fine because Al-Ahli was a repeat offender — sanctioned at least eight times for overdue payables between 24 February 2022 and 20 April 2023 and subject to forty-nine registration bans in three years — which is an aggravating circumstance under Article 12bis para. 6 RSTP. The fine represented only 14% of the total disrespected financial obligations of USD 713,494.65, and while Al-Ahli's settlement attempts were noted as a mitigating factor, they were insufficient to render the fine evidently and grossly disproportionate.

What base amount should have been used to calculate the second instalment penalty in Al-Ahli v Jeonbuk?

The correct base amount was USD 360,030, not USD 380,000 as used by the FIFA PSC. This is because Al-Ahli overpaid the first instalment by USD 19,970 (after deducting USD 30 in remittal charges from the solidarity contribution), which Jeonbuk credited toward the second instalment, reducing it from USD 380,000 to USD 360,030 — a figure Jeonbuk itself used in its First Default Notice of 20 March 2023.

Topics: Art. 17 RSTP & contract termination at CAS

Source: official award. This digest was generated by LexXi from the full award text and machine-verified against it — every figure, article and citation above appears in the source. It is an editorial summary, not legal advice. See how ElevenLex verification works.