CAS Case Digest · Verified against the full award text

CAS 2026/A/12215 — Santos Futebol Clube v. Al Markhiya Sports Club

"Santos v. Al Markhiya" · CAS dismissed Santos's appeal, confirming EUR 332,500 principal plus 10% interest and EUR 33,250 penalty owed to Al Markhiya.

What happened in Santos v. Al Markhiya

Santos FC loaned Gambian player Yusupha O. M. Njie from Qatari club Al Markhiya under a Loan Agreement dated 30 June 2024. The loan was terminated early by a Termination Agreement dated 28 January 2025, under which Santos agreed to pay EUR 350,000 in seven equal instalments of EUR 50,000, with a 10% p.a. default interest clause and a 10% penalty on the total outstanding amount after a five-day grace period. Santos paid none of the seven instalments. Al Markhiya filed before the FIFA Players' Status Chamber (PSC) on 20 August 2025. The PSC partially upheld the claim, reducing the principal to EUR 332,500 after a 5% solidarity deduction, awarding 10% p.a. interest on seven tranches of EUR 47,500 each from the day after each due date, and a EUR 33,250 contractual penalty, plus USD 25,000 costs. Santos appealed to CAS, arguing the grace period required prior written notice before interest or penalty could accrue, and that the combined 10% interest and 10% penalty was excessive under Swiss law and constituted unjust enrichment. The Sole Arbitrator dismissed all grounds and confirmed the PSC decision in its entirety. The case matters because it reinforces that fixed-date payment obligations trigger automatic default under Article 102(2) SCO without prior notice, and that a 10% interest rate combined with a 10% penalty is not excessive between sophisticated commercial parties.

Procedural history of CAS 2026/A/12215

On 30 June 2024, Santos, Al Markhiya and the Player entered into a Loan Agreement providing for a EUR 350,000 loan fee. On 28 January 2025, the parties executed a Termination Agreement restructuring that debt into seven instalments of EUR 50,000 each. Santos paid none of the instalments. On 20 August 2025, Al Markhiya lodged a claim before the Players' Status Chamber of the FIFA Football Tribunal (PSC), seeking EUR 350,000 principal, 10% p.a. interest, and a EUR 35,000 delay penalty. On 9 December 2025, the PSC rendered its decision (grounds notified 30 January 2026), partially upholding the claim: it reduced the principal to EUR 332,500 (after 5% solidarity deduction), awarded 10% p.a. interest on seven tranches of EUR 47,500 from the day after each due date, awarded a EUR 33,250 contractual penalty, and ordered Santos to bear USD 25,000 in costs. Santos filed its Statement of Appeal with CAS on 20 February 2026 and its Appeal Brief on 2 March 2026. The matter was submitted to a Sole Arbitrator and decided on written submissions alone.

Key holdings in CAS 2026/A/12215

• Under Article 102(2) SCO, where a contract fixes specific payment dates, the debtor falls into default automatically upon expiry of each date without any need for a prior written notice of default.
• The five-day grace period in Clause 1.6 of the Termination Agreement operates only to defer the point at which the contractual penalty becomes chargeable, and does not affect the accrual of default interest from the day following each due date.
• Article 12bis of the FIFA RSTP establishes a regulatory mechanism for FIFA sanctions and does not import a written default-notice requirement into contractual default clauses negotiated between clubs under private agreements.
• A contractual default interest rate of 10% per annum is not excessive under Swiss law, falling materially below the 18% threshold consistently recognised as the acceptable maximum in CAS jurisprudence.
• A contractual penalty of 10% of the outstanding net principal (EUR 33,250 of EUR 332,500), freely negotiated between two professional clubs, is not clearly and flagrantly excessive under Article 163(3) SCO, and its combination with 10% p.a. interest does not give rise to unjust enrichment.

How the CAS panel reasoned

The Sole Arbitrator addressed five discrete issues. On the default-notice question, he applied Article 102(2) SCO, which provides for automatic default upon expiry of a fixed contractual date, citing CAS 2025/A/11560 for the proposition that no notice is necessary. He read Clause 1.6 textually, finding that the grace period was grammatically and substantively attached only to the penalty obligation, not to the separately triggered interest obligation. He rejected the analogy to Article 12bis FIFA RSTP as operating on a different legal basis and pursuing distinct regulatory purposes. On the interest rate, he applied the CAS line of authority from CAS 2025/A/11693 establishing that rates below 18% p.a. are consistently permissible under Swiss law and do not require judicial adjustment. On the penalty, he applied the multi-factor test from CAS 2020/A/7007 under Article 163(3) SCO, noting the penalty was 10% of the net principal, the agreement was freely negotiated between sophisticated parties with no unequal bargaining power, the default was total and prolonged across all seven instalments, and Santos adduced no evidence of hardship or maximum presumed damage. On the combined effect, he found no aggregate ceiling in Swiss law or CAS authority, relying on CAS 2021/A/7673 & 7699 and Swiss Federal Tribunal decisions 4A_536/2016 and 4A_540/2016. On unjust enrichment, he noted the PSC had already avoided double recovery by not applying interest to the penalty amount.

Why Santos v. Al Markhiya matters in CAS jurisprudence

This award consolidates CAS doctrine on three intersecting issues: (1) automatic default under Article 102(2) SCO requires no written notice even where a contract contains a grace-period mechanism, with the grace period construed as applying only to the penalty trigger; (2) contractual interest rates below 18% p.a. are permissible without judicial adjustment; and (3) a 10% interest plus 10% penalty combination between professional clubs is not excessive, aligning with CAS 2021/A/7673 & 7699 and Swiss Federal Tribunal decisions 4A_536/2016 and 4A_540/2016.

Cases cited in this award

CAS 2025/A/11560 CAS 2025/A/11693 CAS 2020/A/7007 CAS 2017/A/5233 CAS 2019/A/6568 CAS 2021/A/7673 & 7699

Frequently asked questions about Santos v. Al Markhiya

Did Santos FC need to receive a written default notice before interest started running under the Termination Agreement?

No. The Sole Arbitrator held that under Article 102(2) SCO, where a contract fixes specific payment dates, the debtor falls into default automatically upon expiry of each date without any written notice. The five-day grace period in Clause 1.6 was found to apply only to the contractual penalty, not to the accrual of default interest, which ran from the day following each missed due date.

Is a 10% per annum contractual interest rate combined with a 10% penalty clause enforceable under Swiss law in CAS proceedings?

Yes. The Sole Arbitrator confirmed that CAS jurisprudence treats rates below 18% p.a. as consistently permissible under Swiss law, citing CAS 2025/A/11693. The 10% penalty was separately upheld under the Article 163(3) SCO multi-factor test applied in CAS 2020/A/7007. The combination was also upheld by reference to CAS 2021/A/7673 & 7699 and Swiss Federal Tribunal decisions 4A_536/2016 and 4A_540/2016.

Does Article 12bis FIFA RSTP require a written default notice before contractual penalty clauses between clubs can be triggered?

No. The Sole Arbitrator held that Article 12bis FIFA RSTP establishes a regulatory mechanism for FIFA to sanction clubs with overdue payables and does not govern or displace the contractual mechanics privately negotiated between clubs. The two mechanisms operate on separate legal bases and pursue distinct purposes, and nothing in the FIFA RSTP imports a default-notice requirement into every contractual default clause between clubs.

What was the total amount Santos FC was ordered to pay Al Markhiya in the Santos v. Al Markhiya CAS case?

Santos was ordered to pay EUR 332,500 as outstanding principal (the EUR 350,000 loan fee reduced by a 5% solidarity contribution deduction), plus 10% per annum interest calculated separately on seven tranches of EUR 47,500 each running from the day after each respective contractual due date until effective payment, plus a contractual penalty of EUR 33,250. The PSC also ordered Santos to bear costs of USD 25,000, and that decision was confirmed in its entirety by the CAS.

Topics: Training compensation & solidarity at CAS

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