The recent ruling by the Court of Arbitration for Sport (CAS) in Granada Club de Futbol S.A.D. v. Alanyaspor Kulubu serves as a stark reminder of the importance of strict adherence to financial obligations in football transfer agreements. The dispute, which centered around a delayed payment following Granada’s promotion to LaLiga, raised complex legal questions about contract enforcement, the role of banking inefficiencies, and the enforceability of penalty clauses under FIFA’s regulatory framework. The case not only brought into focus the stringent financial responsibilities of clubs in transfer dealings but also underscored the broader implications for contractual compliance in international football.
At the heart of the dispute was a loan transfer agreement for the Senegalese footballer Famara Diedhiou, who was loaned from Turkey’s Alanyaspor to Spain’s Granada CF on January 19, 2023. A key clause in the agreement stipulated that if Granada secured promotion to LaLiga, the loan deal would automatically convert into a permanent transfer, obligating Granada to pay a transfer fee of €500,000. This sum was to be paid in two equal installments, with the first €250,000 due by August 31, 2023. However, Granada did not transfer the funds within the specified timeframe, leading to Alanyaspor’s claim for overdue payments, contractual penalties, and interest before FIFA’s Players’ Status Chamber (PSC).
Alanyaspor maintained that the late payment constituted a breach of contract and invoked a penalty clause that required Granada to pay an additional 15% of the overdue sum, amounting to €37,500. The Turkish club also demanded interest at an annual rate of 5%. Granada, in its defense, argued that it had initiated the payment on time but encountered unforeseen banking delays that were beyond its control. According to Granada, the banking institution handling the transfer had experienced a technical failure, which resulted in the funds only being received on September 11, 2023.
On December 7, 2023, FIFA’s PSC issued a ruling that largely favoured Alanyaspor. The decision required Granada to pay the penalty and interest, along with a minor outstanding balance of €27. Additionally, FIFA PSC warned Granada that failure to comply could result in a transfer ban in line with FIFA’s disciplinary measures. Dissatisfied with the ruling, Granada appealed to the CAS, arguing that the penalty was excessive and that it had acted in good faith by initiating the payment before the deadline. The Spanish club further contended that FIFA PSC had overstepped its authority by awarding sums that Alanyaspor had not explicitly requested, thereby violating the legal principle of non ultra petita.
Granada’s appeal revolved around three primary legal issues. The first concerned the timeliness of the payment and whether merely initiating the transfer, rather than ensuring receipt, fulfilled the contractual obligation. The second issue pertained to the application of Swiss law, specifically Article 163.3 of the Swiss Code of Obligations (SCO), which allows courts to reduce excessive penalties. Finally, Granada challenged FIFA PSC’s decision on procedural grounds, asserting that it had awarded damages beyond those sought by Alanyaspor, thus exceeding its jurisdiction.
On January 14, 2025, CAS delivered its verdict, partially upholding Granada’s appeal while affirming the key aspects of FIFA PSC’s ruling. The tribunal, presided over by sole arbitrator Yasna Stavreva, held that the club’s obligation under the transfer agreement was not merely to initiate payment but to ensure its receipt by the deadline. CAS found that by waiting until the last possible day to process the transfer, Granada had failed to exercise due diligence, particularly given the common knowledge that international bank transfers can take several days to clear. In light of this, the tribunal ruled that Granada bore the risk of any banking delays and could not use them as a justification for missing the contractual deadline.
Furthermore, CAS addressed the issue of penalty enforceability, rejecting Granada’s argument that the 15% charge was excessive. The tribunal noted that penalty clauses are a standard feature of football contracts and that such provisions serve an important deterrent function. CAS jurisprudence has consistently upheld penalty clauses unless they are manifestly unreasonable, which was not the case here. While Swiss law allows for the reduction of disproportionate penalties, the tribunal found that a 15% surcharge was within industry norms and proportionate to the nature of the breach.
However, CAS did provide some relief to Granada by acknowledging the club’s argument regarding non ultra petita. The tribunal ruled that FIFA PSC had indeed awarded an additional €27 and associated interest that Alanyaspor had not explicitly requested. As a result, CAS amended FIFA’s ruling to exclude these sums while maintaining the penalty and default interest obligations imposed on Granada.
The ruling in Granada CF v. Alanyaspor carries significant implications for football clubs, particularly in terms of financial discipline and contractual risk management. The decision reinforces the principle that clubs must not only initiate payments but also ensure their completion within agreed deadlines. Given the increasingly globalized nature of football transfers, this case underscores the necessity for clubs to account for potential banking delays and administrative hurdles when executing financial transactions.
Additionally, the decision highlights the robust enforcement of penalty clauses in football contracts. CAS's refusal to reduce the penalty under Swiss law suggests that clubs cannot rely on ex post facto appeals to mitigate financial consequences that were clearly outlined in their agreements. This ruling may encourage clubs to negotiate more flexible penalty structures at the outset rather than challenging them retrospectively in arbitration proceedings.
Another key takeaway from this case is the reaffirmation of procedural safeguards in dispute resolution. CAS’s acknowledgment of Granada’s non ultra petita claim serves as a reminder that legal bodies must strictly adhere to the claims presented by the parties without overstepping their mandate. This aspect of the ruling may have broader implications for FIFA’s dispute resolution mechanisms, potentially prompting a more cautious approach in future cases.
The CAS ruling in Granada Club de Futbol S.A.D. v. Alanyaspor Kulubu serves as a landmark decision reinforcing the importance of contractual compliance in football transfers. While CAS provided limited relief to Granada by correcting FIFA PSC’s overreach, the ruling largely upheld the club’s financial obligations and emphasized the importance of timely payments. Moving forward, football clubs must exercise greater diligence in executing financial transactions, ensuring that payments are received within the stipulated deadlines to avoid unnecessary disputes and financial penalties. The decision also underscores the enforceability of penalty clauses and the principle that contractual commitments must be honored without exception. As football’s financial landscape continues to evolve, this case stands as a critical reference point for clubs, legal practitioners, and regulatory bodies alike.
About the author: Ujwal Trivedi is a Partner of Manilal Kher Ambalal & Co. He is also a Licensed FIFA agent.
Disclaimer: The opinions expressed in this article are those of the authors. The opinions presented do not necessarily reflect the views of Bar & Bench.
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