CAS 2010/A/2128 C.S. Chimia Brazi v. S.C. C.S. Unirea Urziceni S.A.

CAS 2010/A/2128 C.S. Chimia Brazi v. S.C. C.S. Unirea Urziceni S.A.

It is a general principle of commercial law that interest is chargeable in case of any delay and/or default in paying the principal amount and no express contractual provision is required.

Liquidated damage is applicable when a specific sum of money has been expressly stipulated by the parties as the amount of damage to be recovered by any party in result of a breach of contract by the other.

Public policy is violated if an arbitral award violates the fundamental legal principles and is therefore incompatible with Swiss law and values. Under Swiss law it is considered usury as per Article 157 of the Swiss Penal Code where a loan is granted with an interest rate of 18% to 20% p.a. or where there is a disproportion of 25% between the value of the obligations of the parties.

Taking into consideration the circumstances of the case, an annual default interest rate of 17 % p.a. is the maximum rate that can be granted without violating Swiss public policy.

Facts/Procedure

On 16 July 2009, Brazi and Urziceni entered into an agreement for the transfer of the Player M.

Under the Transfer Agreement, Brazi agreed to transfer the Player to Urziceni for the amount of EUR 200,000 plus VAT of 19% which totals to EURO 238,000 to be paid no later than 30 September 2009 (Article 2 and 3.2.a) of the Transfer Agreement).

The Parties also agreed on Clause 1 of the Annex to the Transfer Agreement that in case Urziceni defaulted in paying the Transfer Fee on the agreed date, a daily interest rate of 1% would accrue from the said amount as a penalty.

On 1 December 2009, Brazi sent Urziceni the invoice related to the amount of the Transfer Fee but the invoice was not paid.

On 15 January 2010, and in result of the non-payment of the Transfer Fee, Brazi filed a claim before the Romanian Football Federation´s...

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