Penalty clauses under Swiss Law
It is commonly accepted, and has been recognised by the Court of Arbitration for Sport (CAS) on several occasions, that a clause regulating in advance the payable compensation under Article 17 RSTP should be qualified as “a contractual penalty or ‘liquidated damages’ clause (‘clause pénale’ or ‘Konventionalstrafe’) under Swiss Law.”[1] As a consequence, the validity and enforceability of such a clause will be assessed by the decision-making body in light of Articles 160 et seq. of the Swiss Code of Obligations (CO).[2] In particular, the following elements are required for a clause to be qualified as a valid contractual penalty clause under Swiss Law: (i)...
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