## Facts

- MasterCard, a long-time exclusive FIFA World Cup sponsor in the financial services category, held sponsorship rights for four consecutive tournament cycles.
- The parties’ most recent agreement included a contractual “first right to acquire” the next World Cup sponsorship cycle in the same category.
- The contract contained a Swiss choice-of-law clause; the parties litigated the meaning and enforcement of the clause under Swiss law.
- As the next sponsorship cycle approached, FIFA negotiated in parallel with MasterCard and Visa.
- FIFA representatives made repeated misrepresentations to MasterCard about not concluding a deal with a third party unless FIFA could not reach agreement with MasterCard.
- FIFA representatives also misrepresented to Visa that MasterCard had no incumbency or priority rights and provided Visa with detailed information about the status of FIFA’s negotiations with MasterCard.
- The trial court found MasterCard agreed to all material terms FIFA demanded, yet FIFA awarded the sponsorship to Visa.
- MasterCard sued for breach of contract and sought equitable relief, including enforcement of its priority right and displacement of the competing sponsorship award; related arbitration proceedings in Zurich were pending.

## Issues

1. Under Swiss law, did the contract grant MasterCard an enforceable “first right to acquire” the next sponsorship cycle?
2. Did FIFA breach that right and violate Swiss-law good-faith obligations through its negotiation conduct and award of the sponsorship to Visa?
3. If breach occurred, was equitable relief (including specific performance affecting the competing sponsorship arrangement) an available remedy?

## Decision

- The district court held that the contract granted MasterCard a valid and enforceable first right to acquire the next sponsorship cycle.
- The court found FIFA breached the contractual priority right by awarding the sponsorship to Visa despite MasterCard’s willingness and ability to accept the material terms FIFA sought.
- The court further found FIFA’s negotiation conduct violated the heightened good-faith obligations imposed by Swiss law, citing repeated misrepresentations to both MasterCard and Visa.
- The court granted relief enforcing MasterCard’s priority right, including equitable remedies directed at restoring the contractual order of acquisition.
- The Second Circuit, in a nonprecedential summary order, largely affirmed the core determinations that the priority right existed, was breached, and was performed in bad faith, while addressing remedy and arbitration-interaction questions more narrowly.

## Legal Principles

- A Swiss-law “first right to acquire” in a commercial sponsorship contract can create a substantive priority: the grantor may not award the rights to a third party if the holder is prepared to match the material terms the grantor would accept.
- Swiss contract law imposes strong good-faith duties in performance and negotiation, particularly where one party’s discretion can defeat the other party’s contractual priority.
- Misrepresentations and strategic parallel negotiations designed to circumvent a bargained-for priority right can constitute both breach of the priority clause and breach of Swiss-law good-faith obligations.
- Specific performance or comparable equitable relief may be appropriate where the contractual right is central to the bargain and monetary relief is inadequate, subject to managing overlap with related arbitral proceedings.

## Conclusion

The courts enforced MasterCard’s Swiss-law priority right to acquire the next World Cup financial-services sponsorship and held that FIFA breached the contract and violated heightened good-faith duties by steering the award to a competitor despite MasterCard’s assent to FIFA’s terms, warranting equitable enforcement of the contractual priority.


MasterCard Int'l Inc. v. Fédération Internationale de Football Ass'n, 464 F. Supp. 2d 246 (S.D.N.Y. 2006), aff'd, 239 F. App'x 625 (2d Cir. 2007)