A panel of retired UK judges has begun hearing an arbitration filed by football club Manchester City against the Premier League over allegations the competition’s sponsorship rules are discriminatory.
The hearing began yesterday at the International Dispute Resolution Centre in London, where the proceeding is being heard by a tribunal chaired by former High Court judge
Sir Nigel Teare.
The panel also includes the former Master of the Rolls
Lord Dyson, who is now an arbitrator at 39 Essex, and
Christopher Vadja KC – the UK’s former judge on the Court of Justice of the European Union who practises at Monckton Chambers.
Manchester City is using Freshfields Bruckhaus Deringer and a team of barristers in the proceeding, led by
Lord Pannick KC of Blackstone Chambers. The Premier League is represented by Slaughter & May and barristers
Andrew Hunter KC of Blackstone Chambers and
Marie Demetriou KC from Brick Court, among others.
The hearing is expected to last two weeks.
The dispute – which could have a seismic impact on the future of English football – relates to the Premier League’s associated party transaction (APT) rules, which provide that any commercial deal or player transfer between a club and entities with links to that club’s ownership must be conducted at fair market value.
The rules were introduced in December 2021 after Newcastle United was taken over by Saudi Arabia’s Public Investment Fund, amid concerns the football club could gain a competitive advantage by signing lucrative commercial contracts with Saudi-linked partners and sponsors in the Middle East.
Football clubs with higher declared revenue have greater leeway to spend on transfer fees and wages under the Premier League’s financial sustainability rules.
In February, the Premier League football clubs voted to strengthen the APT rules – bringing in potential sanctions against clubs who try to secure inflated sponsorship deals and placing the onus on clubs to prove that any such deals were conducted at fair value.
Manchester City, which is owned by Sheikh Mansour bin Zayed Al Nahyan of the Abu Dhabi ruling family, filed for arbitration under the Premier League rules a week later. Four of the football club’s largest sponsors have links to the UAE, including state-owned Etihad Airways, which sponsors the club’s kit and stadium.
In a 165-page pleading seen by
The Times, Manchester City claim they are victims of “discrimination”, that the amended rules were approved by rivals to “stifle” their success on the pitch and is nothing more than “the tyranny of the majority”.
The football club also alleges that the APT rules are in breach of UK competition law. City is reportedly seeking to have those rules scrapped, before pursuing a claim for damages in a second hearing.
Other clubs may be called as witnesses in the proceeding, with one club having already submitted a statement in support of City. At the vote to the strengthen the APT rules in February, six clubs opposed the decision: Manchester City, Newcastle, Chelsea, Everton, Nottingham Forest and Sheffield United.
As per the Premier League rules, the arbitration is being conducted on an ad hoc basis.
If City succeed in scrapping the APT rules, it could have a significant impact on the separate proceeding the Premier League is pursuing over the club’s 115 alleged breaches of the competition’s financial fair play rules.
In that proceeding, which will be heard by an independent commission in November, City is accused of concealing payments from Sheikh Mansour’s Abu Dhabi United Group and disguising them as sponsorship revenue, among other alleged breaches.
If the APT rules are found to be unlawful, it could strengthen City’s defence concerning the legality of the Premier League’s profit and sustainability rules.
European football's governing body UEFA had imposed a two-year ban on Manchester City over “serious breaches” of its own financial fair play regulations, although Court of Arbitration for Sport panel later
lifted the ban and reduced the fine.
In 2019, the Premier League commenced arbitration to obtain a declaration that Manchester City must disclose documents connected to those alleged breaches.
The ad hoc tribunal in that proceeding – composed of
Philip Havers of 1 Crown Office Row as chair,
John Machell of Serle Court and
Daniel Alexander of 8 New Square – ordered the club to turn over the documents in an award from 2020.
City attempted to challenge the jurisdiction of that tribunal in London’s Commercial Court, which rejected that application and said its decision on the challenge should be made public. The Court of Appeal
upheld that decision.
Manchester City v Premier League
Tribunal
- Sir Nigel Teare
- Lord Dyson
- Christopher Vadja KC
Counsel to Manchester City
- Lord Pannick KC of Blackstone Chambers
- Paul Harris KC, Rob Williams KC and David Gregory of Monckton Chambers
- Freshfields Bruckhaus Deringer
Partners
Deba Das and
Rhodri Thomas in London
Counsel to the Premier League
- Andrew Hunter KC of Blackstone Chambers
- Marie Demetriou KC, Daniel Piccinin KC, Max Schaefer, Tom Pascoe and Alastair Richardson of Brick Court Chambers
- Slaughter and May
Partners
Richard Swallow, Smriti Sriram and
Mark Zerdin in London
