Court Rules APT Regulations Unlawful
As part of these decisions, the tribunal also decided that the manner in which the Premier League reached its decision was unreasonably delayed.
A photo showing part of Manchester City Etihad Stadium.Photo by Daily Mail.
By Robert Mutasi
An arbitration tribunal, comprising Sir Nigel Teare, Christopher Vajda KC, and Lord Dyson have decided that several elements of the Premier League’s Amended Profitability and Sustainability Rules are unlawful.
It concluded the rules were in breach of sections 2 and 18 of the Competition Act 1998, inter alia, for their exclusion of shareholder loans and the lack of procedural fairness within key decisions taken in respect of Manchester City Football Club MCFC.
Breach of Competition Law
The tribunal stated the initial APT Rules and the adapted ones both failed to comply with competition law.
In particular, the rules were found to carve out shareholder loans from their purview, which the tribunal held was ultra vires the Competition Act.
This was the only basis that the decision was taken, since the exclusion tended to distort fair competition between clubs.
Apart from this exclusion, the Amended APT Rules were also under scrutiny for the variation in pricing to Appendix 18, which the tribunal also concluded was also a contravention of the Competition Act.
Procedural Unfairness
The tribunal also provided that the manner of dealing with transactions as handled by the Premier League was procedurally defective.
The ruling said clubs were not afforded an opportunity to comment on the comparable transaction data prior to the Premier League’s determination as to whether a transaction was transacted at FMV.
The lack of transparency here was considered procedurally unfair and a violation of the club’s rights to a fair hearing.
Key Manchester City Transactions Overturned
The two major deals in MCFC are the EAG Transaction and the FAB Transaction.
The tribunal felt that the unfair dealing by the Premier League with MCFC was not affording an opportunity to comment on the Benchmarking Analysis prior to any decision being taken over the EAG Transaction.
Similarly, the decision concerning the FAB Transaction was also set aside because, prior to its making the final decision, the Premier League had failed to make available to MCFC certain information from relevant transactions involving other clubs.
Unreasonable Delays
As part of these decisions, the tribunal also decided that the manner in which the Premier League reached its decision was unreasonably delayed.
Both transactions had been subjected to a three-month delay in the case of the FAB Transaction and a two-month delay in respect of the EP Transaction, and both were held as breaches under Rule E.64.
This decision in itself provides considerable vindication for Manchester City FC and calls into question the operation of the Premier League’s regulatory process, with possibly far-reaching implications for ensuring that procedures in the future will be more equitable and transparent.
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