Member Article

When a dispute arises, and the subject matter relates to sport, it tends to attract attention. Whether the dispute concerns football, tennis, swimming or Formula 1, a bit of friction and tension makes for better headlines. For that very reason, most sporting bodies have a dispute resolution procedure that requires the parties to engage in arbitration.

Advantages of arbitration in sport disputes

There are two main benefits of using arbitration in sporting disputes. The first is that the panel, or judge, in an arbitration can be selected by the parties, or are preselected by the sporting body. Those involved as panellists tend to have a good understanding of the sport itself and a deep understanding of the sporting rules and relevant law. The other main advantage is that the arbitration is confidential, and unlike a public courtroom, members of the press and public are not allowed to attend. 

Lessons learnt from recent football arbitrations

In the case involving Heart of Midlothian Football Club, Hearts were seeking to challenge a decision by the Scottish Professional Football League Limited (the SPFL) that resulted in the relegation of Hearts and Partick Thistle, and the promotion of Dundee United, Raith Rovers and Cove Rangers, all from their respective divisions. The decision was made after the first COVID-19 lockdown, and was in essence a decision to bring the season to an early finish. The allegation was that the affairs of the SPFL were conducted in an unfairly prejudicial manner.

Hearts and Partick Thistle sought to argue that the dispute should be dealt with by the court, but the court quoted the oft-cited case of Sanderson & Son v Armour: “If the parties have contracted to arbitrate, to arbitration they must go.” The dispute was then dealt with in private. Only the parties and panel know what happened.

Questions of transparency – parties should not assume that every aspect of the process will be confidential

Private hearings raise questions of transparency in decision-making where matters of public interest are concerned. The English Court of Appeal considered the question of public interest and transparency in the case of Manchester City Football Club Ltd v The Football Association Premier League Ltd & Ors. In that case, there was a fairly complex procedural background involving the disclosure of documents, and considered given to whether the “Merits Judgment” should be published. The Court of Appeal agreed that it could, and the reasoning is of interest:

1. Publication would not lead to disclosure of significant confidential information. What would not be disclosed by the publication is any details of the substance of the underlying disclosure dispute.

2. There is a legitimate public interest in how disputes between the Premier League and member clubs are resolved and, in particular, in the allegation of structural bias made by the club, which appears to have led to a change in the rules. There was also a public interest in there being some explanation for the delay in the case.

3. The fact that both sides opposed publication was relevant, but not determinative. Quoting from Ex Parte P (1998) (Unreported): “When both sides agreed that information should be kept from the public, that was when the court had to be most vigilant."

4. Because the Merits Judgment confirms the entitlement of the Premier League to claim specific performance against member clubs, it is of public interest and significance. The Premier League had imposed a condition on its support of the appeal, that it should be free to rely on and disclose the Merits Judgment in other arbitration proceedings against other member clubs.

5. Given what was already in the public domain, disclosure of the existence of the dispute as to production of documents and information would not give rise to any prejudice or detriment to the club.
   
   

Lord Justice Males added some brief but important comments. He said:

“In general, the imperative of open justice, involving as it does the possibility of public scrutiny as a means by which confidence in the courts can be maintained and the administration of justice can be made transparent, will require publication where this can be done without disclosing significant confidential information.”

And, with a little sting in the tail, he demonstrated some knowledge of the sector, adding:

“This is an investigation which commenced in December 2018. It is surprising, and a matter of legitimate public concern, that so little progress has been made after two and a half years - during which, it may be noted, the club has twice been crowned as Premier League champions.”

Concluding thoughts

Arbitration will continue to be an important process when resolving sports-related disputes. However, those involved in disputes of this kind should not assume that every aspect of the process will be confidential. In the right circumstances, the courts will be content to open up the procedure to public scrutiny.

For more information, please contact John MacKenzie, Partner in our commercial disputes team, at [email protected].

Shepherd and Wedderburn LLP represented the SPFL in the proceedings and arbitration raised by Heart of Midlothian FC and Partick Thistle FC.