Fleetwood Wanderers Ltd (t/a Fleetwood Town Football Club) v AFC Fylde Ltd

JurisdictionEngland & Wales
JudgeHalliwell
Judgment Date30 November 2018
Neutral Citation[2018] EWHC 3318 (Comm)
CourtQueen's Bench Division (Commercial Court)
Date30 November 2018
Docket NumberClaim No D40MA064

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN MANCHESTER

CIRCUIT COMMERCIAL COURT

IN THE MATTER of a challenge to the Award of an arbitral tribunal under Rule K of the Football Association Rules

AND IN THE MATTER of the Arbitration Act 1996

Before:

His Honour Judge Halliwell sitting as a Judge of the High Court on 15th, 16th, 17th, 18th and 19th October 2018, judgment handed down on 30th November 2018

Claim No D40MA064

Between:
Fleetwood Wanderers Limited (t/a Fleetwood Town Football Club)
Claimant
and
AFC Fylde Limited
Defendant

Mr Paul Gilroy QC (instructed by Centrefield LLP) for the Claimant

Mr Martin Budworth (instructed by Harrison Drury) for the Defendant

(1) Introduction

1

By these proceedings, the Claimant challenges an arbitration award in respect of a dispute arising from the termination of a professional footballer's contract of employment.

2

The Claimant and the Defendant are football clubs. At the relevant time, the Claimant was in League One of the Sky Bet Football League and the Defendant was in the Vanarama National League North.

3

On 5 th August 2014 and, again, on 18 th September 2015, the Defendant entered into written contracts of employment with a professional footballer called Dion Charles (“the Player”). However, it failed to register, as required, the second contract (“the Contract”) with the Football Association (“the FA”) or the National League (“NL”)

4

During the currency of the Contract, the Claimant itself engaged the Player. This gave rise to a dispute (“the Dispute”) between the Defendant and the Claimant in which the Defendant contended that, by joining the Claimant when contracted to the Defendant, the Player committed a repudiatory breach of his contractual obligations and the Claimant wrongfully procured the breach. On this hypothesis, the Defendant was furnished with a claim against the Claimant for damages at common law.

5

On 28 th September 2016, the Defendant referred the Dispute to arbitration under Rule K1 of the FA Rules. The Claimant and the Defendant were the only parties to the arbitration. Mr Craig Moore (“the Arbitrator”) was appointed arbitrator. During the arbitration, the Defendant amended its case so as to add a claim for compensation based on Article 17 of the Regulations on the Status and Transfer of Players (“RSTP”), issued by the Federation Internationale de Football Association (“FIFA”). As will be seen, Article 17 contains a principle for the payment of compensation where a relevant contract is terminated without just cause. Article 17.2 provides that if a professional player is required to pay compensation, the player and his new club are jointly and severally liable.

6

Following a hearing on 20 th to 22 nd June 2017, the Arbitrator made an award dated 24 th July 2017 (“the Award”) in which he concluded the Defendant had failed to establish its common law claim against the Claimant on causation but succeeded under Article 17. This was on the basis that the FA Rules had operated to incorporate the Article 17 principle without derogation and the Claimant was thus jointly and severally liable for the payment of compensation regardless of the requirements of a successful claim at common law.

7

When, on 21 st August 2017, the Claimant issued the current proceedings, its claim was based on the propositions that the Arbitrator lacked “substantive jurisdiction” to make the Award under Section 67(1)(a) or had exceeded his powers within the meaning of Section 68(2)(b) of the Arbitration Act 1996. However, it obtained permission to amend the claim after the FA's solicitors drew its attention to an exchange of emails (“the Contentious Emails”) between the Arbitrator and the FA shortly before the Award. Following the substantive hearing, the Arbitrator had apparently communicated with the FA in relation to issues in the Arbitration without notifying the parties or giving them an opportunity to make representations. The Claimant contends that this amounted to a “serious irregularity” owing to a breach of the Arbitrator's statutory duties to act fairly and give the parties a reasonable opportunity to put their case. In seeking to challenge the Award it thus relies on Section 68(2)(a) of the 1996.

(2) The Regulatory Framework

8

As the English game has grown and developed, a number of regulatory and representative organisations have been created to accommodate it. This includes the FA (incorporated as the Football Association Limited), the Professional Footballers Association (“the PFA”) and several organisations separately responsible for administering and regulating the leagues and other competitions.

8.1. The FA is essentially the governing body. As such, it issues rules (“ the FA Rules”). All parties who agree or accede to the FA Rules are bound to comply with the same by express or implied contract, Mercato Sports (UK) Limited v the Everton Football Club Company Limited [2018] EWHC 1567. This includes football clubs and players. It is common ground that the parties to these proceedings are bound to comply with the FA Rules.

8.2. An organisation known as “the Professional Football Negotiating and Consultative Committee (England and Wales)” (“the PFNCC”) has been formed to address issues such as the terms and conditions of the players' employment, disciplinary procedures and health and safety. The PFNCC is a committee formed from representatives of the FA, the PFA, The Football League Limited and The FA Premier League Limited. It meets on a regular basis. The members of the PFNCC can reasonably be expected to ensure that the views of their respective organisations are taken into consideration at PFNCC meetings. As a general rule, the FA can be expected to endorse all PFNCC decisions on matters within their competence.

8.3. The PFNCC were involved in the preparation of standard forms of employment contract for players participating in the Premier League and the English Football League. These have been formally approved by the FA-or treated as such-and incorporated in obligations under the FA Rules. In addition to the standard contracts, the PFNCC were involved in the preparation of an explanatory document denoted as the “Code of Practice and Notes on Contract”. Subject to statutory intervention, the contracts take effect in accordance with common law principles.

9

FIFA is an international organisation. It issues rules to its members, including the FA. In the present case, there is no suggestion that there was or is any direct relationship, contractual or otherwise, between FIFA and the parties to these proceedings under which FIFA are authorised to regulate the latter directly.

10

When the Contract was terminated and the Dispute referred to Arbitration, the FA Rules adopted on 18 th May 2016 and the RSTP approved on 17 th March 2016 were applicable. Save where the context otherwise requires, I shall thus refer to these versions of the FA Rules and the RSTP.

11

At all times, the FA Rules provided a detailed code ranging from matters such as contracts of employment ( Rule C) to the FA's powers of inquiry ( Rule F) and disciplinary powers ( Rule G).

11.1. By Rule A1(b), the Claimant and the Defendant were expressly required, as football clubs, to “play and/or administer football in conformity with” the FA Rules “and…the statutes and regulations of FIFA and UEFA in force from time to time”.

11.2. By Rule C(j)(i), all football clubs were required to enter into a written contract of employment with their players on an approved form, incorporating all the terms and conditions of employment. The Contract was to be of stated duration and signed at the same time as the player's registration form.

11.3. By Rule E1(d), it was provided that the FA “may act against a participant”, such as clubs and players, “in respect of any ‘Misconduct’”, in turn defined so as include “a breach of…the statutes and regulations of FIFA”.

11.4. By Rule K1(a), disputes were generally to be referred to arbitration including disputes arising in connection with the FA Rules and the statues and regulations of FIFA and UEFA, in force from time to time. However, rights of appeal on a point of law were expressly excluded. By Rule K14(a), it was expressly provided that “these Rules and any arbitration pursuant to them shall be governed by English law” and that “the Tribunal shall apply English law (both procedural and substantive) in determining any dispute referred to arbitration under the Rules”.

12

Although the RSTP have been amended from time to time, it was common ground that the material provisions have been in essentially the same form since September 2001. The 2016 version of the RSTP includes the following provisions.

Scope

1.1 These regulations lay down global and binding rules concerning the status of players, their eligibility to participate in organised football, and their transfer between clubs belonging to different associations.

1.2 The transfer of players between clubs belonging to the same association is governed by specific regulations issued by the association concerned in accordance with article 1 paragraph 3 below, which must be approved by FIFA. Such regulations shall lay down rules for the settlement of disputes between clubs and players, in accordance with principles stipulated in these regulations. Such regulations should also provide for a system to reward clubs investing in the training and education of young players.

1.3 (a) The following provisions are binding at national level and must be included without modification in the association's regulations: articles 2–8, 10, 11, 12bis, 18bis, 18ter, 19 and 19bis.

(b) Each association shall include in its regulations appropriate means to protect contractual stability, paying respect to mandatory national law and collective bargaining agreements. In particular, the following principles must be considered:

...

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