Sheffield United Football Club Ltd v West Ham United Football Club Plc [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 26 November 2008 |
| Neutral Citation | [2008] EWHC 2855 (Comm) |
| Docket Number | Case No: 2008 FOLIO 1064 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 26 November 2008 |
[2008] EWHC 2855 (Comm)
IN THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
QUEEN'S BENCH DIVISION
Mr. Justice Teare
Case No: 2008 FOLIO 1064
Ian Mill QC, Adam Lewis and Andrew Hunter (instructed by Denton Wilde Sapte) for the Claimant
Paul Chaisty QC and Wilson Horne (instructed by Brabners Caffe Street) for the Defendant
Hearing dates: 10 November 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
MR.JUSTICE TEARE
Introduction
There is before the Court an application by the Claimant, Sheffield United, for an interim order restraining the Defendant, West Ham, from taking any further steps to pursue an appeal or challenge to an award made by an arbitral tribunal in England other than by way of an application to this Court under the Arbitration Act 1996. There is also before the Court an application by West Ham seeking a stay of Sheffield United's application.
The circumstances in which these applications have been made are these. During the 2006/2007 football season Sheffield United and West Ham were in the Football Association Premier League. West Ham engaged the services of an Argentinean football player, Carlos Tevez. At the end of the season West Ham survived relegation but Sheffield United did not. Sheffield United considered that the engagement of Carlos Tevez had been in breach of the rules of the Premier League and that such breach was an effective cause of Sheffield United being relegated to the Championship. Sheffield United therefore wished to claim damages from West Ham. Since both clubs are party to an arbitration agreement contained in Rule K of the rules of the Football Association Sheffield United's claim was referred to arbitration. The arbitrators were Lord Griffiths, Sir Anthony Colman and Robert Englehart QC. Following a hearing held from 9 – 17 June 2008 and on 28 July 2008 the arbitral tribunal issued an interim award dated 18 September 2008. It was held that Sheffield United was entitled to recover damages from West Ham for breach of contract. The amount of the damages was to be assessed at a further hearing. On 2 October 2008 West Ham filed an appeal from the arbitral decision to the Court of Arbitration for Sport in Lausanne, Switzerland (“CAS”).
Sheffield United say that the pursuit of an appeal to CAS is a breach of the arbitration agreement between the two clubs and that CAS has no jurisdiction to entertain any such appeal, that damages would not be an adequate remedy for that breach and that the balance of convenience lies in restraining West Ham from pursuing its appeal to CAS until the trial of Sheffield United's claim for a permanent injunction. The application for an interim injunction is made pursuant to section 37 of the Supreme Court Act 1981 and section 44 of the Arbitration Act 1996.
West Ham do not accept that an appeal to CAS is a breach of the arbitration agreement or that CAS has no jurisdiction to entertain the appeal. If there has been a breach West Ham say that damages would be an adequate remedy, that CAS ought to be allowed to determine whether or not it has jurisdiction to entertain the appeal and that the injunction should be refused. West Ham also seeks a stay of Sheffield United's proceedings pursuant to section 9 of the Arbitration Act 1996.
Rule K of the Rules of the Football Association.
Rule K provides as follows:
Agreement to Arbitration
1. (a) Subject to Rule K1(b) below, any dispute or difference (a “dispute”) between any two or more Participants (which shall include, for the purposes of this section of the Rules, The Association) including but not limited to a dispute arising out of or in connection with (including any question regarding the existence or validity of)
(i) The Rules and Regulations of The Association;
(ii) The rules and regulations of an Affiliated Association or Competition;
(iii) The Statutes and Regulations of FIFA and UEFA; or
(iv) The Laws of the Game
shall be referred to and finally resolved by arbitration under these Rules.
………….
The Tribunal
3. (a) In these Rules, “Tribunal” means the arbitrator or arbitrators appointed pursuant to these Rules to determine the dispute. A Tribunal of three arbitrators shall be appointed unless the parties agree otherwise.
(b) The Claimant(s) and the Respondent(s) shall within 14 days of service of the Response(s) agree to the appointment of a third arbitrator who shall act as Chairman of the Tribunal.
…………
(d) Each arbitrator must be, and remain, impartial and independent of all the parties to the arbitration at all times. Each arbitrator must be resident in England.
………….
Award
5. (a) The Tribunal shall make its award (the Award) in writing and, unless all parties otherwise agree in writing, shall state the reasons for its decision. The Award shall be dated and signed by the Tribunal. Without prejudice to its obligations under Rule K6, the Tribunal shall inform The Association of its Award and provide The Association with a copy of any written decision.
(b) The Award shall be final and binding upon the parties as from the date it is made.
(c) The parties shall be deemed to have waived irrevocably any right to appeal, review or recourse to a Court of law.
(d) Where there were three Arbitrators and the Tribunal fails to agree on any issue, the Arbitrators shall decide that issue by a majority. Failing a majority decision on any issue, the Chairman of the Tribunal shall decide that issue.
Governing Law
9. These rules and any arbitration pursuant to them shall be governed by English law. The Tribunal shall apply English Law (both procedural and substantive) in determining any dispute referred to arbitration under the Rules. The arbitration shall take place in England.
The rival cases
It is submitted on behalf of Sheffield United that Rule K clearly provides that where disputes are referred to arbitration they are to be finally resolved by arbitration. For this purpose reliance is placed upon Rule K 1(a) and 5(b). It is further submitted that since the seat of the arbitral tribunal is England (see Rule K 9) that is an implied choice of England as a forum for remedies seeking to challenge the award; see C v D [2008] 1 Lloyd's Rep. 239 at paragraph 17 per Longmore LJ.
It is submitted on behalf of West Ham that Rule K does not, on its true construction, oust the jurisdiction of an agreed arbitral appeal tribunal. It is further submitted that the parties have agreed to CAS having an appellate arbitral role. The latter submission is based upon the following propositions:
i) The parties are bound by the rules of the Football Association Premier League. Those rules bind the clubs to comply with the statutes and regulations of FIFA; see paragraph 12.5 of the Rules of the Premier League.
ii) The FIFA statutes oblige its members, namely, the national football associations, to comply with the decisions of CAS on appeal and to ensure that the members of the national football associations comply with such decisions; see Articles 13 and 64 of the FIFA statutes.
iii) The jurisdiction of CAS is to consider “appeals against final decisions passed by …..Members”, that is, in the present case, a final decision passed by the FA; see Article 63 of the FIFA statutes.
Where a final anti-suit injunction is granted the claimant must show that the foreign proceedings are vexatious or oppressive. Where the proceedings are brought in breach of an arbitration agreement or exclusive jurisdiction agreement and the defendant is unable to show a strong reason why he should not be held to his agreement the foreign proceedings will be regarded as oppressive and vexatious; see The Angelic Grace [1995] 1 Lloyd's Rep. 87. However, this is not the trial of the action but an application for an interim injunction. There was a dispute between the parties as to the required strength of the claimant's claim on such an application. Counsel for Sheffield United submitted that the test was the conventional American Cyanamid test, namely, whether the claimant's case raises a serious issue to be tried. Counsel for West Ham suggested that the test was higher. In his written submissions it was said that a breach of contract had to be established (relying upon National Westminster Bank v Utrecht-America Finance Co. [2001] EWCA Civ 658 at paragraph 37 per Clarke LJ and American International Speciality Lines Insurance Co. v Abbott Laboratories [2003] 1 Lloyd's Rep. 267 per Cresswell J.). In his oral submissions it was said that it had to be shown that Sheffield United is “actually entitled” to the relief sought (relying upon The Anti-Suit Injunction, edited by Fawcett, paragraphs 13.27–13.29).
This dispute as to the appropriate test was not debated at length before me. Counsel for Sheffield United was content to say that however high the test the strength of Sheffield United's case passed it. Counsel for the West Ham went no further in his argument than the extent to which I have indicated.
There appears to be considerable support for the view that even if the American Cyanamid test applies it should be applied with caution in the case of an application for an interim anti-suit injunction; see the cases cited in The Anti-Suit Injunction paragraph 13.28 at footnote 66 and Dicey on the Conflict of Laws 14 th.ed. paragraph 12–067 at footnote 91. There is also support for the view that, at any rate where the grant of an interim injunction will be determinative of the question of forum, the test is higher and requires the applicant to show a prima facie right to a final anti-suit injunction or even that he would be...
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