England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		25 June 2014

Sir David Eady :

1. Mr Bruce Baker for many years has managed boxers and he is the Chairman and Managing Director of the Professional Boxers Promoters Association ("the PBPA"). He was formerly the holder of a boxing manager's licence granted by the British Boxing Board of Control ("the BBBC"). He was, however, found guilty of misconduct in certain respects following a hearing before the BBBC in accordance with its regulatory procedures on 19 November 2013. A decision was given on 10 December of that year and, at a subsequent hearing on 11 February 2014, the licence was withdrawn.
2. In accordance with the applicable rules, there is an appeal to the Stewards currently pending and likely to be heard in the last week of July (having been adjourned unilaterally from 29 May). Mr Baker has now sued the BBBC, alleging procedural unfairness and challenging specifically its Regs 4.12(b) and 5.15 (dated 2013) as being supposedly incompatible with EU law and also with chapters I and II of the Competition Act 1988.
3. The matter for immediate determination is whether Mr Baker is entitled to interim remedies in these proceedings, and in particular to have his licence restored, pending the hearing of the appeal in July. The primary remedies identified in his application notice dated 27 May 2014 are injunctions to the effect that:

i) The Defendant is restrained from withholding the Claimant's manager's licence pending the outcome of his appeal hearing.

ii) The Defendant is required to reinstate the Claimant's manager's licence pending the outcome of his appeal hearing.

iii) The Defendant is restrained from withdrawing its recognition of the PBPA bond pending the outcome of the Claimant's appeal hearing.

4. The application was heard before me on 6 June 2014, when his case was argued by Mr Mercer QC and that of the BBBC by Mr Lewis QC. An application was also made on behalf of the BBBC seeking a stay of the proceedings under s.9 of the Arbitration Act 1996 on the basis that the dispute, including the issues of law and the challenge to the validity of the relevant regulation, are the subject of arbitration (i.e. before the Stewards). It is said that the outstanding appeal constitutes an arbitration in accordance with the tests identified by Cooke J in English Cricket Board v Kaneria [2013] EWHC 1074 (Comm) at [28]-[41].
5. Alternatively, it is submitted that the Stewards of Appeal route represents a contractually binding appeal process and Mr Baker should be required to exhaust that before seeking relief from the court. Indeed, it is said on behalf of the BBBC that the application for restoration of the licence is itself a matter within the jurisdiction of the Stewards and that an application should have been made to them for that purpose: see Regs 28.9 and 28.10. Mr Lewis contends, therefore, that the claim is premature either way, whether on the arbitration ground or on that based on contract, and that no cause of action could yet be said to have arisen.
6. In any event, Mr Lewis would argue that there is no serious issue to be tried as to either procedural unfairness or the validity of the Regulations. He would also contend, if necessary, that damages would provide an adequate remedy and/or that the "balance of convenience" (or of justice) lies in favour of refusing any relief. Accordingly, Mr Baker would be unable to surmount the hurdles identified in American Cyanamid Co v Ethicon Ltd [1975] AC 386. I shall address these arguments on the merits rather than confining myself to the preliminary objections.
7. The casus belli between the parties was Mr Baker's involvement in two promotions in Bethnal Green which had not been sanctioned by the BBBC held on, respectively, 27 April and 4 October 2013. These were said to have been "regulated" by the German Boxing Association ("the GBA"). Mr Mercer seeks to characterise the disciplinary proceedings as part of a "turf war" and as an attempt by the BBBC to establish itself as having the sole right to organise boxing shows in the United Kingdom. Mr Baker is an innocent party, he says, who finds himself "caught in the middle".
8. As Mr Mercer summarised it, Mr Baker's case is based primarily upon the contention that the BBBC's rules and regulations, and the decisions of 10 December 2013 and 11 February 2014 themselves, amount to a restriction on his freedom to receive and provide services. Thus, it is clear that he challenges not only the decisions currently under appeal but also the validity of the Regs 4.12(b) and 5.15 under which they were made.
9. Reg 4.12 provides that:

"A Member shall only participate:

…

(b) in or at a Promotion organised by a Federation, Commission, Association or Controlling Authority affiliated to, or recognised by, the BBB of C."

So far as material, Reg 5.15 provides:

"No Boxer resident in the Territory and holding a valid BBB of C licence shall take part in any Contest or exhibition outside the jurisdiction of the BBB of C without obtaining the prior written permission of the Board. Contracts for such Contests shall not be signed by a Boxer until such permission has been granted by the Board. Application for such permission must be made to the Registered Office of the Board at least 14 days prior to the date of the Contest. Permission for such Contests shall be incorporated into an International Boxer's Licence or other documentation satisfactory to the Board which must include therein the official authorisation of the Board for the Contest, the medical certification of the Boxer by his Area Medical Officer or deputy prior to his departure abroad … "

10. These regulations are said, first, to be in breach of the provisions of Article 101 of the Treaty on the Functioning of the EU and/or of Chapter I of the Competition Act 1988, since they give rise to an anti-competitive agreement. Further, the decision of 10 December 2013 is said to be in breach of Article 102 of the Treaty and of Chapter II of the 1988 Act, as it amounts to an abuse of a dominant position in a relevant market; that is to say, the market to supply licences for regulated professional boxing shows in Great Britain, Northern Ireland, the Isle of Man and the Channel Islands (an area defined in Reg 2). That argument was rejected by the Board in November 2013 and will no doubt be presented afresh before the Stewards, who will conduct a de novo hearing.
11. Mr Mercer argued that the English courts have an obligation to enforce the rights of citizens under the provisions of EU law, which they cannot "delegate" to private bodies such as the BBBC. Mr Lewis responds that there is no question of delegation, although the BBBC seeks to have its regulatory procedure as a whole exhausted first: see e.g. Modahl v British Athletic Federation [2002] 1 WLR 1192 at [61] and [115] and Calvin v Carr [1980] AC 574, 593. There is no doubt that the court's supervisory jurisdiction can come into play later if, for example, there is a procedural irregularity or the decision of the Stewards contains an error on its face.
12. Meanwhile, submits Mr Lewis, the application for interim relief is premature and it should not be entertained until the appeal procedure has been exhausted. Mr Baker has agreed to follow inter alia the terms of Regs 27 and 28, which spell out the procedure and the powers of the Stewards.
13. As will emerge later, it is clear that the Board's decision under appeal was not based solely on any technical breach but upon matters of substance in relation to Mr Baker's conduct and the particular circumstances of the relevant promotions.
14. Mr Lewis argues that not only was the decision itself lawful and rational but also that the regulations under which it was made were not incompatible with the EU law as it relates to a free market, competition law or the restraint of trade. For present purposes, of course, he submits that there is not even a serious question to be tried on those contentions. His reasons were developed, specifically in the context of sport, as follows.
15. There is no legal prohibition on the organisation of any sports under the umbrella of a national governing body or, for that matter, under the auspices of an international body comprising representatives of such national entities. It is recognised that sport plays a legitimate role in expressing and preserving national identity. This has been made clear by the European Commission, for example, in the context of football:

"The organisation of football on a national or regional geographic basis seems to be part of the nature of the sport and allows international championships to be held between club teams. Accordingly the regulations of sports organisations laying down rules along these lines or decisions applying such rules in an objective and non-discriminatory manner are not in principle caught by Arts 81 or 82 of the Treaty."

(See the draft/preliminary guidelines on the Application of the Competition Rules to Sport (unpublished memorandum), 15 February 1999.)

16. There is nothing unique about the organisation of football or, for that matter, of boxing in this respect and Mr Lewis makes the point that, if Mr Baker's anti-competitive argument is correct, it would be of much wider significance in the sense that other sports would be found correspondingly to be in breach.
17. The BBBC is a member of the EBU and its opposite number in Germany is the BDB – not the GBA, which is a separate commercial body.
18. Any national governing body is free to stipulate that its members should comply with its rules and, if that is not acceptable, people are free to operate independently either individually or in combination with others.
19. Moreover, where regulation by such a national body can be objectively justified, it is difficult to see how it could be unlawful. There is now a detailed methodology available as to how the Commission will apply competition rules in the sports context:

Step One. Is the sports association to be considered an "undertaking" or "association of undertakings"? This depends upon its carrying out an economic activity, in the absence of which Arts 101 and 102 have no application.

Step Two. Does the rule restrict competition (Art 101) or constitute abuse of a dominant position (Art 102) having regard to the rule's overall context and its objectives? Is any such restriction inherent in the pursuit of its objectives? Is it proportionate to that objective?

Step Three. Is trade between Member States affected?

Step Four. Does the rule fulfil the conditions of Art 102?

This methodology was framed in accordance with the ECJ judgment in Meca-Medina v European Commission [2006] ECR 1-6991.

20. The rules with which I am concerned are Regulations 4.12(b) and 5.15, as set out above. (Rule 4.12 was amended in September 2013.) Those rules are inherent in the organisation of the sport. As was explained in the BBBC decision on liability of 10 December 2013, at [58] et seq, the objectives " … are to ensure that the sport is conducted fairly, including the need to safeguard equal chances for the boxers, boxers' health, the integrity and objectivity of the sport and the ethical values in the sport". Reference was made also to the words of Sir Robert Megarry in McInnes v Onslow Fane [1978] 1 WLR 1520, 1535F, where he recognised that the BBBC promoted a public interest by seeking to maintain high standards in a field of activity which otherwise might easily become degraded and corrupt. (Incidentally, I would not accept Mr Mercer's unqualified submission that "validity must be for the court in any event" (emphasis added). These were matters the Tribunal was at least entitled to consider in the course of its deliberations – even though the court may well have the final word.)
21. Mr Baker himself admitted to the Board that it does indeed have high standards. Evidence was given both in November 2013 and before me by Mr Robert Smith to the effect that these particular rules were inherent in the organisation of the sport and that they were in place, in particular, to safeguard boxers' health and other sporting and economic interests. The BBBC's policy, he affirmed, has been to grant permission under Reg 5.15 and to recognise a regulatory body under Reg 4.12(b) unless there were good reasons not to do so (i.e. reasons based upon other rules, regulations and standards, the safety of participants, those attending, the interests of boxing and the public interest). The Board concluded (at [63]) that, even if the criteria for the application of Arts 101 and 102 were made out, these regulations, as applied by the BBBC on a qualitative basis, did not fall within the prohibitions laid down. Reference was specifically made to the Meca-Medina case, at [42]-[45], upon which the Commission's detailed methodology is now based.
22. Against that wider background, I am persuaded that the broadly based challenge to the regulations does not give rise to a serious question to be tried.
23. I should add that I have discounted the expert opinion of Mr Keyworth, whose evidence was served shortly before the hearing on behalf of Mr Baker. He is an economist who expresses a personal opinion on the very issues which I have to resolve in accordance with well established legal principles.
24. Having rejected the submission that any disciplinary action must necessarily have been unlawful, I now proceed to consider the way in which the regulations were applied by the Tribunal. As Mr Lewis submits, there was nothing disproportionate in the application of the rules to the facts of this case. In particular, the decision was not based merely on a blanket ban or any arbitrary rule of thumb. There were quite specific concerns which emerged from the Board's adjudication as the grounds for finding Mr Baker guilty of misconduct. For example, whilst he purported to regulate a promotion at York Hall on 27 April 2013, on behalf of the GBA, it was found that the GBA were brought in at the last minute to sanction (i.e. "rubber stamp") the promotion and allowed boxers to take part in contests without checking their documents, and in particular their medical records to ensure that they were fit to box.
25. It was concluded that, on any basis, it had not been possible for the GBA to organise the April 2013 promotion as a regulatory body should. It was also concluded that it was wholly inappropriate for Mr Baker to act as the regulatory body, having at the material time "various financial interests in boxing" of which instances were cited. He himself agreed that he did not check the medical records of any of the boxers. He "simply took the word of their managers".
26. In relation to one boxer, Iain Weaver, he said that he understood that he had obtained a licence from the Malta Boxing Commission and that "he must have satisfied them with his medical status". He did not ask to see any documents to satisfy himself that he was fit to box. In any event, he must, or should, have known that the Malta Boxing Commission was a discredited organisation not recognised by the BBBC.
27. So far as the 4 October promotion was concerned, "a similar picture emerged". It was found that, while Mr Baker effectively regulated the promotion, this was "wholly inappropriate". He took no reasonable steps to ensure that the boxers were fit to box.
28. Decisions of this kind are dependent on knowledge and experience and the court should be slow indeed to substitute its own opinion for that of expert decision makers, whether in relation to findings of fact or matters of judgment and proportionality. I certainly cannot be satisfied that any of those decisions fell outside the range of possible decisions open to the Board – nor indeed even that there is a serious issue to be tried to that effect.
29. I see no reason to accept the suggestion made by Mr Mercer that the BBBC's expressed concerns were not genuine or that they were only thought up ex post facto in an attempt to put forward (in effect dishonestly) an "objective justification". It is at this stage bare assertion.
30. I would conclude that Mr Baker is unable to fulfil the first requirement for obtaining an interim injunction in accordance with American Cyanamid, whether in relation to his challenge to the validity of the relevant regulations or to the decision making process.
31. Mr Baker says that it is necessary for him to have his licence restored (on a temporary basis) in order to stem the damage flowing to his professional reputation. In so far, however, as the reputation has been damaged by the actions of the BBBC, it surely must have been as a result of the findings in December and/or the withdrawal of the licence in consequence. That is hardly going to be reversed by a merely temporary restoration. People are more likely to focus on the outcome of the appeal process which is known to be pending. Some boxers have already apparently transferred to other managers, but there is no reason to suppose that a temporary restoration would cause any of them to return at this stage.
32. In so far as the withdrawal of his licence may cause Mr Baker financial damage between now and the outcome of the appeal, that in my view can be adequately compensated, should it prove necessary, by an award of damages. By contrast, any undertaking as to damages from Mr Baker is largely irrelevant to meeting the BBBC concerns as to how he might conduct himself if the licence were now to be restored.
33. Another factor relied on by Mr Lewis was that of delay. It is true that there was a considerable lapse between the decision on the sanction, on 11 February 2014, and the commencement of these proceedings on 27 May. The original date for the appeal (29 May) was postponed in early April until the end of July, but nevertheless the delay, even before that change occurred, militates to some extent against the granting of equitable relief, but it is not in my view determinative.
34. Mr Baker remains unrepentant and would wish to behave in a similar way in respect of any promotions that may occur before the appeal is heard or concluded. In the view of the BBBC, that would not be in the interests of the sport generally or of those likely to become involved. Accordingly, submits Mr Lewis, the balance of convenience lies firmly in maintaining the status quo.
35. Reliance was placed by Mr Mercer on what he called the "default position" provided for in Reg 28.9, whereby a sanction does not come into effect pending appeal unless ordered to do so. There is a discretion so to order which will be exercised, as here, when the BBBC is of the view that the holding of the licence over the interim period might damage third parties (e.g. boxers) or the sport in general. In view of Mr Baker's attitude, to which I have already referred, the Board was plainly entitled to take the view that the sanction should be of immediate effect. It is not for the court to second-guess that specialist judgment. There is certainly nothing irrational about it.
36. Those are my reasons for refusing interim relief, on the merits of the application, both in relation to the December decision and the ruling on sanction dated 11 February of this year.
37. As I have already noted, one argument raised by the BBBC was based on the Arbitration Act 1996. It has applied for a stay of these proceedings on the basis that the pending appeal before the Stewards constitutes an arbitration, and that it should be allowed to take its course. This would require consideration of the characteristics identified in Kaneria as to whether any given body should be substantively regarded as an arbitral body or not. In the light of Mr Robert Smith's evidence, Mr Lewis would submit that the Stewards should indeed be so regarded. Alternatively, he argues that there is an enforceable contractual obligation to go through, at least in the first instance, the disciplinary procedure laid down in the BBBC Regulations and that any challenge through court proceedings would for that reason be premature.
38. In the circumstances, it is not necessary to determine which of the two arguments should prevail, since it would follow in either case that these proceedings are premature. I take the view that before any legal challenge is mounted to the disciplinary procedure under the Regulations, that procedure should be allowed to come to its natural conclusion, so that any such attack can be made on the procedure taken as a whole: see Modahl v British Athletic Federation and Calvin v Carr, cited above.
39. There is no special factor so far as concerns the claim for the licence to be restored immediately. Although it is not so expressly stated in the Regulations, I have no doubt that the Stewards would have the relevant power in appropriate circumstances. So much is clear from Reg 28.10, which confers the power to "… confirm or vary any such decision or order made by the Tribunal". Since the Tribunal has the power under Reg 28.9 to order that a sanction should take effect immediately, it follows that such an order may be varied by the Stewards. It would thus have been appropriate, in the first instance, to apply for interim restoration to them rather than resorting to court proceedings. It is true that this has not been suggested at any stage in correspondence on behalf of the BBBC, but that does not affect the jurisdiction or legal position.
40. While I agree that these proceedings are premature, on one basis or another, I nonetheless thought it right to consider the application for an interim injunction on its merits, as the parties invited me to do. Until the pending appeal is resolved, the application for a stay under the Arbitration Act can be adjourned and no further steps need be taken in these proceedings.