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RECLAIMING MOTION BY PARK'S OF HAMILTON (HOLDINGS) LTD AGAINST THE SCOTTISH FOOTBALL ASSOCIATON LTD AND ANOTHER FOR JUDICIAL REVIEW [2021] ScotCS CSIH_61 (20 October 2021)
URL: http://www.bailii.org/scot/cases/ScotCS/2021/2021_CSIH_61.html
Cite as:
[2021] ScotCS CSIH_61,
[2021] CSIH 61,
2021 GWD 36-472,
2021 SLT 1537
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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
[2021] CSIH 61
P639/21
Lord President
Lord Woolman
Lord Pentland
OPINION OF THE COURT
delivered by LORD CARLOWAY, the LORD PRESIDENT
in the Reclaiming Motion
by
PARK'S OF HAMILTON (HOLDINGS) LIMITED
Petitioners and Respondents
against
THE SCOTTISH FOOTBALL ASSOCIATON LIMITED
Respondents and Reclaimers
THE RANGERS FOOTBALL CLUB LIMITED
Interested Parties
for Judicial Review of a failure by the respondents to comply with their
Articles of Association, interdict and interdict ad interim
______________
Petitioners and Respondents: MacColl QC; Brodies LLP
Respondents and Reclaimers: Borland QC; BTO Solicitors LLP
Interested Parties: DM Thomson QC; Anderson Strathern LLP
20 October 2021
Introduction
[1]
The SFA reclaim (appeal) the interlocutor of the Lord Ordinary, dated 23 August
2021. He granted an interim interdict which prohibits the SFA from appointing an arbitral
2
tribunal in a dispute between the Scottish Professional Football League and Rangers,
without having first issued a Secretary's Notice to the petitioners. The issue is whether the
petitioners have a prima facie case based upon the SFA's Articles of Association.
Contractual Terms
[2]
The SFA's Articles of Association provides that "parties who are subject to the
jurisdiction" of the SFA must submit certain disputes to arbitration (Article 99.1).
Associated persons also agree to settle Football Disputes in that manner (Art 99.13). Both
these terms are defined. An associated person is someone who is "involved in Association
Football in Scotland under the auspices of or pursuant to a contract with a member"
(Art 1.1). A Football Dispute is "a dispute between or among members and/or any
associated person(s) arising out of or relating to Association Football" (Art 99.7). As a
generality, members or associated persons cannot take a Football Dispute to court
(Art 99.15). They can instead submit it to arbitration by lodging a Notice to Refer with the
SFA, and intimating it to the other party or parties to the dispute (Art 99.16). The Notice
should contain: a description of the dispute "and ... the parties involved"; details of where
and when the dispute arose; a note of the redress sought; and the names and addresses of
"the parties to the contract" (Art 99.16).
[3]
On receipt of a Notice to Refer, the SFA Secretary must send a notice to the referring
party "and to any other party or parties with an interest in the Dispute" (Art 99.19(a)). The
Secretary's Notice is to include: (i) a copy of the Notice to Refer; (ii) the Tribunal Candidate
List; (iii) a copy of Article 99; and (iv) an invitation to nominate, or agree to, the appointment
of arbitrators.
3
Facts
[4]
The petitioners specialise in the sale of new and used cars. They have a longstanding
commercial relationship with Rangers. This includes advertisement by Rangers of the
petitioners' business. A written contract has been in existence since June 2015. It was
renewed on 17 May 2021. The following month the SPFL entered into a sponsorship
contract with Cinch; a business concerned in the sale of second-hand cars. Previously,
Rangers had expressed their concerns to the SPFL that the terms of the two contracts might
conflict with one another. Subsequently, Rangers have refused: (a) to provide the SPFL with
the rights, facilities and properties required under SPFL's contract with Cinch; and (b) to
produce a copy of their contract with the petitioners.
[5]
The SPFL referred their dispute with Rangers to arbitration. In their Notice of
Referral, the SPFL seek an order to produce the contract between Rangers and the
petitioners. The substance of the dispute is whether the Cinch contract takes precedence
over Rangers' agreement with the petitioners. The SPFL maintain that Rangers are in breach
of their rules, notably rule 17, and seek an order requiring Rangers to put the name of the
sponsors (Cinch) on their players' shirts and on interview backdrops.
[6]
The Secretary's Notice intimating the arbitration was issued on 9 August 2021. It was
not sent to the petitioners. Their central contention is that they are a "party ... with an
interest in the Dispute" in terms of Article 99.19(a) and, as such, the Secretary requires to
issue them with his Notice. The SFA do not accept this.
Decision of the Lord Ordinary
[7]
The Lord Ordinary held that the petitioners' averments did disclose a prima facie case
that they were parties with an interest in the dispute. They could not be categorised merely
4
as persons who were interested in the outcome. They had a direct patrimonial interest. The
definitions of "football dispute" and "associated persons" could be widely construed, with
the result that Article 99 could apply to disputes between parties who were not members of
the SFA. It accorded with common sense and fairness that a party with a direct patrimonial
interest in a dispute should be entitled to be heard.
[8]
On the balance of convenience, the Lord Ordinary concluded that, if interim interdict
were granted, it was difficult to see what prejudice any party would suffer pending
resolution of the petition. Having regard to his assessment of the strength of the prima facie
case, and to the potential prejudice to the petitioners if interim interdict were not granted, he
held that the balance of convenience favoured them.
Submissions
SFA
[9]
The SFA submitted that there was no prima facie case, on the basis that the petitioners
were not parties with an interest in the dispute, because they were not: (i) members in terms
of the SPFL Articles; (ii) subject to the jurisdiction of the SFA; (iii) entitled to refer the
dispute to arbitration in terms of the SPFL Rules and (iv) parties to the contract between the
SPFL and the SPFL clubs. Taken cumulatively, these factors suggested that they were not
entitled to receive the Secretary's Notice.
[10]
The SFA advanced several other arguments in support of its position. Arbitration
was a private agreement between two or more parties (Lord Hope: Arbitration in Stair
Memorial Encyclopaedia (re-issue) para 2)). A third party could not intervene (The "Eastern
Saga" [1984] 2 Lloyd's LR 373 at 379) at least without clear wording. The petitioners were
third parties. In terms of section 11(1) of the Arbitration (Scotland) Act 2010, the decision of
5
the arbitrator would not be final and binding upon them. A legal or commercial connection
to Rangers was not sufficient to allow them to participate in the arbitration. The petitioners,
as third parties, would not be able to invoke an arbitration provision and seek to sist the
proceedings in terms of section 10(1)(b) of the 2010 Act.
[11]
The SFA was performing an administrative function when carrying out its role under
Article 99.19. They should not be required to engage in substantive legal and/or factual
analyses in relation to whether third parties might have an "interest" in the dispute. The
Lord Ordinary's over literal approach flouted common sense. It required the Secretary to
notify a person who was not a party to the contract. They would have a say in the
nomination of the arbitrator.
Petitioners and Rangers
[12]
The petitioners replied that the proper approach at the interim stage was "not so
much the absolute relevancy of the case as the seeming cogency of the need for interim
interdict", Burn-Murdoch, Interdict, at para 143 (affirmed in Highlands and Islands Enterprise v
CS Wind UK [2020] CSIH 48, at para [5]). It was not appropriate for the court to embark
upon a detailed assessment of issues of substantive law (Toynar v Whitbread & Co 1988 SLT
433, at 434). Only in a clear case would the appellate court interfere with an interim order.
[13]
The Lord Ordinary was correct to find that there was a prima facie case.
Article 99.19(a) did not place a restriction on who may properly be con sidered a party with
an interest. A person, whose patrimonial interests would (or might) be affected by any such
dispute, was such a party. Article 99.19(a) did not restrict those having an interest to
members of the SFA or associated persons. The petitioners were specifically named in the
Notice to Refer. The dispute was best resolved by all relevant parties being bound by the
6
arbitration, including both the petitioners and Cinch, since otherwise the excluded parties
may have to resort to litigation.
[14]
Rangers submitted that it was difficult to see what interest of the SFA had been
affected by the interim interdict, given that they were simply concerned with the
administration of the arbitration. It was open to the SFA to fix a substantive hearing in
order to address the merits expeditiously.
Decision
[15]
It is not now disputed that the balance of convenience favours the petitioners. The
focus is therefore on a single question; has a prima facie case been made out? At the interim
stage, it is not normally appropriate for the court to reach a definitive conclusion on the
merits of the petition. Nevertheless, in a case where all the facts are known, the point of
construction is well focused and the court has heard a full argument on the applicable law, it
may be of considerable benefit to the parties if the court felt able to express a preliminary
view (cf Reed Stenhouse (UK) v Brodie 1986 SLT 354, LJC (Wheatley), delivering the opinion of
the court, at 358).
[16]
It is, of course, correct to describe arbitration as a private process. A standard
arbitration clause in a commercial contract is unlikely to permit intervention by a third
party. Whether it does must depend on the particular wording of the clause. If it does
permit a third party to intervene, they will become a party to the arbitration and will be
[17]
A contract must be construed objectively, contextually, purposively, and in a manner
which accords with commercial common sense (Ardmair Bay Holdings v Craig 2020 SLT 549
(Lord Drummond Young, delivering the opinion of the court, at para [47] et seq).
7
[18]
Article 99.1 refers to "parties who are subject to the jurisdiction of the Scottish FA".
That is in relation to the power to refer disputes to arbitration, which only a member of the
SFA or an associate has. The petitioners are not attempting to refer the dispute to
arbitration. They wish to participate in a prospective arbitration process. It is in relation to
that process that the phrase a "party ... with an interest in the Dispute" appears relative to
the potential participants. Article 99.19(a) does not restrict intimation of the Secretary's
Notice to parties who are subject to the SFA's jurisdiction.
[19]
The words of Article 99.19(a) should be given their ordinary meaning in the context
in which they occur, having regard to the Article's purpose and common sense. Applying
that meaning, both the petitioners and Cinch have an interest in the dispute between
Rangers and the SPFL. The phrase occurs in the context of an arbitration clause whose
purpose is to prevent disputes relating to football and football clubs being litigated in the
public forum. The airing of such disputes may carry a reputational risk to the game and its
participants which the SFA, as the supervisory body, will be keen to avoid. These disputes
may not always be confined to members of the SFA, the SPFL or associated persons. A
clause which permits third parties with an interest to enter the arbitration process, and
thereby be bound by it, accords with common sense. It carries with it the prospect of the
whole dispute being resolved in one process rather than being partially settled but with
satellite litigation to follow. The third parties cannot be compelled to agree to arbitration,
but they may be anxious to do so.
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[20]
There is at least a prima facie case. It is impossible to find fault in the Lord Ordinary's
approach. The reclaiming motion must be refused.
