Hearts and Partick Thistle successfully petition for documents relevant to SPFL rules change
Two Scottish football clubs have succeeded in their petition for the recovery of documents relevant to orders they sought in terms of the Companies Act 2006.
Heart of Midlothian Football Club plc (Hearts) and The Partick Thistle Football Club Ltd (Partick Thistle), alleged that the Scottish Professional Football League Ltd (SPFL) had conducted their affairs in a manner that was unfairly prejudicial to them.
The case was heard in the Outer House of the Court of Session by Lord Clark, who issued a summary form decision note in light of the urgency of the case.
On 15 April 2020, a written resolution altering the rules of the SPFL was passed by its member clubs. This alteration resulted in the relegation of Hearts and Partick Thistle from their respective divisions and the promotion of Dundee United, Raith Rovers and Cove Rangers from their respective divisions. The latter clubs opposed the petition along with the SPFL.
The petitioners sought to suspend the written resolution insofar as it related to relegation and promotion, interdict the SPFL from implementing those terms, and reduce the written resolution in that regard.
The petitioners also sought the recovery of documents relevant to the decision made by the SPFL. The respondents submitted that the documents sought by the petitioners were not relevant, and that the motion to recover them was premature.
The respondents filed a motion to dismiss the petition, stating that member clubs were bound by the Scottish Football Association’s articles of association not to raise court proceedings without the consent of the board, which was not asked for or granted. Lord Clark held that this could not be dealt with at this stage due to the complexity of the issues.
The respondents’ second motion was to sist the proceedings to allow the dispute to go to arbitration as per section 10 of the Arbitration (Scotland) Act 2010. The SFA’s articles of association required that members settled disputes relating to association football by arbitration proceedings. The petitioners submitted in response that nothing in the articles referred this matter to arbitration.
English law of assistance
In his opinion, Lord Clark addressed the authorities on the referral of cases to arbitration, saying: “Given that the Scottish legislation is modelled on the English provisions (and indeed is very similar in its wording) I regard the English case law as being of assistance. These authorities found strongly upon the principle that if any responses given to substantive claims are subject to the clear qualification that a sist for arbitration is requested, then no step has been taken which should bar the request for arbitration. Applying that interpretation, the argument for Hearts and Partick Thistle on this point must fail.”
He continued: “I do not accept the submission for Hearts and Partick Thistle that there is nothing in the SPFL’s articles of association which refers this matter to arbitration. In terms of articles 2 and 196 of the SPFL’s articles, Hearts and Partick Thistle are contractually obliged to comply with the SPFL’s rules. By virtue of rule B4 of the SPFL’s rules, Hearts and Partick Thistle have to comply with the SFA’s articles of association. In my view, it is clear that all of the member clubs and the SPFL have agreed that the articles of the SFA, the articles of the SPFL and the rules of the SPFL are binding upon them.”
For these reasons, Lord Clark granted the respondents’ motion for a sist pending the outcome of arbitration.
Proper to respect the tribunal’s authority
Before granting the sist, Lord Clark also dealt with the motion for the recovery of documents. He noted that, by default, rule 28 of the Scottish Arbitration Rules allowed an arbitration tribunal to grant disclosure of documents, but that this rule could be excluded by the parties.
He went on to say: “It is proper for this court to respect the powers and duties of the arbitration tribunal and to leave it to that tribunal to deal with the evidential, procedural and substantive matters in this dispute. However, it is not entirely clear whether rule 28 is excluded. More importantly, this case arises in unprecedented circumstances. We are now just 28 days away from the start of the football season and in my view every effort must be made to resolve the dispute before then.”
He continued: “In these unprecedented circumstances, it is, in my view, open to me under the inherent jurisdiction of the court, to make an order for the recovery of documents. I do not accept the contention of [the respondents] that granting such an order is not competent; the issue is before the court. I have had full regard to the points made on behalf of those parties in opposition to the motion for Hearts and Partick Thistle for recovery of documents.”
On the relevance of the documents, he said: “I am satisfied that all of the documents that are identified are of potential relevance to the issues to be determined. These issues require to be determined with real expedition. The motion is not premature given the timing and the matters which are in dispute. Far from in way usurping or interfering with the tribunal’s powers, I am seeking to assist. I regard it as appropriate that I ensure that the parties and the arbitral tribunal are given full and proper disclosure of all material relevant to this claim.”
He continued: “Any issues of confidentiality can be dealt with in accordance with the normal practice of the court. Documents will be produced in an encrypted password protected file and if there is any legal issue that can be addressed before the court. Of course, any documents recovered will be subject to the restrictions as to their use which is made clear in the authorities.”
For these reasons, the petitioners’ motion for the recovery of documents was granted.
© Scottish Legal News Ltd 2020