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FULHAM FOOTBALL CLUB (1987) LTD V. RICHARDS

Fulham Football Club (1987) Ltd v. Richards [2012] 1 All E.R. (Comm) 1148

ISSUE:

  • Whether the arbitration clause contained in the FAPL and FA Rules should be construed so as to exclude the claims for unfair prejudice which fall within Section 994 of the Companies Act, 2006?

RULE:

  • The disputed issues are covered by the arbitration agreement, provided that the relief requested by the party is not one that would bind third parties or one that an arbitrator could not give owing to public policy concerns, which should render the arbitration agreement void.

FACTS:

  • A disagreement emerged when Tottenham Hotspur Football Club (THFC) and Fulham Football Club (FFC) were trying to sign Peter Crouch from Portsmouth Football Club.
  • According to FFC, Sir David Richards, the Chairman of the Football Association Premier League (FAPL), interfered with the transfer discussions and made it easier for the player to transfer to THFC, violating the FA Rules and the FAPL’s Articles of Association.
  • Section 994 of the Companies Act of 2006 gives members of a company the right to petition the court on the grounds that the company’s affairs are being conducted in a way that is unfairly prejudicial to the interests of all or some of its members. This is what FFC sought to do when it filed an unfair prejudice petition with the courts.
  • FFC and FAPL were parties to the FAPL Rules, which contained arbitration clauses; the disagreement should be resolved through the arbitration process outlined in the contract.
  • An injunction was sought by FFC to restrain Sir David Richards from participating in future transfer negotiations, together with an order to cease acting as Chairman or director of the FAPL.
  • The High Court, at first instance, granted the stay of proceedings. FFC appealed

HELD:

  • The Court of Appeal dismissed the appeal.
  • The court further stated that the problems at issue are covered by the arbitration agreement, provided that the relief requested by the party is not one that would bind third parties or one that an arbitrator could not give owing to public policy considerations, which should render the agreement void.
  • In this instance, the Court of Appeal determined that the petition’s disputes fell within the scope of the arbitration agreement and that an arbitrator may also provide FFC the relief it was seeking.
  • Additionally, the Court of Appeal mentioned in passing that the arbitrator might determine whether the underlying claim of unfair prejudice was made out and then authorise the complainant to seek relief from the courts in circumstances where a third party may be bound or where the remedy sought cannot be provided by an arbitrator.