In Sheffield United Football Club Ltd v West Ham United Football Club Plc - Lawtel 3.12.08 the Applicant claimed that, in breach of the rules of the Premier League, the Respondent had signed an Argentinean player, resulting in the Applicant being relegated at the end of the season.
The Applicant claimed damages from the Respondent in an arbitration pursuant to r.K of the Football Association rules. The arbitrators issued an interim award holding that the Applicant was entitled to recover damages from the Respondent for breach of contract. The amount of the damages was to be assessed at a further hearing. The Respondent filed an appeal from the arbitral decision to the Court of Arbitration for Sport (CAS) in Lausanne, Switzerland. The Applicant applied for an interim injunction pursuant to s 37 Supreme Court Act 1981 and s 44 Arbitration Act 1996 on the basis that the pursuit of an appeal to the CAS was a breach of the arbitration agreement and that the CAS had no jurisdiction to entertain any such appeal.
The Commercial Court held that the Applicant had a very strong argument that the effect of r.K 5(b) of the Football Association's rules, which provided for the award of the arbitral tribunal to be final and binding upon the parties, and the absence of a provision for an arbitral appeal was that an award of the arbitral tribunal was final and binding on the parties in the sense that the decision of the arbitral tribunal alone would finally and exclusively determine the issues between the parties. The jurisdiction of the CAS was to consider appeals against final decisions passed by members, but the decision of the arbitral tribunal was not a decision passed by the Football Association. The Football Association's rules did not provide any right of appeal to the CAS. It followed that the Applicant had a very strong case that the Respondent's recourse to the CAS was a breach of the arbitration agreement. At trial the burden would be upon the Respondent to show a strong reason why it should not be held to its contract. The remedy of damages was not regarded as an adequate remedy for breach of an arbitration clause. The Respondent was not entitled to a stay under s.9 of the 1996 Act. Therefore, the Applicant was entitled to the interim relief sought.