Man City's case against the Premier League (PL) re the Associated Party Transaction (APT) rules.
A lot has been written about this - some of it hyperbolic and not entirely accurate. Some headline thoughts below:
⚫ Man City (MC) will, and should be, the happier of the two sides. Although the vast majority of MC's challenges on competition law and procedural unfairness were not upheld by the Tribunal, MC is right to say it only needed to succeed on one ground, which it has (indeed it succeeded on three grounds as explained below).
First, the Tribunal has found that the APT rules (introduced in December 2021) and the Amended APT rules (introduced in February 2024) are unlawful because they breach competition law. This is on the basis that they exclude from their scope shareholder loans provided at non market rates (e.g with no or low interest rates). The Tribunal found that the shareholder loan exclusion amounts to a sufficient degree of harm for it to be categorised as a restriction by object i.e. it has found that the object of the rules was to “prevent, distort or restrict” competition, as opposed to finding the lesser charge that this was the “effect” of the rules.
Second, the Tribunal has found that the APT rules and the Amended APT rules are procedurally unfair because they preclude a club having access to, and therefore ability to comment on, comparable transaction data relied upon by the PL before the PL Board determines whether a transaction is at Fair Market Value.
The third ground on which MC succeeded was in relation to the First Abu Dhabi transaction. The Tribunal found that the decision was reached in a procedurally unfair manner in that the PL did not provide MC, prior to its Final Determination, with the Databank transactions entered into by other clubs, which the PL Board referred to in its Final Determination.
⚫ So what happens next? The Tribunal has reserved its jurisdiction to grant injunctive relief and damages to MC. There will need to be a further hearing in which the parties have the opportunity to make submissions on this. All PL Board decisions made since December 2021 on APTs will likely need to be revisited. The PL will need to amend its rules to expressly include shareholder loans. It remains to be seen whether this is to be from December 2021 or just going forwards. Whichever route the PL takes, it appears likely further legal challenges will follow (e.g. clubs with high amounts of shareholder loans (often interest free), may find themselves charged with breach of the Profitability and Sustainability Rules if those loans need to be recalculated at commercial rates of interest at say 8% pa).