Manchester City rivals line up damages claims over Premier League charges

Exclusive: Six-year limitation on breach of contract claims could force clubs to open legal proceedings in search of damages

The Premier League’s civil war will enter a new phase over the next month when Manchester City are expected to receive legal notices from rival clubs that reserve their rights to seek damages.
Claims for breach of contract generally have a six-year limitation and, with allegations of Manchester City rule-breaking emerging in Der Spiegel in November 2018, there is a feeling inside the league that clubs must act to reserve their rights while football’s so-called ‘trial of the century’ continues.
City have always denied breaking any rules but, such has been the time it has taken for the Premier League to investigate and bring charges, it is understood that clubs are taking legal advice on the issue before deciding how to proceed.
Any eventual arbitration between Premier League clubs is private but City will soon have a much better idea of who intends to seek damages if an ongoing independent commission finds serious wrongdoing in its investigation of more than 100 alleged rule breaches.
“It is not something clubs would want to do before knowing the outcome of the commission but they may very well feel that they have no choice,” said one lawyer, who has advised Premier League clubs. “Clubs who have been competing with City for major trophies and European qualification would potentially have most at stake but it all ultimately depends on what the commission finds and the result of any appeal, so this could go on for many months yet.”
A reservation of rights letter is typically served where a party has become aware of facts which may amount to breach of contract, but needs time to investigate and consider its options, and wishes in the meantime to reserve its rights.
The 1980 Limitation Act sets out a six-year period from being aware of any potential breach with reasonable diligence. It is a point in time that could be open to interpretation given City’s consistent denials and how allegations first surfaced via Der Spiegel’s reports of the Football Leaks documents on November 5, 2018.
City say they have “irrefutable evidence” to support their innocence over alleged breaches and that they “look forward to this matter being put to rest once and for all.”
The hearing – which concerns Premier League rules relating to financial information, acting in good faith and providing information – began last month in St Paul’s and is expected to last around 10 weeks. It follows a separate arbitration tribunal that heard City’s challenge over the associated party transaction (APT) rules in June, and for which findings were published by the two sides this week.
With both the league and City continuing to claim victory, executives from both sides are understood to have written to the tribunal panel to gain full clarity on the status of the APT regulations. The three-man panel, all retired senior judges, are expected to issue further written clarification in days, if not weeks. However, it is unlikely there will be any definitive response prior to next Thursday’s emergency meeting to discuss the consequences for clubs.
The war between City and the league escalated after the club sent an explosive email to the other 19 clubs claiming the top tier summary of findings contained “inaccuracies” and was “misleading”. Rivals have been taken aback by the letter, however, accusing City of attempting to seize control of the competition.
The APT rules seek to ensure that commercial deals between clubs and entities linked to their ownership are done at fair market value (FMV), to avoid such deals being artificially inflated to boost revenue.
City argue the APT rules are all void because the judgment found certain aspects of them to be in breach of competition law. The Premier League’s position is that the judgment was on the whole an endorsement of the APT rules and the principles behind it, and therefore only those aspects found in breach need revising.