Newcastle United officially underline Saudi takeover intentions as legal team FAILS in bid to change arbitration panel

Newcastle United have lost the first skirmishes in their owners’ and directors’ test battle against the Premier League – but they have reaffirmed they are determined to win the takeover war.

Friday, 5th March 2021, 1:39 pm
Updated Friday, 5th March 2021, 2:05 pm

The Magpies have confirmed via a statement they’ve lost two specific points in relation to the club’s arbitration hearing against the Premier League

The first of which was a request for the hearing to be made public, that was denied. And the second was in relation to the chairman of the hearing panel – Michael Beloff QC – which was due to sit imminently, over what the club viewed as a conflict of interest. A High Court judge ruled against this.

Newcastle United’s legal team may yet appeal the second point.

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Newcastle United's English owner Mike Ashley (R) watches his side lose the English Premier League football match between Newcastle United and Brighton and Hove Albion at St James' Park in Newcastle upon Tyne, north-east England on September 20, 2020.

As things stand currently, a hearing panel has been named, if not fully agreed upon, and the actual arbitration process can theoretically begin in earnest.

Despite these two blows, the club have confirmed their desire to push ahead with the Public Investment Fund of Saudi Arabia, Reuben Brothers and PCP Capital Partners takeover.

In their statement they say: “The Club is committed to the speedy and fair determination of its claim so that the proposed takeover can go ahead as soon as possible.”

The statement continues: “The Club shall continue to actively pursue its claim in the arbitration and calls on the EPL to resolve the matter in a speedy and transparent way that does not prevent the substantial investment into English football, and the North East region, that the proposed takeover would bring.”

These words pour cold water on suggestions the takeover process is on hold or the club has been taken off the market by Mike Ashley.

One point the Magpies’ legal team – fronted up by Nick De Marco and Shaeed Fatima – did win was in relation to this judgement being made public, even if the future hearing would not be.

They claim the Premier League didn't want to make the judgement public which United claim is "consistent with EPL’s lack of transparency over the takeover."

And as a result of winning this point, United have been able to explain in detail the exact nature of the arbitration.

Their statement reads: "The Club’s case is that arbitration is wider than definition of ‘Director’ & part of the Club’s challenge is to lawfulness of EPL’s approach when considering takeover."

As well as explain, on public record, the issues with the test application in 2020. They explain: "the EPL decided that the KSA controlled the PIF and was therefore a ‘Director’ under its Rules."

They continue: "The Club disputes this analysis."

Newcastle United wanted to change the chairman of the panel on grounds of ‘apparent bias’, which apparently has a lower burden of proof.

The chairman has, according to the statement, worked with Premier League representatives Bird & Bird previously, as well as having provided confidential advice to top flight on changes to their ODT in 2017.

Shortly after, they say, "rules were changed to prevent foreign owner involved in alleged broadcasting piracy from passing test."

The arbitration panel is made up of Michael Beloff QC, Lord Neuberger & Lord Dyson. Newcastle selected one, the Premier League another, while the other was selected independently.

Newcastle United argue they want the hearing, and its result, to be transparent and above board, which they fear may not be the case with what they see as a biased chairman, and subsequently, panel.

The arbitration panel chair was asked to step down by Newcastle, when legal team were presented with potential conflicts evidence, but he refused, according to the club.

The club then report the chair privately asked the Premier League’s legal teams if he stood step down, which goes against the rules of arbitration, they say.

The judge was critical of this 'error of judgement' but didn't agree a change in the panel make-up was necessary.

Finally, Newcastle United have called for the "need for the dispute to be determined by way of a fair process".

No timescale has been set on any appeal, when the hearing will take place, or conclude.

When contacted by the Gazette the Premier League issued a “no comment” response.

Newcastle United statement in full

Today the High Court handed down judgment in NUFC’s application to have the Chairman of the Arbitration Panel under the Premier League’s (‘EPL’) Rules removed from hearing its claim concerning the proposed takeover of the Club. The Club asked for the Chairman to be removed on the ground of apparent bias.

The Club made the application because two weeks after the Chairman had been appointed the lawyers representing the Premier League, Bird & Bird, disclosed information that the Club had previously been unaware of. In particular, Bird & Bird disclosed that the Chairman had provided confidential advice to the EPL in 2017.

Although the advice was not provided to the Club, the Club was informed that the Chairman had advised the EPL on amendments to its ‘Owners and Directors Test’ (‘OADT’) in Section F of its Rules. Shortly after the Chairman provided that advice in 2017 the Rules were changed to prevent a foreign owner involved in alleged broadcasting piracy from passing the test.

This information concerned the Club given the following context: in a much publicised letter to EPL clubs in April 2020, BeIN Sports called for the EPL to “strictly apply” the OADT to prevent the Saudi sovereign wealth fund, PIF, from being involved in the takeover of the Club because BeIN alleged that the Kingdom of Saudi Arabia (‘the KSA’) was involved in broadcasting piracy. Later that year, the EPL decided that the KSA controlled the PIF and was therefore a ‘Director’ under its Rules. The Club disputes this analysis and brought an arbitration to reverse the decision. As today’s Judgment records, the Club’s case is that the arbitration is wider than simply the definition of ‘Director’ and part of the Club’s challenge is to the lawfulness of the EPL’s approach when considering the takeover.

The Chairman had also failed to disclose, when he was appointed, that he had previously been appointed by Bird & Bird and, in the last 3 years, had been an arbitrator in 12 cases involving Bird & Bird. When challenged by the Club, prior to the High Court claim, the Chairman did not agree to step down. The Club’s concerns were heightened when he then engaged in unilateral communications with Bird & Bird about the Club’s challenge, which is expressly against the EPL arbitration rules. In his private emails with the EPL’s lawyers he asked if they wanted him to carry on as Chairman, and he later explained that if they had asked him to step down he would have done so. The private email exchange was only disclosed after Bird & Bird suggested it should be.

Although the Court was critical of these communications, describing them as an “error of judgment” the Court refused the Club’s application to remove the Chairman on grounds of apparent bias.

The Club is disappointed with the Court’s judgment on this issue. As noted at the end of the Judgment, the Club submitted that the Judge did not address all of the Club’s arguments. The Club is committed to the speedy and fair determination of its claim so that the proposed takeover can go ahead as soon as possible. However, it felt it had to make this application given the need for the dispute to be determined by way of a fair process. The Club is considering whether or not to pursue an appeal.

The Club argued for the hearing to be in public but lost on that argument. The Club also wanted the Judgment to be published, even though it was dissatisfied with the outcome. Meanwhile, the EPL attempted to prevent it from being published at all. The EPL said that if it was published it should be heavily redacted and anonymised so that readers would not be able to identify the dispute. Unfortunately, this is consistent with the EPL’s lack of transparency over the takeover. The Club won on this point. The Judge rejected the EPL’s arguments and said there was a “public interest” in publication of the Judgment. The Club welcomes the fact that at least its supporters, and the wider public interested in the takeover and the dispute, will now be able to have some information about the process.

The Club shall continue to actively pursue its claim in the arbitration and calls on the EPL to resolve the matter in a speedy and transparent way that does not prevent the substantial investment into English football, and the North East region, that the proposed takeover would bring.

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