Man City threaten further legal action and rubbish Premier League ‘victory’ claims

Manchester City have accused the Premier League of “misleading” clubs and warned of more potential legal action amid bitter recriminations after their associated-party transaction (APT) tribunal battle.

The civil war inside England’s top tier escalated as the champions accused the league of “several inaccuracies” in its “peculiar” summary of the tribunal’s findings. Further legal disputes could ignite if clubs now push through swift amendments to the rules on APTs, the club’s head of legal is now suggesting.

City’s general counsel, Simon Cliff, outlined the club’s dismay in a letter sent to all other top-tier clubs on Monday evening, hours after both the club and the league claimed victory.

Earlier, the league had categorically rejected City’s claim of a seismic triumph, conceding only that the ruling showed a “small number of discrete elements” do not comply with competition law.  “These elements can quickly and effectively be remedied by the League and clubs,” the league added, with a meeting of shareholders to rectify the rules pencilled in for this month.

Cliff wrote to the other 19 clubs in an effort to dismantle the lengthy league statement, saying its summary of the panel’s award was “not correct”.

“We will be writing separately about this to the PL but in the meantime, given the findings in the award, this is the time for careful reflection and consideration by all clubs, and not for a knee-jerk reaction,” Cliff then writes, warning against Premier League plans to quickly amend APT rules in apparent line with the tribunal’s findings.

“Such an unwise course would be likely to lead to further legal proceedings with further legal costs. It is critical for member clubs to feel that they can have trust in their regulator.”

Cliff tells clubs that the Premier League’s “summary is misleading and contains several inaccuracies”.

“Of even greater concern,” Cliff adds, “is the PL’s suggestion that new APT rules should be passed within the next ten days.”

‘Process was ill-thought-out’

Telegraph Sport reported on Monday how further tensions were simmering over a meeting next week of clubs, with City opposing plans to rule out applying fair market tests to shareholder loans retrospectively in the three years since APT rules were introduced.

Those with understanding of the club’s position suggest now applying 2021-24 sponsorship deals to fair market value tests but not shareholder loans in that period would be “discriminatory” in the wake of the arbitration verdict. The likes of City’s bitter rivals Arsenal are among teams to have benefitted from such loans in recent years.

Abu Dhabi-owned City launched an unprecedented arbitration claim of “discrimination” over rules governing market value on sponsors and transfers in February. A two-week arbitration hearing was heard in private in June, with up to 60 lawyers combined inside the room.

In contrasting interpretations of a 175-page judgment finally made public on Monday, the league claimed it had “endorsed the overall objectives, framework and decision-making of the APT system” while City also claimed they had “succeeded”.

Cliff now writes: “When the PL consulted on and proposed the original APT rules in late 2021, we pointed out that the process (which took several weeks) was rushed, ill-thought-out and would result in rules that were anti-competitive. The recent award (conclusion of the panel) has validated those concerns entirely.

“The tribunal has declared the APT rules to be unlawful. MCFC’s position is that this means all of the APT rules are void, and have been since 2021.

“In recent correspondence, the PL agreed with MCFC that this is an issue which will need to be resolved by the tribunal. It is therefore remarkable that the PL is now seeking to involve the member clubs in a process to amend the APT rules at a time when it does not even know the status of those rules.”

Details in the findings expose a major gulf between clubs, however. Witnesses for the Premier League included Manchester United, Liverpool, Arsenal, Tottenham, Brighton and West Ham. Everton, Newcastle and Chelsea provided some support for City, meanwhile, and Nottingham Forest are also said to be sympathetic to the champions’ cause.

In his message to all the clubs, Cliff states the ruling “does not contain an ‘endorsement’ of the APT rules, nor does it state that the APT rules, as enacted, were ‘necessary’ in order to ensure the efficacy of the league’s financial controls”.

“It is not correct that the tribunal’s decision identifies ‘certain discrete elements’ of the APT rules that need to be amended in order to comply with competition and public law requirements,” he adds.

In responding to the Premier League stating that “Manchester City was unsuccessful in the majority of its challenge”, Cliff writes: “This is a peculiar way of looking at the decision. While it is true that MCFC did not succeed with every point that it ran in its legal challenge, the club did not need to prove that the APT rules are unlawful for lots of different reasons.

“It is enough that they are unlawful for one reason. In the event, the tribunal found the APT rules are unlawful for three different sets of reasons.”

Telegraph Sport has approached the Premier League for comment.

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