The following post is (a) technical and (b) hypothetical. I suspect that nobody will go down these roads to get access to the 5-way Agreement. Maybe old-fashioned investigative reporting will get hold of the executed copy. However, as there are practical reasons why it being published would be beneficial, that probably means that it will stay hidden!
The “Holy Grail” of Scottish football is, for now anyway, the famous 5-way Agreement. This notorious document was agreed between the Scottish Premier League, Scottish Football Association, Scottish Football League, RFC 2012 PLC (in liquidation) and Rangers Football Club Ltd. Like the Holy Grail, it has been much spoken of, but never seen, except by a select few.
It provided the pathway for “Rangers” to enter Scottish football after the decision of the SPL to refuse to approve the transfer of SPL share from oldco Rangers to newco Rangers. The 5-way Agreement smoothed the path of Rangers to SFA membership.
Despite it being covered and discussed at great length in the press, on radio and TV, and in blogs and message boards, the terms of the Agreement have never been published. On assumes that commercial confidentiality is offered as a reason for this. Of course there are confidential details – but the impression has been given that even the members of the football bodies – the clubs – have not seen the terms.
The management of each body has authority to conclude such an agreement – there is no suggestion it was ultra vires – and there was no requirement for each organisation to approve the deal.
One of the key clauses in the Agreement is that by which newco accepted responsibility for oldco’s “football debt”. What does that mean?
There are various possibilities.
It could mean only the debt owed to other football teams when Rangers entered administration.
It could refer to any debt owed, or which becomes owed, by oldco in relation to football activities.
It could extend to fines imposed on oldco for breaching rules.
It could go as far as binding newco to cover awards of damages made against oldco for “football wrongs”.
In it he suggested, based on information from a sports lawyer, that clubs which had been financially harmed by Rangers breaking rules regarding disclosure, as determined by the Nimmo Smith Commission, could take action against oldco under SFA/SPL disputes procedures.
As the lawyer points out, the case would be against the oldco and not the newco. Whether it would be worthwhile pursuing a case would depend on the terms of the 5-way Agreement.
In addition, although perhaps a more remote claim, sponsors could potentially take action against oldco, in a similar way to the proposed legal actions by various companies against Lance Armstrong. There could also be the possibility (remote however) of a supporter of an aggrieved team taking a civil action on the basis that the contest they were paying to see was rendered unfair by oldco rule breaking.
(The point of this piece is not to consider the possibility of success of such an action but whether there are ways in which disclosure of the 5-way Agreement could be forced as part of, or as a preliminary to, a claim. I am not suggesting that such an action would be used as a device to disclose the Agreement.)
As Phil’s piece mentions, though not in these terms, there is no res iudicata arising from the Nimmo Smith Commission. This means, simply, that the decision of the Commission, whilst persuasive in relation to any future arbitration, Commission or court hearing, is NOT binding.
Now, any of the parties mentioned above would want to know, prior to raising a complaint under the SFA/SPL process, or a court action, if their claim was one newco might have to meet, under the 5-way Agreement.
(I will also pass over just now whether the 5-way Agreement could provide legally enforceable rights of recovery to a third party, not a member of the various football bodies, and not party to the Agreement.)
So how to get hold of the Agreement?
Where the process is an arbitration, which would apply in a dispute between another football club and oldco, the Arbitration (Scotland) Act 2010 contains the rules of procedure and these give the arbiter the power to order disclosure of any relevant documents. However, to get to that stage, an arbitration needs to have been commenced.
It is possible to seek production of the Agreement in advance of a court action, by using the procedure under the Administration of Justice (Scotland) Act 1972.
Section 1 of the Act confers on the Court of Session and the sheriff court power to make various orders before commencement of proceedings including an order for the inspection, photographing, preservation, custody and detention of documents which appear to the court to be property as to which any question may relevantly arise not only in any existing civil proceedings before that court but in civil proceedings which are likely to be brought, and to order the production and recovery of any such property.
Before the court may grant the order it is necessary for the applicant to show that civil proceedings are likely to be brought, and that in such proceedings questions may relevantly arise as to the documents. In order to do so he must give sufficient information to enable the court to know what the action is going to be about, and what assistance the documents or other property referred to will give in deciding it. The applicant must disclose the nature of the claim he intends to make and show, not only the intention of making it, but also that there is a reasonable basis for making it. A prima facie case must be made out.
As the late Lord MacPhail’s book on Sheriff Court Practice states:-
“Ill-founded, irresponsible and speculative allegations based merely on hope would not provide a reasonable basis for an intended claim in subsequent proceedings.”
As an action would be against oldco (ignoring too the complications of raising proceedings against a company in liquidation) the relevance of the 5-way Agreement would be to determine if there was in fact a third party, newco, who was “indemnifying” oldco.
Should a company or an individual make such an application, it would be instructive to see if any of the parties holding a copy of the Agreement, namely the five parties, would be willing to agree to disclosure, or whether they would fight against it. Whilst the court would consider an argument about confidentiality, it is by no means certain, and indeed is unlikely, that that would prevent an order for disclosure where that was the only contrary argument.
Matters would be simplified, of course, if the Agreement was published, even with redaction. After all, as it is a document which clearly has importance for the welfare of a PLC and its investors (Rangers International FC PLC), there is an argument that Rangers itself should be disclosing it.
It would be of use to investors to know how far the “football debt” clause extended.
Will someone make such an application? It might be worth a go, if only to provoke reaction! But one should never use court proceedings for such a frivolous purpose!
Posted by Paul McConville