Arbitration agreements and Premier League football

Wilfried Guemiand Bony v Gilbert Francis Kacou [2017] EWHC 2146 (Ch)).

The recent case of Bony v Kacou provides insight into when the courts will, and will not, find that an arbitration agreement exists under s5 Arbitration Act 1996. The Court also considered the interaction between s5 Arbitration Act and applications for stays of court proceedings under s9 Arbitration Act 1996.  This is the sixth and final post in our new term catch-up series.

Background Facts

Premier league footballer, Wilfried Bony, issued proceedings against his former agents accusing them of receiving secret commissions themselves (or through their corporate vehicles) in the course of contract negotiations with Swansea FC. The Defendants were alleged to have breached contractual and fiduciary duties to Mr Bony, and to have made fraudulent and/or negligent misrepresentations.

The First Defendant was Mr Bony’s former agent. The Second Defendant was an Ivory Coast corporate entity, controlled by the First Defendant. The Third Defendant was another former agent of Mr Bony. The Fourth Defendant was a Czech corporate entity, controlled by the Third Defendant. Only the Third Defendant had been a registered FA agent, and that only for a period within the time frame in dispute.

The Defendants denied the Court’s jurisdiction and sought to have the disputes determined in arbitration under FIFA Rules.

The Defendants’ Jurisdictional Arguments

There was a written agreement between Mr Bony and the First Defendant, but it did not include an arbitration clause.

There was an oral agreement between Mr Bony and the Third Defendant.  Between 2013 and 2015, there was an agreement in writing which contained the following dispute resolution provision:

“the settlement of disputes between the Player’s Agent and the Client, club or another player’s agent of whom all are registered with the same national association (national disputes) is the responsibility of the respective national association. As regards FACR, the respective arbitration committee will be in charge.
“… Any other complaint which is not subject to the preceding Paragraph hereof shall have to be transferred to the FIFA Players’ Status Committee.”

There were no agreements at all between Mr Bony and the Second and Fourth Defendants.

FIFA Rules Section K do make provision for arbitration as a dispute resolution mechanism, stating:

any dispute or difference between any two or more Participants (which shall include, for the purposes of this section of the Rules, The Association) including but not limited to a dispute arising out of or in connection with (including any question regarding the existence or validity of): the Rules and regulations of the Association which are in force from time to time; (i) the rules and regulations of an Affiliated Association or Competition which are in force from time to time; (ii) the statutes and regulations of FIFA and UEFA which are in force from time to time; (iii) the Laws of the Game, shall be referred to and finally resolved by arbitration under these Rules.”

At first instance,  the Defendants relied on this provision and argued that the matters should be stayed in court in favour of arbitration pursuant to s9 Arbitration Act 1996. The Defendants failed both at first instance and on appeal.

Decision of the High Court

His Honour Judge Pelling QC, sitting a High Court Judge (Chancery Division), rejected the appeal. For an arbitration clause to be relied upon for the purposes of a stay of court proceedings under s9 Arbitration Act, it must come within s5 Arbitration Act. S5 Arbitration Act states:

Agreements to be in writing.
(1) The provisions of this Part apply only where the arbitration agreement is in writing, and any other agreement between the parties as to any matter is effective for the purposes of this Part only if in writing.
The expressions “agreement”, “agree” and “agreed” shall be construed accordingly.
(2) There is an agreement in writing—
(a)if the agreement is made in writing (whether or not it is signed by the parties),
(b)if the agreement is made by exchange of communications in writing, or
(c)if the agreement is evidenced in writing.
(3) Where parties agree otherwise than in writing by reference to terms which are in writing, they make an agreement in writing.
(4) An agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement.
(5) An exchange of written submissions in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response constitutes as between those parties an agreement in writing to the effect alleged.
(6) References in this Part to anything being written or in writing include its being recorded by any means.”

The arbitration clause must also satisfy the definitional requirements of s6 Arbitration Act 1996. A non-written agreement that incorporates by reference written terms that consist of or include an arbitration clause may constitute an arbitration agreement in writing. Further, the Judge considered that an implied agreement could fall within s5(3) Arbitration Act as an agreement otherwise than in writing. Nevertheless, the Judge stated that

“it remains the case that a party asserting that such an agreement incorporated an arbitration agreement must establish that the implied agreement was by reference to terms which are in writing and which included the arbitration clause relied on.”

The Defendants’ case depended on the incorporation by reference of at least part of Rule K of the FIFA Rules. However, there were express agreements between Mr Bony and the First and Third Defendants. These agreements did not contain arbitration clauses, except for the limited agreement with the Third Defendant. The arbitration clause contained in that agreement was inconsistent with FIFA Arbitration. There was no basis on which other terms could be implied.

Mr Bony did not enter into any contract at all with the Second and Fourth Defendants, and no contract could be implied.

It was therefore impossible for Rule K of the FIFA Rules to be incorporated by reference. There was no basis for a stay of the court proceedings under s9 Arbitration Act.