FULHAM FOOTBALL CLUB (1987) LTD V RICHARDS AND ANR

[2011] EWCA Civ 855, Court of Appeal, Lord Justice Rix, Lord Justice Longmore and Lord Justice Patten, 21 July 2011

Arbitration - Petition for relief against unfair prejudice - Companies Act 2006, sections 994 and 996 - Whether right to petition was inalienable - Stay of proceedings - Construction of arbitration clause - Arbitration Act 1996, section 9

Fulham was a member of Football Association Premier League Ltd (FAPL), the rules of which provided for disputes to be resolved by arbitration. Fulham accused the chairman of a breach of the rules, and also breach of duty, by intervening in the proposed transfer of Peter Crouch from Portsmouth to Fulham and facilitating his transfer to Tottenham Hotspur. Fulham presented a petition under section 994 of the Companies Act 2006, alleging unfair prejudice, and sought injunctions preventing the chairman from participating in future player transfer negotiations and requiring him to relinquish his office. FAPL applied for a stay of the proceedings under section 9 of the Arbitration Act 1996, relying on the arbitration clauses in the various agreements. The Court of Appeal, upholding the decision of Vos J, refused to follow Exeter City Association Football Club Ltd v Football Conference Ltd [2004] 1 WLR 2910 and preferred the decision in Re Vocam Europe Ltd [1998] BCC 396, holding that the right of a shareholder to apply for relief was not inalienable and was therefore one which could be made subject to an arbitration agreement. The fact that only the court could make a winding up order did not preclude a reference to arbitration where a lesser remedy was sought. On the facts the dispute fell within the scope of the arbitration clause. A stay was thus mandatory.