Sheffield United Football Club Ltd v West Ham United Football Club Plc

An English court may restrain proceedings before a foreign arbitral body where those proceedings breach an arbitration agreement seated in England. The applicant must show a sufficiently strong case for final relief; where the case is exceptionally clear, it is unnecessary to resolve whether the ordinary interim injunction test or a higher test applies. Damages are ordinarily inadequate for breach of an arbitration clause because the contractual right is to have the dispute determined in the agreed forum. The English court may exercise its supervisory jurisdiction despite the tribunal’s competence to consider its own jurisdiction. A dispute about the court’s supervisory intervention is not ordinarily a matter falling within an arbitration clause.

Sheffield United sought an interim injunction restraining West Ham from pursuing an appeal to the Court of Arbitration for Sport in Lausanne against an interim award made by an arbitral tribunal constituted under Rule K of the Football Association Rules. The award held that West Ham was liable to Sheffield United in damages, with quantum to be assessed later.

Sheffield United contended that Rule K made the tribunal’s award final and binding and that the English court was the appropriate forum for supervisory relief. West Ham argued that the Rules, FIFA statutes and the jurisdiction of CAS permitted an appellate arbitral challenge. West Ham also sought a stay under section 9 of the Arbitration Act 1996.

1. Interim injunction. Sheffield United had an exceptionally strong case that Rule K 5(b), read with the absence of any provision for an arbitral appeal, made the tribunal’s award final and binding in the sense that the tribunal alone would finally determine the issues between the parties. Rule K 5(c) excluded such court remedies as could validly be excluded, but did not create an appellate arbitral body.
2. The tribunal’s award was not a decision passed by the Football Association for the purposes of Article 63 of the FIFA statutes. The tribunal was independent of the Association, and the Rules contemplated that the Association would merely receive a copy of the award. The proposed CAS appeal therefore breached the arbitration agreement. Under The Angelic Grace [1995] 1 Lloyd’s Rep. 87, West Ham had to show a strong reason not to be held to its agreement, and none was identified.
3. The court did not need to determine whether the ordinary American Cyanamid test or a higher test applied to an interim anti-suit injunction. Sheffield United satisfied even the higher test because it was actually entitled to a final injunction. Damages were inadequate for breach of an arbitration clause, following Starlight Shipping Co. v Tai Ping Insurance Co. Ltd [2008] 1 Lloyd’s Rep. 230.
4. The balance of convenience favoured relief. Allowing the CAS appeal to proceed would risk duplicating and disrupting the forthcoming quantum hearing, while West Ham had no real prospect of success at trial. Weissfisch v Julius [2006] 1 Lloyd’s Rep. 716 was distinguishable because it concerned a foreign-seated arbitration governed by foreign law. Here the arbitration was seated in England and governed by English law.
5. The court’s supervisory jurisdiction supported intervention. The principles of legal certainty and avoiding conflicting proceedings explained in The Front Comor [2007] 1 Lloyd’s Rep. 391 applied persuasively to proceedings before a private foreign arbitral body. Section 44 of the Arbitration Act 1996 was satisfied: the case was urgent and the constituted tribunal was unable, in the unusual circumstances, to act effectively.
6. The section 9 stay application was dismissed. Rule K did not encompass a dispute concerning the court’s supervisory jurisdiction. In any event, West Ham had taken a step to answer the substantive claim before making an effective application for a stay.

Sheffield United was entitled to the interim injunction. West Ham’s application for a stay was dismissed.