Fulham Football Club (1987) Ltd v Richards & Anor

A shareholder’s statutory right to petition for relief from unfair prejudice under Companies Act 2006, section 994, is not inalienable. Parties may agree to arbitrate disputes which could otherwise support such a petition. A stay under section 9 of the Arbitration Act 1996 should be granted where the dispute falls within a broad arbitration agreement, provided that the arbitration does not require relief binding third parties, affecting the public at large, or taking the form of a judgment in rem. The fact that an arbitrator cannot grant every remedy available to the court does not prevent a stay where the parties chose arbitration and the tribunal has adequate remedial powers.

Fulham presented an unfair prejudice petition concerning alleged interference by the Premier League chairman in the transfer of a footballer. The respondents sought a stay under section 9 of the Arbitration Act 1996, relying on arbitration provisions in the Football Association and Premier League rules.

The parties accepted that the disputes fell within those provisions if the statutory right to petition under section 994 of the Companies Act 2006 could be restricted by agreement. The issue was whether that right was inalienable, as held in Exeter City Association Football Club Ltd v Football Conference Ltd, or whether the petition could be stayed, as held in Re Vocam Europe Ltd.

1. The petition was stayed. The disputes fell within the wide arbitration agreements, and section 9 of the Arbitration Act 1996 therefore required a stay unless the agreements were null, void, inoperative or incapable of performance.
2. The argument that the disputes were outside the arbitration agreements because only the court could grant relief under section 996 of the Companies Act 2006 was rejected. The agreements covered all disputes, including whether the alleged conduct amounted to unfair prejudice. The arbitral tribunals had powers to order a party to do or refrain from doing anything. Even if their powers were less extensive than the court’s, that reflected the parties’ choice of forum and its attendant advantages and disadvantages.
3. The relevant limitation was not the statutory source of the claim but the nature of the relief sought. Arbitration could not grant relief binding third parties, affecting the public at large, or constituting a judgment in rem. Those limitations did not apply: the petition sought orders against the FAPL and Sir David, and other clubs would not be bound by the award.
4. The statutory right to seek section 994 relief was therefore not inalienable. Parties could agree to arbitrate disputes that might otherwise support an unfair prejudice petition, subject to the limits identified above.
5. Exeter City Association Football Club Ltd v Football Conference Ltd was wrongly decided and should not be followed. Re Vocam Europe Ltd was correct. The court suggested that the parties agree to a consolidated arbitration and the joinder, by consent, of clubs wishing to be heard.