Fulham Football Club (1987) Ltd v Richards & Anor

An agreement to arbitrate may cover an unfair-prejudice dispute under Companies Act 2006 s 994. The statutory right to petition is not inalienable. Such disputes ordinarily concern contractual and equitable obligations between members and the company, and do not inherently require judicial determination.

An arbitrator cannot make a winding-up order or an order binding non-parties. Those remedial limits do not make the underlying dispute non-arbitrable. They limit the relief available in arbitration. Wide clauses referring all or any disputes to arbitration include unfair-prejudice allegations unless statute or necessary public-interest safeguards require otherwise.

Fulham, a member club of the Football Association Premier League Ltd, presented a petition under Companies Act 2006 s 994. It alleged that Sir David Richards, the Premier League chairman, had acted improperly in facilitating the transfer of a player from Portsmouth to Tottenham, and that the company had unfairly dismissed Fulham’s complaint.

Vos J stayed the petition under Arbitration Act 1996 s 9. The FAPL Rules required disputes between the company and clubs to be arbitrated. The FA Rules separately required arbitration of disputes involving Sir David. Fulham appealed, relying principally on Exeter City Association Football Club Ltd v Football Conference Ltd [2004] 1 WLR 2910.

The central issue was whether an unfair-prejudice dispute was incapable of arbitration, or fell outside these wide arbitration agreements.

1. Appeal dismissed. Patten LJ, with whom Longmore LJ agreed and Rix LJ also agreeing, upheld Vos J’s stay of the petition.

2. The relevant matter for Arbitration Act 1996 s 9 was the underlying dispute pleaded as unfair prejudice, not the statutory label or the full range of remedies available on a court petition. The arbitration agreements covered that dispute. A stay was therefore mandatory unless the agreements were null and void, inoperative, or incapable of performance.

3. Companies Act 2006 ss 994–996 did not expressly or impliedly reserve every unfair-prejudice dispute to the court. The jurisdiction is directed to internal disputes concerning the agreed or equitable basis on which members coexist. It ordinarily does not engage collective insolvency rights or a public interest requiring state adjudication.

4. An arbitral tribunal could determine whether there had been unfair prejudice and grant the personal relief sought against Sir David. It could not wind up the company or make orders regulating its affairs so as to bind absent members. Those restrictions concern the scope and effectiveness of arbitral relief; they do not make the underlying dispute non-arbitrable. Exeter City Association Football Club Ltd v Football Conference Ltd [2004] 1 WLR 2910 was wrongly decided and was overruled.

5. The clauses’ references to “all disputes” and “any dispute or difference” were comprehensive. In the absence of a statutory or public-policy bar, there was no basis to imply an exclusion for s 994 claims.

6. Patten LJ added, obiter, that a dispute capable of grounding a just-and-equitable winding-up petition could similarly be arbitrated before any petition. The court would retain exclusive jurisdiction to decide whether to make a winding-up order if arbitration established that such proceedings were justified.

• Court of Appeal (Civil Division): dismissed Fulham’s appeal and affirmed the stay under Arbitration Act 1996 s 9: [2011] EWCA Civ 855 .
• High Court of Justice, Chancery Division, Companies Court: Vos J stayed Fulham’s unfair-prejudice petition by an order dated 1 December 2010: Vos J 3534 of 2010.