Cov City high court result

LAWYERS for Coventry City owners Sisu and Coventry City Council locked horns at Birmingham High Court yesterday.

They argued over details of the sale of the Ricoh Arena operating company ACL to Wasps back in 2014 as Sisu sought a judicial review into the terms of the deal.

The firm which runs the stadium, originally built for Coventry City, was sold to the rugby club after a longrunning dispute over rent and ownership between CCFC and the stadium owners.

Coventry City Council and the Alan Edward Higgs Charity, who owned the Ricoh Arena business 50-50, agreed to sell their shares to Wasps for £2.77m each.

Wasps also took on a £14.4m loan from the local authority and were granted a lease extension from 50 years to 250 years by the stadium’s freehold owners, the council, as part of the deal. Wasps later paid back the council loan in full, and almost 20 years early, after raising £35m via a retail bonds scheme.

Lawyers for hedge fund Sisu argued that the deal to sell the Ricoh Arena was not made on a commercial basis.

Wasps were named as an “interested party” in the legal action, along with ACL – the Ricoh Arena stadium firm they now own – and had legal representation in court. The Higgs Charity was also named as an interested party, but had not hired lawyers for the hearing.

There were three claimants, including the two Sisu-owned businesses which make up Coventry City FC - Otium Entertainment and Sky Blue Sports and Leisure. They were joined by Sisurelated Cayman Islands-based firm Arvo. Coventry City Council was listed as the sole defendant. COVENTRY City’s owners look set to try for another legal appeal after losing their bid for a judicial review into the sale of Ricoh Arena operating company ACL to Wasps.

Sisu-related companies revealed they wanted the rugby club to pay almost £30million extra for ACL as they took Coventry City Council to the High Court in Birmingham yesterday to argue over the sale of the stadium firm in 2014. Wasps were also listed as an interested party along with former ACL shareholder the Alan Edward Higgs Charity.

The judge, Justice Rupinder Singh, ruled against Sisu on all three points they had put to him, the main one being the demand for a judicial review. Sisu’s QC Rhodri Thompson told the court he expects his clients will seek permission to appeal. The judge told him they would need to approach the Court of Appeal.

The bid for a second judicial review follows a series of court defeats for Sisu in an initial judicial review which had claimed the council’s £14.4m loan to ACL was unlawful state aid. Yesterday’s hearing was told the council had undervalued ACL and the extended 250-year lease on the stadium when it sold to Wasps in 2014.

But Justice Singh said: “My judgment is that the claimants seek to compare apples with pears. The valuation before the authority was one that perfectly entitled it to come to the view it did. There would be no arguable basis there was unlawful state aid in this case. I refuse application.”

The firm which runs the Ricoh Arena, originally built for Coventry City, was sold to the Premiership rugby club after a longrunning dispute over rent and ownership between CCFC and the stadium owners.

During yesterday’s hearing, Sisu’s QC said they were not seeking to “unwind” the council’s decision on the sale but “seeking the underpayment to be rectified in accordance with EU law”.

That would mean Wasps making up the perceived shortfall in the value of the Ricoh - just shy of £30 million. He also clarified that Sisu could also seek damages from Wasps as a result of not being given the opportunity to bid for the stadium.

Mr Thompson says that in February 2016 a letter was sent to ACL/Wasps letting them know that damages could be sought.

He argued that it was the right approach to seek the judicial review against the council first then damages from a third party later.

He told the court: “The question is whether or not the Ricoh Arena, sold for £20 million, was in fact worth £50 million. That can’t be avoided by fancy footwork from lawyers. It would be state aid.”

Mr Thompson also claimed that CCFC had to put in a bid for a share in ACL on the basis of press reports. He says the council would not give information it requested in 2014.

After the judge had delivered his decisions, he left the room for a short while to allow lawyers acting for all sides to reach an agreement on costs, with a deal reached for Sisu to pay £75,000 to the council and £20,000 to Wasps/ ACL. The council QC James Goudie had said their costs were £77,838.26.

After the hearing, the council released a joint statement from Cllr George Duggins, leader of Coventry City Council, and his Conservative counterpart Cllr Gary Ridley, which read: “We are pleased that permission to apply for a judicial review by Sisu-related companies has been refused. Sisu had sought to re-open a decision taken by the Council more than two-and-a-half years ago, on 7 October 2014. The Judge has today refused to do so, and rejected Sisu’s grounds for seeking to challenge that decision. We hope that this will be the last stage of the litigation, and that Sisu will not seek permission to appeal, which would only lead to further unnecessary legal costs for all parties involved.”