Manchester City are set to learn the verdict of a legal challenge regarding associated party transaction rules within the next few days, according to reports. The case is unrelated to the ongoing probe into the 115 charges of alleged rule breaches facing the Premier League champions.
Associated party transaction rules were introduced by the Premier League following Newcastle’s takeover and were updated earlier this year. The idea of the rules was to maintain competitiveness by preventing clubs from artificially inflating commercial deals with companies linked to their owners.
City argued the rules discriminated against their ownership by the Abu Dhabi United Group, an investment company for the royal family of Abu Dhabi. In June, they issued a 165-page claim against the Premier League before a two-week hearing took place in June.
The verdict is expected to arrive before the end of this week, according to The Telegraph, with a meeting of Premier League club shareholders pencilled in for Thursday. However, the arbitration procedure does not contain any provision for the findings to be publicly announced.
In their claim, City reportedly said they were being impacted by a ‘tyranny of the majority’ when it came to associated party transaction rules. Amendments to the rules were approved by 12 out of 20 clubs in a vote which took place earlier this year.
City are seeking financial damages for the ‘losses which it has incurred as a result of the unlawfulness of the FMV [fair market value] rules’. They believe the rules are ‘deliberately intended to stifle commercial freedoms of particular clubs in particular circumstances, and thus to restrict economic competition’.
According to the Premier League rulebook, associated party transaction rules are in place so that ‘clubs are not able to derive an unfair advantage over domestic competitors by increasing revenues or reducing costs via arrangements with entities linked to a club’s ownership’.
City have also accused rival clubs of attempting to ‘safeguard their own commercial advantages’ by voting in favour of the rules. Their legal challenge is said to have ‘split’ the Premier League with clubs taking different views regarding the situation.
Some rival clubs are thought to be worried that defeat for the Premier League would weaken financial controls and have far-reaching consequences for the game as a whole.
The separate hearing into City’s alleged financial rule breaches, which started last Monday, is expected to continue for another nine weeks. A verdict will not be announced until next year, though it is expected to arrive before the end of the current season.
