West Ham acted in breach of FAPL rules in respect of its registration of the players Carlos Tevez and Javier Mascherano. A Disciplinary Commission was appointed by FAPL to deal with these matters. It decided to fine West Ham and not to deduct points. In the result West Ham remained in the Premier League and Sheffield United were relegated.
The breaches by West Ham included entering into contracts which gave third parties the ability materially to influence the club’s policies and performance and, through non-disclosure of such arrangements, breaches of the duty of utmost good faith owed by clubs to one another under FAPL rules.
After the Commission’s decision West Ham served notice of termination of the third party contracts and agreed to maintain the position that these were invalid, unenforceable and terminated. It undertook to not accept or recognise any third party influence and agreed to measures that would allow the FAPL to monitor the situation.
Sheffield invoked the arbitration provisions of the FAPL Rules to complain that the Commission’s decision was flawed and unlawful, and that the FAPL had failed, following the initial disciplinary decision, to conduct a proper investigation and to take other steps, including terminating the registrations and the commencement of further disciplinary proceedings against West Ham. An arbitration Panel constituted under FAPL rules had to determine whether any of those complaints and claims should be upheld.
Fulham FC had brought separate arbitration proceedings against FAPL based on similar allegations and seeking similar relief. An application to consolidate the two proceedings was refused by the FAPL Panel, but Fulham was permitted to take a limited part in the Sheffield arbitration proceedings.
The FAPL contended that Sheffield had no standing to pursue claims in respect of the Commission’s decision before the arbitration Panel. Alternatively, it was argued that both the Commission and the FAPL had acted lawfully.