SPOTLIGHT #12: Arbitration and Competition Law – The “APT” Connection
At Lead up, we are committed to providing our clients with the most innovative conflict resolution solutions tailored to their specific industry contexts. To achieve this, we stay abreast of the latest developments in our clients’ sectors and analyse these changes in relation to their needs. Each month, in the ‘Lead up Spotlight’, we share with our colleagues, clients, and potential partners – our analysis of a recent development related to conflict resolution in a sector that matters to us and our clients.
In this month’s ‘Lead up Spotlight’, we explore a significant intersection of arbitration and competition law, inspired by a recent Premier League arbitration decision. In a playful nod to the song APT by Rosé & Bruno Mars, we draw unexpected parallels between music and the legal complexities of arbitration and competition law.
Arbitration, Competition, and the Associated Party Transactions (APT) Case
Manchester City Football Club challenged the legality of the Premier League’s Associated Party Transaction (APT) Rules, arguing they were in breach of the Competition Act 1998 and public law principles of procedural fairness. APT refer to dealings between connected parties that could potentially distort market fairness.
Manchester City brought the claim before an arbitral tribunal under Section X of the Premier League Rules, which provides for arbitration on issues of law, fact, and regulation validity.
In a First Partial Final Award (September 2024), the tribunal found the APT rules unlawful in three respects: the exclusion of shareholder loans, certain pricing changes, and restrictions on clubs’ ability to access comparable transaction data.
In a further arbitration hearing (January 2025), Manchester City sought a declaration that these unlawful aspects could not be severed, rendering the entire APT Rules void. The Premier League opposed this, arguing that amendments made in November 2024 addressed the issues, making the case academic.
In an award rendered on 13 February 2025, the Tribunal found that the severance issue was a legal matter arising from its earlier declarations. Since Manchester City was contesting the validity of the amended rules in a separate arbitration, the issue remained live and was not merely academic.
Substantively, the Tribunal ruled that the identified breaches were integral to the framework and could not be severed. As a result, the APT Rules and Amended APT Rules were declared void and unenforceable. A separate arbitration initiated by Manchester City in January 2025 will now determine the validity of the Premier League’s November 2024 amendments.
The case demonstrates how competition law, traditionally seen as a matter for public enforcement, is now finding a place in private dispute resolution mechanisms.
Follow-On Actions and Arbitration’s Growing Role
Follow-on actions are legal proceedings initiated by individuals or businesses in the wake of a competition authority’s decision that a company has engaged in anti-competitive practices. Essentially, once a regulatory body confirms a breach – like price-fixing, market manipulation, or abuse of dominance – affected parties can “follow on” by seeking compensation for the harm they’ve suffered due to that misconduct.
These actions utilise the authority’s findings, so claimants don’t need to re-establish the existence of anti-competitive behaviour. Instead, they can focus on demonstrating how the infringement affected them financially or otherwise. This streamlines the legal process, making it more efficient and accessible for those harmed.
Follow-on actions can be brought before State Courts or arbitration tribunals when the parties agree to arbitration.
In the APT case, however, the decision was not taken by a competition authority but by an arbitral tribunal because the Premier League Rules contain an arbitration agreement. The ruling in the APT case opens the door for follow-on actions, where affected clubs may seek damages for transactions that were previously blocked under the voided APT rules.
Manchester City already started a follow-on action by claiming that the 2024 Amendments were illegal, following the first award.
In matters not relating to sports governance, companies facing regulatory scrutiny by competition authorities should consider the role of arbitration, both in challenging potentially anti-competitive restrictions and in pursuing follow-on damages claims against entities found to have breached competition law. In a globalised economy where cross-border competition issues arise frequently, arbitration offers neutrality and expertise.
APT: A Catchy Tune or a Legal Battleground?
While the Rosé & Bruno Mars song ‘APT’ may be about something entirely different, the acronym serves as an amusing reminder that Associated Party Transactions are now at the heart of a major arbitration and competition dispute.
The APT case highlights how arbitration is becoming the ‘go-to’ forum for resolving high-stakes regulatory challenges.
Just as artists blend genres to create a hit song, the convergence of arbitration and competition law is composing a new melody in legal dispute resolution.
Strategies for Legal Practitioners
To navigate the challenges at the intersection of arbitration and competition law regarding anti-competitive rules or behaviours, legal practitioners should:
- Draft Comprehensive Arbitration Clauses that address potential competition law disputes, ensuring a ready path for resolution.
- Select Arbitrators with expertise in both arbitration and competition.
- Advise on Follow-On Actions.
- Stay Informed on Regulatory Developments.
Conclusion
As the APT case illustrates, arbitration is not just for commercial disputes – it is playing an increasingly pivotal role in competition law matters. The Premier League arbitration is a reminder that businesses can and should consider arbitration as a strategic tool in challenging regulatory decisions and seeking redress. At Lead up, we help our clients navigate these evolving legal landscapes, ensuring they are well-positioned to use arbitration to their advantage in competition disputes.
Because whether it’s a hit song or a landmark case, an “APT” moment can change everything.