30-03-06

Arbitration Clause Enforced: Stretford v FA The football agent Paul Stretford has lost his case against the FA in which he attempted to stop the FA relying on an arbitration clause within their rulebook. The FA had started disciplinary proceedings against Stretford, and he wanted to challenge those proceedings in court. The FA countered that, under "Rule K", the matter must first go to arbitration and on 22 March in Stretford v FA, the High Court agreed with them. Mr Stretford's challenge to the arbitration clause made two claims: · "Rule K" had not been part of the agreement between Mr Stretford and the FA Mr Stretford asserted that he had no knowledge of Rule K and had only been sent the FA rulebook after receiving his licence. Dismissing this argument, the Court noted that his licence agreement said he must abide by FA rules, and, therefore, once he had a copy of the rulebook in his possession "it was his duty to keep himself informed of the rules." Mr Stretford also claimed that Rule K was "unusual and onerous" because the arbitration proceedings would be heard in private, the award of the arbitrators would not be published unless all parties agreed, and recourse to the courts would be excluded. The Court disagreed, saying that "a private hearing and a confidential award are far from being either onerous or unusual in the context of an arbitration agreement. Indeed it is the element of privacy which makes the arbitral system so attractive to so many". · Rule K was null and void because it did not comply with his right to a "fair and public hearing" under the Human Rights Act The Court said that right could validly be waived, provided that such a waiver was "voluntary, informed and unequivocal" and that it did not run counter to some important public interest. With this ruling in its favour, the FA can now instigate arbitration proceedings under Rule K without fear of being sued in court. However, it should be noted that in this case the FA, under the auspices of FIFA, only claimed jurisdiction over an individual licensed agent and not the company for which he works, so there is a possibility of this case being so distinguished in future. Whilst arbitration is now increasingly seen as a private and preferable route to choose, there are many examples to show that it can be more expensive, slower and less flexible than the normal courtroom. This case is a good illustration of the courts' willingness to uphold arbitration clauses in contracts and how those who choose arbitration as an attractive alternative should be careful what they wish for. The full text of the judgment may be accessed via: http://www.lawtel.com/~5e8d0f63a4a649bc990fd1a41cad2ac5~/content/display.asp?ID=AC0110651ChD.pdf
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