A force majeure event.

So now we know that 6/11 clubs have decided that in the name of “Sporting Integrity” they will not be allowing the big bad Rangers to remain in the SPL.

There are however some problems with the logic behind these decisions and I will try to explain these and then why it could open the door for not only the SPL, but the clubs and their directors to become the subject of legal action by whoever is the custodian of Rangers Football Club.

The reason for the “Sporting Integrity” claim is that the clubs (who suddenly have decided to listen to the fans) have decided that the big bad Rangers have to be punished for breaking the rules!

So what rules have Rangers broken?

1. “Those EBT’s and the dual contracts man”

Unfortunately for these clubs, there has been nothing concluded about the use of EBT’S or dual contracts. The SPL (acting on the advice of Septics lawyers) believe they have a case to answer (in other words they want them to answer some questions and explain some things they don’t understand) but that is it.

In fact, as has been explained in another thread, it appears that HMRC seem to be of the opinion that Rangers only acted on professional advice in good faith, so are only guilty of poor financial management, not deliberate tax avoidance/evasion. Therefore as a result they intend to chase the directors/players who benefitted from said advice, because they don’t appear to see the club as culpable or liable.

Also the EBT’S were declared in the annual accounts, so weren’t hidden as is claimed, from the SFA because these accounts are filed annually with the Association after being independently audited and signed off.

Finally, any sporadic bonus that I receive from my employer is not written into my contract of employment so why should any footballers have to be either? My guaranteed bonuses through any performance related pay are documented, which I assume would be the same for players with respect to win, goal, appearance bonuses.

With respect to the EBT’S, they appear to be ad-hoc bonuses and the so called smoking gun of the side letters, only seem to explain how any such payments would be made, in the event that the player was considered eligible for them. Again this is alluded to in other threads.

In summary, nothing has been proved so far, there are no criminal charges pending and most importantly Rangers are currently not guilty of anything connected to tax avoidance/evasion as is being claimed, therefore cannot be punished as a result of this.

2. “They didn’t pay PAYE/NIC last season”

Yes, that is correct, however Rangers were found guilty by the SFA of bringing the game into disrepute as a result of this. This led to the club being punished accordingly by an SFA judicial panel, granted the punishment has yet to be confirmed as the result of legal argument, but they have already been punished for this.

So again, no further punishment can be delivered

3. “They went into administration, with loads of debt”

Again, this is correct, but once again (in accordance with SPL rules) Rangers have already been punished for this by receiving a 10 point deduction in last season league championship race, and have had prize monies withheld to cover any footballing debts to other SPL clubs, the maximum penalties available to the league.

Again, this means there can be no further punishment

4. “They were liquidated”

Again this is correct, however the liquidation is the result of the existing “Insolvency Event” and as a result Rangers have already been punished to the maximum penalties with reference to the existing “Insolvency Event”

In addition to these penalties, as a result of the company being liquidated, the club are now prevented from competing in Europe for the next 3 years, denying them the opportunity to possibly earn an additional £45m in revenue during this time, and are also looking as possibly losing players as a result of the TUPE regulations covering the transfer of employment contracts.

Therefore the club have already been penalised under the “insolvency event” rules and have to accept the additional consequences as a result of these events.

So as you can see at this point the club have already been punished to the maximum under the rules available to the ruling bodies for said “Insolvency Event”. 

This means that the only thing that should be considered is whether the new owners are “Fit & Proper Persons” and as a result should they be allowed to receive ownership of the SPL share and SFA membership, that’s it.

Granted there was previously no advice or rules prior to this season regarding what should happen in the event of a newco share transfer. The only advice was that the SPL board should make the decision should the situation ever arise, but the clubs demanded a say in this and this is how we end in this situation, with the clubs, their fans and chairman of the opinion that they will punish Rangersfor their misdemeanours.

Herein lies the problem – “Rangers have already been punished for those misdemeanours”

Any further punishment as a result of this could be therefore deemed as acting ultra vires, to quote Lord Glennie and could result in another trip to the Court of Session for a Judicial Review, if the ruling was then made in favour of Rangers it would allow for the SPL, clubs and directors being sued.

Why would they rule in favour of Rangers, well the answer is simple and it is written within the SPL rule book, I’ll explain.

The SPL rule book explains that if any club suffers an “Insolvency Event” as the result of an act of “Force Majeure” they can appeal any punishments received to the SPL board, who will refer the case to an Appellant Tribunal to make a final binding decision on what should be the eventual outcome.

What is “Force Majeure”?

Quite simply this means should any club suffer said “Insolvency Event” as a result of a criminal act, then they can appeal any punishments and allow the Appellant Tribunal make the decision.

Now with the Craig Whyte takeover and subsequent actions now being subject to a criminal investigation, the SPL should be looking to remove the power surrounding any newco vote from the clubs, until the investigation has concluded at the very least.

As a result, they should refer the situation to an independent Appellant Tribunal, who should allow Rangers to compete in the SPL next season under appeal with any future decisions on punishment/exclusion to be concluded after the criminal investigation/prosecution has been finalised.

Granted, if at the end of the process it is found that Rangers didn’t suffer as the result of “Force Majeure” then the SPL board would therefore be within their rights to allow the Appellant Tribunal to deal with this with whatever punishment was allowed within the rules.

However, if they don’t allow Rangers to compete under appeal next season and it is found that the club suffered as a result of “Force Majeure” they would be leaving themselves wide open to legal action for failing to abide with their own rules, similar to what happened with the SFA with respect to the transfer embargo.

Anyway an explanation of “Force Majeure” and the rules can be found here:

Pages 14,15 & 80 I think

Nookie Bear