6 November 2017
Clifford Chance secures victory for Blackpool FC President in landmark dispute
International law firm Clifford Chance has advised Valeri Belokon and his company in a notable victory in his long running dispute against Owen and Karl Oyston over the ownership and management of Blackpool Football Club.
Published today, the judgment of Justice Marcus Smith orders Owen Oyston, Karl Oyston and their vehicle, Blackpool Football Club Properties Limited (formerly Segesta) to buy out Mr Belokon's shareholding in the football club for £31.27 million. The case has been widely reported as the most valuable in English football history.
In a comprehensive judgment totalling in excess of 250 pages, which followed a five week London trial, Smith J found that the Oystons had unfairly prejudiced Mr Belokon's shareholding in the football club by extracting in excess of £26 million in disguised dividends, following the club's lucrative promotion to the Premier League in 2010.
"Chris Yates, Clifford Chance litigation partner who led the team advising Mr Belokon, said: "This is an excellent result following a very hard fought case. We are simply delighted for Mr Belokon and his team. English football attracts investors from around the globe resulting in considerable injections of capital into the game. This increase in investment will inevitably lead to high value disputes between parties and cases like this one are likely to become more common."
Key conclusions from today's judgment are:
- Between 2011 and 2015 Blackpool Football Club received £122,995,000 from the Premier League (para 14).
- In the period 2010 – 2012 Owen and Karl Oyston paid £24.269 million out of the Club to companies they controlled (para 354). In total £26.77 million was paid to their companies between 2010 and 2016. The Judge deemed these to have been "disguised dividends" (para 439).
- There was a gentleman's agreement between Mr. Belokon and Owen Oyston that they would each own 48.14% of the Club and would be equal partners (para 94).
- Smith J found that in making disguised dividends "there was clear discrimination between the interests of Segesta and those of the other members of the club. That discrimination – which benefited Segesta and disadvantaged the other members – was plainly unfair" (para 351)
Today's judgement can be found here: https://www.judiciary.gov.uk/judgments/vbfa-v-blackpool-fc-properties-ltd-ors/
Chris Yates was supported by Senior Associate James Cranston and Associate Emma Mack. The team was further assisted by Adam Snowdon of Clifford Chance's in-house forensic accounting team and Senior Associate- Robert Stewart.
Clifford Chance instructed Blackstone Chambers’ Andrew Green QC and Fraser Campbell.
This case follows a related success that the firm had for Mr. Belokon in February this year in the Manchester Mercantile Court. HHJ Moulder (now Justice Moulder) ordered that Segesta account to Mr Belokon for revenue received from an investment he made in the Club's stadium.