State Aid

October 15th, 2018 by James Goudie KC

In R (Sky Blue Sports & Leisure Ltd) v Coventry City Council (2018) EWCA Civ 2252 the Court of Appeal rejected a challenge brought by the owners of Coventry City Football Club against the City Council. The Council had a half-owned subsidiary, Arena Coventry Limited (“ACL”). ACL has operated the Ricoh Arena in Coventry, where the Football Club play home games. The Claimants sought to challenge by judicial review the Council’s decision to extend ACL’s lease of the Arena.

The decision was part of a wider transaction in which the Council also sold its 50% share in ACL to Wasps Rugby Club, who now play their home games at the Arena, and Wasps purchased the other 50% share in ACL from its local charity owner. The Council and the Charity sold their respective shares at the same price.

The Claimants alleged that the lease extension amounted to unlawful State Aid.

That is not arguable the Court of Appeal has ruled. The Council had obtained and followed advice from KPMG as to the value of the lease extension. It had been demonstrated that a market price had been achieved.

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