Supreme Court refuses permission to appeal in council loan case

The Supreme Court has refused the owner of Coventry City Football Club (CCFC), Sisu, permission to appeal a ruling that Coventry City Council’s loan to local stadium the Ricoh Arena was not unlawful state aid.

In May this year the Court of Appeal upheld a High Court ruling in the council’s favour.

The dispute concerned CCFC’s use of the stadium and rental payments. The council was half-owner of the stadium and loaned its then owner ACL £14.4m when lack of rental income from CCFC threatened the future of the stadium, whose construction had been a key regeneration project.

Chambers 11KBW, whose barristers James Goudie QC and Ronnie Dennis have appeared for the council throughout the proceedings, said in a statement: “The principle has been upheld in that there will be no state aid by a public authority if a rational private investor might have entered into the transaction on the same terms, having regard to the foreseeability of obtaining a return and leaving aside all social and policy considerations.

“Where the authority acts in a way that corresponds to normal market conditions, the transaction cannot be regarded as state aid. This is the market economy investor principle.”

Coventry’s Labour leader George Duggins and opposition Conservative group leader John Blundell called in a joint statement for the ruling to mark an end to any legal proceedings.

“Coventry City Council is pleased with the ruling of the Supreme Court today and that the judicial review process is now exhausted,” they said.

“For us it's the right conclusion and we hope this draws a line under things and allows the owners of Coventry City Football Club to focus on bringing success back to the club both on and off the pitch." 

Last May’s case in the Court of Appeal had been welcomed by the council as recognising that the loan decision had been “taken to protect the interests of Coventry taxpayers and secure the future of an important sporting, cultural and economic asset for the city”.

Football supporters’ body the Sky Blue Trust called on SISU “to put a stop to any further court action and return to the negotiating table to secure a sustainable future for the club at the Ricoh Arena” or else to sell the club.

SISU could not be contacted.

Mark Smulian