CAF argue they had ‘no choice’ in ending Lagardère deal, but jurisdiction questions remain

By Paul Nicholson

November 8 – The Confederation of African Football (CAF) have responded to Lagardère Sports’ complaint over the termination of its rights contract arguing that the regional body had no choice following an Egyptian Competition Authority (ECA) decision in 2017 that the contract was null and void.

This is despite the contract having been written and signed under Swiss law.

The original $1 billion contract that was signed in 2016 would have run until 2018 but came under dispute in Egypt when local company Presentation Sports claimed that the tender process was not transparent and that it had made a bigger and better offer for the rights.

Not surprising the ECA found (CAF’s wording) “that the Agreement breached Egyptian competition rules because Lagardère was appointed as CAF’s exclusive agent for the marketing and media rights for an uninterrupted 20 year period without any open tender. By the same decision, ECA declared the Agreement null and void and imposed a number of remedies on CAF. Those remedies included the obligation to immediately terminate the Agreement and suspend its effects within the Egyptian market.”

Outgoing CAF officials – former President, Issa Hayatou, and the former secretary general, Hicham El Amrani, who signed the Agreement – were then found guilty of anti-competitive and fraudulent conduct, and hit with a fine of EGP 500 million each (reduced to EGP 200 million on appeal).

CAF was made jointly liable for the payment of that fine – which has not been made. However, the size of the fine was generally interpreted as a ruse to keep Hayatou from returning to football and to give the Egyptians political leverage in the running of CAF.

CAF is an international organisation and while its headquarters are hosted in Egypt, many of its agreements and contracts follow international or Swiss law, making any enforcement of the ECC ruling difficult.

CAF, conveniently for their argument, say the ECC ruling and a later 2017 Competition Commission of the Common Market for Eastern and Southern Africa (CCC) assessment (not legal ruling) that the Agreement infringed the CCC Competition Regulations, gave them “no choice but to terminate the Agreement”.

“Termination of the Agreement is the legal consequence of the decision of ECA, the judgments of Egyptian courts and the recommendations and imminent decision of the CCC,” said CAF.

CAF said it had “invited Lagardère to discuss appropriate next steps and cooperation to ensure the fulfillment of the obligations toward sponsors, licensees and football fans with respect the current competitions. Lagardère has not taken CAF up on that invitation.” With news that SuperSport have already stopped broadcasting CAF looks to have created a rod for their own back, won that could potentially break it.

See: CAF moves to cancel $1bn Lagardere deal but is met with fierce resistance

Contact the writer of this story at moc.l1600624048labto1600624048ofdlr1600624048owedi1600624048sni@n1600624048osloh1600624048cin.l1600624048uap1600624048