Arbitration on Super arbitration
Wayne Smith, Rugby union editor | October 22, 2009
Article from: The Australian
SANZAR may need to go to arbitration to decide who will arbitrate the long-running saga of whether Melbourne or South Africa's Southern Kings will be awarded the Super 15 expansion licence.
Not unexpectedly, the SANZAR executive committee, meeting in Brisbane yesterday, did not even put the matter to a vote after discussion around the board table made it clear Australia was entrenched in its support of Melbourne, South Africa of the Port Elizabeth-based Kings.
Because SANZAR is an unincorporated joint venture registered in Australia, it is bound by the laws of NSW, but that does not necessarily mean the arbitrator will be a Sydney legal identity of the ilk of Laurence Street QC, the former chief justice of the NSW Supreme Court.
Australia and South Africa are both entitled to nominate preferred arbitrators of appropriate standing and if both parties can agree on an individual, the independent arbitration process -- which is designed to produce a binding decision -- could proceed without delay.
But if the two rivals for the Super 15 expansion franchise cannot agree on who should hear the case, the Australian Commercial Disputes Centre might need to be called in to appoint an arbitrator.
SANZAR chairman Oregan Hoskins, who is also the president of the South African Rugby Union, refused to shed any light on the process when contacted after the meeting. "I'm not able to tell any more at this stage," Hoskins said. In an interview with The Australian last month, Hoskins all but conceded that the Southern Kings had no chance of winning the licence because, as he put it, "we're out-voted anyway ... we always are". That was a none-too-subtle reference to the fact that New Zealand always votes with Australia.
Since then, however, South Africa has toughened its stance, refusing to accept a majority decision on the licence question.
That meant that unless there was unanimity at yesterday's meeting -- which was never likely to happen -- a decision on the matter would have to
be outsourced.
Significantly, SANZAR skipped the mediation stage to go straight to arbitration, which further suggests neither side intends to budge.
It is extremely difficult to see how even the most independent of arbiters could do anything but rule in favour of Melbourne.
Logistically, it makes no sense to award the licence to the Kings when SANZAR already has decided the new team will compete in the Australian conference.
But as so often is the case, money makes the most compelling argument, with broadcasters having told SANZAR they will trim a significant sum -- believed to be tens of millions of dollars -- off the new still-to-be-finalised broadcast deal if Melbourne is not chosen.
It is not simply that the competition would lose eight prized derbies if the Kings fill the vacancy in the Australian conference, but also the fact that broadcasters are aware that rugby's penetration of the South African market has just about reached saturation point, while Melbourne and Victoria are virtually virgin territory. In terms of growing Super rugby's television audience, a new team in a major international city like Melbourne offers far more than one in Port Elizabeth, a South African holiday destination.
Given New Zealand stands to lose financially if Melbourne does not win the licence, it is not expected to stand idly by during the arbitration process. It may well be that to preserve the appearance of neutrality, a New Zealand judge is invited to arbitrate the dispute, though, again, basing his ruling on NSW law.
It is understood that as keen as the South African government is to see a virtual all-black Super rugby franchise set up on the Eastern Cape, it decided against putting any money behind the Southern Kings because that would have created an uncomfortable precedent. Seemingly, unless the government was prepared to provide SANZAR with a cheque big enough not only to cover the reduced broadcast revenue but also the additional logistical costs of admitting the Kings, there is no way the SARU could effectively counter Melbourne's claims.
Hoskins and SARU chief executive Andy Marinos surely recognise how weak their bargaining position must be, which has given rise to speculation within Australia that the South Africans are fighting the issue to the death for domestic political reasons, though well aware that they will lose to Melbourne in the end.
http://www.theaustralian.news.com.au...015651,00.html
