Coventry City’s owners, Sisu, have lost their judicial review case which claimed that the City Council’s loan to the Ricoh Arena constituted illegal state aid under European Union rules. Sisu have stated that they will seek leave to appeal.
The City Council’s case was that once Sisu ceased to make its rent payments it had to make a loan to Arena Coventry Limited (ACL), the operators of the Ricoh, to protect its investment. It argued that the judicial review formed part of a campaign to ‘distress’ ACL and acquire control of the Ricoh for Sisu.
Coventry City’s owners, Sisu, have lost their judicial review case which claimed that the City Council’s loan to the Ricoh Arena constituted illegal state aid under European Union rules. Sisu have stated that they will seek leave to appeal.
The City Council’s case was that once Sisu ceased to make its rent payments it had to make a loan to Arena Coventry Limited (ACL), the operators of the Ricoh, to protect its investment. It argued that the judicial review formed part of a campaign to ‘distress’ ACL and acquire control of the Ricoh for Sisu.
The judge dismissed all three grounds on which the case was brought. In particular he ruled that the loan did not constitute state aid. But he also ruled that the Council’s actions were not ‘irrational’ as had been claimed.
What is less clear is what the implications of this ruling are, For the club’s part it has stated that it means that it has no viable commercial alternative to building its own stadium in the city, but this could be bluster.
An alternative view, stated in this reflective blog posting, is that this is the first time Sisu have taking a ‘battering’ and thus may no longer be able to take the view that they are smarter than everyone they are dealing with.