The owners of Coventry City Football Club have failed to persuade the Court of Appeal that the local council should not have given a multi-million-pound loan to the owner of its stadium.
Lawyers for the club had sought to overturn a 2014 High Court ruling in which Hickinbottom J found that the local council’s decision to loan £14.4m to Arena Coventry Ltd (ACL), the freehold owner of the city’s Ricoh Arena stadium, was lawful and did not constitute state aid.
But Lord Justice Tomlinson dismissed the appeal, saying: “The appellants have not in my view come close to demonstrating that the judge reached an impermissible conclusion. I would dismiss the appeal. In doing so I would pay tribute to the judge’s impressive judgment.”
Companies in the SISU group, which owns the club, had sought an order quashing the council’s decision, and requiring the council to recover the loan plus commercial interest from ACL, as well as damages.
Rhodri Thompson QC, for the club’s owners, had argued at the appeal in February that the loan constituted state aid on the basis that ACL received “selective benefits or advantage” that was “not available from a private undertaking”.
He said that ACL would “never have been able to find a loan on such good terms from a private sector lender.”
He claimed that the terms were particularly advantageous, and allowed ACL to halve its annual repayments.
In the background to the dispute, ACL served a statutory demand on leaseholder and SISU company Coventry City Football Club Ltd (CC Ltd) in December 2012 for £1.1m in what it claims are unpaid rent and licence fees.
Following the loan, ACL applied to put CCFC into administration and, in response, SISU company ARVO Master Fund put CCFC into administration on 21 March 2013.
