Typhoon Hagibis has brought chaos to Japan, and to the rugby world. With the Typhoon forecast to hit Tokyo and Yokohama, World Rugby made the decision to cancel two games on Saturday 12 October, New Zealand v Italy and England v France. Whether Scotland v Japan will go ahead currently hangs in the balance.
The game is a decider. Scotland need to win and claim four match points more than Japan in order to qualify for the quarterfinals. If the game is cancelled and declared a draw (as per the Tournament Rules), Scotland will be eliminated, and Japan will progress. As such, the Scottish Rugby Union (“SRU”) have threatened the game’s governing body, World Rugby, with legal action. According to a report in the Telegraph, the SRU will bring a “multi-million pound claim for damages” if the game is cancelled.
This article will briefly explain the basis on which the SRU is making this challenge and will consider how it might play out. Crucially, it will argue that World Rugby is perfectly entitled to cancel the game.
Disclaimer: at the time of writing, I have not had sight of the Participation Agreement and, as such, cannot definitively comment on the scope of the force majeure clause discussed below. I am writing on the basis of publicly available information.
The Participation Agreement and Tournament Rules
In order to take part in the Rugby World Cup 2019 (“RWC”), every participating Union had to sign the Participation Agreement. This sets out the terms of participation for the teams – the obligations they owe, and the obligations owed by World Rugby. In simple terms, it is a contract which governs the teams’ involvement in the RWC.
This agreement will have incorporated the Tournament Rules (along with World Rugby’s Regulations). So, by entering into the Participation Agreement, the Unions will have agreed to be bound by the Tournament Rules – which explain the cancellation procedures.
Are they Contractually Binding?
Sports regulations and competition rules have readily been construed as contracts in the courts (see Korda v ITF and Jones v WRFU).
It has been suggested that the SRU might not in actual fact have signed the Participation Agreement, such that they should not be bound by the Tournament Rules. However, this would not necessarily be fatal for World Rugby. In Modahl v British Athletics Federation, the Court of Appeal accepted that there are various bases upon which sporting parties can enter into agreements with governing bodies, one of which being “participation”. Simply by taking part in the RWC, which is governed by the Tournament Rules the SRU will be deemed to be bound by them.
Some have also questioned the fact that the SRU had no real choice in being bound by the Participation Agreement – if they wish to participate in the RWC, they had to agree with its terms, regardless of their views on its content. If there is no real consent, have the SRU really agreed to anything? This is something I have argued previously in the context of arbitration clauses (see here and here), and there is certainly something in this argument. However, the courts have consistently considered there to be sufficient consent (in order for sport to be administered effectively), in cases such as R v Disciplinary Committee of the Jockey Club, ex p Aga Khan and Stretford v Football Association. Any departure from this position would have to come from – in all probability – the Supreme Court.
Governing Law
The above assumes that the Participation Agreement and Tournament Rules will be governed by the law of England and Wales. This is based on World Rugby Bye-Law 15(b) which states that:
These Bye-Laws and any Regulations or Laws of the Game made pursuant thereto shall in all respects be governed by and construed in accordance with English Law, and any dispute arising there under shall be subject to the exclusive jurisdiction of the English Courts.
It is thus fair to assume that the Participation Agreement and Tournament Rules will also be governed by English Law…or, as it should properly be called, the Law of England and Wales!
The Cancellation Rules
Rule 3 of the Tournament Rules provides for what is to happen in the event of “Delayed, Postponed, Abandoned and Cancelled Matches”. There are separate rules for “Pool Matches” and “Knock-out Matches”. The rules on Pool Matches provide for matches to be delayed, cancelled or abandoned after commencement. There is no provision for postponing Pool Matches in the Tournament Rules. With regard to cancellation, the rules state:
Where a pool Match cannot be commenced on the day in which it is scheduled, it shall not be postponed to the following day, and shall be considered as cancelled. In such situations, the result shall be declared a draw and Teams will be allocated two Match points each and no score registered. For the avoidance of doubt, no bonus points will be awarded.
The rules are quite clear. If Scotland v Japan cannot be played on Sunday 13 October, it will be cancelled and declared a draw. This was the approach taken by World Rugby to the games cancelled on Saturday 12 October.
It is a principle of contract law that agreements can be varied by further agreements. As such, it will have been open to those involved in the matches to agree to vary the Tournament Rules with World Rugby to, for example, postpone the fixture until Monday. It has been reported that New Zealand insisted on the Tournament Rules being followed in relation to its match with Italy and, thus, the game had to be cancelled. Teams are within their rights to do this.
However, with Scotland v Japan, there is also Ireland to consider. Given that deviating from the Tournament Rules could potentially knock them out of the RWC, Ireland, too, would have to agree to the variation. One would imagine that this is unlikely.
The SRU’s Case
The SRU – having instructed eminent sports lawyer Nick de Marco QC – are arguing that there is a clause in the Participation Agreement which renders the above non-binding. According to the Telegraph, the SRU argue that there is a “force majeure clause” releasing the parties from their obligations to perform the agreement.
A force majeure clause is a contract term that relieves parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance of the contract impossible or, perhaps, significantly more difficult. Such clauses typically state the types of event which will trigger such relief, such as “outbreak of war” or “storm or tempest”. According to de Marco, the Participation Agreement clause refers to “storm or tempest”.
Typhoon Hagibis is certainly a “storm”, so the force majeure clause may apply. If it does, both the SRU and World Rugby are released from their obligations. In other words, the Participation Agreement no longer binds them. In such a case, World Rugby could not insist on sticking to the Tournament Rules outlined above (although this would presumably also extinguish the SRU’s right to participate!).
However, this clause conflicts with Rule 3 of the Tournament Rules. The force majeure clause will state that the “storm or tempest” must prevent or perhaps substantially hinder performance of the Participation Agreement in order for the parties to be released from their obligations. Yet the Participation Agreement, by virtue of Rule 3, makes provision for exactly this type of situation – Rule 3 ensures that even if there is a typhoon, the Participation Agreement will still continue, by providing for a solution to the problems it creates.
In other words, performance of the Participation Agreement is not prevented or made more difficult because it is still perfectly possible for Rule 3 to take effect. In fact, Rule 3 only comes into play when there is an intervening event like a storm or other natural disaster – it is specifically designed to solve this type of problem.
As such, on a proper construction of the force majeure clause (subject to the disclaimer above) and the Tournament Rules, both the SRU and World Rugby will surely remain bound by the terms of the Participation Agreement and, thus, World Rugby will be within its rights to cancel the game, should they deem it necessary.
It might, therefore, be that these claims from the SRU are simply being made to pressure World Rugby into not cancelling the game.
An Injunction?
It was at first suggested that the SRU might seek to obtain an interim injunction to prevent World Rugby cancelling the game. To do so, they would have to act incredibly swiftly and – given the above – it is unlikely that they would succeed. This is particularly so if they are arguing that the force majeure clause takes effect, as this amounts to arguing that the Participation Agreement is terminated. In such circumstances, though World Rugby would have no right to cancel the game, the SRU would have no right to participate in the tournament. As such, this would deprive them of the very right they seek to protect.
Nonetheless, the test for awarding an interim injunction – i.e. an injunction pending the full resolution of the case – is, if there is a serious question to be tried, the “balance of convenience” test (American Cyanamid Co v Ethicon Ltd).
This test involves asking whether damages would be an adequate remedy and whether a cross-undertaking in damages from the SRU would be sufficient to protect World Rugby if, at trial, the interim injunction proves to have been wrongly granted. If there is any doubt, a court will consider the balance of convenience more generally – this may involve consideration of the case’s merits and the general preference that the status quo is preserved.
It is also worth raising the point made by lawyer Tim O’Connor that injunctions are, ultimately, equitable remedies, such that the principles of equity must apply. Given that World Rugby have already cancelled Italy and France’s games, it may not be equitable to award the SRU an injunction.
Suing for Damages?
The Telegraph reports suggest that the SRU are no longer pursuing an injunction but will push ahead with a claim for damages if the game is cancelled. Three specific points are worth discussing.
Firstly, it is not clear what they would be suing for breach of. As above, if they are arguing that the contract is terminated, there is nothing to sue under.
If they are not arguing that the contract is terminated – perhaps due to further nuance in the force majeure clause – they will presumably sue for breach of a term entitling them to participate. Given the earlier analysis, it is unlikely that they could succeed in establishing a breach, if World Rugby took steps to ensure that the game could be played as scheduled. Given that Typhoon Hagibis is the worst storm to have hit Japan in 60 years, it would be difficult to argue they have not done all they could, within the Tournament Rules. This is particularly so because Tournament Rule 3 gives World Rugby (or, more precisely the RWC organisers, RWCL) a broad discretion:
in circumstances deemed necessary and/or appropriate by RWCL, Matches may need to be delayed, postponed, abandoned or cancelled…
Secondly, the SRU would be claiming for the loss of a chance of progressing in the RWC. Given the permutations of Pool A, some detailed statistics would be required to calculate the probability of Scotland reaching the quarterfinals – and going beyond. Any damages claimed would be reduced according to the percentage chance of this event occurring (see Perry v Raleys Solicitors)
This is related to the third and final point; that it would be incredibly difficult to quantify the SRU’s losses in financial terms. It would require detailed evidence and thorough examination of that evidence to establish what exactly the SRU will lose by missing being eliminated in the pool stage (prize money aside). Perhaps they could ask the RFU.
Conclusion
In light of the above analysis, it is argued that World Rugby have every right to cancel the game if it considers such action necessary and that, failing a specific clause that we are not yet aware of, the SRU have little to no chance of bringing a successful legal challenge.