Sky Blue Sports & Leisure Ltd & Ors, R (On the Application Of) v Coventry City Council

Sky Blue Sports & Leisure Ltd & Ors, R (On the Application Of) v Coventry City Council

A rational private market operator with a 50% shareholding in ACL might have made the loan on the terms agreed, considering long-term profitability and commercial objectives; thus, the loan was not State aid. The Council took into account all material considerations and acted within its discretion. The decision was not irrational.

Parties
Claimant: Sky Blue Sports & Leisure Limited; Claimant: Arvo Master Fund Limited; Claimant: Coventry City Football Club (Holdings) Limited; Defendant: Coventry City Council; Interested Party: Arena Coventry Limited; Interested Party: The Alan Edward Higgs Charity
Jurisdiction
England and Wales
Judgment Date
30 June 2014
Procedural Posture
Judicial Review / Final Judgment After Substantive Hearing
Outcome
Claim dismissed; permission refused on Ground 2.
Legal Topics
State Aid, Wednesbury Irrationality, Material Considerations, Local Authority Powers
Public Law European Union Law Local Government Law State Aid Wednesbury Irrationality Material Considerations Local Authority Powers

Case Brief

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Parties

Sky Blue Sports & Leisure Limited

Claimant

Arvo Master Fund Limited

Claimant

Coventry City Football Club (Holdings) Limited

Claimant

Coventry City Council

Defendant

Arena Coventry Limited

Interested Party

The Alan Edward Higgs Charity

Interested Party

Procedural Posture

Judicial Review / Final Judgment After Substantive Hearing

Legal Issues

  1. 1 Whether the Council's £14.4m loan to ACL constituted unlawful State aid under EU law
  2. 2 Whether the Council failed to take into account material considerations in making the loan decision
  3. 3 Whether the Council's decision was irrational in the Wednesbury sense

Ratio Decidendi

A rational private market operator with a 50% shareholding in ACL might have made the loan on the terms agreed, considering long-term profitability and commercial objectives; thus, the loan was not State aid. The Council took into account all material considerations and acted within its discretion. The decision was not irrational.

Court Disposition

Claim dismissed; permission refused on Ground 2.

Orders

  • Application refused on Grounds 1 and 3.
  • Permission to proceed refused on Ground 2.