The Premier League have been left stunned by an appeals board's decision that they are unable to punish Leicester City for an alleged breach of their profit and sustainability rules (PSR).
Leicester were up on a charge applying to the three-year period from 2020/21 to 2022/23, having lost more than the permitted £105m over that span.
However, an independent panel found in Leicester's favour - and against the Premier League - after they appealed against the charge, meaning they will now not face a points deduction in the current season.
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Why did Leicester City's appeal against their PSR charge succeed?
Leicester City had appealed on grounds that technically speaking, they were not a Premier League club when charges were laid against them, having been relegated from the top flight at the end of the 2022/23 season.
There was a period between Leicester's admission into the EFL in June 2023 and the end of their financial year, which came on 30th June 2023.
The club argued that the Premier League therefore had no jurisdiction over them - and an independent appeals' panel agreed. Their written decision said: "It is not obvious why such a club should be subject to the disciplinary jurisdiction of the Premier League."
Isn't it common sense that Leicester WERE a Premier League club in 2022/23?
Yes, it is, and that's exactly the case the Premier League tried to make. But this appeal was not held under rules of common sense - it was heard under the terms of contract law, with the Premier League rules held to be a contract between the clubs and the league.
The case hinged around at what point the breach is adjudged to have taken place: was it, as Leicester argued on 30th June 2023, by which point Leicester were no longer legally a Premier League club; or, as the Premier League argued, should you take the entire year into account and say 'well, they were a Premier League club for most of it, so it's irrelevant'?
The appeal board went with the first one, finding that the Premier League's rules, as written, specify 'at midnight on 30th June', and that Leicester' Premier League/EFL status had been transferred with Championship play-off winners Luton Town earlier in the month.
There was quite some debate among the panel as to whether they should be quite so literal, but they ultimately fell in line with precedent from the civil courts in matters of contract law.
As they put it in their decision: "The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Accordingly, when interpreting a contract a judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party."
How have the Premier League reacted to Leicester's PSR appeal?
Not happily. The Premier League sought to punish Leicester in a manner consistent with how they dealt with Nottingham Forest and Everton last season, when both clubs received points deductions.
But the Premier League are now bound to the decision of the appeals panel in this case, and have expressed their dismay at how the rules have been intepreted by the panel.
The league said in a statement: "The Premier League is very disappointed with the Appeal Board’s decision, and the limited reasons provided for it."
They added: "If the appeal board is correct, its decision will have created a situation where any club exceeding the PSR threshold could avoid accountability in these specific circumstances. This is clearly not the intention of the rules."
As the appeals board made clear, though: "Unless [the words of the Rules] are truly ambiguous or nonsensical, [a club] should not have to consider the unwritten intentions of the PL and the other Clubs.“
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