Wednesday 26 November 2014

Dispute over disclosure of documents for legal action by Rory McIlroy to be heard next month

Published 24/02/2014 | 19:00

Rory McIlroy holds a one-shot lead at the Omega Dubai Desert Classic
Rory McIlroy
Rory McIlroy. Photo: Ross Kinnaird/Getty Images
Rory McIlroy
Rory McIlroy. Photo: AP Photo/Ted S. Warren

A DISPUTE over the extent of documents which must be disclosed for the legal action by golfer Rory McIlroy over a representation agreement for services provided by a sports management company will be heard next month.

Mr McIlroy claims he signed the December 2011 representation agreement with the company under "undue influence" when he was just 22 years-old and inexperienced.

As a result, he says, he has paid more than US$6.8m (€4.9m) based on "unreasonable" fee rates "many times greater" than is standard in the sports agency industry.

He also alleges the defendants - Dublin-based Horizon Sports Management; Gurteen Limited, with a registered address in Malta, and Dublin-based Canovan Management Services - are not entitled to be paid certain fees into the future related to his US$20m a year sponsorship deal with sportswear giant Nike.

In denying those claims, the defendants contend Mr McIlroy freely entered into the December 2011 agreement under which he agreed to pay certain defined remuneration for services provided to him.  They deny any undue influence or that the terms of agreement were unreasonable or unconscionable and contend Mr McIlroy is not entitled to terminate the agreement.

The defendants have also counter-claimed for monies allegedly owed under the agreement, including some US$3m fees for off-course gross revenues. They are also seeking damages over alleged breaches of the agreement which, they say, are continuing.

The claim for damages includes a claim the defendants have been denied the opportunity to sell the branding rights to Mr McIlroy's golf bag to the corporate market. It is also alleged the defendants have been denied the opportunity to continue building Mr McIlroy's global commercial model as per an alleged agreed long term brand strategy.

The central issue in the case relates to the validity and enforceability of the December 2011 representation agreement which, Mr McIlroy insists, he is not bound by.  The defendants contend it was agreed with Mr McIlroy that the contractual rights under the December 2011 agreement were with Gurteen rather than Horizon but he disputes that. 

Horizon admits his relationship concerning the matters at issue in the case was "de facto" with Horizon but it contends, once the representation agreement was signed, Horizon provided the services as agent for Gurteen and, later, Canovan.

The full hearing of the action is expected to open later this year but issues over discovery of documents in advance came before Mr Justice Peter Kelly yesterday in the Commercial Court.

The judge was told there was agreement on some of the discovery sought but the sides remained in dispute on other discovery matters. That discovery dispute will be heard over two days from March 19.

Ciarán Lewis BL, for the defence, indicated his side may also be in a position to inform the court by March 19th whether they intend to proceed with an application to take evidence on commission from witness who is unwell,  Owen O'Connell, a solicitor and partner in William Fry Solicitors. 

In the context of Mr McIlroy's claim he entered into the representation agreement as a result of "undue influence", Mr O'Connell is  "an indispensable witness" as he was present for the execution of the agreement, the defendants said in an affidavit.

As Mr O'Connell is very unwell, Mr Justice Kelly said the issue of whether it was necessary to take evidence on commission from him, or whether the matter can be dealt with via an agreed statement of evidence from Mr O'Connell, should be addressed.

Among documents sought by the defendants are all documents relating to a settlement of proceedings with Oakley Inc concerning a sponsorship agreement, including any and all negotiations and communications between Mr McIlroy, Nike and Oakley leading to that settlement.

In his discovery application, Mr McIlroy wants, among many categories of documents, all documents concerning the termination of his contract with International Sports Management Ltd and all documents relating to the defendants' management of his affairs from October 2011.

He also wants all documents concerning the negotiation, formation, drafting and execution of the December 2011 agreement.

Other documents sought include material relating to commercial contracts entered into by the defendants.

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