Wednesday 22 October 2014

Rory McIlroy wants autumn trial date for management company dispute

Tim Healy

Published 20/03/2014 | 16:47

Rory McIlroy. Picture: Mark Metcalfe/Getty Images
Rory McIlroy. Picture: Mark Metcalfe/Getty Images

GOLFER Rory McIlroy wants an autumn trial date for his legal challenge over a 2011 fees agreement with agents managing and promoting him.

He is contesting the validity and enforceability of representation agreements with three companies involving allegedly "unreasonable" fee rates and commissions, the Commercial Court has been told.

Rossa Fanning BL, for Mr McIlroy, said his side is anxious for a trial date in October because the golfer, due to his commitments, has "limited windows". 

Paul Sreenan SC, for the three companies, said he was not sure if that trial date could be achieved.

Counsel was speaking during a hearing in which he sought disclosure of documents from the companies in preparation for his action.

Mr Sreenan said his clients would do their best to discover all the documents sought by Mr McIroy's side for the hearing by June 12 next but could not guarantee that deadline would be met.

Ms Justice Mary Finlay Geoghegan said the matter would be listed on June 16 for further directions when it would then be decided if a trial date could be fixed.

Mr McIlroy's case is against Dublin-based Horizon Sports Management Ltd; Gurteen Limited, with a registered address in Malta, and Dublin-based Canovan Management Services.

He argues a representation agreement signed by him in December 2011 is not valid and enforceable on grounds including undue influence. That agreement was signed when he was aged just 22, inexperienced and without the benefit of independent legal advice, he claims.

The agreement, he also alleges, resulted in him paying more than US $6.8m based on "unreasonable" fee rates "many times greater" than the standard in the golf industry, including 20 per cent commission on his off-course earnings and 5 per cent on his on course earnings

He also alleges the defendants are not entitled to be paid certain fees into the future related to his US$20m a year sponsorship deal with sportswear giant Nike.

The defendants deny the claims and have counter-claimed for some US $3m dollars allegedly outstanding for off-course gross revenues and other sums allegedly outstanding under the December 2011 and a March 2013 agreement, plus damages for alleged past and continuing breaches of the agreements.

They claim they have been denied the opportunity to sell the branding rights to Mr McIlroy's golf bag and to continue building his global commercial model under an alleged agreed long term brand strategy.

Earlier, when ruling on a small number of outstanding discovery issues between the sides, the judge said Mr McIlroy was entitled to get all documents dated between October 18, 2011, and September 27, 2013, concerning the legal and beneficial ownership of all three companies, their shareholdings and their legal relationship. Those documents include material concerning the ultimate beneficial ownership of any companies holding shares in any of the defendant companies.

The motivation behind the incorporation of Gurteen and Canovan was arguably relevant to the issue whether Mr McIlroy still had a relationship with Horizon when the representation agreement was executed, the judge said.

In that context, she also directed disclosure of documents concerning financial, tax and other advices given concerning the incorporation and use of those two companies regarding management of Mr McIlroy.

While the defendants had argued Mr McIlroy was not entitled to documents concerning Horizon, the judge ruled he was because there was an issue in the case as to whether Horizon controlled Gurteen and Canovan.

Agreement was earlier reached concerning discovery by both sides of various other categories of documents sought for the action, including documents relating to fees and commissions for agents of professional golfers

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