MasterCard and FIFA may go to arbitration

An arbitration panel might have the final word on whether MasterCard or Visa is the sponsor of the next two World Cups.

The three-judge panel of the 2nd U.S. Circuit Court of Appeals reserved the ruling on the case after hearing oral arguments. But two of three judges said the arbitration panel in Zurich, Switzerland, might be entitled to decide some aspects of the dispute.

FIFA lawyer William M. Brodsky told the appeals panel Wednesday that contracts between MasterCard and FIFA provide the governing body with the right to arbitrate disputes rather than have the courts decide them.

MasterCard has maintained that FIFA wants the case arbitrated to give it a second chance to go ahead with its Visa deal.

FIFA filed a lawsuit with the arbitration panel asking it to consider the dispute after U.S. District Judge Loretta Preska ruled last December that MasterCard International Inc. can sponsor the next two World Cups in 2010 and 2014. Preska ruled FIFA did not honor its MasterCard agreements when it awarded the rights to Visa International Inc.

Preska said FIFA misled MasterCard into thinking it had an exclusive 90-day period in early 2005 to consider a sponsorship deal for the next two World Cups. Instead, FIFA was simultaneously negotiating with Visa.

Judge Sonia Sotomayor said the arbitration panel should be permitted to decide which contract is valid. And Judge Ralph K. Winter agreed some of the issues in the dispute may have to be decided through arbitration.

One major sticking point is whether FIFA should be bound by a contract signed with MasterCard in 2005, or one it decided against signing in March 2006.

Source: euFootball.BIZ © Copyright 2006 - All rights reserved.