Manchester City have launched a fresh legal challenge against the Premier League over its Associated Party Transaction (APT) rules, marking the latest development in an ongoing dispute between the league and its champions.
The club initiated new arbitration proceedings on January 20, 2025, contesting amendments to sponsorship regulations that were approved by Premier League clubs in November 2024.
City are seeking a declaration that the current APT rules, which govern commercial deals between clubs and companies linked to their owners, are "unlawful and void."
The challenge will be led by Lord Pannick KC, who is also representing the club in their defence against 115 charges of alleged breaches of Premier League financial rules.
City have ramped up the war between them and the Premier League with a legal dispute of their own
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The case represents a further escalation in the increasingly tense relationship between the Premier League and its reigning champions.
City's challenge centres on the treatment of shareholder loans under the revised regulations, which they claim remains discriminatory and unfair.
The club argues that while commercial deals must undergo fair market value assessments, existing shareholder loans have been "set to one side" and escape retrospective fees worth millions.
Some of City's rivals, including Arsenal and Liverpool, have benefited significantly from such lending arrangements.
The champions specifically contest that clubs can continue to benefit from shareholder loans with only the interest rate subject to fair market assessment.
They further object that clubs can obtain the full value of these loans before any such assessment takes place.
The dispute follows City's partial victory in a previous arbitration, where a panel found elements of the original APT rules to be unlawful.
The amendments to the APT rules were passed in a Premier League vote last November, with 16 clubs supporting the changes.
Only four clubs opposed the modifications: Manchester City, Aston Villa, Newcastle United and Nottingham Forest.
Prior to the vote, Villa had warned other clubs about the likelihood of legal action from Manchester City.
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City still face 115 charges from the Premier League
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In a letter to clubs, Villa stated it was "abundantly clear that any vote (if passed) will result in immediate further litigation by Manchester City FC."
The vote followed City's initial legal challenge in June 2024, when the Premier League rejected a new sponsorship agreement with Abu Dhabi-based airline Etihad.
The Premier League had ruled this deal was not of fair market value, triggering the first round of legal proceedings.
Premier League chief executive Richard Masters has informed clubs of City's new challenge through a letter sent on Thursday.
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Lord Pannick is defending City from the Premier Leaguw
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"The Premier League remains strongly of the view that the amendments passed in November were lawful and the APT rules comply with all competition law requirements," Masters wrote.
He emphasised the need for swift resolution, stating: "We consider that the new arbitration must be resolved as soon as possible and, to that end, have agreed that the same tribunal should be appointed to hear the new case."
The Premier League confirmed that existing APT rules will remain in force while the challenge proceeds.
No timeframe has yet been set for the arbitration hearing, though both parties are currently corresponding regarding further directions.
The matter is expected to be discussed at what sources describe as a "feisty" Premier League shareholder meeting on Thursday.
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