11KBW in restraint of trade case for tennis star

Cases

A dispute between Alexander Zverev, one of the world’s leading tennis players, and his former agent, Ace Group, settled in the High Court yesterday on the second day of a nine day trial. The case raised important issues as to the proper approach to applying restraint of trade principles to sports agency contracts, including as to the implications of the Supreme Court’s recent decision in Peninsula Securities Ltd v Dunnes Stores (Bagnor) Ltd [2020] 3 WLR 521, which decision overturned the House of Lords’ judgment in Esso Petroleum Co Ltd.

In 2012, when he was aged only 15, Mr Zverev entered into an exclusive agency agreement with a sports agency company, Ace Group Ltd. Some seven years later, in 2019, Mr Zverev’s career was flourishing and he decided that he wanted to leave Ace and seek out alternative representation. Accordingly, he wrote to Ace confirming that he was terminating their relationship. Ace responded by asserting that it was not open to Mr  Zverev to terminate the contract, because the effect of the contract he had entered into in 2012 was that he was required to retain Ace as his agent on an exclusive basis until 2023. Ace’s persistent refusal to treat the contract as having been effectively terminated resulted in Mr Zverev issuing a claim before the English High Court for a declaration that the contract was unenforceable on restraint of trade grounds. Ace disputed the claim for declaratory relief and counterclaimed for a declaration that the contract was enforceable. That counter-claim for declaratory relief was coupled together with a claim for the damages, brought on the basis that Ace had suffered loss and damage as a result of Mr Zverev’s purported early termination of the contract and an alternative claim for a quantum meruit payment for services rendered under the contract. Ace also brought a Part 20 claim against Mr Zverev’s parents, which claim was brought on the basis that, pursuant to a parental guarantee they entered into when the contract with Mr Zverev was signed, the parents were liable to indemnify Ace in respect of all damages and costs incurred by Ace as a result of Mr Zverev’s early departure.

Last month, Ace tried and failed to prevent Mr Zverev’s legal team from accessing the alleged comparator contracts relied on by Ace’s expert (see further the report on this on Lawtel). Yesterday morning, on the second day of trial, proceedings were settled (on non-confidential terms) on the basis that Mr Zverev was free of all obligations under the contract and was not required to pay any sums to Ace (whether in costs, quantum meruit or otherwise).

The case, and its settlement, has been widely reported in the UK and in Germany:

Mr Zverev and his parents were represented by 11KBW’s Anya Proops QC, Zac Sammour and Michael White, instructed by Mark Stephens and Elizabeth Morley at Howard Kennedy.