RANGERS have lost their legal battle with Sports Direct over the disclosure of documents relating to the club's deal with Castore and could be forced into a multi-million pound pay-out.
A company in the Sports Direct Group, SDI Retail Services (SDIR), is suing the Ibrox club for damages after successfully claiming Gers had breached an agreement with the sportswear firm over merchandise rights.
The sportswear firm owned by Mike Ashley (who will step down in May next year) took
Rangers to court to claim for losses arising from the club's kit deal with Hummel, struck in 2018, but their most recent deal with Castore also factors in when calculating the final cost of the damages.
This latest development will reveal how much money
Rangers and Castore made and therefore how much Sports Direct would have had Gers complied with their contract, with a trial date in June.
As a result, the retail firm could be entitled to several million pounds worth of damages.
Mr Sa'ad Hossain QC argued on behalf of SDIR that details of the Castore deal should be disclosed as part of a bid to determine potential damages.
In court documents seen by
SunSport, Mr Hossain submitted: "Castore has been the exclusive manufacturer and wholesale supplier of Rangers Replica Kit and clothing Branded Products for the 2020-2021 season. It has also exclusively operated the Rangers Megastore and an official online store, where it has retailed Replica Kit and other Branded Products and acted as wholesaler and supplier of Replica Kit and clothing Branded Products to retailers (including Sports Direct). Castore's agreement is of the same or similar kind common to both Elite/Hummel's position and to SDIR's counterfactual scenario.
"Castore's sales revenues are the primary source of actual data from which the level of SDIR's counterfactual sales in the 2020-2021 season, and sales made in the 2019-2020 season that relate to the launch of the 2020-2021 season's kit, can be analysed. It is therefore invaluable and irreplaceable to have sales figures that reflect the particular season in respect of which damages are to be quantified.
"Castore's sales revenues will also be an important comparable for the earlier 2018-2019 and 2019-2020 seasons. This is because the Elite/Hummel sales data for those seasons is affected by the inhibiting influence of the injunctions which had been ordered by the Court in respect of the Elite/Hummel Agreement and the September 2018 Agreements during those seasons. After Rangers contracted with Castore in around March 2020 and Castore commenced in its role in August 2020, Replica Kit and other products have been sold without injunctive restraint, and those sales will therefore provide the best (or amongst the best) guidance as to sales in the counterfactual world where SDIR had entered into similar arrangements that were similarly capable of being performed without restraint.
"The Castore Documents are not just relevant, they are likely to be central to any assessment of damages and therefore are necessary for the just disposal of the proceedings. It is reasonable and proportionate to order their disclosure. Any disclosure order would be in respect of a narrow class of documents: one agreement and five Quarterly Statements for each of the three Offered Rights (with any information or documents accompanying them)."
Mr Akhil Shah QC (who appeared with Mr Max Kasriel), on behalf of Rangers, argued that disclosure of the documents was "unnecessary", and that it would "complicate and add cost to the experts' stage of the litigation".
He added: "Since, as Rangers contends, Castore's rights were considerably broader than those rights SDIR claims it would have had in the 2020-2021 season, if Castore's sales information is disclosed in these proceedings it is likely that the parties' experts would have to undertake additional and potentially complicated, ie costly, analysis in order to determine what elements of Castore's sales in the 2020-2021 season relate to rights that SDIR alleges it would have had in that season. The work of the experts becomes even more complicated and convoluted."
Judge Peter MacDonald Eggers QC ruled in favour of Sports Direct, paving the way for the details of the deal to be made public.
He said: "I allow SDIR's application for an order under paragraph 18 of CPR PD51U for the disclosure of the Castore Agreement, as well as the Castore Quarterly Statements (to include documents containing the accompanying information within the meaning discussed above) for the 2020-2021 season, but not the Quarterly Statement for the first quarter of the 2021-2022 season.
"In my judgement, an order for specific disclosure within the meaning of the second sentence of paragraph 18.1 of CPR PD51U is justified given that the documents sought are specifically identified or fall within a narrow compass and relate to Issues for Disclosure, even if they do not fall within the date range within the Court's order for Extended Disclosure dated 16th February 2021. Insofar as it is relevant, I would alternatively have been prepared to make an order varying the Court's order for Extended Disclosure to embrace these documents.
"I am very grateful to both counsel for their helpful submissions."
In July 2019, judge Lionel Persey said Rangers had breached a legal agreement and allowed a Sports Direct subsidiary to make an offer for the club's merchandising, including replica kits.
He ruled Mr Ashley's business should've been given the opportunity to match a shirt deal reached with football merchandising firm Elite and the Danish firm Hummel, believed to be worth £10m.
The company won another round of the ongoing kit wrangle in February this year when Mr Persey ruled that
the club had to reveal files linked to former Rangers bosses Dave King and Paul Murray.
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