Dorsey James Michael v World Sport Group Pte Ltd

• Judge: Sundaresh Menon CJ
• Judgment Date: 14 January 2014
• Neutral Citation: [2014] SGCA 4
• Citation: [2014] SGCA 4
• Court: Court of Appeal (Singapore)
• Published date: 28 January 2014
• Docket Number: Civil Appeal No 167 of 2012
• Plaintiff Counsel: N Sreenivasan SC and Sujatha Selvakumar (Straits Law Practice LLC) and George Hwang (George Hwang LLC)
• Defendant Counsel: and Deborah Barker SC and Ushan Premaratne (KhattarWong LLP)
• Subject Matter: Civil procedure,Interrogatories,application for leave
• Hearing Date: 25 September 2013

V K Rajah JA (delivering the judgment of the court):

This appeal raises important questions about the proper exercise of judicial discretion in the ordering of pre-action interrogatories. The grant of pre-action interrogatories, while not exceptional, is not usual. It requires a court to take a multi-factorial approach that necessitates the answering of a number of questions. What matters can and/or ought to be considered by a court in assessing the merits of a pre-action application for interrogatories? What is the relevance of the particular subject matter of the proceedings? When is it just to grant pre-action interrogatories? Here, at the heart of the existing legal controversy are potential claims for defamation and breach of confidence arising from the publication of certain blog posts alleging that serious improprieties had been committed by a former head of an international sports body by entering into questionable transactions with certain commercial entities.

Facts Parties to the dispute

The appellant, James Michael Dorsey (“Dorsey”) is a Senior Fellow at the S Rajaratnam School of International Studies, Nanyang Technological University (“NTU”). In addition, Dorsey asserts that he continues to be a journalist and has been one for almost four decades. He has at various times worked as a foreign correspondent for the New York Times, Financial Times, and the Wall Street Journal. At all material times, Dorsey maintained a blog titled ‘The Turbulent World of Middle East Soccer’ (http://mideastsoccer.blogspot.sg/), where he discussed political, economic and social issues relating to the sport of soccer in the Middle East.

The respondent, Word Sport Group (“WSG”), is an international sports marketing, media and event management company. Part of its business involves the sale and exploitation of commercial rights in connection with sporting events taking place throughout Asia and the Middle East. WSG and its related entities have had commercial links with the Asian Football Confederation (“AFC”) since 1993. On 15 June 2009, the AFC and World Sport Football, a company associated with WSG, entered into a Master Commercial Rights Agreement (“MRA”) in relation to the commercial rights of major football competitions held under the auspices of the AFC. The MRA was novated to WSG on 1 January 2010. It is this document that takes centre stage in these proceedings.

Background facts

The subject proceedings came in the wake of shocking allegations of bribery and corruption which rocked the AFC and caused grave consternation in the global footballing community around July 2011. This culminated in the suspension and ban of its former President, Mr Mohamed Bin Hammam (“Bin Hammam”), from all football-related activities by the Fédération Internationale de Football Association (“FIFA”). Subsequently, this ban was overturned by the Court of Arbitration for Sport (“CAS”), but FIFA eventually banned him again because of unresolved concerns about his handling of AFC’s funds and an investigation into election bribery charges.

In July 2012, a report on this troubling matter was finalised by PricewaterhouseCoopers Advisory Sdn Bhd (“PWC”), acting under the instructions of the AFC (“the PWC Report”). PWC had been tasked by AFC to investigate and review certain transactions, accounting practices and contracts negotiated during Bin Hammam’s tenure as president of the AFC, from 2002 to 2011. The PWC Report generated great international media interest and controversy as it raised, among other matters, troubling questions about the propriety of the MRA structure and its terms. In particular, the PWC Report found that the MRA comprised no-bid contracts which were considerably undervalued and that Bin Hammam had allegedly received substantial amounts of money from individuals linked to various AFC contracts during his tenure as AFC President. A copy of the PWC Report was later submitted to FIFA by AFC.

Between July and August 2012, the key findings of the PWC Report were referred to extensively by the international media all over the world in their reporting on Bin Hammam’s alleged involvement in this scandal. These included news.com.au, SaudiGazette.com.sa, Daily Reporter, The Republic, The National, SI.com, Al Jazeera, San Francisco Chronicle and Greenwich Time. For instance, on 7 August 2012 SaudiGazette.com.sa published an article that stated:¹

The audit, prepared by the international accounting firm of PricewaterhouseCoopers and dated July 13, claims the 63-year-old Qatari [Bin Hammam] received millions of dollars from individuals linked to AFC contracts during his tenure that dates back to 2002 and spent tens of thousands on items such as a honeymoon for his son and dental work, haircuts and cash payments for his family

…

The audit found that a contract for commercial rights with World Sports Group and its subsidiary World Sports Football were no-bid contract that were “considerably undervalued.” A $14 million payment from companies with stakes in WSG, Al-Baraka Investment and Development Co. and International Sports Events Company was made to the AFC for the “personal use of its president” the report said.

…

The audit said its review of the AFC accounts found that tens of thousands of dollars in cash were routinely given to federation presidents and their relatives. Most of it went into their personal bank accounts and none of it was for football-related expenses, it said.

Dorsey too covered the issue in various blog posts on his blog titled “Bin Hammam Audit Opens Pandora’s Box – Analysis” (dated 23 July 2012); “Qatar and UAE Hire Fired AFC Bin Hammam Associates – Analysis” (dated 24 July 2012); “FIFA’s suspension of Bin Hammam buys time/ Column by James M Dorsey” (dated 29 July 2012); and “FIFA investigates: World Cup host Qatar in the hot seat” (dated 28 August 2012) (collectively, “blog posts”)². In the blog posts, Dorsey allegedly made extensive references to and/or quoted the PWC Report and the MRA. To substantiate his assertions, Dorsey cited various “sources close to the AFC” or “sources” (collectively, “sources”) in the blog posts as well. In relation to the present appeal, only the blog post-dated 28 August 2012 remains material. Indeed, the Judge only relied on the 28 August 2012 blog post in her decision (World Sport Group Pte Ltd v Dorsey James Michael [2013] 3 SLR 180 (“GD”) at [23]). The relevant excerpts from that blog post which was captioned “FIFA investigates: World Cup host Qatar in the hot seat” are as follows³:

The AFC has raised questions about the sincerity of its investigation by hiring the [Freeh group owned by former FBI director Louis Freeh which produced a report which served as part of the basis for Bin Hammam’s ban] despite CAS’s (sic) rejection of its earlier work. The group has been tasked with further investigating the findings of a report by Price Waterhouse Cooper (PwC) that charged [Bin Hammam] had used an AFC sundry account as his personal account and raised questions about his negotiation of a $1 billion marketing and rights contract with Singapore-based World Sport Group (WSG), a $300 million contract with the Qatar-owned Al Jazeera television network and payments of $14 million to [Bin Hammam] by entities belonging to a Saudi businessman with a vested interest in the WSG deal. …

…

The WSG master rights agreement (MRA) that according to sources close to the AFC handed the soccer body’s assets embodied in its rights to the company is certain to be at the core of both investigations. PwC questioned the fact that the contract as well as the agreement with Al Jazeera had been awarded without being putting (sic) out to tender or financial due diligence. Sources close to AFC said the contract awarded WSG all the benefits while ensuring that AFC retained the potential liabilities. PwC said the contract failed to give AFC a right to audit WSG’s services or costs. “In comparison with similar-type agreements for other sports, it appears that the current MRA may be considerably undervalued,” the PWC Report said.

…

Sources close to the AFC said the soccer body had been advised to conclude a service provider rather than a master rights agreement with WSG. This would have allowed the AFC to retain control of its rights, determine how they are exploited and enabled it to continuously supervise the quality of services provided by WSG. … They said the contract was out of sync with other international sports bodies that had shifted years ago from rights to service provider agreements.

The sources said the WSG agreement was further detrimental to AFC’s interests because it failed to precisely define what commercial rights were being granted. As a result, the sources said, AFC had effectively surrendered its treasure, making it difficult, if not impossible, for the soccer body to explore potential opportunities with third parties.

The sources said the contract put WSG in the driver’s seat with no oversight or transparency. They said WSG determined which AFC officials would be members of the committee that oversees WSG’s execution of the agreement. AFC further failed to insulate itself from any damages that could arise from WSG actions[.] … They suggested further that contract gave WSG rather than the AFC control of monies emanating from the agreement.

It merits reiteration that by 28 August 2012 several articles in the international media had already made explicit references to this alleged corrupt relationship between Bin Hamaan and WSG. For example on 30 July 2012 the Wide World of Sports, News.com.au, The Republic and Al Jazeera (amongst others) reported that the subject commercial rights agreement between AFC and WSG were no bid contracts and were “considerably undervalued” [emphasis in original].⁴There is absolutely no suggestion by WSG in these proceedings that it was Dorsey who broke the story on the PWC Report findings and/or the nature of the...