Ospreys and Scarlets in legal action against WRU amid Cardiff controversy
The WRU's acquisition of Cardiff didn't go down well in some quarters and its emerged a legal challenge has been launched
The Ospreys and Scarlets are in the midst of a legal challenge against the Welsh Rugby Union
(Image: Huw Evans Picture Agency Ltd)
The Welsh Rugby Union are in the midst of a legal challenge from the Ospreys and Scarlets over the governing body's acquisition of Cardiff in April.
WRU chair Richard Collier-Keywood has confirmed the WRU have been embroiled in a legal dispute with two of its professional clubs but has emphasised his confidence in the union's position. Cardiff entered administration last April after Helford Capital failed to meet its financial requirements, leading to the WRU assuming ownership of the capital city club.
This resulted in the Ospreys and Scarlets refusing to sign the new Professional Rugby Agreement (PRA) over concerns Cardiff would receive favourable treatment from the governing body. The WRU responded by calling in the two-year notice period on the old PRA, which has led Welsh rugby to the brink of a reduction of professional clubs from four to two.
Confirmation of the ongoing legal challenge came on the day the WRU publicly announced it's preferred plan to halve the number of pro teams to just two, with a six-week consultation to now begin.
The WRU has been accused by the two west Wales clubs of being in breach of UK and EU competition law as well as an abuse of its dominant position.
Collier-Keywood says the process is ongoing but wants the arbitration to be postponed until after the consultation process.
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"We are defending that as you might expect us to and we are confident of our position," he said. Sign up to Inside Welsh rugby on Substack to get exclusive news stories and insight from behind the scenes in Welsh rugby.
"At the moment we have an arbitration which is scheduled for sometime in October.
"Whether that takes place or not I think is a matter for all three parties involved in the arbitration.
"Our view from a WRU point of view, which we expressed to the parties, is we think it would be better if that arbitration is stayed to allow us to do this consultation properly.
"If people are uncomfortable over the outcome of that at that point of time then of course they can restart a legal challenge if they want to."
WalesOnline understands it is likely to be postponed until December by which time the WRU will have decided on the number of professional clubs and which ones will either be merged or killed off completely.
But Collier-Keywood is adamant this does no jeopardise the consultation process.
"I don't think so," he said when asked.
"I think we have to manage both and they are clearly interrelated. We've been really public about this around May, we had some really cogent reasons around why we did need to step in and rescue Cardiff.
"We actually talked through that with the clubs the day following our decision to do it and the legal challenge emerged quite a bit later, frankly to that.
"So, we believe in the best interests of Welsh rugby we shouldn't hang around and wait for that arbitration to reach its conclusion."
WRU chair Richard Collier-Keywood
(Image: Kian Abdullah/Huw Evans Agency)
The legal challenge is partly based on a potential breach of the PRA in assuming ownership of Cardiff and taking on the role of the club's benefactor.
"Yes, and we disagree with that," said Collier-Keywood when asked if a breach of the PRA was the basis of the legal case.
"We think the previous PRA was pretty clear and we had the authority to step in and rescue that.
"We did it for the best interests of Welsh rugby." Join WalesOnline Rugby's WhatsApp Channel here to get the breaking news sent straight to your phone for free
If the WRU do push through their optimal solution of two professional clubs, Collier-Keywood conceded there is potential for further legal challenges.
"There are probably two or three areas that there would be a potential legal challenge," he said.
"One is we have contracts with the clubs called the PRA and we have made it very clear to the clubs we will stick by our obligations in those agreements.
"We have two clubs on one and two clubs on a different version as you all know from the events that happened in early May.
"But we are confident about that contractual position.
"The second potential challenge is under competition law.
"We want to hear people's views anyway but doing a consultation is an important element for us as a regulator of rugby in Wales of actually listening to people's perspectives, hearing that back and actually making the right decision for the future of Wales rugby as a whole as opposed to individual elements of it going forward.
"The consultation we are engaging in now is a really important part of getting that right from a competition law perspective.
"The final potential challenge is something to do with have we acted in malfeasance and so on and fairness. Get the latest breaking Welsh rugby news stories sent straight to your inbox with our FREE daily newsletter. Sign up here.
"We've been very transparent on this as a board and we'll continue to be very transparent on it as a board.
"We are doing it without any favour towards any particular one of the four regional clubs and we will continue to operate in that way.
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"We feel confident about our legal position."
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