Monday, February 26, 2007

US judge stops FIFA from using Swiss arbitrator

A US judge has stopped FIFA, football's world governing body from pursuing arbitration against MasterCard Inc in Switzerland, dealing a blow to FIFA in a dispute over its sponsorship deal. Last April, FIFA handed Visa the rights for the 2010 and 2014 World Cups. MasterCard, which had been the tournament's official credit-card sponsor for the past 16 years, sued FIFA for breach of contract, arguing that it should have had first refusal for future tournaments. In December US District Judge Loretta Preska ruled that FIFA improperly awarded sponsorship of the next two World Cups to Visa and ordered FIFA to grant MasterCard advertising and sponsorship rights to the tournament for the period from 2007 to 2014.

The Federation Internationale de Football Association subsequently activated other terms of its agreement with MasterCard to litigate the case again before an arbitration panel in Switzerland. During a hearing in Manhattan on Monday, Preska enjoined FIFA from pursuing the Swiss arbitration. She also asked MasterCard not to seek any counter claims against FIFA in arbitration until a US appeals court has ruled on her decision. FIFA appealed Preska's earlier ruling in the US Court of Appeals for the Second Circuit in New York, and a lawyer for FIFA said it would also appeal the latest decision.

"We are delighted the judge has ruled in our favour," MasterCard General Counsel Noah Hanft told Reuters after the hearing. "They cannot retry those issues in Switzerland."

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