Coventry City Council Ricoh loan was lawful, says judge

COVENTRY City Council acted lawfully in loaning £14m to the operators of the Ricoh Arena, a judge has ruled.

The verdict, delivered at Birmingham’s High Court, followed a three-day independent judicial review to consider if the loan was an unlawful use of public funds.

Sisu, the owner of Coventry City Football Club, called for the review into the loan, which was used to allow Ricoh’s operators, Arena Coventry Limited (ACL) to pay off debts.

Sisu argued the loan was an unlawful use of public funds, but the council said it had done nothing wrong in supporting ACL amid a rent row between the arena and the club.

The long-running rent dispute saw the club play home games at Northampton Town’s Sixfields ground, more than 30 miles from Coventry, last season.

The judge. Mr Justice Hickinbottom, said: ”This claim fails formally on grounds one and three of the judgment and I refuse permission for further action on ground two of the judgment.”

“I do not consider that the council’s loan to ACL was state aid. Ground one consequently fails.”

Ground two analysed whether the council had taken into account material considerations when agreeing to make the loan to ACL.

The judge took into account seven key matters when making his decision and concluded: “I do not consider there is any arguable force in any of the seven discrete elements of ground two.”

On ground three – Sisu’s claim that the council acted ‘irrationally’ – the judge said: “It clearly cannot survive my findings in relation to other grounds, particularly those in respect of state aid.”

Sisu is likely to appeal the verdict.