WE are inching ever closer to the legal dispute between Hearts/Partick Thistle and the SPFL being resolved, but we are not quite there yet.

During Friday's virtual meeting of the Court of Session, Lord Clark ruled that the matter must be arbitrated by the Scottish FA’s judicial panel – and not in open court, as the two relegated clubs were advocating.

Lord Clark made his decision after hearing three days of submissions from a trio of lawyers: one representing Hearts and Thistle; another representing the three promoted clubs – Dundee United, Raith Rovers and Cove Rangers; and a third appearing on behalf of the SPFL.

So, what was decided?

In a nutshell, the dispute is set to rumble on for a while yet. After listening to arguments from the three QCs, Lord Clark ruled that the matter falls within the SFA’s jurisdiction and has now granted a cist order for the national association to carry out its own arbitration process.

The court heard from Garry Borland QC, representing the three promoted clubs, and Gerry Moynihan QC, on behalf of the SPFL, that under the SFA articles of association there was no legal basis for the matter to be brought to the Court of Session. Article 99 states that no club can begin legal action without express permission from the SFA.

David Thomson QC, who represented Hearts and Thistle, argued that the SFA articles of association were not incorporated by the SPFL and as a result, there was a legal basis for his clients to bring the dispute before the court but Lord Clark disagreed.

“I don’t accept the submission from Hearts and Partick Thistle that there is nothing in the SPFL’s articles of association which refers this matter to arbitration,” he said. “Hearts and Partick Thistle are contractually obliged to comply with the SPFL’s rules.

“By virtue of rule B4 of the SPFL’s rules, Hearts and Partick Thistle have to comply with the SFA’s articles of association.”

Borland had put forward a motion for the case to be dismissed in its entirety but this was refused by Lord Clark.

Additionally, Lord Clark ruled that a separate motion advanced by Thomson – that documents related to Dundee’s controversial missing ballot from the vote to curtail the 2019/20 season should be uncovered so that the independent SFA judicial panel have full and proper disclosure – was granted: something that Moynihan was strongly opposed to, citing grounds of confidentiality.

Lord Clark added that he “would prefer to have the issues aired in open court” due to the public interest in the case but “as a matter of law, the parties agreed to the terms of the SFA articles of association”, thereby ruling that the dispute must be settled by the SFA.

What happens next?

The case has now been referred to the SFA, who will carry out their own arbitration process to settle the dispute. With the Premiership scheduled to return on August 1, Lord Clark outlined his expectation that the matter would be concluded by then.

The question of whether Hearts and Thistle were victims to ‘unfair prejudice’ - the crux of the pair's argument - “can be determined by arbitration”, Lord Clark said.

A three-person independent judicial panel will be set up and the dispute will be settled by them.

Who’s on the judicial panel?

Article 99 of the SFA’s articles of association says that the two parties – Hearts/Thistle and the SPFL – will each nominate an individual from the tribunal candidate list as its arbitrator, and these two people will appoint a third arbitrator from a legal background who will act as chairman.

“The SFA itself will not judge the issue in the arbitration,” Lord Clark explained. “The independent arbitral tribunal will be presided over by an experienced lawyer or a member of the judiciary.”

He added that the tribunal may be required to obtain evidence from witnesses and said that “if required, the court can make appropriate orders in that regard”.

What happens if Hearts and Thistle win?

There are two possible outcomes here. The first is that the panel agree with the two clubs’ position and their relegations to the second and third tiers respectively are overturned, but this would prove highly controversial. After clubs voted overwhelmingly against league reconstruction, it does not appear as though this remains a viable outcome – in which case, Dundee United, Raith Rovers and Cove Rangers would not be promoted from their divisions despite being crowned champions.

The other possibility is that Hearts and Thistle are consigned to relegation but receive some form of financial compensation from the SPFL. The precise figure that the clubs could be awarded will be down to the discretion of the panel and will be based on the loss of earnings brought about from their relegations, with Hearts reportedly asking for £8m and Thistle looking for £2m.

What happens if they lose?

Not too much, in all likelihood. Hearts will compete in the Championship and Thistle will be in League One for the upcoming campaign, both of which will run on a reduced 27-game calendar. However, it is possible that the two sides could face financial penalties.

It has previously been suggested that the two clubs could face expulsion from the SFA for taking the SPFL to court without the governing body’s permission, with Moynihan pointing out to Lord Clark that this was the maximum penalty available.

However, Lord Clark said that it was is view that such a punishment could be deemed unlawful.

He said: “In my opinion, the existence of that potential penalty – which includes expulsion or as Mr Moynihan put it, ‘being put out of the game’ – is a factor that has to be considered when analysing the lawfulness or otherwise of Article 99.15.

“The issue of penalties could itself be subject of the supervisory jurisdiction of the court.”