The legal battle between Rory McIlroy and Horizon Sports Management is only getting started.
A discovery dispute over the documents to be used at the October court date has been set for the Commercial Court on March 19 following Monday's hearing before Mr Justice Peter Kelly.
On the face of things, it appears that they two sides are a long way away from coming to an out-of-court settlement.
Mr Justice Kelly was told that while there was agreement on some of the discovery sought, both sides remained in dispute on other discovery matters.
One of the keys to the case appears to be the testimony of solicotor Owen O'Connell, a partner at William Fry, who was present when McIlroy signed his contract with Horizon in December 2011.
According to Mary Carolan's court report in The Irish Times, McIlroy claims he signed his contract with Horizon:
... under “undue influence” when he was just 22 years old and inexperienced and, as a result, has paid more than US$6.8m based on “unreasonable” fee rates “many times greater” than is standard in the sports agency industry.
However, Mr O'Connell is currently unable to give evidence on what happened at the contract signing due to ill health.
McIlroy also alleges the defendants - Dublin-based Horizon; Gurteen Limited, with a registered address in Malta, and Dublin-based Canovan Management Services - are not entitled to be paid certain fees into the future related to his US$20m a year sponsorship deal with sportswear giant Nike.
Horizon refutes his claims and are counter-claiming for US$3m fees for off-course gross revenues and seeking damages over alleged breaches of the agreement which, they say, are continuing.
An interesting aside to the affair is that the claim for damages by Horizon because they have been denied the opportunity to sell the branding rights to McIlroy’s golf bag.
McIlroy appeared at last week's WGC-Accenture Match Play Championship in Tucson with the name of his sponsors Bose emblazoned on his golf bag.
According to the RoryFoundation.com:
For a total of eight tournaments, beginning this week at the WGC-Accenture Match Play in Arizona, Rory will carry one of two golf bags showing the Bose logo. As a Global Ambassador for the brand, Rory has teamed up with Bose to highlight the work of his charity, the Rory Foundation. Then, at select fundraising events over the coming months and with the financial support of Bose, the one-off Golf Bags will be auctioned with the proceeds going to benefit the children’s charities supported by the Rory Foundation.
We understand that Bose are making a financial contribution to his Foundation in exchange for the exposure.
Horizon also claim they have been denied the opportunity to continue building McIlroy’s global commercial model as per an alleged agreed long term brand strategy.
According to The Irish Times' court report:
The central issue in the case relates to the validity and enforceability of the December 2011 representation agreement which, Mr McIlroy insists, he is not bound by. The defendants contend it was agreed with Mr McIlroy that the contractual rights under the December 2011 agreement were with Gurteen rather than Horizon but he disputes that.
Horizon admits his relationship concerning the matters at issue in the case was “de facto” with Horizon but it contends, once the representation agreement was signed, Horizon provided the services as agent for Gurteen and, later, Canovan.
Horizon's barrister, Ciarán Lewis, his clients may know by March 19th whether they intend to proceed with an application to take evidence on commission from Owen O’Connell, a solicitor and partner in William Fry Solicitors.
"In the context of Mr McIlroy’s claim he entered into the representation agreement as a result of “undue influence”, Mr O’Connell is “an indispensable witness” as he was present for the execution of the agreement, the defendants said in an affidavit.
As Mr O’Connell is very unwell, Mr Justice Kelly said the issue of whether it was necessary to take evidence on commission from him, or whether the matter can be dealt with via an agreed statement of evidence from Mr O’Connell, should be addressed.
McIlroy's side wants a raft of documents from Horizon:
- All documents relating to a settlement of proceedings with Oakley Inc concerning a sponsorship agreement, including any and all negotiations and communications between McIlroy, Nike and Oakley leading to that settlement.
- All documents concerning the termination of his contract with International Sports Management Ltd, all documents relating to the defendants’ management of his affairs from October 2011
- All documents concerning the negotiation, formation, drafting and execution of the December 2011 agreement.
- Material relating to commercial contracts entered into by Horizon.
McIlroy is in Palm Beach Gardens this week for the Honda Classic, the tournament where he walked off the course midway through his second round last year when he was world No 1 and the defending champion at the time.
Currently ranked No 8 in the world has since claimed that while he was playing poorly at the time [he was playing just his third event with his new Nike clubs], off-course distractions such as the developing row with Horizon, may have been a factor.