Rangers have applied to the Court of Session to overturn a player signing ban imposed on them by football authorities.
On Friday, legal representatives argued that the 140-year-old club would suffer "utterly irretrievable" prejudice if the ban was not withdrawn.
The club are seeking a judicial review of the sanction imposed by the Scottish Football Association’s (SFA’s) judicial panel imposed a 12-month player registration embargo on the Ibrox club for a number of rule breaches including bringing the game into disrepute.
Richard Keen QC told the Court of Session on Friday that senior players had struck an agreement with the club under which they took a substantial wage cut in return for the right to seek a transfer for about 25% of their perceived market value. He added that the deal expires next month.
Mr Keen said it would be of considerable benefit to the individual players as they would be able to secure "a golden hello" from buyers and added: "These players have every incentive to go."
The Dean of Faculty told Lord Glennie that although the wages limit ended in June, when the summer transfer window opens, "the knockdown prices" did not.
Mr Keen added: "If this sanction is in place they cannot be replaced by players over 18 years of age." He said that if Rangers wanted the players to stay they and their agents knew they could not be replaced and their bargaining power would be "immeasurably stronger".
The QC said: "If the additional sanction was to remain in place for all or the material part of the transfer window the prejudice on the petitioners would be utterly irretrievable."
Rangers were also hit with a £160,000 fine by the SFA panel for several rule breaches, while owner Craig Whyte was banned from holding any position in Scottish football for life and fined £200,000. Last week Mr Keen represented Rangers in an appeal before an SFA tribunal chaired by Lord Carloway to have the ban overturned.
This was rejected and left the crisis-hit club with the option to appeal to UEFA, Fifa or the Court of Arbitration for Sport in Switzerland. However, Rangers have decided to take their appeal beyond the football governing bodies to the law courts.
Mr Keen told the court it had been suggested that the club had more than 40 players on its books, but the realilty was that 25 of the squad were 18 or under. He said: "In reality they could not just draw on a junior team to replace their senior players for the Scottish Premier League.
"If the additional sanction was to be suspended they would be able to sign replacement players for those who are in all probability leaving."
Mr Keen, whose fees are being paid by the Rangers Fans’ Fighting Fund, said administrators Duff and Phelps are seeking to finalise arrangements for the takeover of the club by a consortium led by former Sheffield United chief executive Charles Green.
"The indications from him are that he would be willing to proceed even if the additional sanction is in place," the QC said. "However, the preferred route for any resolution of the present difficulties is a CVA (company voluntary arrangement) and it is not clear all other creditors would take the same view of the company's prospects if the additional sanction was in place."
Mr Keen argued it was not competent for the tribunal to impose the additional sanction on the club and it was outside its powers. He said that a fine, suspension, expulsion and termination of membership were available, but added: "The sanction of suspending the registration of players is not available under the general disciplinary rules to the tribunal in respect of an alleged breach.
"It follows in my submission that the purported additional sanction imposed by the tribunal and confirmed by the appeal tribunal was not a competent sanction and was not one available to the tribunal. My understanding is that those representing the SFA at the original hearing were as surprised as we were when the tribunal came back to impose such a sanction, or I should say purported sanction."
Aidan O'Neill QC, for the SFA, said the tribunal had sought to find a punishment or sanction which would fit the breach. He added: "They did not want to be in a situation of giving a sanction which is not effective and not dissuasive or a disproportionate sanction which is suspension or expulsion." He told the court it was understood within the sport that a ban preventing the registration of new players was a sanction.
Mr O’Neill added: "We don't want a clunky reading of these rules which means either we have a useless sanction or a nuclear option. That is just nonsensical." He argued that the tribunal had properly applied its mind to come up with what it considered to an effective and proportionate outcome. "This club brought the game into disrepute because it did not pay its taxes, among other things," he said.
The hearing is scheduled to continue next week.
Paul Clark, joint administrator, said on Friday: "The club started proceedings at the Court of Session today in an attempt to challenge the imposition by an SFA judicial panel of a player signing embargo. The process will continue at the court on Tuesday and it is the club's position that the judicial panel did not have the powers to impose such a sanction.
"The club and the administrators are grateful for the support of the Rangers Fighting Fund on this matter."
A SFA spokesman said: "We note Rangers FC’s initiation of proceedings at the Court of Session in relation to the sanctions imposed by an independent judicial panel, which were subsequently upheld by an Appellate Tribunal chaired by Lord Carloway.
"With the hearing continued until Tuesday, it would be inappropriate to comment further at this stage."
Some of the previous instances where football clubs have gone beyond the SFA in bids to overturn its decisions include a case involving St Johnstone FC in 1964.
The Perth club was fined £25 over a testimonial match which the SFA deemed had breached its rules. St Johnstone’s lawyers successfully sought a judicial review of the punishment.
In the decision in that case, the judge ruled that there was a distinct lack of "natural justice" in the process and the SFA had acted "ultra vires" or beyond its authority. However, there are several differences in Rangers’ case including the fact that they have had repeated opportunities to state their case and have already appealed it to the SFA.
More recently, East Fife player Kevin Fotheringham failed in his attempt to be granted a judicial review of an SFA eight-match ban against him for making racist comments towards Gregory Tade, who was playing for Stranraer at the time in 2008, at the end of a game.
He had initially tried to overturn the ban at the SFA’s disciplinary appeals committee, but that failed, which lead to the Court of Session action. Mr Fotheringham argued that the committee that decided his punishment was biased and the decision was unfair.
Lord Pentland rejected the appeal, saying sporting bodies were entitled to "a certain margin of respect" in dealing with their own disciplinary issues and that the key test was whether the proceedings produced "a fair result".
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