The Algerian former owner of a Brussels football club has launched an ICSID claim against Belgium, claiming nearly €50 million over the actions of a local council and the country’s competition authority that allegedly led to the club’s liquidation.
Algerian national Djamel Ben Ferha had his claim under the Algeria-Belgium-Luxembourg bilateral investment treaty registered at ICSID on 24 May.
Ben Ferha is the former owner of Royal White Star Bruxelles – a football club based in the Brussels municipality of Molenbeek-Saint-Jean. Since its founding in 1948, the club had an inauspicious track record in Belgian football, having never played higher than the country’s second division.
The businessman acquired the football club in 2013 as part of a plan to turn the club into a professional first division side. He reportedly invested at least €5 million in the club through his Dubai-based company, Gulf Dynamic Challenges.
In 2016, Royal White Star finished first in the second division and applied for a professional licence ahead of its expected promotion. However, a day before its application was due to be heard, the local council informed the club it had terminated its occupancy contract for its home stadium, the Edmond Machtens Stadium. Royal White Star was later forced to share the ground with another team, RWD Molenbeek, under a new contract.
The Belgian Football Association rejected Royal White Star’s application for a professional licence, saying the club needed a stadium to qualify. The club appealed that ruling to an arbitration body within the Belgian Football Association, which upheld that decision after it cited fears over the club’s financial health.
With the league season just days away from starting, Royal White Stars also applied for provisional measures from the Belgian Competition Authority to overturn the decision rejecting its professional licence, alleging that the decision was anti-competitive. The competition authority refused.
Following those decisions, the club was not only refused entry to the first division but was also demoted to the third division. In 2017, the Molenbeek council also unilaterally terminated its contract for its stadium.
Languishing in the third division without its former ground or revenues from televised games, Royal White Star was judicially dissolved in October 2017 and liquidated in April 2020 after one of its creditors launched bankruptcy proceedings.
In his claim, Ben Ferha alleges that the decisions from the Molenbeek council and the Belgian competition authority were at best arbitrary and at worst discriminatory. He says that RWD Molenbeek, the team that eventually took over Royal White Star’s stadium, was favoured as several members of the local council were supporters of that club.
Ben Ferha has previously told French newspaper Liberación he believes the decision to reject Royal White Star’s application for a professional licence was made to benefit the club that was promoted instead – KAS Eupen, which is owned by Qatar’s state-owned football academy Aspire. According to Ben Ferha, KAS Eupen was able to comply with a requirement from Belgian football authorities to make a €10 million euro deposit before obtaining promotion.
The Algerian investor is claiming for breaches of the BIT’s provisions on expropriation, most-favoured nation treatment and failure to accord full protection and security.
GAR understands he will seek between 30 and 48 million euros in damages – the amount he says the club would have been worth in 2019 with a professional licence and its stadium contract intact.
Belgium is currently facing one other ICSID case launched by Libya’s sovereign wealth fund over the freezing of its assets. Another ICSID case brought by Emirati logistics operator DP World ended in February with the state being ordered to pay €41 million. Belgium has used Taylor Wessing in London for both disputes.
Source: Global Arbitration Review
