Global sports and entertainment media group, beIN Corporation (beIN), has launched an international investment arbitration against the Kingdom of Saudi Arabia for damages totalling more than $1 billion (€0.87bn), claiming it has unlawfully been driven out of the Saudi market and subjected to what has been described as the most widespread piracy of sports broadcasting that the world has ever seen.
The landmark case is the only known investment arbitration ever to be brought in connection with State-supported illegal broadcast piracy. The arbitration is being commenced following universal public condemnation of the Saudi-based pirate TV channel beoutQ which – beIN alleges is in tandem with Riyadh-based satellite provider Arabsat – has orchestrated a plague of piracy on world sports and entertainment over the past year.
Following the suspension of diplomatic relations with Qatar in June 2017, Saudi Arabia initiated what beIN desciribes as a series of abusive measures specifically targeting global broadcaster beIN, with the objective of forcing the Qatar-headquartered company out of the local broadcasting market and destroying the value of beIN’s investments in Saudi Arabia. The alleged unlawful and unilateral measures include:
According to beIN, in addition to these measures, Saudi Arabia has “flagrantly” breached international law and norms by actively supporting the broadcast TV pirate channel named ‘beoutQ’. “This sophisticated pirate steals on a near-daily basis beIN’s proprietary media content – together with content of other international broadcasters such as NBCUniversal Telemundo, and ELEVEN SPORTS – and makes it accessible illegally via the internet and satellite broadcasting,” says beIN. “Some of the most internationally-renowned sports and entertainment brands in the world have fallen victim to the Saudi-backed piracy – from Hollywood movie studios, the NBA and NFL, Formula 1 and the Olympic Games, to bodies across world tennis and world football including UEFA, the Premier League and LaLiga – prompting, in a unique step, FIFA to appoint legal counsel in July to take action in Saudi Arabia, with others considering the same while increasingly also taking a public stand to denounce any Saudi politicisation of sport,” it reports.
“As a result of the arbitrary and discriminatory measures implemented by Saudi Arabia specifically against beIN – which have also included baseless competition law proceedings, ongoing harassment of beIN employees and disruption of major beIN sporting events – beIN has suffered damages in excess of $1 billion, which continue to increase with each passing day,” says beIN. beIN is seeking full compensation for these damages in its investment arbitration, which is brought pursuant to the OIC Agreement (The Agreement on Promotion and Protection and Guarantee of Investments among Member States of the Organisation of the Islamic Conference), other bilateral investment treaties, and the UNCITRAL Arbitration Rules.
As a sign of the increasing number of significant legal claims being brought against Saudi Arabia for backing beoutQ, the State of Qatar filed a case October 1st with the World Trade Organisation in Geneva based on numerous serious violations by Saudi Arabia of its obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). Saudi Arabia’s non-compliance with the TRIPS Agreement can result in the WTO authorizing trade retaliation.
beIn says that while the Saudi government has asserted that it has made “relentless efforts” to combat piracy, the reality is that beoutQ set-top boxes have been widely and openly sold across Saudi Arabia from dealers regulated by the Saudi regulatory authority (GCAM), and beoutQ’s pirate channels continue to be viewed in cafes, hotels, restaurants, airport lounges, public places and homes across the country.
beIN notes that earlier in 2018, for the first time in more than 10 years, the US Government placed Saudi Arabia on its 2018 Special 301 Watch List, noting concerns over the deteriorating environment for the protection of intellectual property. Pressure intensified further on Saudi Arabia in August when three of the world’s leading digital security, media solutions and technology companies, Cisco Systems, NAGRA and Overon, independently and definitively confirmed that beoutQ is being distributed on the Riyadh-based satellite provider Arabsat, leading to further international condemnation of Saudi Arabia’s continued piracy by major sports rights-holders and the world’s media. All the while, Saudi Arabia remarkably seeks to encourage world sports and entertainment bodies to enter its market.
“After failed attempts to resolve this dispute through dialogue, we have now been forced to issue a Notice of Arbitration due to Saudi Arabia’s concerted campaign to prevent beIN from operating in the country, despite beIN having the legal and commercial right to do so,” stated Sophie Jordan, Executive Director of Legal Affairs – General Counsel of beIN MEDIA GROUP. “We are a well-respected global broadcaster, providing millions of customers around the world with top-quality programming. Quite clearly, we are being unfairly used as a political football in a wider regional dispute. But this case has implications far beyond beIN – in beoutQ, Saudi Arabia has created a plague of piracy and unless the whole sports, entertainment and broadcast industry takes a stand, its impact will be devastating and irreversible.”
David Roney, partner at international law firm Sidley Austin LLP, who is leading the investment arbitration on behalf of beIN, said: “beIN seeks redress for Saudi Arabia’s numerous unlawful measures that have excluded this successful broadcaster from the country and provide support for the sophisticated piracy of beIN’s proprietary media content. Piracy is a major problem facing the sports and broadcasting industries. By supporting beoutQ’s widespread and notorious infringement of the intellectual property rights of beIN and its partners, Saudi Arabia is setting a dangerous new precedent. beIN will pursue all available legal remedies to protect its rights and secure full compensation.”