The NBL has secured another major legal victory in its ongoing dispute with the Illawarra Hawks after the club’s appeal was dismissed by the NSW Supreme Court of Appeal.
The league announced the decision in a statement, declaring it a “decisive win” after the court upheld an earlier ruling in favour of the NBL.
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It is the second time the courts have sided with the league in the bitter dispute, which initially involved both the Hawks and South East Melbourne Phoenix and has centred around the clubs’ licence agreements and the NBL’s governance.
“The National Basketball League has today secured a decisive win, with the NSW Supreme Court of Appeal dismissing the Illawarra Hawks’ appeal and upholding the earlier ruling in favour of the NBL,” the league said.
“The Court has now twice confirmed what the NBL has maintained throughout; that these proceedings should never have been commenced, and this dispute should have been addressed through the agreed grievance processes, not the courts.
“The proceedings constitute a breach of the licence agreement, and the NBL is now considering the consequences of the judgment.”
The latest ruling follows the NSW Supreme Court’s earlier decision to permanently stay proceedings brought against the NBL after Justice Elisabeth Peden found the action breached the clubs’ licence agreements.
At the centre of that case was Part 14 of the club licences, which contains a grievance procedure requiring disputes to ultimately be referred to the Court of Arbitration for Sport (CAS).
Clause 14.3 states that no party will “institute or maintain proceedings” regarding a grievance or other matters relating to their NBL participation in any court or tribunal other than CAS.
Justice Peden accepted the NBL’s argument that an “obvious purpose” of the clause was to ensure disputes between clubs and the league were handled confidentially rather than through public litigation which could damage the competition.
The Hawks and Phoenix were subsequently ordered to pay the NBL’s costs.
The dispute first erupted publicly in March when an email from Illawarra billionaire owner Jared Novelly was made public.
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Novelly raised a series of concerns surrounding NBL owner Larry Kestelman and the league, referencing alleged “secret Ambassador Agreements, gambling revenue, the sale of the JackJumpers, integrity concerns and financial transparency”.
The situation escalated the following month when a letter was sent to FIBA on behalf of Novelly’s private firm Crest Sport and Entertainment, which owns the Hawks.
It accused Kestelman of a “remarkable accumulation of power” and raised potential conflict-of-interest concerns surrounding his involvement with the league and other basketball interests.
South East Melbourne later joined Illawarra in the Supreme Court action, which had been launched in May.
However, the NBL successfully argued the dispute belonged within the grievance process established under the clubs’ licence agreements rather than before the courts.
The Hawks’ subsequent appeal has now also been dismissed, strengthening the league’s position as it considers what action could follow from the judgment.
“The Court’s decision confirms the League’s original position and draws a line under this chapter of the proceedings,” the NBL said.
“It reinforces the need for all parties to respect their contractual obligations and act within the proper governance of the League.”