Manchester City have earned a huge win over the Premier League after an independent tribunal ruled sponsorship rules that had been in place for almost three years “void and unenforceable”. In October, the English champions claimed victory when three aspects of Associated Party Transactions (APT) regulations were deemed “unlawful”.

A tribunal comprised of Sir Nigel Teare, Lord Dyson and Christopher Vajda KC has made the latest conclusion following a two-day hearing at the end of January.

The new ruling has declared the three “unlawful” aspects of the regulations “cannot be severed with the result that the APT Rules as a whole are void and unenforceable.”

It has left the Premier League vulnerable to the risk of clubs attempting to claim compensation for potentially undervalued deals between December 2021 and November 2024.

The competition must also cover legal costs from the high-profile proceedings, which could be worth tens of millions.

On Friday, a Premier League statement read: “An arbitration tribunal has determined the effects of its first award published last year relating to Manchester City’s legal challenge of the Premier League’s previous associated party transaction (APT) rules.

“The tribunal’s decision has found that the three narrow aspects of the old APT rules, previously found to be unlawful, cannot be separated from the rest of the previous rules as a matter of law. The result, the tribunal has determined, is that the previous APT rules, as a whole, are unenforceable.

“However, the previous APT rules are no longer in place, as clubs voted new APT rules into force in November 2024. This decision expressly does not impact the valid operation of the new rules.

“The tribunal has made no findings as to the validity and effectiveness of the new rules. The tribunal states that whether its decision has any benefit to the club, therefore, depends on whether the new APT rules are found to be lawful as part of the second challenge issued by the club last month. The league continues to believe that the new APT rules are valid and enforceable and is pressing for an expeditious resolution of this matter.

“The new APT rules are in full force and clubs remain required to comply with all aspects of the system, including to submit shareholder loans to the Premier League for fair market value assessment.”

The same three-person tribunal will rule on City’s fresh legal challenge against the APT amendments launched last week.

Aston Villa, Newcastle United and Nottingham Forest joined the Cityzens in opposition to the changes, while 16 of the Premier League’s 20 clubs were in favour.

City consider the new rules discriminatory because the club feel existing shareholder loans aren’t scrutinised like other commercial deals, posing the same legal problems as previously.

The Etihad Stadium giants believe shareholder loans should also be subject to retrospective fair market value tests.

This case isn’t linked with the 129 Premier League charges that City face for allegedly breaching financial regulations, which the club denies.