Update on Wilder-Povetkin appeal

January 16, 2019

When we last wrote about the Deontay Wilder-Alexander Povetkin lawsuit, Wilder had filed its appeal brief in which it sought the 2nd Circuit Court of Appeals to overturn the District Court decision which sided with Povetkin.

The legal drama has been long and winding and despite a jury trial that determined that the Russian boxer had taken Meldonium after January 1, 2016, the trial court sided with Povetkin’s attorneys after the WBC, the boxing governing body, had reversed course on its belief that Povetkin had taken Meldonium.

You had to wonder what was the court thinking?

The issue of money deposited in a trust account still remained a question.  Upon the court siding with Povetkin and his promoter, they demanded the $4.3 million held in escrow.

The Court opinion sided with Povetkin on the basis of the Bout Agreement entered into was the deciding factor.  It cited language in the World Boxing Council’s Rules and Regulations which stated that “any dispute or controversy” would be bound by the WBC.

Another layer of this dispute revolves around purse money placed in escrow for the fight.  Wilder had written the escrow company to hold the money until a court decided the outcome.  Povetkin and World of Boxing objected to this and sued claiming a violation of the duty of good faith and fair dealing.  In addition, they claimed that Wilder had violated the terms of the Bout Agreement and should be subject to a liquidated damages clause of $2.5 million.  Wilder was due $4.5 million to fight Povetkin while Povetkin was due $1.9 million.  In addition, there was a $715,000 bonus for the winner.

While Povetkin and his promoter claimed that they were the winners and should be entitled to the money sitting in escrow, Wilder appealed the ruling citing issues with the trial court ruling.

Our rundown on Wilder’s appeal brief from this past October is here.

In November, Povetkin/WOB’s attorneys filed its answering brief to essentially agree with the trial court’s ruling which negated the jury trial’s ruling and request that the appeals court vacate the jury verdict.

The attorneys argue that there was no breach of the Bout Agreement by the Russian as the contract vests discretion in the WBC to make all the decisions relating to the bout.

The focus of Povetkin’s brief cites that the WBC issued a supplemental ruling in November 2017 which stated that “it is not possible to ascertain that Mr. Povetkin ingested Meldonium after January 1, 2016.”  The basis was in line with the trial court when it sided with Povetkin in stating that the contract for the fight with Wilder contained no language “mandating that each fighter refrain from ingesting banned substances.” It would defer to the WBC on these matters on whether or not an athlete breached the contract.  This ruling set aside the authority of the trial court and deferred it to the WBC.

The power quote utilized by Povetkin in its response to Wilder’s appeal brief was that “the parties specifically agreed that the WBC’s decision on this question [anti-doping] would be conclusive.”  Povetkin’s attorney cite a NASCAR case which ruled that it should follow NASCAR’s rules.”  It also cited the Tom Brady Deflategate case as the District Court “improperly invaded the contractual authority of the NFL Commissioner.

The basis of Povetkin’s argument that the appeals court should uphold the trial court’s decision is based on its interpretation of the contract which indicates that the WBC is the arbiter of all claims under the Bout Agreement.  As a result, since it determined that it could not conclude that Povetkin ingested Meldonium post-January 1, 2016, he did not breach the contract.

This conclusion seems sound in a vacuum.  The court should defer to the contract.  But it doesn’t seem to harmonize with the factors in this case.  Namely, Povetkin’s failed drug test in April 2016 and the subsequent cancellation (or postponement) of the Wilder fight.  Perhaps the key issue here is whether the bout was cancelled or postponed as Wilder believed it to be cancelled while Povetkin argues it was postponed.

Povetkin argues that the bout was a postponement and it was not a breach.  It cites the Bout Agreement with the WBC rules which states that a scheduled fight may be “rescheduled…or postponed by the WBC.”

In addition, Povetkin’s attorneys argue that the trial jury decided an immaterial fact indicating that the question presented to the jury was whether Meldonium was ingested by Povetking post-January 1, 2016, but the Bout Agreement was not signed until April 11, 2016 and “there is no contractual provision covering the parties conduct prior to execution.”

Povetkin also stakes his claim to the money in the Escrow Account which was to award the purse amounts to each fighter as well as the commission fees.

Finally, Povetkin argues that it should be awarded fees for the anticipatory breach of Wilder.  The claim is that Wilder wrongfully repudiated the Bout Agreement by not showing up in Russia prior to the fight in May 2016.  Instead, Wilder flew home from his training camp in England once he learned that Povetkin had failed a drug test.  Povetkin claims that the bout was to be postponed but Wilder breached the Bout Agreement by treating it as if the bout was cancelled.

Wilder will have a chance to respond to Povetkin’s appeal brief once more prior to oral arguments which should happen later this year.  MMA Payout will keep you posted.

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