May 25, 2007 / 4:49 PM / in 11 years

Court orders review of World Cup sponsor ruling

NEW YORK (Reuters) - An appeals court on Friday ordered a lower court to revisit a ruling that gave MasterCard Inc. (MA.N) a coveted sponsorship deal for World Cup soccer tournaments.

The decision means that sponsorship for the 2010 and 2014 World Cups remains uncertain.

In December, U.S. District Judge Loretta Preska ruled that MasterCard — not rival Visa International — should get an eight-year contract with soccer’s governing body, FIFA. MasterCard already had sponsored the tournament for 16 years.

A three-judge panel of the U.S. Court of Appeals for the Second Circuit said Preska needed to clarify whether a 2006 agreement between MasterCard and FIFA was binding and whether it would supersede a 2002 contract under which MasterCard contended it had the right of first refusal on a new pact.

At the same time, the appellate court said: “The district court is free to reconsider other aspects of its original decision and relief ordered if the answer to the question for which we have remanded the case causes the court to rethink one or more of its rulings.”

MasterCard, in a statement, said that it “looks forward to Judge Preska addressing this particular issue and final resolution of the ongoing matter,”

FIFA said the appellate ruling was what the soccer body “has already long requested, that it clarify the question of which contract between FIFA and MasterCard is valid. In this respect, FIFA is very pleased with the judgment.”

    Visa said it had no immediate comment. The appeals court last year rejected Visa’s bid to become a party to the lawsuit.

    Preska ruled that FIFA breached its contract with MasterCard by switching World Cup sponsorship rights for the 2007-2014 period to Visa. In that decision, the judge said FIFA negotiators “lied repeatedly to MasterCard.”

    FIFA appealed Preska’s ruling. The soccer body, which is based in Zurich, wants an arbitration panel in Switzerland to decide the matter, rather than the U.S. District court in Manhattan.

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