Portsmouth's triumph in court opens door for Chainrai sale

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Portsmouth and their long-suffering supporters last night had something to celebrate after Her Majesty's Revenue and Customs (HMRC) had a case against the club dismissed by the High Court.

The decision by Mr Justice Mann meant Pompey avoided being ordered to pay a bill to the taxman they could not afford and which may have threatened their existence. Instead they were awarded £200,000 to cover their legal costs and HMRC will not appeal the decision. "It was a very real prospect that it could have been the end for the club," said Peter Kubik, joint administrator for Pompey.

HMRC had challenged a proposed Company Voluntary Agreement (CVA) put together to help the club out of administration, asking for more than the 20 pence in the pound for creditors. Effectively, they were told it was the best offer they would get. A ruling in favour of HMRC had the potential to change the rule on clubs paying football creditors first and in full. Mr Justice Mann insisted it was "not the right place to decide whether creditors rules are fair or not".

The club's administrators are now in a position to sell Portsmouth to Balram Chainrai, who was regarded as the only serious potential owner for the club relegated from the Premier League last season. "There is no reason to suppose any other person would be interested, let alone anybody who would come in with a binding deal that would preserve the club's position in the Championship," the High Court judge added.

Chainrai's lawyer, Ashok Patel, said: "Mr Chainrai was very happy because it opens the way for the only realistic solution, which is for his company to purchase the club and stabilise the club and to continue in the Championship.

"From the very beginning Mr Chainrai's aim has been to stabilise the club and to make sure Portsmouth continues as a football club and in that regard Mr Chainrai is prepared to work with the administrators and do all things necessary to allow the club to play in this season's Championship and to take the club forward."

Chanrai is hoping to strike a deal in the "next few days" to take control of the club, and he is expected to attend the club's first game of the season, at Coventry tomorrow.

HMRC issued a statement, reading: "Our aim when pursuing debt of any kind is to achieve a fair outcome for the taxpayer and we will take this forward in the wider context of the football industry through separate and outstanding legal proceedings over the status of the 'Football Creditors Rule'."