UK Attorney Lays Out “Game of Chicken” for IOC and Japan in Olympic Decision

John Mehrzad, a sports law & business protection specialist based with London lawfirm Littleton Chambers, has laid out a case for why the International Olympic Committee is not quite yet going to announce a cancellation or postponement of the 2020 Tokyo Olympic Games.

With the formal announcements from both Canada and Australia in the last 24 hours that neither will participate in the Olympic Games if held as scheduled in late July, the writing is on the wall. The IOC can see it as plainly as the rest of us, and at this point it should be clear for athletes and coaches globally that the pressure to target a July 24th Olympic event has been all-but-alleviated.

This has led several to question “what are they waiting for?”

Mehrzad lays out the most likely explanation in a series of Tweets, referring to a probable “game of chicken” between the IOC and the Japanese government over who officially pulls the plug on the games, and how that relates to liability for the costs of postponement or cancellation.

Mehrzad is a member of the Queen’s Counsel, indicating a higher level of merit and experience within the legal profession in England.

Mehrzad’s Analysis is Below:

• A few thoughts on the ‘elephant in the room’ in the @Tokyo2020 coverage about whether it should be cancelled or postponed.
• Neither Japanese government nor IOC wish to cancel or, presently, call for a postponement despite athletes and federations calling for a decision for obvious reasons.
• The IOC and Japan are parties to a contractual host city agreement, setting out mutual obligations for the performance of the
  @Olympics.
• The party that ‘cancels’ or ‘postpones’ that agreement, unless mutually agreed by the other party, will put itself in breach of contract and expose itself to huge (billions $) of damages claims.
• That litigation will last for years, being hugely costly not just financially but reputationally. There will be spin-off litigation from suppliers, sponsors and media networks etc who have already spent huge sums preparing for the @Olympics
• It would seem that neither Japan or the IOC (wish) to be the party to pull the ‘trigger’ – ie be the party in breach of the host city agreement, and expose itself to crippling claims. There looks to be a ‘game of chicken’ taking place.
• A postponement may limit damages, but it will still lead to huge claims which will drag on for years.
• There will, ordinarily, be insurance coverage in place for ‘force majeur’ incidents, but insurance will necessarily be capped and even the insurer may litigate over liability.
• Of course, if Japan and the IOC delay any decision, causing as a result athletes to pull out themselves (such as Canada with other countries, probably, to follow) – then they can argue the host city agreement is ‘frustrated’ a @Olympics cannot take place without athletes.
• The concept of ‘frustration’ is recognised in Swiss Law (then IOC is based in that jurisdiction). There would then be a strong(er) defence to any future damages claims if the @Olympics are cancelled/postponed as a result of a ‘no-show’ by athletes.
• and End. We are facing a global human tragedy, but it is uncommercial not to believe that the legal/financial analysis above is not being considered by the IOC and Japan and, at least in part thus far, has not been a factor in decision-making.

1. A few thoughts on the ‘elephant in the room’ in the @Tokyo2020 coverage about whether it should be cancelled or postponed.

— John Mehrzad KC (@JohnMehrzadKC) March 23, 2020