original petition to confirm arbitration award

PLAINTIFFS ORIGINAL PETITION FOR CONFIRMATION OF ARBITRATION AWARD PAGE 1 01842-401/4830-4154-0385

NO. ________________ SCA PROMOTIONS, INC. IN THE DISTRICT COURT Plaintiff, v. OF DALLAS COUNTY, TEXAS LANCE ARMSTRONG AND TAILWIND SPORTS, INC., Defendants. _____ JUDICIAL DISTRICT

PLAINTIFFS ORIGINAL PETITION FOR CONFIRMATION OF ARBITRATION AWARD

TO THE HONORABLE JUDGE OF SAID COURT: Plaintiff SCA Promotions, Inc. (SCA) files its Original Petition for Confirmation of

Arbitration Award against Lance Armstrong (Armstrong) and Tailwind Sports, Inc.

(Tailwind) pursuant to Tex. Civ. Prac. & Rem. Code Section 171.087, would show the Court

as follows:

NOTICE OF RELATED CASE: Pursuant to Local Rules 1.06 and 1.07, Plaintiff

hereby gives notice that this case is related to the following previously-filed case:

SCA Promotions, Inc., plaintiff v. Lance Armstrong, Tailwind Sports, Inc. and William Stapleton, defendants

No. 13-01564 (116th Judicial District Court)

Further, pursuant to Local Rule 1.06 and 1.07(a), Plaintiff believes that this case

should be transferred to the 116th Judicial District Court because, among other

reasons, such transfer would facilitate the orderly and efficient disposition of the

litigation.

PAGE 1 OF 38


Summary of This Lawsuit:

1. This lawsuit seeks to confirm a $10 million arbitration award rendered against

Defendants Lance Armstrong and Tailwind. The arbitration concerned whether Lance

Armstrong should be sanctioned for his outrageous conduct (including rampant perjury) in a

prior arbitration proceeding between the parties. The arbitration panel, finding that Armstrong

had engaged in an unparalleled pageant of international perjury, fraud and conspiracy and had

used perjury and other wrongful conduct to secure millions of dollars in benefits from SCA,

concluded that Mr. Armstrong should be punished and awarded $10 million in sanctions against

him and in favor of SCA (the Award).

2. Mr. Armstrong has indicated that he will refuse to comply with the Award. Thus,

pursuant to Tex. Civ. Prac. & Rem. Code 171.087, SCA now seeks to confirm the Award and

render judgment in favor of SCA and against Lance Armstrong in the amount of $10 million,

plus other relief to which SCA is entitled. SCA seeks similar relief against Tailwind.

I. Parties

3. Plaintiff SCA Promotions, Inc. is a Texas corporation located at 3030 LBJ

Freeway, Suite 300, Dallas, Texas 75234.

4. Defendant Lance Armstrong is an individual who resides in Austin, Travis

County, Texas, and may be served through his attorneys of record, Timothy Herman and Sean

Breen, Howry Breen & Herman, L.L.P., 1900 Pearl Street, Austin, Texas 78705-5408; Emails:

[email protected] and [email protected].

5. Defendant Tailwind Sports, Inc. is a corporation, whose principal officer was

William Stapleton. Tailwind may also be served through its attorneys of record, Timothy

PAGE 2 OF 38


Herman and Sean Breen, Howry Breen & Herman, L.L.P., 1900 Pearl Street, Austin, Texas

78705-5408; Emails: [email protected] and [email protected].

II. Jurisdiction and Venue

6. This Court has jurisdiction over this proceeding pursuant to Tex. Civ. Prac. &

Rem. Code Section 171.081 (an arbitration agreement confers jurisdiction on the Court to

enforce the agreement and to render judgment on an amount[.]).

7. This Court has venue over this action because a substantial part of the events or

omissions giving rise to the claims stated herein occurred in Dallas County, Texas.

III. Factual Background

A. Background: SCAs Original Involvement with Lance Armstrong.

8. SCA and Disson Furst & Partners (later known as Tailwind) entered into a

contract known as the Contingent Prize Contract #31122. The Contingent Prize Contract

required SCA to pay Tailwind a specified amount of prize money if Lance Armstrong was the

Official Winner of a series of successive Tour de France races in 2002, 2003 and 2004.1

9. Paragraph 9 of the Contingent Prize Contract contains an arbitration clause

providing as follows: Sponsor [Tailwind] agrees that any dispute arising under this contract

shall be resolved by binding arbitration pursuant to the Texas General Arbitration Act. The site

of such arbitration shall be Dallas, Texas. Id. at 876.

10. Mr. Armstrong was declared the Official Winner of the Tour de France races in

2002, 2003 and 2004. SCA paid the prize money specified by the Contingent Prize Contract in

2002 and 2003. However, although Mr. Armstrong was the Official Winner of the 2004 Tour de

1 Tailwind (a sports management company) had separately contracted with Mr. Armstrong to pay him the prize money if he won the Tour de France races. In effect, SCA, through the Contingent Prize Contract, was assuming Tailwinds risk in exchange for a fee. The contract called for a payment of $1.5 million if Mr. Armstrong was the Official Winner of the 2002 race; an additional $3 million if he was the Official Winner of the 2002 and 2003 races; and an additional $5 million if he was the Official Winner of the 2002, 2003, and 2004 races.

PAGE 3 OF 38


France race, a dispute arose over whether SCA was still obligated to pay the prize money

because there were allegations that Mr. Armstrong may have cheated.

11. When SCA did not immediately pay the prize money, Tailwind and Mr.

Armstrong sued SCA in Dallas state district court and then, as required under the Contingent

Prize Contract, sought to compel arbitration of the dispute. The matter was referred to

arbitration and a panel of Richard Faulkner (Chairman and neutral), Richard Chernick (SCAs

party-appointed arbitrator), and Ted Lyon (Tailwind and Mr. Armstrong's party-appointed

arbitrator) was appointed to hear the matter (referred to herein as the Arbitration Panel or the

Tribunal).

B. The First SCA-Armstrong Arbitration.

12. An arbitration was then commenced and discovery was taken. During the

arbitration proceedings, both Lance Armstrong and Bill Stapleton (on behalf of Tailwind)

testified under oath, among other things, that Mr. Armstrong never used performance enhancing

drugs during the entirety of his cycling career; that Mr. Armstrong had won the 2002-2004 Tour

de France races legitimately and without cheating; and that SCA (and all witnesses who asserted

otherwise) were lying and should be punished accordingly.

13. In 2005, prior to the conclusion of the arbitration, Tailwind, Lance Armstrong and

SCA entered into a Comprehensive Settlement Agreement. As part of that agreement, they

reaffirmed and expanded their arbitration agreement by providing in paragraph 5.6 as follows:

The Arbitration Panel consisting of Richard Faulkner, Richard Chernick and Ted Lyon shall have exclusive jurisdiction over the parties hereto with respect to any dispute or controversy among them arising under or in connection with this SETTLEMENT AGREEMENT or Contingent Prize Contract #31122 and, by execution and delivery of this SETTLEMENT AGREEMENT, each of the parties hereby submits to the jurisdiction of that Panel and waives any objection to such jurisdiction on the grounds of venue or forum non conveniens, the absence of in

PAGE 4 OF 38


personam or subject matter jurisdiction and any similar grounds, consents to service of process by mail or any other means permitted by law, and irrevocably agrees to be bound by any order or award issued or rendered thereby in connection with this SETTLEMENT AGREEMENT. 14. In addition, based on the settlement, the Original Panel then issued an arbitration

award for $7,500,000. Mr. Armstrong was a party to that arbitration award. The award was

never confirmed by a court but SCA paid the full amount.

C. Mr. Armstrongs Fall From Grace.

15. In January 2013, Mr. Armstrong was interviewed on television by Oprah Winfrey.

During that interview, Mr. Armstrong admitted for the first time that (1) he used performance

enhancing drugs in every Tour de France race he allegedly won; (2) he lied under oath in

connection with the prior arbitration proceeding involving SCA; and (3) he sought to intimidate

and harass witnesses who had otherwise tried to tell the truth about him and his conduct.

D. SCA Files Suit Against Armstrong.

16. Based on his admissions, SCA filed suit against Lance Armstrong, Tailwind

Sports, Inc. and William Stapleton in February, 2013. SCA asserted a series of claims, including

fraud, unjust enrichment, money had been received, an appointment of a receiver, civil contempt

and conspiracy. That case is still pending and is styled:

SCA Promotions, Inc., plaintiff v. Lance Armstrong, Tailwind Sports, Inc. and William Stapleton, defendants No. 13-01564 (116th Judicial District Court)

17. In June 2013, SCA moved to re-convene the arbitration against Armstrong and

Tailwind. Pursuant to paragraph 5.6 of the Comprehensive Settlement Agreement and paragraph

9 of the Contingent Prize Contract, SCA sought to re-convene the Original Panel. In its request

for arbitration, SCA asserted two basic claims against Mr. Armstrong. First, SCA sought to

sanction Mr. Armstrong and Tailwind for perjury and other fraudulent conduct in connection

PAGE 5 OF 38


with the original arbitration and the settlement. Second, SCA sought the forfeiture of all prize

money paid to Mr. Armstrong by SCA based on the fact that Mr. Armstrong was stripped of all

of his Tour de France titles.

18. Mr. Armstrong and Tailwind opposed the effort to reconvene the arbitration,

claiming that the Original Panel lacked jurisdiction to hear the dispute, primarily because there

was no authority for the Original Panel to reconvene or to sanction Mr. Armstrong.

19. The Original Panel heard the jurisdictional challenge and denied Armstrong and

Tailwinds requests in a written order dated October 29, 2013. In its written order, the Original

Panel rejected Armstrongs arguments, and further found that since Mr. Armstrong and Tailwind

had themselves sought sanctions from the Original Panel after the initial arbitration had

concluded, they had waived any complaint that the Original Panel lacked such authority.

E. Mr. Armstrongs Court Challenge to the Second Arbitration.

20. Mr. Armstrong and Tailwind then filed a Motion to Stay with the 116th Judicial

District Court pursuant to section 171.023 of Texas Arbitration Act. In that Motion, Armstrong

raised the very same issues that he had urged before the Original Panel. After a full hearing and

briefing, the Court (the Honorable Tonya Parker) denied Mr. Armstrongs Motion.

21. Armstrong then filed a Petition for Writ of Mandamus with the Dallas Court of

Appeals. He also filed a Motion to Stay Proceedings. The Dallas Court of Appeals denied

Armstrongs requests and dismissed the appeal on April 24, 2014. Armstrong then filed a

Petition for Writ of Mandamus with the Texas Supreme Court. The Supreme Court denied

Armstrongs Petition on May 30, 2014.

22. Having exhausted all appeals, the parties proceeded to arbitration. An evidentiary

hearing was held before the Original Panel on September 4 and 5, 2014. During that hearing the

PAGE 6 OF 38


parties were given full opportunity to present any evidence and testimony they believed was

relevant to their case. Lance Armstrong testified during the hearing, as did SCA president Bob

Hamman. After the hearing was concluded, the parties filed substantial briefing regarding all

relevant issues.

23. On February 4, 2015, the Original Panel rendered its Award. A copy of the

Award is attached as Exhibit A.

24. In its Award, the Original Panel granted SCA the following relief: Lance

Armstrong and Tailwind were sanctioned the sum of $10,000,000.

25. The arbitrators, in the written Award, explained that they sanctioned Armstrong

because, among other things, they found he had used perjury and other wrongful conduct to

secure millions of dollars in benefits from SCA. See Award at 17. The award was further

justified, the arbitrators ruled, because Armstrongs conduct during the legal proceeding with

SCA was an unparalleled pageant of international perjury, fraud and conspiracy. Id. at 1.

26. In that regard, the Original Panel also found that:

Armstrong committed perjury with respect to every issue in the case. Armstrong intimidated and pressured other witnesses to lie. Armstrong used a false personal and emotional appeal to perpetuate his lies to

the arbitrators.

Armstrong expressed no remorse to the arbitrators for his wrongful. Armstrong continued to lie during the reconvened arbitration.

Id. at 17.

27. Armstrong has not satisfied the Award. Nor has Tailwind.

PAGE 7 OF 38


FIRST CAUSE OF ACTION (For Confirmation of Arbitration Award Against Lance Armstrong)

28. Plaintiff incorporates the preceding paragraphs as if fully set forth herein.

29. Pursuant to Tex. Civ. Prac. & Rem. Code 171.087, this Court shall confirm the

award upon application of a party.

30. SCA hereby requests that this Court confirm the Award against Armstrong. This

application is made timely under Texas law.

31. The Award is valid and enforceable as against Armstrong. There are no reasons

to vacate, modify or correct the Award.

32. SCA hereby requests that this Court confirm the Award and enter judgment

against Armstrong and in favor of SCA in an amount of $10 million, plus applicable interests,

costs and such other relief as is allowed by law.

SECOND CAUSE OF ACTION (For Confirmation of Arbitration Award Against Tailwind)

33. Plaintiff incorporates the preceding paragraphs as if fully set forth herein.

Pursuant to Tex. Civ. Prac. & Rem. Code 171.087, this Court shall confirm the award upon

application of a party.

34. SCA hereby requests that this Court confirm the Award against Tailwind. This

application is made timely under Texas law.

35. The Award is valid and enforceable as against Tailwind. There are no reasons to

vacate, modify or correct the Award.

36. SCA hereby requests that this Court confirm the Award and enter judgment

against Tailwind and in favor of SCA in an amount of $10 million, plus applicable interests,

costs and such other relief as is allowed by law.

PAGE 8 OF 38


PRAYER

Plaintiff SCA Promotions, Inc. hereby prays that this Court grant the following relief:

1. Confirm the Award and enter judgment against Defendant Lance Armstrong in an

amount of not less than $10,000,000;

2. Confirm the Award and enter judgment against Defendant Tailwind Sports, Inc. in an

amount of not less than $10,000,000;

3. and for such other and further relief, at law or in equity, to which it may be justly

entitled.

Dated: February 16, 2015 Respectfully submitted,

________________________________________ Jeffrey M. Tillotson, P.C. State Bar No. 20039200 Jonathan R. Patton State Bar No. 24088198 LYNN TILLOTSON PINKER & COX, LLP 2100 Ross Avenue, Suite 2700 Dallas, Texas 75201 Telephone: (214) 981-3800 Facsimile: (214) 981-3839 ATTORNEYS FOR SCA PROMOTIONS, INC.

PAGE 9 OF 38


CERTIFICATE OF SERVICE

I certify that the above and foregoing document was served by e-service on February 16, 2015:

Timothy Herman Email: [email protected] Sean Breen Email: [email protected] HOWRY BREEN & HERMAN, L.L.P. 1900 Pearl Street Austin, Texas 78705-5408

____________________________________ Jeffrey M. Tillotson, P.C.

4830-4154-0385, v. 2

PAGE 10 OF 38

FINAL ARBITRATION AWARD

ARBITRATION TRIBUNAL

Sitting in the following composition:

Chariman: Hon. Richard D. Faulkner, J.D., LL.M., FCIArb, Dip. Intnl. Comm. Arb., Dallas, Texas

Arbitrators: Mr. Richard Chernick, Esq., FCIArb, JAMS Los Angeles, California

Hon. Ted Lyon, Esq., Attorney-at-Law

Dallas, Texas

Secretary to the Tribunal: Mr. Charles Bennett, Esq., Attorney-at-Law Dallas, Texas

In the Matter of an Arbitration Between

LANCE ARMSTRONG and TAILWIND SPORTS CORP. Represented by: Mr. Timothy J. Herman, Esq Austin, Texas

Claimants and

SCA PROMOTIONS, INC., SCA INSURANCE SPECIALISTS, INC. Represented by: Mr. Jeffrey M. Tillotson, Esq. Dallas, Texas Respondents

PAGE 11 OF 38

swadeTypewritten TextEXHIBIT A

TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................................................. i

I. SUMMARY OF FINAL ARBITRATION AWARD ............................................................................... 1

II. THE PARTIES, COUNSEL AND ARBITRATION TRIBUNAL ......................................................... 2

III. THE ISSUES IN DISPUTE ................................................................................................................... 2

IV. THIS ARBITRATION HAS AFFORDED THE PARTIES A FULL HEARING ................................ 3

V. BACKGROUND .................................................................................................................................... 3

VI. SECOND AND THIRD ARBITRATION PROCEEDINGS ................................................................ 4

VII. FOURTH ARBITRATION PROCEEDING ........................................................................................ 4

VIII. INDEPENDENT ARBITRATION ..................................................................................................... 5

IX. ISSUES PRESENTED .......................................................................................................................... 5

A. The Compromise Settlement Agreement Arbitration Provisions ...................................... 6

B. Prior Party Actions Significant to Tribunal Jurisdiction........................................ 6 C. Party Assertions Regarding Tribunal Jurisdiction ................................................. 6 D. Prior Partial Final Award of Jurisdiction and Court Review ................................. 7

X. ARBITRABILITY AND JURISDICTION DISPUTES ......................................................................... 7

A. Proper Parties Before This Tribunal ...................................................................... 7 B. This Tribunal Has No Jurisdiction Over William Stapleton .................................. 8 C. This Tribunal Has Jurisdiction Over Claimants and Respondents ....................... 9 D. Functus Officio Doctrine Inapplicable ................................................................... 9 E. Facts and Circumstances ........................................................................................ 9 XI. LEGAL ANALYSIS ............................................................................................................. 10

A. Facts ..................................................................................................................... 10

B. Jurisprudence ....................................................................................................... 10 i

PAGE 12 OF 38

C. Analysis................................................................................................................ 12 D. Conclusion ........................................................................................................... 13

XII. SANCTIONS........................................................................................................................ 13

A. Background .......................................................................................................... 13 B. Facts ..................................................................................................................... 14 C. Party Obligation Not to Frustrate or Impede Contracts ....................................... 14 D. Claimants Frustrated and Impeded SCA Contract Performance ......................... 16 E. Claimants Frustrated and Impeded Arbitration Tribunal Performance ............... 16

XIII. DETERMINATION OF SANCTIONS .............................................................................. 17 XIV. CLAIMANTS COUNSEL DID NOT KNOW OF CLAIMANTS PERJURY AND DID

NOT KNOWINGLY PERPETRATE A FRAUD UPON THE TRIBUNAL .................... 18 XV. THE STATUS OF TAILWIND SPORTS CORP. ............................................................... 18 XVI. SEPARATE CONCURRENCE IN PART AND DISSENT .............................................. 19 XVII. CONCLUSION ................................................................................................................. 19 Signatures ..................................................................................................................................... 20 DISSENT FROM FINAL AWARD ............................................................................................ 21

ii

PAGE 13 OF 38

IN THE MATTER OF AN ARBITRATION BETWEEN

LANCE ARMSTRONG and TAILWIND SPORTS CORP.

Claimants, BEFORE AN ARBITRATION TRIBUNAL CONSISTING OF THE

HONORABLE RICHARD v. FAULKNER, CHAIRMAN,

MR. RICHARD CHERNICK AND HONORABLE TED LYON, ASSISTED BY TRIBUNAL SECRETARY MR. CHARLES BENNETT

SCA PROMOTIONS, INC., SCA INSURANCE SPECIALISTS, INC. Respondents.

FINAL ARBITRATION AWARD

I. SUMMARY OF FINAL ARBITRATION AWARD

Perjury must never be profitable. Justice in courts of law and arbitration tribunals is

impossible when parties feel free to deliberately deceive judges or arbitrators. The case yet

again before this Tribunal presents an unparalleled pageant of international perjury, fraud and

conspiracy. It is almost certainly the most devious sustained deception ever perpetrated in world

sporting history. Tailwind Sports Corp. and Lance Armstrong have justly earned wide public

condemnation. That is an inadequate deterrent. Deception demands real, meaningful sanctions.

This Arbitration Tribunal awards sanctions of Ten Million Dollars ($10,000,000.00) against Mr.

Lance Armstrong and Tailwind Sports Corporation.

1

PAGE 14 OF 38

II. THE PARTIES, COUNSEL AND ARBITRATION TRIBUNAL

Pursuant to the multiple agreements of the parties, this Arbitration Tribunal consisting of

Messrs. Richard Chernick, Esq., appointed by Respondent SCA Promotions, Inc. et al, former

Senator Ted Lyon, Esq., appointed by Claimants, Tailwind Sports Corp. and Mr. Lance

Armstrong, and the neutral Chairman, former Judge Richard Faulkner, Esq. was appointed as the

exclusive Tribunal to determine all disputes between the parties. Participating, subject to

continuing objection to the Tribunals jurisdiction over Tailwind Sports, Inc. and Mr. Lance

Armstrong, were the former counsel for Tailwind Sports, Inc. and previous and current counsel

for Mr. Lance Armstrong, Messrs. Timothy J. Herman, Esq. and Sean Breen, Esq. and the

Respondents through counsel, Mr. Jeffery Tillotson, Esq.

III. THE ISSUES IN DISPUTE

These parties return to this Arbitration Tribunal yet again to consider the parties latest

disputes raised in SCA Promotions, Inc.s (SCA) Motion to Reconvene Arbitration and

Request for Sanctions and Forfeiture Against Claimants (Motion), Lance Armstrong

(Armstrong) and Tailwind Sports Corp. (Tailwind) (collectively Claimants). Respondents

make multiple assertions which effectively present for decision four discrete issues:

1.) Does this Arbitration Tribunal have the jurisdiction or authority to decide and

resolve the existing disputes between the named parties?

2.) Which parties are properly subject to this Tribunals jurisdiction?

3.) What jurisdiction, if any, does this Tribunal have to award sanctions? and

4.) If sanctions are appropriate, what sanctions should this Arbitration Tribunal

award?

2

PAGE 15 OF 38

IV. THIS ARBITRATION TRIBUNAL HAS AFFORDED THE PARTIES A FULL HEARING

This Arbitration Tribunal has permitted the parties substantial pre-hearing discovery,

issued multiple subpoenas, conducted a full hearing on the merits of the issues during which the

testimony of multiple witnesses, extensive documentary evidence and significant briefing were

received and considered. The Tribunal also directed the parties to provide supplemental briefing

analyzing particular jurisprudence and then thoroughly reviewed all party submissions and the

applicable law. The issues in dispute are now appropriate for decision and award.

V. BACKGROUND

The history of the numerous disputes between these parties is very well-known to

this Arbitration Tribunal. The complicated reality is that this Tribunal was originally empanelled

to determine if SCA was required to honor the commitment it made to Claimants in Contingent

Prize Contract 31122 (CPC) in connection with the Tours de France in 2004.

SCA denied liability under the CPC asserting that Armstrong won the 2004 Tour de

France using prohibited means. Claimants strongly controverted that assertion. The Tribunal

entertained extensive evidence at trial and was prepared to rule. However, before this Tribunal

rendered its own Final Award on the merits, the parties privately resolved their disputes. Their

agreement was memorialized in the private Compromise Settlement Agreement (CSA) and the

public Consent arbitration Award. The Award provided for SCA to pay $7,500,000.00 to

Claimants in satisfaction of their rights under the CPC. The CSA addressed multiple additional

issues. Most importantly to the continuing jurisdiction and authority of this Tribunal, the CSA by

its own terms anticipated future additional disputes would inevitably arise. The CSA

affirmatively maintained the agreed arbitration Tribunal by individually naming each of the

arbitrators, granting the Tribunal exclusive jurisdiction to resolve any future disputes arising

3

PAGE 16 OF 38

under or in connection with the CSA and CPC, and waiving any challenges to the jurisdiction of

the Tribunal. As the parties anticipated and expressly provided for in the CSA, the parties

subsequently returned to this Tribunal multiple times to contest additional disputes after the

public Consent Award was issued.

VI. SECOND AND THIRD ARBITRATION PROCEEDINGS

Questions persisted concerning whether Armstrong won fairly and within the rules the

various Tours de France. On two occasions after the entry of the consent award, Armstrong

and Tailwind affirmatively sought relief from this Tribunal, including sanctions, for SCA

conduct they claimed violated their rights. (App. 19-20; 276-289). Notably, neither Claimants,

nor SCA objected to the Tribunals jurisdiction or authority in either arbitration. In each

instance, after the Tribunal resumed action, the parties subsequently resolved their disputes.

Neither dispute resulted in the Tribunal issuing a Final Award.

VII. FOURTH ARBITRATION PROCEEDING

Recently, Armstrongs status as the official winner of the various Tours de France,

was revoked by the United States Anti-Doping Agency, known as USADA. The evidence

established that after the first arbitration, SCA provided extensive information to USADA. SCA

also provided information to the United States Department of Justice. Claimants asserted that

those actions violated the Confidentiality Order issued by the Tribunal in the first arbitration.

Respondents denied that assertion noting that providing information to the Department of Justice

was completely proper. Claimants argument that an arbitration Confidentiality Order could be

used to conceal perjury and fraud from the very Tribunal that issued the Order was innovative,

but completely unpersuasive.

Armstrong also tried to enjoin USADA from investigating him. He asserted in the

4

PAGE 17 OF 38

United States District Court that the actions of USADA, particularly the process leading to

USADAs revocation of his status, were inconsistent with due process or natural justice. The

United States District Court declined to enjoin USADA. However, it issued scathing comments

highly critical of USADAs motives and actions. Those were noted and considered in light of

Tribunal members significant judicial and prosecutorial experience. Lance Armstrong v. Travis

Tygert & United States Anti-Doping Agency, USDC WDTX, Case No. A-12-CA-606-66, Order,

20 Aug. 2012.

VIII. INDEPENDENT ARBITRATION

This Arbitration Tribunal has taken great care to determine completely independently of,

and without any reliance upon USADAs report, what, if any, sanctions against Claimants were

appropriate for their actions before this Tribunal. The parties have been afforded a full, fair and

complete opportunity to present their positions. This Tribunal has ensured that the parties all

received a full, complete hearing consistent with all modern conceptions of due process and

natural justice.

After the revocation of Armstrongs Tour de France victories SCA timely proceeded to

seek relief in court. Eventually the parties returned yet again to this Tribunal.

IX. THE ISSUES PRESENTED

The questions presented for determination now are:

1.) Does this Arbitration Tribunal have the jurisdiction or authority to decide and

resolve the existing disputes between the named parties?

2.) Which parties are properly subject to this Tribunals jurisdiction?

3.) What jurisdiction, if any, does this Tribunal have to award sanctions? and

4.) If sanctions are appropriate, what sanctions should this Arbitration Tribunal

5

PAGE 18 OF 38

award?

A. The Compromise Settlement Agreement Arbitration Provisions

The key for determination of these issues is the language of the arbitration provisions of

the CSA which states:

This SETTLEMENT AGREEMENT shall be governed by, construed, interpreted and

the rights of the parties determined in accordance with the laws of the State of Texas, without

regard to conflict of law principles thereof. The Arbitration Panel consisting of Richard

Faulkner, Richard Chernick and Ted Lyon shall have exclusive jurisdiction over the parties

hereto with respect to any dispute or controversy among them arising under or in connection

with this SETTLEMENT AGREEMENT or Contingent Prize Contract #31122 and, by

execution and delivery of this SETTLEMENT AGREEMENT, each of the parties hereby

submits to the jurisdiction of that Panel and waives any objection to such jurisdiction on

the grounds of venue or forum non conveniens the absence of in personam or subject matter

jurisdiction and any similar grounds, consents to service of process by mail or any other

manner permitted by law, and irrevocably agrees to be bound by any order or award issued or

rendered thereby in connection with this SETTLEMENT AGREEMENT. emphasis added. See

CSA, p.5, 5.6.

B. Prior Party Actions Significant to Tribunal Jurisdiction

The Claimants previous pursuit of multiple claims in two separate post-award arbitration

proceedings, and specifically their filing the Request for Sanctions, conclusively demonstrate

acceptance of this Tribunals continuing jurisdiction as further explained below.

C. Party Assertions Regarding Tribunal Jurisdiction

SCA asserts that the parties agreements, the language of the CSA and CPC arbitration

provisions together with Claimants own actions seeking relief from this Tribunal, including

6

PAGE 19 OF 38

Claimants Request of Sanctions, admitted and re-verify the continuing jurisdiction of this

Tribunal to determine the latest disputes between these parties. SCA also claims that the

Tribunal has jurisdiction over Mr. William Stapleton who executed the CSA, though he was

identified when doing so as acting in a corporate capacity or as an agent of Armstrong.

Claimants deny this Tribunal has any jurisdiction to entertain or decide SCAs claims.

They each and all specifically contest and deny that this Tribunal has jurisdiction to entertain any

of SCAs claims and deny the Tribunal has any authority to assess sanctions against them.

D. Prior Partial Final Award on Jurisdiction and Court Review

The Tribunal separately considered the issues of jurisdiction in an effort to provide the

parties an opportunity to have that determination expeditiously reviewed by the courts. A Partial

Final Award on Jurisdiction was issued on October 29, 2013, the findings and conclusions of

which are further supplemented by the jurisdictional findings and conclusions of this Final

Award on the merits. Claimants attempted to stay the arbitration proceedings and to vacate the

Partial Final Award on Jurisdiction in the 116th District Court of Dallas County Texas. Cause

No.: DC13-01564. Claimants were unsuccessful and sought review of the District Court decision

in the Court of Appeals, Fifth District of Texas at Dallas in Case No. 05-14-00300CV where in a

Memorandum Opinion the court concluded that it dismissed the appeal for want of jurisdiction.

Claimants thereafter sought temporary relief and a writ of mandamus in the Supreme Court of

Texas. The Texas Supreme Court declined to intervene and denied the Motion for Temporary

Relief and denied the petition for a writ of mandamus.

X. ARBITRABILITY AND JURISDICTION DISPUTES

A. Proper Parties Before This Tribunal

The issue of which parties are properly before this Tribunal is easily addressed.

7

PAGE 20 OF 38

Arbitration Tribunals only have jurisdiction of those parties and issues affirmatively delegated to

them. Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010); AT&T Mobility LLC v.

Concepcion, 131 S. Ct. 1740 (2011). The language of the CSA states that this Tribunal, shall

have exclusive jurisdiction over the parties hereto with respect to any dispute or controversy

among them arising under or in connection with this SETTLEMENT AGREEMENT or

Contingent Prize Contract #31122 andeach of the parties hereby submits to the jurisdiction

of that Panel and waives any objection to such jurisdiction on the grounds of venue or forum

non conveniens the absence of in personam or subject matter jurisdiction and any similar

grounds The arbitration provisions grant this Tribunal the exclusive authority to interpret

and define its own jurisdiction. Claimants are further estopped by the language they agreed to

from legitimately claiming otherwise as they affirmatively waived the jurisdictional challenge

they now attempt. That view is buttressed by Claimants own subsequent actions. Thus, this

Tribunals interpretation of the agreements language is entitled to appropriate deference. Oxford

Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013). We recognize that the United States

Supreme Court has warned arbitration Tribunals that they are not common law courts of general

jurisdiction. Stolt-Nielson S.A. v. AnimalFeeds Intl Corp., 559 U.S. 662 (2010). We recognize

that arbitration Tribunals hold no roving commission to determine or vindicate public policy and

we do not assert one here. However, as all adjudicators, arbitration Tribunals must have the

authority to regulate, control and, if necessary, sanction parties for conduct in connection with

the proceedings before them.

B. This Tribunal Has No Jurisdiction Over William Stapleton

The evidence before this Tribunal clearly establishes that Mr. Stapleton acted in a

disclosed capacity as a corporate officer or as the authorized agent of Armstrong. In neither case

8

PAGE 21 OF 38

did Mr. Stapleton agree to any jurisdiction of this Tribunal over himself as an individual.

Whatever, if any, relief SCA may be able to obtain against him must be pursued in a forum with

jurisdiction. This Tribunal is not that forum. The evidence and law do not provide any basis for

this Tribunal to assert jurisdiction over Mr. Stapleton. We dismiss and deny SCAs request for

sanctions from this Tribunal against Mr. Stapleton. We express no opinion concerning what, if

any, claims may be pursued against him in any other forum.

C. This Tribunal Has Jurisdiction Over Claimants and Respondents

The documents in evidence before this Tribunal specify the parties who have agreed to be

parties to the CSA and CPC. The listed parties are Tailwind Sports Corp., Lance Armstrong,

SCA Promotions, Inc. and SCA Insurance Specialists, Inc. The evidence unquestionably

establishes that those persons and entities agreed directly, or by authorized agent, to arbitrate any

disputes between any or all of them before this Tribunal, all as defined in these agreements.

D. Functus Officio Doctrine Inapplicable

SCA asserts various theories seeking remedies that have been characterized by Claimants

as attacking the 2006 Award. Claimants argue that the doctrine of functus officio bars such

remedies. We find that doctrine to inapplicable here. The claims at issue now are but the newest

set of disputes between these parties and ones substantially similar to claims previously asserted

by Claimants against SCA. The doctrine of functus officio is inapplicable to deprive this

Tribunal of jurisdiction.

E. Facts and Circumstances

The facts and circumstances of this case are unusual and distinct from virtually all of the

jurisprudence presented by Claimants and considered by the Tribunal. The language of the CSA

was drafted to empower the Tribunal to address future disputes, which the parties perceived as

9

PAGE 22 OF 38

virtually inevitable. The acrimonious history of these parties mandated the creation of a private

mechanism for resolution of any additional disputes that would arise after issuance of the

original Award. The parties agreements anticipated that disputes were likely to arise in the

future and provided for the continuing jurisdiction of this Tribunal to arbitrate them. They did

indeed arise, and without contemporaneous objection, the parties submitted all of those disputes

to this Tribunal for decision.

XI. LEGAL ANALYSIS

A. Facts

The facts clearly demonstrate that contrary to Claimants new position, they affirmatively

asserted that this Tribunal had the authority and jurisdiction to sanction SCA after the issuance of

the consent Award for conduct Claimants believed violated their rights. The validity of that

view of the Tribunal jurisdiction was confirmed by the fact that SCA never contested Claimants

right to proceed before this Tribunal on those occasions. Critically, all of the parties agreed the

CSA was to be interpreted as creating and maintaining the jurisdiction and authority of this

Tribunal to determine any disputes between the parties relating to the CSA whenever those

disputes might arise. Thus, the authority and jurisdiction of this Tribunal is directly analogous to

that of the arbitration tribunal agreed between Germany and the United States of America in

Lehigh Valley Railroad Company v. Germany, 8 R.I.A.A. 84 (1930) (rehearing 8 R.I.A.A. 222

(1936)) (rehearing 8 R.I.A.A. 225 (1939)).

B. Jurisprudence

The many parallels between that Tribunal and this one are patent. Both arbitrations

involve awards procured by a party with a win by any means view of arbitration; both

arbitrations involve perjury and fraud perpetrated upon the Tribunals that remained unknown and

10

PAGE 23 OF 38

unknowable for many years. Each arbitration Tribunal was specifically created to address future

disputes which the parties reasonably expected would have to be determined after the agreement

of an armistice. The CSA and original consent Award were merely these parties private

equivalent of a temporary cease-fire. Hostilities between them continued precisely as expected.

The resumption of hostilities upon discovery of Claimants perjury and deception of the

arbitration Tribunal in the instant case simply occurred within five years of the issuance of the

Consent Award, rather than nine years as in Lehigh, supra. The jurisdiction, imperium and

authority of an arbitration tribunal to address and determine disputes within the parameters of the

parties carefully crafted contract language, and their actions consistent with that language, is

unquestionable, whether the arbitration Tribunal is created by an international treaty or by a

domestic contract. This basis for jurisdiction was expressed in the Partial Final Award, p. 4,

supra; we assume the Texas courts considered that authority in declining to intervene in this

proceeding.

This contractual identity of both forms of arbitral jurisdiction and the relevance of treaty

jurisprudence to domestic arbitration jurisprudence was recently reaffirmed by the United States

Supreme Court in BP Group vs. Republic of Argentina, 134 S. Ct. 1198; 188 L. Ed. 2d 220.

There the Court held that, As a general matter, a treaty is a contract, though between nations. Its

interpretation normally is, like a contract's interpretation, a matter of determining the parties

intent. Air France v. Saks, 470 U. S. 392, 399, 105 S. Ct. 1338, 84 L. Ed. 2d 289 (1985)

Treaties are to be interpreted upon the principles which govern the interpretation of contracts in

writing between individuals Wright v. Henkel, 190 U. S. 40, 57, 23 S. Ct. 781, 47 L. Ed. 948

(1903) Thus the jurisprudence construing the jurisdiction and authority of arbitration tribunal in

11

PAGE 24 OF 38

Lehigh Valley Railroad Company v. Germany, supra, is directly relevant to any review or

evaluation of this Tribunals jurisdiction.

The U. S. Supreme Court further noted that courts presume parties to an arbitration agreement

intend arbitrators to determine if the preconditions for arbitration have been complied with.

Thus, parties normally expect arbitrators to decide . . . claims of waiver, delay, or a like

defense to arbitrability. Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S.

1, 25, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983). (emphasis added) The same expectation applies

to disputes relating to time limits, notice, laches, estoppel, and other conditions precedent to an

obligation to arbitrate. Howsam v. Dean Witter Reynolds, 537 U.S. 79, 85, 123 S. Ct. 588, 154

L. Ed. 2d 491 (2002) (emphasis added). The arbitration provisions chosen by the parties here

affirmatively waived any such challenges to the jurisdiction of this Tribunal.

The facts of the parties disputes reveal that they fit within the parties agreements, the

language of the CPC and within the broad arbitration provision of the CSA. The fact that now

SCA, rather than Claimants, seeks sanctions does not alter the outcome of the jurisdictional issue

consistently applied to all post-consent award disputes between these parties. That is

emphatically true in light of the undisputed fact that Claimants acknowledged the jurisdiction of

this Tribunal to issue sanctions previously when they sought precisely that relief. The latest

disputes fall within the parties agreements, the CSA and CPC. The parties prior conduct

confirms that interpretation of their agreements. No fair reading of these agreements supports the

view that only Claimants could seek sanctions from this Tribunal.

C. Analysis

Claimants attacks upon the jurisdiction of this Tribunal are fairly characterized as

addressing issues of waiver, laches and estoppel. These issues are clearly within the jurisdiction

12

PAGE 25 OF 38

they themselves granted this Tribunal. The actions of Claimants in bringing prior post-Consent

Award disputes to this Tribunal requesting relief almost identical to that now sought by SCA are

strong proof that Claimants are precluded from contesting the jurisdiction and authority of this

Tribunal in this proceeding. APP 19-20, 276-287. Rachal v. Reitz, 403 S.W.3d 840 (Tex. 2013),

In Re FirstMerit Bank, 52 S.W.3d 749, 754. 1

D. Conclusion

The Tribunal finds and holds that Claimants are precluded and estopped from contesting

the Tribunals jurisdiction now. If Claimants ever had any valid argument concerning the

jurisdiction and authority of this Tribunal to award sanctions, they also waived that dubious

challenge by themselves seeking the award of sanctions from this Tribunal against SCA.

XII. SANCTIONS

A. Background

The Tribunal accepts that the authority of arbitrators to award monetary sanctions is not

universally accepted. The Dissent eloquently explains why Senator Lyon is not alone in

asserting that arbitrators lack such authority. However, arbitrators have long been accepted as

having the authority to take actions that fit well within the rubric of sanctions. Tribunals have

assessed or transferred the allocation of arbitration fees, administrative fees and costs upon

arbitral miscreants, assessed attorneys fees upon disruptive parties and even threatened to or

actually drawn adverse inferences against parties refusing to produce evidence thereby

effectively penalizing and sanctioning parties in arbitrations before them. The Majority is

satisfied that this Tribunal has the jurisdiction and authority, indeed, the duty to award sanctions

1 The knowledge of Mr. Armstrong that the jurisdiction of this Tribunal includes authority to issue sanctions is further buttressed by the fact that throughout his long cycling career he, like all high level athletes, was subject to the jurisdiction of the Court of Arbitration for Sport. The jurisdiction and willingness of CAS Arbitration Tribunals to sanction parties to arbitrations for improper actions in arbitration is well known and unquestioned. Floyd Landis v. USADA, CAS 2007 A/1394, Award, 30 Jun. 2008.

13

PAGE 26 OF 38

against Claimants for the egregious breach of their contractual obligations to SCA, their

obligations to this Tribunal and their calculated affront to the integrity of the arbitration process

which Claimants themselves initiated.

B. Facts

The Majority believes that the conduct at issue is subject to the power of this Panel to

remedy or punish because it was part of the arbitral proceedings, occurred in the presence of the

Panel and was directly related to the issues submitted to the Panel for determination. There is

ample authority that arbitrators have inherent power to remedy such conduct. E.g., Reliastar Life

Ins. Co. of New York v. EMC National Life Co., 564 F.3d 81 (2d Cir. 2009) (agreement to

arbitrate confers inherent authority on arbitrators to sanction a party who participates in

arbitration in bad faith).

The jurisdiction of governmental adjudicatory bodies to manage and control the process

and the parties before them is unquestioned. Arbitration Tribunals are different in that they draw

their authority and jurisdiction from the contractual agreements of the parties. Stolt-Neilsen,

supra. The jurisprudence of Texas and of the United States offer little guidance concerning the

basis for any jurisdiction or authority of arbitration tribunals to entertain or award sanctions.

Such authority as exists is often based upon the rules of an administering agency, however

obtuse and unclear. This Tribunal does not have the luxury of resort to that evasion as this

arbitration is purely ad hoc or non-administered. Consequently, we must analyze this issue

and explain our conclusions.

C. Party Obligation Not to Frustrate or Impede Contracts

Claimants object to jurisdiction and correctly advise that Texas does not accept or follow

the contract doctrine of good faith and fair dealing. English v. Fischer, 660 S.W.2d 521, 522,

14

PAGE 27 OF 38

27 Tex. Sup. Ct. J. 74 (Tex. 1983). Therefore, Claimants assert that no jurisdiction to sanction

wrongdoing exists. Fortunately, Texas, and other jurisdictions, recognize and accept the more

limited subsidiary concept of an implied covenant that parties must not frustrate or impede any

other parties performance of their contract. Though disfavored in Texas law, application of an

implied covenant is appropriate where necessary to effectuate the parties' intentions where the

obligation is "so clearly within the contemplation of the parties that they deemed it unnecessary

to express it." Bank One, Tex., N.A. v. Stewart, 967 S.W.2d 419, 434 (Tex. App.-Houston [14th

Dist.] 1998, pet. denied). (quoting Nalle v. Taco Bell Corp., 914 S.W.2d 685, 687 (Tex. App.-

Austin 1996, writ denied)). We conclude that the obligations of parties to be truthful, to not

commit perjury and to not intentionally submit fraudulent evidence in arbitrations of their

disputes arising from their agreements are precisely such implied covenants and obligations.

Thus parties duty to cooperate is implied in every contract in which cooperation is

necessary for performance of the contract. Where applicable, this implied duty requires that a

party to a contract may not hinder, prevent, or interfere with another party's ability to perform its

duties under the contract. Id. at 435; Hallmark v. Hand, 833 S.W.2d 603, 610 (Tex. App.-Corpus

Christi 1992, writ denied). Furthermore, as explained by the Fifth Circuit Court of Appeal, an

implied covenant to cooperate differs from the broader covenant of good faith and fair dealing

that the Texas Supreme Court rejected in English v. Fischer, supra.

An implied covenant of good faith and fair dealing places duties of "good faith," "fairness," "decency," and "reasonableness" upon all parties in regard to actions construing the contract, and components, terms and conditions of the contract. Implying a promise on the part of one party not to prevent the other party from performing the contract falls far short of implying a covenant of good faith and fair dealing.

Tex. Nat'l Bank v. Sandia Mortgage Corp., 872 F.2d 692, 698-99 (5th Cir. 1989) (emphasis added).

15

PAGE 28 OF 38

The Dallas Court of Appeals adopted that analysis in Case Corp. v. Hi-Class Business

Systems of America, Inc. and HBS Systems, Inc., 184 S.W.3d 760; 2005 Tex. App. LEXIS 10549

(Tex. App. Dallas 2005) and recently reiterated its continuing support for that analysis in Lemon

v. Hagood, 2014 Tex. App. LEXIS 8113.

D. Claimants Frustrated and Impeded SCA Contract Performance

The Tribunal here affirmatively finds that Claimants actions improperly prevented SCA

from performing its duties under the parties contracts and the agreements to arbitrate.

Claimants further intentionally breached their obligations to arbitrate their disputes with SCA.

Breach of a partys contractual duty to honor an agreement for use of a dispute resolution

process or arbitration has been recognized in Texas as imposing liability and damages for over

160 years. Owens v. Withee, 3 Tex. 161 (1848); Brown v. Eubank, 443 S.W.2d 386 (Tex. Civ.

App. -- Dallas 1969, no writ) Standard Fire Insurance Company v. Melvin L. Fraiman, dba

Jamaican Apartments, 588 S.W.2d 681; 1979 Tex. App. LEXIS 4228.

E. Claimants Frustrated and Impeded Arbitration Tribunal Performance

This Tribunal further affirmatively finds that Claimants also intentionally prevented this

arbitration Tribunal from properly discharging the contractual duties it was obligated to perform

for the benefit of all of the parties by knowingly presenting perjury and fraudulent evidence. A

thorough analysis of arbitration reveals the reality is that every contract with an arbitration clause

is a primary contract containing within it multiple subsidiary agreements imposing additional

sets of obligations upon the parties and the arbitrator(s). There is first the agreement of the

parties to arbitrate with their counterparty. Breach of that obligation can lead to damages. Owens

v. Withee, supra; Brown v. Eubank, supra, Standard Fire Insurance Company v. Melvin L.

Fraiman, supra. There are also agreements between the parties and the arbitrator(s) to participate

16

PAGE 29 OF 38

in any arbitration according to any agreed rules, to comply with validly issued awards and to pay

the arbitrators for their services. Those obligations of the parties are reciprocated by the

arbitrators agreeing to dedicate sufficient time and judgment to resolving the parties dispute

according to their agreement consistent with the designated law. The Claimants employment of

perjured testimony and fraudulent prevented the Tribunal from performing those obligations

which were owed to all of the parties participating in the arbitration.

XIII. DETERMINATION OF SANCTIONS

Ample evidence was adduced at the hearing through documents and witnesses that

Claimants commenced this proceeding knowing and intending to lie; committed perjury before

the Panel with respect to every issue in the case; intimidated and pressured other witnesses to lie;

or influenced others to help them lie and to hide the truth; used a false personal and emotional

appeal to perpetuate their lies to the Panel; used perjury and other wrongful conduct to secure

millions of dollars of benefits from Respondents; used lies and fraud to falsely claim that the

Panel exonerated them, thereby further allowing them to profit further from additional

endorsements and sponsorships; expressed no remorse to the Panel for their wrongful conduct;

and continued to lie to the Panel throughout the final hearing even while admitting to prior

falsehoods and other wrongful conduct. Claimants admitted in substantial part the substance of

all (but the last) of the foregoing conduct.

The evidence placed before the Tribunal established that SCA paid Claimants

$7,500,000.00 pursuant to the Consent Final Award of February 8, 2006. The evidence

adduced in the recent arbitration hearing established that SCA has reasonably incurred attorneys

fees and costs in excess of $2,000,000.00, which fees and costs continue. Claimants actions

have further imposed upon SCA additional costs insusceptible of precise calculation. These

17

PAGE 30 OF 38

figures are not cited as a calculation of damages but rather as one measure of the harm

generally caused by Claimants conduct. Considering that the Claimants must take full

responsibility for the consequences of their actions, sanctions in the sum of $10,000,000.00 are

appropriate and are awarded against Claimants.

XIV. CLAIMANTS COUNSEL DID NOT KNOW OF CLAIMANTS PERJURY AND DID NOT KNOWINGLY PERPERTRATE A FRAUD UPON THE TRIBUNAL

The sad facts of this case required that the Tribunal receive and consider evidence

relating to whether Claimants counsel were aware of the perjury or participated in perpetrating a

fraud upon this Tribunal. The Arbitration Tribunal affirmatively concludes, determines and

finds that Claimants counsel, Mr. Tim Herman, Esq. and Mr. Sean Breen, Esq. did not know of

Claimants perjury, misrepresentations or the conspiracy to present fraudulent claims to the

Tribunal. Counsel were also victims of Claimants conspiracy and did not knowingly participate

in Claimants schemes. Mssrs. Herman and Breen at all times acted properly, professionally and

ethically.

Despite the mutual animosity and hostility of the parties in this matter towards each

other, all counsel always acted with the utmost civility, ethics and professionalism towards each

other and this Tribunal.

XV. THE STATUS OF TAILWIND SPORTS CORP.

Tailwind Sports, Corp. (Tailwind) asserted that this Tribunal has no jurisdiction

because it was dissolved consistent with Delaware law. We need not do more than to note that

the existence or nonexistence of Tailwind is, in our view, an issue relating to the possible

enforcement of this final award. Tailwind is a party to the CSA and CPC and this Tribunal has

jurisdiction over it.

18

PAGE 31 OF 38

XVI. SEPARATE CONCURRANCE IN PART AND DISSENT

Senator Lyon concurs in the following Dissent of this Award determining that this

Tribunal has no jurisdiction over Mr. William Stapleton. For the reasons separately stated in his

Dissent to this Award, he does not join the majority decision.

XVII. CONCLUSION

Based upon the law and evidence received and analyzed above, the interpretation of the

parties agreements, CSA and CPC, this Tribunal concludes, determines and issues this Final

Award on Jurisdiction and Sanctions as follows:

1. This Tribunal has no jurisdiction over Mr. William Stapleton; and

2. This Tribunal, by the agreement of the parties and the express terms of the CSA and

CPC, does have jurisdiction to determine and make a final award resolving any disputes between

or among only the named parties to the original arbitration, to wit: Tailwind Sports, Corp., Lance

Armstrong, and SCA Promotions, Inc.; and

3. This Tribunal has jurisdiction to determine SCAs Request for Sanctions and finds that

the defenses asserted by Claimants disputing the continuing jurisdiction of this Tribunal are not

established and were waived, and Claimants are estopped by both the language of the parties

agreements and by their actions in their previous submissions of multiple other disputes to this

Tribunal; and

4 That Claimants, Tailwind Sports Corp. and Mr. Lance Armstrong jointly and severally

shall pay the sum of Ten Million Dollars ($10,000,000.00) as Sanctions to SCA Promotions Inc.

and SCA Insurance Specialists, Inc.

This Award resolves all issues submitted for decision in this proceeding. Any claim that

is not directly addressed in the Award is deemed denied.

19

PAGE 32 OF 38

This award executed and published to the parties in Dallas County Texas, this 4th d.ay of February, 2015.

Senator Lyon dissents from this Award for the reasons he independently assigns below, this the 4th day of February, 2015.

Hon. Ted Lyon, Esq., Attorney-at-Law

DISSENT FROM THE FINAL AWARD

In Book III of his Politics, Aristotle wrote that it is well that we have a government of

laws and not of men because even the best men are overruled by their passion.

I respectfully dissent from the sanctions awarded to SCA Promotions, Inc. ("SCA") in

this case because I believe the majority's award is not based on the law. In Texas, arbitration is

favored as a means of dispute resolution, and courts indulge every reasonable presumption in

favor of upholding the award as a binding final settlement of the claims and/or issues submitted

to arbitration. Wetzel v. Sullivan, King & Sabom, P.C., 745 S.W.2d 78, 81 (Tex.App.-Houston

[1st Dist.] 1988, no writ).

SCA and Lance Armstrong ("Armstrong") entered into a settlement agreement nine years

ago. That settlement agreement was followed by an Agreed Final Arbitration Award negotiated

20

PAGE 33 OF 38

at arms length by extremely competent and seasoned lawyers. SCA entered the settlement

agreement with an expressed understanding of the risks and an expressed waiver of reliance on

any testimony given or representations made by Armstrong.

At the time of the settlement, SCA had been found by the Panel to have engaged in the

business of selling insurance in Texas without a license, a fact which at the time of the

settlement exposed SCA to possible liability for treble damages and attorney fees.

Armstrong was seeking $10,000,000.00 in damages and attorney fees, opening SCA up

to potential liability of over twenty-two million dollars. No party in this case came here with

clean hands. Texas law provides that (1) an unlicensed insurer can have a penalty imposed on

them of up to $10,000.00 for each day of violation, and (2) an insurer may be enjoined from

continuing the violation. The Texas Insurance Code makes it clear that to do what SCA did is a

third degree felony. Tex. Ins. Code Ann. 101.106 (West); Tex. Pen. Code 12.34.

Further, under the Texas Insurance Code, SCA was precluded from raising any defenses

to payment under the Contingent Prize Contract that was the subject of Claimants cause of

action. There were sound reasons for SCA entering into the agreement to settle, including the

Confidentiality Agreement, which kept the finding that SCA had engaged in the unauthorized

business of insurance from being disclosed to the Texas Department of Insurance, which could

have instituted actions against SCA itself.

The plain language of the settlement agreement between SCA and Armstrong shows the

parties intent that the settlement be final and binding. The Settlement Agreement includes the

following language:

1. Fully and forever binding on The Parties and their heirs, executors,

administrators, successors and assigns.

2. Both parties expressly waived any right to challenge, appeal or attempt to set

21

PAGE 34 OF 38

aside the Arbitrator Award.

3. The parties further agreed that No promise or representation of any kind has

been made to any Party or to anyone acting for a Party, except as is expressly

stated in this Settlement Agreement, and the parties execute this Settlement

Agreement without any reliance on any representation of any kind or character

not expressly stated in this Settlement Agreement.

4. The Agreement further stated before executing this Settlement Agreement, the

Parties became fully informed of the terms, contents, conditions, and effect of this

Agreement.

5. The Agreement further states The parties each acknowledge that this instrument

constitutes the entire agreement between them with respect to the matters being

compromised and settled in this Settlement Agreement, and this Settlement

Agreement supersedes any and all prior agreements and understandings relating

to the subject matter hereof.

The Agreed Final Arbitration Award ordered SCA to pay Tailwind and Armstrong seven

million five hundred thousand dollars. The Arbitration Panel did not rely on any testimony or

pleadings and simply implemented the parties Settlement Agreement into an Agreed Final

Arbitration Award, and as such the Panel was not defrauded in any way that would merit

reopening the arbitration. Further, both sides agreed to the Final Arbitration Award.

Under governing Texas law, the parties agreement is clear, it is comprehensive, and it

should be binding. As both sides attorneys expressed during their opening statements to the

Panel, for this Panel to reopen this arbitration and sanction Armstrong would be unprecedented.

It is in fact unprecedented. No arbitration panel in Texas or our nation has ever stretched

back so far in time to issue such a sanction. This Panel has no authority to sanction Armstrong

22

PAGE 35 OF 38

under the Contract signed by the Parties. The agreement to arbitrate any disputes between the

parties contains no language that would allow the arbitrators to sanction Armstrong after their

negotiated settlement waived all rights to challenge the award and expressly disclaimed any

reliance on any prior statements or conduct by the parties.

The arbitration provision of the Contingent Prize Contract states The Settlement

Agreement shall be governed by, construed, and interpreted in accordance with the laws of the

State of Texas, with regard to conflict of law principles thereof. The Contingent Prize Contract

#31122 between the parties provided for arbitration pursuant to the Texas General Arbitration

Act and there was no agreement to incorporate the rules for any arbitration association that

allowed for sanctions. There is no Texas case or statute that allows for this type of sanctions

motion nine years after the award was given. The majority attempts to support its result with

Lehigh Valley Railroad Company v. Germany, R.I.A.A., VIII, 84 (1930). I simply note that the

Lehigh Valley Railroad case was based on the Treaty of Versailles after World War I- the

present matters (by express agreement) is governed by the law of Texas and no Texas law can be

cited that supports the majoritys decision.

The majoritys ruling - that because Tailwind and Armstrong moved for sanctions based

on conduct to enforce the Settlement Agreement and based upon the Panels ongoing order

concerning confidentiality, which occurred after the arbitration concluded, somehow opened the

proceedings to be re-litigated eight years or to infinity after a Final Settlement Agreement was

made and effectuated - is unprecedented and farfetched and (as the majority freely admits) not

based on any Texas law.

SCA filed a Motion to Reconvene in June of 2013. That is seven years and four months

after the Settlement Agreement and Final Order were agreed to by the parties and the panel

signed the Agreed Final Arbitration Award. Under the Texas Arbitration Act, Texas Civil

23

PAGE 36 OF 38

Practice & Remedies Code 171.088, SCA had 90 days to challenge the arbitration award but

they failed to do so. The amount of the sanction is almost exactly that which SCA paid to settle

with Claimants and what SCA paid in attorneys fees and costs. To say that this is a sanction

when it mirrors almost exactly what SCA paid is incorrect. In substance, the majoritys sanction

is an unwarranted, unlawful reversal of a settlement agreement that was made and effectuated

nine years ago. There is an old saying that if it looks like a duck, walks like a duck and quacks

like a duck, its a duck. This is a duck and it is no more or less than SCA trying to overturn an

agreement SCA voluntarily entered into in February 2006 to get its money back because

Armstrong lied about performance enhancing drugs in the 2005-2006 proceedings.

In closing, I respectfully dissent from the majoritys ruling. I concur in the Tribunals

ruling that it has no jurisdiction over William Stapleton and disagree that the Tribunal has

jurisdiction over Tailwind Sports Corp. since it was dissolved under Delaware law and does not

exist. I further agree with the Panel in its conclusions concerning the attorneys for Lance

Armstrong and agree that we found no evidence or testimony that Mr. Tim Herman and Mr.

Sean Breen had knowledge of Armstrongs perjury or the conspiracy to present fraudulent

claims to the Tribunal. I also agree that SCAs counsel, Jeffrey Tillotson, was diligent and

deserves full credit for exposing the perjury.

The final decision by the Panel reminds me about the do right rule. It doesnt matter

what the law is, lets just do what is right. Arbitrators, like judges, dont have that luxury, and

the Panel exceeded its authority by indulging itself here.

If one accepts this sanction for what it is, it could only be done in equity. Equity demands

that one will not suffer an injury for lack of a remedy at law, but equity also demands clean

hands from one seeking to invoke it. As neither party comes with clean hands then equity should

not provide a remedy.

24

PAGE 37 OF 38

With respect, the Panels decision fundamentally violates Texas public policy by (1)

frustrating the policy of our law favoring voluntary disputes; (2) rendering irrelevant disclaimers

of reliance; and (3) substituting international precedent for governing Texas law.

25

PAGE 38 OF 38

Original Petition to Confirm Arbitration AwardFinal Arbitration Award.Exhibit A

original petition to confirm arbitration award

Documents

lance armstrong armstrong

texas lance armstrong

plaintiff sca promotions

defendants lance armstrong

defendant lance armstrong

favor of sca

tailwind pursuant

sca files