London Welsh have won their appeal against the decision to block their promotion to the Aviva Premiership which means the Newcastle Falcons are relegated to the Championship.
The Exiles claimed this season's RFU Championship title with victory over Cornish Pirates last month but were denied the opportunity to step up from the second tier having failed to meet the minimum standards criteria (MSC) laid down by the Professional Game Board (PGB).
However, London Welsh rejected the claim that they did not fulfill primacy of tenure requirement at their proposed Premiership home, Oxford United FC's Kassam Stadium, citing the fact that three existing Premiership clubs - London Irish, London Wasps and Saracens - all have similar ground share agreements in place. While the appeal panel decided that London Welsh did not fulfill the criteria, they also ruled the primacy of tenure requirements were "contrary to EU and competition law" and therefore "void".
The panel also went onto say that the "the three club exemption" - which refers to the maximum number of clubs allowed to ground share in the Premiership - was too narrow a stipulation and placed a "restrictive effect on aspirant Championship clubs".
Newcastle argued their case in return stating that London Welsh were "not entitled to succeed because of its delays in making arrangements to secure the Kassam Stadium as its home stadium". But the panel rejected that argument. The panel also rejected the notion that London Welsh were victims of a "breach of natural justice on the part of the RFU".
Newcastle now look set to play their rugby in the Championship next term but can take an appeal to the High Court. They released a statement on their website which seemed to suggest that they are preparing for life in England's second tier.
"We are extremely disappointed with the decision and the representations witnessed at the appeal hearing and we will leave our options open as to where we go from here.
"We do not underestimate the competitiveness and challenges we face in the Championship but under the tutelage of Dean Richards we will have one, and only one goal - to win. Dean has been in this situation with Harlequins and he understands what it takes to navigate through the Championship, whilst putting together a team that will be successful with immediate effect on our return to the Aviva Premiership.
"Winning rugby will be a habit at the Falcons and we expect to bring attacking and exciting play for our fans to enjoy. Add some semi-finals, finals and trophies to the mix and it will be a season to remember."
The RFU's CEO Ian Richie commented on the decision saying: "I would like to thank all involved for their professionalism throughout the considerable time dedicated to this matter, which ensured the case in question was approached with the importance it warranted.
"The decision taken by the RFU Board was based entirely upon the results of the independent auditor's report in accordance with the Minimum Standard Criteria (MSC), as set out by the Professional Game Board (PGB). We will now instigate a full review of the MSC, working within the PGB, with the aim of ensuring all stakeholders are agreed on the process going forward.
"The RFU considers this matter closed which will now enable all clubs to continue their planning for the 2012-13 season."
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