International Swimming League Takes Legal Action Against Ex-Law Firm for Negligence and Unjust Practices

The International Swimming League, which has spent nearly as much time in litigation as it has in a swimming pool, is initiating a lawsuit against its previous legal representation for over $7 million.

The Zurich-based ISL and its founder, Konstantin Grigorishin, filed a lawsuit against the law firm Farella Braun + Martel in the San Francisco Superior Court on December 30. The claim accuses the firm of professional misconduct, violation of fiduciary responsibility, breach of implied agreement, and unethical business conduct in its anti-trust lawsuit against FINA (now known as World Aquatics).

The legal action asserts that co-defendant Neil A. Goteiner, a partner at the firm, “convinced ISL to engage Defendants…despite lacking adequate experience in prosecuting antitrust lawsuits.”

Among the allegations made by ISL:

• That the concurrent representation of the three identified athletes (Katinka Hosszu, Tom Shields, and Michael Andrew) in the anti-trust lawsuit and ISL’s case posed a conflicting interest, and that they failed to secure ISL’s informed written approval for the shared representation.
• That Farella “habitually surpassed” litigation budgets and “overcharged ISL through means such as double billing, overstaffing, and exceeding litigation budgets.”
• That the court ruled a summary judgment against ISL because the law firm “did not timely identify an expert” in the anti-trust suit and “was unable to demonstrate the necessary relevant market to succeed in an antitrust case without expert evidence.”
• That the defendants created a “temporary liquidity predicament” in November 2019 due to their budget overages, resulting in a delay in payments to the firm.
• Forced Grigorishin to surrender various artworks from his notorious personal collection as collateral to continue their services.

In the legal documentation, ISL highlights several liquidity challenges, stating that these persisted into 2020, and that Farella did not withdraw or assist ISL in seeking new legal counsel; instead, they consistently required personal guarantees from Grigorishin, who was reportedly a billionaire at that time.

The issue of conflicting interests may seem unusual to the public, as ISL recruited the athletes to engage in their lawsuit and instigated the legal actions against FINA.

The lawsuit seeks damages of $7.2 million for ISL and Grigorishin, which they refer to as the “complete reimbursement of legal fees and expenses…paid to defendants.”

ISL continues to grapple with liquidity challenges more than three years after its final competition. Although solidarity payments have slowly arrived for some athletes, others report that they have yet to receive hundreds of thousands of dollars in awards and legal reimbursements from the league’s last season, with payment delays starting before the Russian invasion of Ukraine, which allegedly hindered Grigorishin’s access to sufficient funds to make international payments.

In September 2024, the lawsuits, now six years old, gained new momentum when the 9th U.S. Circuit Court of Appeals stated in a unanimous 3-0 decision that the plaintiffs provided adequate allegations to allow their antitrust claims to progress against World Aquatics, reversing the decision of the lower court.

The swimmers are being represented by Jeffrey Kessler, an attorney with expertise in antitrust and sports law, from the law firm Winston & Strawn.

Additional Context

The league persistently encountered issues with timely payments, a situation worsened by Russia’s incursion into Ukraine in February 2022. The solidarity payments were meant to commence in October 2021.

The league’s financial supporter Konstantin Grigorishin was born in the USSR and acquired Ukrainian nationality in 2016. Most of the billionaire’s business interests are situated in Ukraine, and he has also profited from the importation of energy and natural resources from Russia. In 2018, he was among 322 Ukrainian citizens subjected to sanctions by the Russian Federation.

At least one of Grigorishin’s enterprises was confiscated by the Ukrainian government as a “strategically significant enterprise,” a decision that the government claimed was made “due to military necessity.”

Earlier this year, one swimmer notified SwimSwam that they received a text from ISL commissioner Ben Allen, indicating that the Tokyo Frog Kings’ solidarity payment had been dispatched to the team and that a plan was set to issue the remaining payments. The swimmer, who is part of another team, mentioned that they still had not received payment at that time.

The invasion of Ukraine also led to the cancellation of the anticipated 4th season of the ISL, which was initially postponed until 2023. While individuals close to the league suggest that organizers have not lost hope for a revival, the league office has remained silent for several years, and most previous general managers of the teams have transitioned to other ventures.

Athletes considered a league boycott due to non-payment during the 2021 season. Jean-François Salessy, the former general manager of the Energy Standard team, alongside Hubert Montcoudiol, the former commercial director of the ISL, accused the league of financial mismanagement in a letter sent to SwimSwam in September 2021. Salessy and Montcoudiol asserted that ISL had allegedly failed to properly compensate supporting vendors and personnel, such as press officials, webmasters, team managers, and even some elite competitors. They did not specify anyone directly affected by the claimed practices, but asserted that their experiences starkly contradicted ISL’s commitment to meet all obligations to suppliers before season three.

The league also issued a statement in 2020 acknowledging the financial difficulties it encountered, but expressed its desire to move forward despite those challenges. At that time, SwimSwam reported that numerous season one vendors had not received the full amounts owed, yet the league promised to settle all outstanding payments before Season 3. The league also emphasized its efforts for the benefit of the sport as a whole.

Energy Standard clinched the championships in the 8-team league in 2019 and 2021, while the Caeleb Dressel-led Cali Condors secured the victory for the 2020 season.