SCA Promotions v. Lance Armstrong: Fraud, Perjury, and a Landmark $10 Million Arbitration Sanction

The 2015 arbitration ruling in SCA Promotions, Inc. v. Lance Armstrong & Tailwind Sports Corp. remains one of the most influential decisions in modern sports arbitration. A Texas arbitral tribunal issued a $10 million sanction after concluding that Armstrong and Tailwind secured an earlier settlement through perjury and fraudulent testimony.

What makes this case especially meaningful to Bennett Legal is that two of our own leaders participated directly in the proceedings. Hon. Richard D. Faulkner served as Chair of the Tribunal, and Charles Bennett, Esq. served as Secretary to the Tribunal — roles documented on the first page of the Final Arbitration Award. Their involvement in this widely cited decision reflects the level of real-world arbitration experience that informs Bennett Legal's practice today.

This case continues to be referenced across the legal system because it illustrates how arbitration handles serious misconduct and how tribunals may respond when the integrity of the process is threatened.

Background of the Dispute

SCA Promotions had agreed to pay Armstrong a bonus tied to his Tour de France victories under Contingent Prize Contract #31122. When doping allegations surfaced, SCA challenged the payment and the dispute went to arbitration in 2005. Armstrong testified under oath that he had never used performance-enhancing drugs.

Before the tribunal reached a final decision, the parties settled. SCA paid roughly $7.5 million under a Compromise Settlement Agreement (CSA), and the matter appeared to be fully resolved. Under most arbitration frameworks, a settlement and consent award mark the end of the process.

Why the Case Was Reopened

Years later, Armstrong publicly admitted to using prohibited substances. His admission directly contradicted his earlier sworn testimony, raising questions about whether the original settlement had been obtained through fraud.

Because the CSA expressly gave continuing, exclusive jurisdiction to the same three-person tribunal — naming Faulkner, Chernick, and Lyon as the only arbitrators empowered to decide related disputes — SCA asked the tribunal to reconvene. Reopening a closed arbitration is extremely rare and typically occurs only when there is compelling evidence that the original proceedings were tainted.

Tribunal Composition: How Richard Faulkner and Charles Bennett Contributed

The Final Arbitration Award identifies the members of the tribunal that handled the Armstrong-Tailwind matter. The panel was chaired by Hon. Richard D. Faulkner, a former judge with deep experience in commercial arbitration. Charles Bennett, Esq. served as Secretary to the Tribunal, supporting the panel throughout the proceedings. They worked alongside arbitrators Richard Chernick (appointed by SCA) and Hon. Ted B. Lyon (appointed by Claimants).

"The arbitration was led by Hon. Richard D. Faulkner, with Charles Bennett, Esq. serving as Secretary to the Tribunal."

Their involvement in this case demonstrates the level of knowledge, judgment, and practical arbitration experience that Bennett Legal brings to clients navigating complex disputes.

Key Issues Before the Tribunal

The tribunal framed the dispute around four central questions:

1. Did the tribunal still have jurisdiction to hear the post-settlement allegations?
2. Which parties were subject to that jurisdiction?
3. Could the tribunal award sanctions — including monetary sanctions — under the contract and Texas law?
4. If sanctions were appropriate, what amount and form were justified?

The tribunal relied on the CSA's arbitration clause, which gave the arbitrators continuing authority to resolve disputes connected to the contract and included broad waivers of objections to jurisdiction and venue. The majority held that the Claimants had also waived challenges to jurisdiction through their own prior post-award participation.

Findings of the Arbitration Panel

After reviewing Armstrong's admission and the associated evidence, the tribunal's majority found that Armstrong and Tailwind had engaged in:

• Fraud
• Perjury
• Conspiracy involving false testimony

The panel emphasized a core principle: "Perjury must never be profitable."

The majority concluded that it had authority — via both the CSA and Texas law — to impose sanctions designed to protect the integrity of the arbitration process. The tribunal ordered $10,000,000 in sanctions against Armstrong and Tailwind, jointly and severally. This remains one of the largest sanctions ever issued by a U.S. commercial arbitration panel.

Importantly, the tribunal also found that Armstrong and Tailwind's attorneys did not knowingly participate in any fraud.

The Dissenting Opinion

Arbitrator Ted B. Lyon concurred with certain jurisdictional findings but dissented from the sanctions award. His key points included:

• The 2006 settlement and consent award were meant to be final.
• Challenges to arbitration awards must be raised within 90 days under Texas law.
• Imposing sanctions nearly a decade later exceeded the tribunal's authority.
• The majority's approach was unprecedented within Texas arbitration practice.

The dissent remains a valuable counterpoint in discussions of arbitral authority and the finality of settlements.

Why This Case Still Matters

This case is frequently cited in legal commentary, training materials, and court discussions because it raises enduring questions about:

• The effect of fraud and perjury on arbitration outcomes
• When tribunals may revisit settled matters
• How broad arbitration clauses can preserve continuing jurisdiction
• The scope of arbitral sanctions under Texas law
• The importance of honesty and candor in arbitration proceedings
• How counsel and parties navigate post-award disputes

It serves as a leading example of how arbitration, contract law, and procedural integrity intersect.

Bennett Legal's Real-World Arbitration Experience

The Armstrong-Tailwind tribunal represents a rare and high-stakes arbitration — one that reconvened years after a settlement to address allegations of fraud and perjury. Bennett Legal's leadership participated directly in that tribunal.

That experience, documented in the Final Award, is part of what shapes Bennett Legal's approach to arbitration today: grounded, practical, and deeply informed by firsthand knowledge of how panels respond when the credibility of the system is at stake. Clients benefit from that insight whether they are bringing a claim, defending one, or navigating complex post-award issues.

If you are facing an arbitration dispute — whether it involves a consumer claim against a corporation, a business contract breach, or an international matter — contact Bennett Legal for a free consultation.

External Sources

• ESPN: Lance Armstrong loses $10 million arbitration ruling
• WSJ: Arbitration Award PDF

Frequently Asked Questions

What legal issues were involved in the Armstrong arbitration case?

Fraud, perjury, continuing jurisdiction, and the tribunal's authority to impose sanctions.

Did the arbitration clause prevent the case from being reopened?

No. The CSA gave the original tribunal ongoing authority to resolve disputes related to the agreement.

Did courts play a role in the case?

No. The matter stayed within arbitration, though later court decisions have discussed the tribunal's reasoning.

Who were the parties to the dispute?

SCA Promotions; Lance Armstrong; and Tailwind Sports Corp.

Could the parties avoid the sanctions?

No. The tribunal found the earlier settlement was obtained through misrepresentation and imposed sanctions accordingly.

Are arbitration cases usually reopened like this?

Almost never. Only clear evidence of serious misconduct tends to justify such an action.

Why is this case often referenced by law firms and in legal education?

Because it highlights the boundaries of arbitral authority and the legal consequences of dishonest testimony.