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Tokyo Olympics - the cost of cancelling

With less than a month to go to the opening ceremony of the Olympic Games in Tokyo on 23 July, serious questions continue to be asked as to whether the games, can, or should actually go ahead.

Tokyo has now nominally emerged from its state of emergency but the city remains under tight restrictions, and in recent days, Japan’s emperor has voiced concern about COVID spread during Olympics.

The Japanese Government remains under pressure by many in the country to cancel the games. But it is not that simple. The contract between the International Olympic Committee (‘IOC’) and the host sovereign government is perhaps somewhat surprisingly heavily weighted in favour of the IOC.

The deal gives the sole right to cancel the games to the IOC and given the huge value in TV deals to broadcast the games, it seems very unlikely that the IOC would consider any attempt to cancel.

The terms of the contract also make clear that should Japan seek to pass regulations which adversely impact the running of the games, then the IOC can consider Japan in breach, cancel the Olympics themselves and seek to recover losses from the Japanese government.

A reminder to us all, even sovereign governments, of the power of our contractual relationships and to be careful when entering into any commercial deal.


Editorial prepared by: Mark Thompson, Senior Associate, Mills Selig

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