Dallas-based SCA Promotions Inc., a specialist in insuring prizes, promotions and contests, announced that Lance Armstrong has been hit with a $10 million sanctions award by an arbitration panel hearing his dispute with the insurer.
SCA filed suit against Armstrong in February 2013, seeking to recoup millions in prize money awarded to the former professional cyclist for winning the Tour de France beginning in 2002 through 2004.
Armstrong originally denied using performance enhancing drugs but eventually was stripped of his seven Tour de France winning titles due to his drug use during the time he competed in the international cycling event.
With its 2013 suit, SCA sought the return of the more than $12 million it paid Armstrong for winning Tour de France races in 2002, 2003 and 2004.
SCA said the recent ruling by the arbitrators states that the sanctions award punishes Armstrong for engaging in “an unparalleled pageant of international perjury, fraud and conspiracy.”
The $10 million award is to be paid directly to SCA Promotions, the company said.
SCA has filed a motion with a Dallas state district court to have the award confirmed into a judgment against Armstrong.
Armstrong previously settled with Nebraska-based Acceptance Insurance after it sued the cyclist for $3 million in performance bonuses it paid him from 1999 to 2001.
After being alerted in 2004 to the possibility that Armstrong was using performance enhancing drugs, SCA said it tried to delay payment for 2004 while it investigated the doping allegations.
Armstrong then sued the company for bad faith. The company agreed to settle for $7.5 million in 2006, after Armstrong swore under oath on numerous times that he had never used performance-enhancing drugs during his career.
In 2013, however, Armstrong finally admitted to using the drugs and his titles were stripped.
In the most recent hearing, arbitrators considered whether Armstrong should be punished for his wrongful conduct, including perjury, in connection with his original dispute with SCA, the company said.
Bloomberg reported that the penalty reopens the 2006 settlement but does not include recovery of the $7.5 million SCA paid to Armstrong as part of that settlement.
Jeff Tillotson, an attorney for SCA, told Bloomberg that the company’s lawsuit to recover the $12 million in bonus awards it paid to Armstrong for the 2003-2004 Tour de France wins is still pending. The pending lawsuit in District Court of Dallas County, Texas, is SCA Promotions Inc. v. Armstrong.
“We are very pleased with this result,” said SCA’s president and founder, Bob Hamman, in the company’s announcement. “It is hard to describe how much harm Lance Armstrong’s web of lies caused SCA but this is a good first start towards repairing that damage.”
The three-person arbitration panel voted 2-1 in favor of the penalty. The dissenting abitrator, Ted Lyon, agreed with Armstrong’s position that the 2006 settlement was binding, Bloomberg reported.
SCA is asking a Texas court to turn the sanctions award into a final judgment against Armstrong so that it can collect the award amount.
USA Today reported, however, that Armstrong intends to ask the court to have the arbitrators’ “decision nullified on the basis that the parties reached a final and binding settlement in the case in 2006.”
Armstrong also faces action brought by the U.S. Justice Department, which has alleged in a formal complaint against Armstrong that the cyclist violated his contract with the U.S. Postal Service and was “unjustly enriched” while cheating to win the Tour de France.
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