judgment approved by the court for handing down (subject to … · 2017-04-07 · judgment approved...

Neutral Citation Number: [2010] EWHC 1138 (QB)

Case No: HQ08X02518

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice Strand, London, WC2A 2LL

Date: 19/05/2010

Before :

THE HON MR JUSTICE GRIFFITH WILLIAMS

- - - - - - - - - - - - - - - - - - - - - Between :

FORCE INDIA FORMULA ONE TEAM

LIMITED

Claimant

- and -

AMANDO RODRIGUEZ Defendant

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Francis Tregear QC & Edward Knight (instructed by Fladgate LLP) for the Claimant

Daniel Toledano QC (instructed by Bains & Co) for the Defendant.

Hearing dates: 7 – 11, 14-18 December 2009 and 25 February 2010 - - - - - - - - - - - - - - - - - - - - -

Judgment Approved by the court

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(subject to editorial correction)

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Mr Justice Griffith Williams :

[All references in square brackets, unless otherwise stated are to the pages in the Trial Documents Bundles]

Introduction

1. The Federation Internationale de l’Automobile [FIA] World Championship is the pinnacle of motor racing. In 2007, the Formula One Championship involved 11 teams, each of 2 cars competing in 18 races worldwide between March and November. The cost to a team of competing is very high and to fund its participation, a team depends in the main on income from television rights, distributed by Formula One Management Limited (pursuant to the Concorde Agreement between the teams) and from sponsorship agreements. In Formula One, test drivers and less commonly, race drivers are divided into those who pay a team to test and/or race and those who are paid by their teams. From the point of view of the smaller teams, the drivers who pay provide added revenue. No driver may compete in a race unless he has a Super Licence issued by the FIA. Drivers enter into service agreements, by which a team nominates and permits a named driver to drive one of its cars in tests and races, subject to FIA regulations. A “pay driver” arrangement by which the driver pays to race for a team and is financed for this purpose by personal sponsors is commonplace and it is not unusual to have linked sponsorship and service agreements. This action concerns a dispute about a sponsorship agreement between the owners of a Formula One team and one of its sponsors.

The Parties and the Dramatis Personae

2. The Claimant, Force India Formula One Team Limited, is a company registered in England and Wales. It was originally called Jordan Grand Prix Limited; in 2005 the issued share capital was bought by Midland Resources (Holdings) Limited and the team name changed from Jordan to MF1 Racing; in 2006, the company was bought by Spyker Cars NV, a Dutch company and its team name changed to Spyker. By reason of a sponsorship agreement, the team was subsequently named Etihad Aldar Spyker F1 although the agreements which are the subject of this action were entered into by Spyker F1 Team Limited [“Spyker”]. In October 2007, Spyker Cars NV sold the shares in the company to Orange India Holdings Sarl, a joint venture company owned by a Dutch businessman, Michiel Mol and an Indian business man, Vijay Mallya.

3. Vijay Mallya has substantial and diverse worldwide business interests. He is Chairman of United Breweries Group which includes the Kingfisher companies. He is also Chairman of the Federation of Motor Sports Clubs of India. He has a long-standing interest in motor sports since he became involved in a racing club in Calcutta. He first became involved in Formula One in 1996, when Kingfisher Lager sponsored the Benetton Formula One Team. In the 2007 season, it sponsored the Toyota Team.

Judgment Approved by the court for handing down

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4. His evidence was that in 2007, he was told by the Mol family from Holland that they were looking for a new partner for Spyker. He and the Mol family set up Orange India Holdings Sarl which bid successfully for Spyker on or about 31 August 2007. His reason for buying the team was because he believed it could make a huge impact in India. The acquisition was completed on 5 October 2007.

5. At the time of the negotiations which led to the sponsorship and service agreements, (the subject of this action), the structure of Spyker was as follows: the chief executive officer was Victor Muller who was succeeded as interim executive officer by Hans Hugenholtz; the chief financial officer was Klaas Stuijfzand, succeeded from 8 May 2009 by Richard Borsboom; the legal and business affairs officer was Niels Molewijk. The structure of Spyker F1 Team Limited was as follows: the team principal was Colin Kolles; the head of business development until 30 September 2007, Manfredo Ravetto; the chief operating officer, Patrick Missling; the chief technical officer Mike Gascoigne; the chief race and test engineer Dominic Harlow with Oliver Knighton, the test engineer; the director of business affairs was Ian Phillips. The evidence of Colin Kolles was that in the 2006 season, the team had 5 drivers who drove in races and/or tests; in the 2007 season, the team started the season with Christijan Albers and Adrian Sutil as race drivers and Marcus Winklehock as the reserve driver. Giancarlo Fisichella, whose manager was Enrico Zanarini, and Adrian Sutil were the race drivers for Force India for the 2008 season.

6. Colin Kolles was the team principal of the team in its various identities from 2005 until 31 October 2009. He had some 10 years prior experience running two Formula Three Euro Series teams owned by himself and his family. Dr Kolles was, at all material times, a shareholder of the company Kodewa GmbH through which he invoiced for and received payments of commission he had earned.

7. It is unnecessary to refer to the contractual provisions but his entitlement to commission earned him 3% of the sponsorship monies paid by Mr Amando Rodríguez (see paragraph 17 below) and so if the money had been paid in full, he would have received €360,000 and will receive €270,000 if the claimants succeed in their claim. He accepted he has a financial interest in the outcome of these proceedings and that he had not told Mr Amando Rodriguez of that interest – he said he was not obliged to.

8. Manfredo Ravetto comes from a motor sports family and has worked his way up in the world of motor sports. He has known Lorenzo Giorla, who works for a Swiss based agency called Supergenco SA, since at least 1999 when they were both working for the same Italian based team – Mr Ravetto was manager of the F3 Team and Mr Giorla the manager of the F300 Team. Mr Ravetto is the sole owner of a company – Ravetto, Pharaons and Florealis srl. Mr Giorla works for that company as well. The evidence of Dr Kolles was that Supergenco had an agreement with Spyker by which Spyker paid Supergenco 15% commission on all successfully concluded contracts with parties introduced by Supergenco.

9. Amando Rodríguez, the defendant, has been involved in health care for some 20 years and is the president of a private medical group, based in Castilla and León in Spain. His son, Roldan Rodríguez [“Roldan”], who is 25 years old, has been actively involved in motor racing since his mid-teens, progressing from go-karting to the Spanish Formula Junior championship, to Euroseries 3000, Italian F3000 and the





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Spanish Formula 3 championship in 2003, finishing second in the general classification in 2006 before joining the Minardi Piquet Sports team in 2007 for whom he drove in the GP2 series, one step below Formula 1 racing. The evidence of Mr Amando Rodriguez was that he has given his son “the fullest support” possible, watching him race at weekends and subsidising his racing. He accepted, as did Roldan, that Roldan’s ambition has been, for many years, to progress to Formula 1 racing. As a GP2 driver, he did not have a Super Licence and his record as a GP2 driver did not, automatically entitle him to such a licence [see paragraph 72 below].

10. The evidence of Mr Ravetto was that Adrián Campos had been a Formula One driver in 1988/89 and had had his own very successful GP2 team. In the mid 1990’s, he had started his own racing team with Fernando Alonso as one of the drivers and he was involved in driver management as well. Mr Ravetto said that whilst there had been a time when he and Adrian Campos had had no dealings, by 2007, they had an excellent relationship. The evidence of Roldan was that Adrián Campos became his manager on 30 June 2004 and remained so until 11 January 2008 when their contract was terminated by mutual agreement [963A].

11. Ricardo Rodriguez [“Ricardo”] is the elder brother of Roldan – he is 28 years old; he is qualified in business administration and works in his father’s businesses. He too is a supporter of Roldan and of Roldan’s ambitions.

12. José-María Rubio is a friend of Amando Rodriguez and Roldan and a long standing friend of the Rodriguez family. He has specialised in Formula 1 photography for over 30 years and has many contacts in the sport.

The making of the contract

13. The evidence of Mr Ravetto was that Adrián Campos told him he represented a GP2 driver called Roldan Rodríguez whom he recommended Spyker should look at and whose father was very wealthy. If that was said, the inference would be that he was recommending Spyker to consider Roldan Rodríguez for a ‘pay-driver’ arrangement. The evidence of Dr Kolles was that as Supergenco had introduced Adrián Campos to Spyker so Supergenco was entitled to a commission payment of €1,350,000 – he said there was nothing unusual in Formula 1 racing about such an agreement – see paragraph 8 above. Mr Ravetto said Adrian Campos introduced him at the Spanish Grand Prix on 12th May 2007 to a representative (whose name he could not remember) of Roldan Rodríguez, whom he thought dealt with his marketing. The talk was vague but the representative said “we have all the money you want”. The evidence of Amando Rodriguez was he knew nothing of this and the evidence of Roldan Rodriguez was there was nobody who dealt with his marketing.

14. Mr Ravetto said he went to the French Grand Prix on 1st July 2007 specifically to meet Amando Rodriguez. He had been asked by Dr Kolles to handle discussions concerning Roldan Rodriguez and he reported back to him the discussions he had had with Mr Rodriguez. Mr Rodriguez, who agreed he had attended that Grand Prix, said he has no recollection of meeting Mr Ravetto there.

15. Mr Ravetto said he met Mr Amando Rodríguez in the Campos Racing motor-home; he could not recall precisely what was said and there were language difficulties as he does not speak Spanish and Mr Rodríguez speaks little Italian or English. His





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evidence was that he was aware Christijan Albers may not continue driving for Spyker and he told Mr Rodriguez that if Christijan Albers was replaced, Roldan could be the new driver or a test driver. He stated he could not remember if there was talk of the amount of money Spyker would require but he said it was obvious that it would be substantial.

16. There are significant conflicts in the evidence about these two meetings. On balance I prefer the recollection of Mr Ravetto. Asked if there was such a meeting Mr Amando Rodriguez replied “I don’t think so”, a surprising answer from a successful businessman, who was prepared to investigate the possibility of making a significant investment in Formula 1 to advance the career ambitions of his son. Mr Rodriguez gave me the impression that he was not prepared or preferred not to recall these events.

17. There then followed a series of meetings which will be considered later in the judgment. The first drafts of the agreements were sent by Spyker on 9th July and following various revisions, the sponsorship agreement was signed by Mr Amando Rodríguez and the service agreement signed by both Mr Amando Rodriguez and Roldan on 4th August 2007. The agreements were signed on behalf of Spyker on 16th August 2007. The Sponsorship Agreement was for the 2008 season and Mr Rodriguez agreed to pay €12 million - €500,000 on signing, with 7 monthly instalments of €500,000 commencing 15th August 2007, one monthly instalment of €600,000 on 15th March 2008, 4 monthly instalments of €1.1 million commencing 15th April 2008 and three instalments of €1 million, one on 15th August and the third on 20th October 2008. Mr Rodriguez agreed also to provide four bank guarantees, the first of which was to be provided on or before 15th October 2007, expiring 1st April 2008 for €3.1 million [49/50 – Pleading Bundle].

18. The Material Parts of the Service Agreement.

“2. Condition

SPYKER’s obligations in this agreement are conditional upon SPYKER or any affiliate of the SPYKER Group and the Backer entering into a sponsorship agreement (OR agreement regarding purchase of sponsorship) for the sponsorship of SPYKER for a sum agreed between SPYKER and the Backer for the Formula One World Championship race season 2008 and the test season 2007 and 2008 and the Backer fulfilling his payment obligations pursuant to the aforementioned Sponsorship Agreement (or agreement regarding purchase of sponsorship). If the conditions set out in this clause 2 are not satisfied in full before 06 August 2007 or any date thereafter or waived by SPYKER in writing, this agreement will at SPYKER’s election be terminated with immediate effect without notice.

3. SPYKER’s obligations.

3.1 Subject to the terms and conditions of this agreement and in consideration of the Backer providing the Driver’s racing, testing and promotional services for SPYKER, SPYKER will during the Term:





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3.1.2 use its best endeavours to present the Car in a Race worthy condition and make it available for the Driver at the Races and Tests;

3.1.3 enter not less than two Cars in all the Races and, provided that the Driver is available, holds valid FIA Super Licence, and is medically fit to drive the Car in the relevant Race as certified by the FIA Chief Medical Officer, nominate the Driver to drive a Car in the Races regarding the 2008 race season; subject to this clause the Driver will during the 2008 race season participate in all FOM tests and in all test sessions during Grand Prix race weekends;

…

5. Backer’s and Driver’s obligations.

5.1 In consideration of SPYKER’s obligations under this agreement and except as set out in clause 5.2 the Backer agrees to provide to SPYKER during the Term the Driver’s exclusive services throughout the world for;

5.1.1 driving the Car in the Races and Tests;

5.1.2 promotional and advertising purposes relating to SPYKER or Team Sponsors as set out in this agreement: and

5.1.3 carrying out the obligations set out in clause 5.3.

5.2 The exception referred to in clause 5.1 is if the Driver is prevented from providing his services due to:

5.2.1 any illness or disability certified by the FIA Chief Medical Officer or such officer’s authorised representative or, in their absence, any other qualified doctor;

5.2.2 death of the Driver;

5.3 During the Term the Backer will ensure that the Driver will;

…

5.3.6 use his best endeavours to obtain and maintain at his own expense all necessary medical certificates and competition licences to enable him to take part in the Races and Tests and perform all the services required of him under this agreement:

…

15. Term and termination

15.1 This agreement is for the Term.

…

15.3 Notwithstanding any other provision of this agreement, it may be terminated by SPYKER of the Backer (non-defaulting party) at any time by written notice to the other (defaulting party) upon the defaulting party having committed:





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15.3.1 a material breach of this agreement which is not capable of being remedied; or

15.3.2 a material breach of this agreement capable of being remedied which is not remedied by the defaulting party within 14 days of the date of notice of default having been given by the non-defaulting party to the defaulting party requesting the breach to be remedied; or

15.3.3 any three breaches of this agreement whether or not capable of remedy in any calendar year of the Term: or

15.3.4 For the purposes of clause 15.4 breach is capable of remedy if the party in breach can comply with the provision in question in all respects other than as to time of performance provided that the time of performance is not of the essence.

15.4 Notwithstanding any other provision of this agreement, it may be terminated by SPYKER if the Driver and/or Backer fails to pay any sum due under this agreement within five Business Days of the due date.

15.5 If the sponsorship agreement or the agreement regarding purchase of sponsorship referred to in clause 2 is terminated (except if such termination is due to SPYKER’s breach of that contract) SPYKER may terminate this agreement at any time by written notice to the Driver and the Backer.

…

The Material parts of the Sponsorship Agreement

1. Interpretation,General remarks

…

1.3 It is agreed that SPYKER will permit and nominate Roldan Rodríguez as its Race and test Driver subject to a separate service agreement. The Sponsor purchases sponsorship rights and sells such rights to third parties subject to the prior written approval of SPYKER and subject to the provisions of this agreement. The sponsor warrants that such third parties fully accept and adhere to the provisions of this agreement. The Sponsor is aware and acknowledges that his payment obligations set out in clause 14 shall not be affected in any way by the circumstance whether or not or to which extent he is able to sell the sponsorship rights set out in this agreement to third parties.

…

2. SPYKER’s obligations and rights

2.1 SPYKER will:

2.1.1 enter not less than two Cars in each of the Races;

2.1.2 provide Team Personnel, Service Vehicles and all other support equipment and services necessary for the Team to compete in the World Championship;

2.2 SPYKER will not be in breach of any of its obligations to the Sponsor if:





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2.2.1. either of the Cars fails to qualify for or to finish any Race for any reason including, without limitation, mechanical breakdown, accident or Driver error;

2.2.2. the Cars and/or Drivers do not meet the Sponsor’s expectations of success or performance in Races or Tests.

2.3 The Sponsor acknowledges SPYKER’s absolute right to manage its racing affairs as SPYKER sees fit and, without limitation, to change its Cars, Team Personnel and suppliers at any time.

…

11. Reputation

11.1 SPYKER will use its reasonable endeavours to ensure that the Team and Team Personnel do nothing, either by act or omission, to harm the reputation, image or goodwill of the Sponsor, the Sponsor Logo or the Spyker F1 Logo.

11.2 The Sponsor will use its reasonable endeavours to ensure that it does nothing, either by act or omission, to harm the reputation, image or goodwill of the Team, Team Personnel, Team Sponsors or the Spyker F1 Logo.

…

14. Fees and Bank Guarantee

14.1 In consideration of SPYKER’s obligations the Sponsor will pay to SPYKER the amount of EUR12,000,000, (EUR twelve million), to be received by SPYKER on the dates set out in part 1 of Schedule 2, subject to the Sponsor having received a respective invoice from SPYKER.

…

14.5 On or before the dates set out in part 2 of Schedule 2 SPYKER shall receive from the Sponsor an irrevocable and unconditional bank guarantee in favour of SPYKER issued by a primary European bank with establishment in the UK acceptable to SPYKER for an amount as set out in part 2 of Schedule 2 and with the wording set out in Schedule 2. The respective bank guarantee shall secure any and all payment obligations of the Sponsor under this agreement and shall be payable upon the first written demand with SPYKER indicating to the bank that the Sponsor did not comply with his payment obligations pursuant to this agreement and the amount requested is due and not paid. Any other rights of SPYKER shall not be affected hereby. The respective bank guarantee shall expire on the dates set out in part 2 of Schedule 2 under the sole condition that the Sponsor fulfilled his respective payment obligations in full on the dates set out in part 1 of Schedule 2. Should the Sponsor be partially or fully in default of his payment obligations, the respective bank guarantee shall remain in full force enabling SPYKER to demand and receive the amount guaranteed from the bank immediately.

15. Term and termination

15.1 The agreement is for the Term. It is agreed that this agreement shall become effective and binding on signing.





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15.2 Either Party (Initiating party) may terminate this agreement with immediate effect on the giving of written notice to the other parety (Defaulting Party) at any time on the happening of the following events by or in relation to the other party:

15.2.1 an Insolvency Event;

15.2.2 Default:

15.2.3 The Defaulting Party failing to pay any sum due under this agreement within 10 (ten) Business Days of the due date;

15.3 This agreement may be terminated by SPYKER with immediate effect if the Sponsor does not provide SPYKER with the respective bank guarantee as asset out in clause 14.5

...

15.5 The Sponsor may terminate this agreement if the service agreement with Roldan Rodriguez is terminated with the written consent of SPYKER due to the circumstance that Roldan Rodriguez joins another F1 team subject to the provisions of clause 15.10 of the service agreement with Roldan Rodriguez.

…

Schedule 1

Definitions and Interpretation

Default: a material breach of any material obligation of this agreement by the Defaulting Party which if the breach is capable of remedy the Defaulting Party has failed to remedy within five Business Days after receipt of a notice from the initiating party giving full particulars of the breach.

Post Contract

19. In circumstances to be considered later in the judgment, Roldan failed to obtain a Super Licence and was not nominated by Force India as a race driver or test driver for the 2008 season. By 15 January 2008, although the 6 instalments due to 15th December 2007 worth €3 million had been paid, the bank guarantee due on or before 15th October 2007 had not been provided and there was owing the monthly instalment of €500,000 due on 15th January 2008. By an email dated 4 January [948], Mr Missling told Mr Amando Rodríguez that if the bank guarantee was not provided by 7 January, Force India would terminate the sponsorship agreement. On 18 January 2008, Mr Amando Rodríguez wrote [1043] to Dr Kolles:

“I am sending you this letter discharging my obligations under the Sponsorship Agreement with Spyker F1 Team (“Spyker”), dated 4 August 2007, after Spyker failed to nominate Roldan Rodriguez as a Racing Driver for the F1 2008 season. Force India F1 Team (as legal successor of Spyker F1 Team Limited) did not provide Mr Roldán Rodriguez with the necessary and reasonable means in order to obtain good testing results that would have backed him for the F1 Superlicence (sic).

In any event, on 10 January 2008, Force India F1 Team Limited (as legal successor of Spyker F1 Team Limited) repudiated the sponsorship agreement by nominating Giancarlo Fisichella





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and Adrian Sutil as its racing drivers. Consequently, the contract was discharged forthwith. Considering I have obtained nothing in return, I hereby request the refund of the total amounts paid so far”.

On 29 January 2008, the Claimant accepted the renunciation.

20. The written submissions of the parties are contained in lengthy skeleton arguments. Force India allege that Mr Amando Rodríguez repudiated the agreement, that €500,000 was due at the date of renunciation and further sums totalling €8.5 million were due under that agreement. The claim, it is said, is a very straight forward and simple one in debt - the Claimant acknowledges that credit should be given in respect of the cost, which the Claimant would have incurred, of production of stickers and/or embroidery incorporating the logos of the sponsors had Mr Rodriguez taken up the spaces allocated to him under the sponsorship agreement; the credit given (and not challenged by the Defendant) is €5,000.

21. The defence is multi-barrelled. It is submitted that Mr Rodriguez was justified in terminating the Sponsorship Agreement and that there was a total failure of consideration, entitling him to recover the €3 million paid. The Defendant’s case is (i) that the Sponsorship Agreement was procured by misrepresentation; (ii) that clause 1.3 of the Sponsorship Agreement, properly construed, was intended by the parties to be a condition precedent to the Sponsorship Agreement so that the failure by Force India to permit and nominate Roldan as one of its two race drivers for the 2008 season discharged the Agreement; (iii) that if Clause 1.3 cannot be so construed, it must at the very least be construed as a promise by Force India to permit and nominate Roldan as its race and test driver subject to the Service Agreement; (iv)that the effect of the promise carried with it positive or negative duties on Force India in relation to the obtaining of the Super Licence; (v)that in the alternative, there was an implied term that Force India owed a positive duty to use its best endeavours to assist Roldan to obtain a Super Licence or at least to co-operate with him to do so; (vi)that there were three areas of wrongful conduct on the part of Force India categorised as the Super Licence breach, the Test Driver breach and the Fisichella breach; it was submitted that Force India failed to use its best endeavours and/or failed to co-operate in the obtaining of a Super Licence and/or took steps to prevent or hinder the Super Licence application made by or on behalf of Roldan and so failed to permit and nominate him as one of its race drivers or as a test driver subject to the Service Agreement and so breached clause 1.3; it was alleged that the unconditional nomination of Mr Fisichella by Force India as its second race driver, so preventing it from permitting and nominating Roldan as its second driver was an anticipatory breach of clause 1.3 of the Sponsorship Agreement. The allegation that the failure to permit and nominate Roldan harmed his reputation and thereby the reputation of Mr Amando Rodríguez in breach of clause 11 of the Sponsorship Agreement was withdrawn.

22. On behalf of the Claimant it was submitted that the misrepresentation point turns fundamentally on findings of fact as to whether the misrepresentations were made as alleged. It was submitted that Clause 1.3 is not expressed to be or to act as a condition or as a condition precedent; the Claimant’s primary position is that Clause 1.3 is merely a recital, rehearsing the existence of the Service Agreement as part of the context of the Sponsorship Agreement. It was submitted there are no grounds for implying terms that it was for the Claimant to use its best endeavours to procure a





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Super Licence for Roldan, to co-operate in any attempts to obtain the licence and not to take any steps to prevent the obtaining of the Licence because the Service Agreement expressly and explicitly placed the obligations in those regards on Mr Amando Rodriguez and Roldan. It was submitted that the Claimant was obliged to do no more than lodge the Service Agreement with the Contract Recognition Board, to provide Roldan with the facility to drive 300 kilometres in accordance with FIA rules and to provide FIA or ASN with the relevant racing data to enable it to establish that this requirement for the issue of a Super Licence had been met; there was no necessity for the Claimant to co-operate further. It is denied that there were any breaches as alleged in the renunciation letter (paragraph 19 above) and it is further denied that there was a repudiatory breach as alleged.

23. The Background.

An important detail is the financial circumstances of Spyker. Dr Kolles and Mr Ravetto gave evidence as to that. Christijan Albers had a service agreement linked to a sponsorship agreement by which an agency acting on behalf of the sponsor had agreed to pay Spyker US$25million over 3 years but by about the end of 2006, it was clear that the sponsors were having difficulty in making payment. Eventually, on 10 July 2007, Spyker announced that Christijan Albers would no longer race for the team because one of his main sponsors remained in default. Dr Kolles was quoted [65] as saying - “This has been a very difficult decision. Christijan has started to find some form in the car, but the team’s ambitious development programme has been seriously compromised by non-payment by one of his sponsors and we are faced with no other option”. Dr Kolles’ evidence was that the sponsors had failed to pay US$3/3.5 million and Mr Ravetto accepted that their default put Spyker in serious financial difficulties.

24. On 31 August 2007, Spyker Cars NV issued a press release [506] reporting its half year results, with losses of €29.9 million, an increase of €28.8 million from the corresponding half year in 2006. Of that figure, Spyker F1 accounted for €13 million (and so just over 40%). The release reported that the loss of €13 million “was caused by higher than expected ‘expenditures’ and by the less than expected income streams from areas such as television rights and sponsor income ... (which) placed even greater pressure on the short term liquidity position of Spyker Cars NV”. It reported also that as of 30 June 2007 Spyker Cars NV had provided loans to Spyker F1 of €7 million and that the 2006 financial accounts had been challenged by the Dutch ASN. These results were released at the same time as Mr Mallia and the Mol family entered into an exclusive 30 day negotiation period with Spyker Cars NV, with an initial offer of €80 million (US$109 million) for the Spyker F1 Racing Team. Dr Kolles said the press release was misleading and said he challenged the claimed loss of €13 million – he said the losses were more like €5-10 million. He accepted that Spyker owed Ferrari €2 million for engines and that was due on 15 July 2007 but he sought to give the impression, in explanations which were not easy to follow, that the problems were caused by members of the Mol family fighting each other and that Spyker F1’s indebtedness presented no problems – indeed the tenor of his evidence was that Spyker was not in any serious financial difficulty; he said that whereas the board said no more money could be put in to the company, the Mol family told him differently.

25. When he was cross-examined, Mr Ravetto agreed that at that time, Spyker owed Ferrari some €2 million for engines and that the default by the sponsors of Christijan





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Albers put Spyker in a serious predicament but he disagreed that Spyker needed the sponsorship agreement with Mr Amando Rodriguez to pay Ferrari; he said that while they needed money, attempts were being made to get the money from the holding company. Mr Ravetto said that the situation in July was critical but under control. He said that Spyker could manage. He had to agree that by 16 August 2007, the situation was more critical, as evidenced by an email of that date [438] from Mr Hugenholtz to Dr Kolles which referred to “lack of money”, to the likelihood that Ferrari could not be paid the following week and that “the Rodríguez contract is vital for that”.

26. The Negotiations

The evidence of Dr Kolles was that to the best of his recollection, the first discussion he had concerning Roldan was at one of the ‘earlier European Grand Prix in 2007’. Supergenco had contacted Spyker to say they had a driver Spyker might be interested in and introduced his manager, Adrián Campos. The approach was on the basis that Roldan would pay to drive for the team. It appears that Mr Campos had found out about the defaults on the part of the sponsors of Christijan Albers. There were, I am satisfied, two meetings at Silverstone, the first on Thursday 5 July, the second on Saturday 7 July 2007.

27. Mr Ravetto’s evidence was that present at the first meeting, held at the Spyker offices at their Silverstone factory were Patrick Missling and himself representing Spyker and Adrián Campos, Amando Rodríguez and Ricardo – Roldan who was practising for a GP2 race was not present. Mr Ravetto made no note of the meeting. A brief diary entry of his recorded only that they needed personal details for the Service and Sponsorship agreements and that the Rodriguez family were interested in a link-up with Spyker because of the link between Spyker and Ferrari. His recollection was they discussed the possibility of Roldan starting to drive for the team from the next race, the European Grand Prix on 22 July 2007 and for the remainder of the season. When he was cross-examined, he said he knew by then of the decision to terminate the agreement with Christijan Albers. He denied that he had said anything about obtaining a Super Licence; he said that that was a matter for Ian Phillips, Spyker F1’s director of business affairs; he said he had pointed to Ian Phillips through the window and said that he was the man who dealt with Super Licences. He said that Spyker would do its best and gave an example of the driver Sakon Yamamoto who had been given a Super Licence under the provisions of sub-paragraph (h) – see paragraph 72 below. He said it was Mr Campos who led the conversation regarding Super Licences; he said it was Mr Campos who said that it was easy to get a licence. Mr Ravetto agreed he did not correct that. The conversation about the licence lasted some 3 – 5 mins of an hour long meeting. He agreed with Mr Toledano that if Roldan failed to get a Super Licence, Spyker would lose both the Service and Sponsorship Agreements because the sponsorship went with the driver. He said he thought it was not impossible to get a Super Licence very quickly and was confident it could be done. He said that if he thought it was not possible there would have been no point in the meeting; he said there was no point in organising a deal which would collapse in 48 hours if he could not get a Super Licence.

28. Mr Ravetto said the second meeting took place in the team’s trailer at Silverstone. On this occasion Spyker was represented by Dr Kolles, Patrick Missling and himself with only Amando Rodriguez on the other side. His recollection is that Amando





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Rodríquez had a headache but rejected advice that he should go back to his hotel to rest. Mr Ravetto said he tried his best to translate for him and it was not an easy meeting. His clear recollection is that Mr Rodríguez was more interested in how much space he could get on the cars for advertising purposes. When Mr Rodríguez asked if he could get a cheaper deal, he was told he could but there would be less advertising space. That was not acceptable to him; he said he would be able to obtain sponsors to cover the fees he would pay to the team; he said he would make his son the Rafael Nadal of motorsport. Mr Ravetto said Dr Kolles said that Roldan should sign with the team from the Turkish Grand Prix on 26 August 2007 and then for the 2008 season. There was then some discussion about a testing programme although no schedule was agreed. At the end of the meeting, it was agreed that Mr Missling would send draft contracts. I am satisfied that nothing happened at the second meeting to change the basic understanding of the parties that the sponsorship monies were being provided in return for a driver’s seat. Mr Ravetto said that on the following day he introduced Roldan to Mr Michiel Mol, a director of the Team, as the new driver. He introduced him also to other members of the team and there were discussions about a seat fitting and his race suit, boots and gloves. A day or so later, one of the Rodriguez team told him that Roldan Rodriguez wanted to finish the GP2 season.

29. The evidence of Dr Kolles was that the purpose of the meeting on 7 July 2007 in the team’s trailer, which he attended, was to agree in principle if and when Roldan would test and race for the team and how much money Mr Amando Rodríguez would pay to be given space on the car to sell to third party sponsors. He recalled Mr Rodríguez appeared confident that he could sell these spaces and was hopeful that he could recoup more than he was to pay to the team and thus make a profit. Dr Kolles’s evidence was that nothing was said about the team taking care of obtaining the Super Licence and having no difficulty in doing so. He suggested that there may have been a misunderstanding on the part of Mr Amando Rodrigues who speaks very little English. Dr Kolles said it would be pointless to assure Mr Amando Rodriguez that a Super Licence could be obtained when the decision was that of the FIA. Although Dr Kolles made mistakes in paragraph 20 of his witness statement about automatic qualification for a Super Licence, I am satisfied he was not trying to mislead the Court and accept his evidence that podium results in GP2 races would assist in an application for Super Licence.

30. He said he recalled saying it would be easier for Roldan to join the team for what remained of the 2007 season and he should try and win his next GP2 race that weekend to improve his prospects of getting a Super Licence. When he was cross-examined he accepted that Spyker had tried and failed to obtain Super Licences in the 2007 season for Giedo van der Garde and Mr Fauzy – he said he had told Mr Amando Rodriguez that Spyker had tried and failed to obtain Super Licences for them and so Spyker could not guarantee getting a Super Licence for anyone but he agreed that there was no mention of this in his witness statement. This is an omission which I found somewhat surprising, given the importance of this issue. He said the failure of Giedo van der Garde to obtain a Super Licence was based, at least in part, on a contractual dispute rather than performance criteria. My impression was that this was an instance of Dr Kolles making things up in an attempt to bolster the Force India case. He did say Sutil had obtained his Super Licence for the 2006 season under the “exceptional category” (see paragraph 72 post) and that he (Dr Kolles) had assisted him in doing so.





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31. Mr Ravetto said they next met on 3 August 2007 at the Hungarian Grand Prix at the team’s motorhome. That meeting was attended by Dr Kolles, Mr Missling, himself and Mr Amando Rodriguez and Mr Campos. At a further meeting on 4 August 2007, Mr Amando Rodriguez and Roldan Campos signed the new agreements for the 2008 season only. Mr Ravetto, when cross-examined, agreed that the testing schedule as at 28 August 2007 [505] had his written entries; they recorded not only test dates but also the dates when Roldan had to spend time with the team. He said that part of the agreement required Roldan to attend the Japanese and Brazilian Grand Prix to meet the team. The test drives were arranged for 12 September at Silverstone, 13/14/15 November in Barcelona and 4/5/6 December in Jerez. Mr Ravetto said he knew that these tests were very important to the Rodriguez family and that Spyker was under a contractual duty to make to make a car available to Roldan for testing but Dr Kolles’s evidence was these arrangements were no more than occasions when Roldan was expected to attend tests. Dr Kolles said he had said as much to Mr Ravetto. I reject his evidence as lacking credibility, observing there was no mention of any such conversation in his witness statement.

32. Dr Kolles said that following the Silverstone meetings, Patrick Missling sent draft contracts to Amando Rodriguez but after further discussions during which Mr Amando Rodríguez said that Roldan wanted to finish the 2007 GP2 season, revised draft contracts were sent on 25 July 2007 in respect of the 2008 season only and a sponsorship fee of €12 million. The team then signed Sakon Yamamoto as a race driver for the remainder of the 2007 season. He said he told Mr Amando Rodríguez that he needed board approval before he could sign the contracts on behalf of Spyker as the team was for sale at the time and he did not know whether that would affect matters. He eventually signed the contracts on behalf of Spyker on 16 August 2007.

33. Dr Kolles was asked about an exchange of emails. On 15 August, the day before Dr Kolles signed the contracts, Niels Molowijk, of Spyker’s legal affairs emailed Patrick Missling [432] “I understand that Marcel Boekhoorn will decide today whether Guido (sic) will be a driver for the next season. If Guido will not drive, I believe it is the intention to sign up Rodriguez. Given the latest developments, we cannot sign a driver agreement without a change of control clause that would entitle a new owner to terminate the agreement with the particular driver. The draft of the Rodriguez contract agreement that I saw does not contain a change of control clause. I therefore request you to insert such clause in the final version in order to make sure that this is arranged. The same goes for the agreement of Guido if we would proceed with him”. The Guido referred to was Giedo van der Garde. Mr Ravetto emailed Patrick Missling and Dr Kolles [436] to say that Mr Rodriguez would not put his son’s career at risk with a change of control clause. Of these emails, Dr Kolles said that Spyker was not interested in going with Giedo van der Garde, that Spyker Cars was not Spyker Formula One, that the decision about the contract was his and his alone and that Mr Hugenholz had his own agenda. He said this was not a company, there were fighting amongst themselves. He said he went to see Bernie Ecclestone, the head of Formula One Management Limited, because he was looking for “the safest way” of completing the Sponsorship Agreement; he told him that Michiel Mol was “with him” and it is not every day that a sponsorship agreement such as this one was available. He said the driver was a secondary issue; the primary deal was the sponsorship agreement.





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34. Mr Ravetto was asked about his email of 15 August 2007 [436] to Mr Missling and Dr Kolles in which he referred to having spoken to Mr Campos who was “very nervous” about the proposal that there should be a change of control clause, failing which Spyker would pay Mr Amando Rodriguez compensation. He said he has no detailed recollection of this. He said he was unaware of these developments but he said that as of 15 August, they (Spyker F1) were pushing very hard for the green light from Holland to get the Sponsorship Agreement finalised because they wanted Roldan as their driver. When Dr Kolles was asked about this email from Mr Ravetto, he agreed he had forwarded it to Mr Hugenholtz and told him he thought it was “not very smart” to make the proposal because “Spanish people are very proud”. He said “My target was still €12 million and nothing else”. He accepted Mr Toledano’s proposition that the Service Agreement would not work without the Sponsorship Agreement but he went on to say that he saw the Sponsorship Agreement as a separate agreement.

35. In his witness statement, Mr Amando Rodriguez said, of the Silverstone meetings, that Adrián Campos translated for him at both meetings; at the first meeting, Spyker offered Roldan a position as race driver for what remained of the season – the Hungarian, Turkish, Italian, Belgian, Japanese, Chinese and Brazilian Grand Prix races and for the whole of the 2008 season. For that Spyker required sponsorship of €3 million for the rest of the 2007 season and €12 million for the 2008 season. This was reduced to €13.5 million after negotiation. He said the service and sponsorship agreements went together. There was discussion about a schedule for test drives. At the second Silverstone meeting, there was negotiation about the placement and size of the advertising spaces – he wanted the best spaces so he could recoup as much of the sponsorship monies as possible – and further discussion about the test drives. He said Mr Ravetto, Dr Kolles and Mr Missling all said there would be no problem in Roldan obtaining a Super Licence.

36. Cross-examined about these meetings he said repeatedly there was no mention of the Super Licence at the first meeting. He was adamant Adrían Campos had not said he would look after the obtaining of the Super Licence with the Spanish Federation. He said there was no mention of the Super Licence at either meeting. Later he said, he thought it was mentioned for the first time in Hungary but he agreed he might be mistaken about that. He said it was Adrían Campos who translated for him; he agreed that Adrián Campos was also advising him and so he may not have known that what Adián Campos said was by way of translation or advice. He denied he was alone at the second meeting and said either Adrián Campos or his son, Ricardo translated for him. Although Mr Rodriguez was mistaken when he said Ricardo was there, I accept his evidence that he was not alone and reject the evidence of Mr Ravetto to the contrary (see paragraph 28 above) – there would be no purpose in holding a meeting with Mr Amando Rodriguez unless there was someone there to interpret for him. I prefer the evidence of Mr Amando Rodriguez in his witness statement about the mention of Super Licences – I am satisfied there must have been such mention at both the Silverstone meetings because the obtaining of a Super Licence by Roldan was essential. As to the contradiction or inconsistency, my conclusion is that it demonstrates a nervous defensiveness on the part of Mr Amando Rodriguez rather than an intention to deliberately mislead the court.





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37. Mr Amando Rodríguez said that on receipt of the draft contracts on 9 July 2007 [20], they were translated for him by his sons but he took no legal advice. He agreed he received the visuals of the advertising spaces on the car which he had agreed to buy. He said – and Roldan confirmed it – that Roldan then decided he wanted to finish the 2007 season with his GP2 team and so the sponsorship agreement was renegotiated at €12 million for the 2008 season. He said that at meetings which took place at the Hungarian Grand Prix meeting between 3 – 5 August, Adrián Campos again interpreted for him. It was agreed that Roldan would meet, and get to know the Spyker team at the Chinese and the Brazilian Grand Prix meetings. There was further discussion with Mr Ravetto, Mr Missling and Dr Kolles about the advertising spaces and a final agreement was reached with Mr Missling and Mr Kolles about the advertising spaces and the schedule of instalment payments of the sponsorship monies. He then signed the contracts with the conviction that Spyker would “give Roldan their maximum support to obtain the Super Licence” and that it would not be a problem.

38. In his witness statement, Ricardo agreed that it was Adrián Campos who interpreted for his father. He confirmed there were discussions at the first Silverstone meeting, which he attended, about the advertising spaces and the test drives. He said the Super Licence was mentioned and while neither he or his father knew of the FIA requirements, “it was clear that Roldan was not automatically qualified for the Super Licence based solely on his track record”. He confirmed that Mr Ravetto said there would be no problem in obtaining the licence. He said Mr Ravetto said Roldan would have to complete 300 kilometres in the team car during trials, that the team would then prepare a good report for the FIA, and if the FIA would not grant Roldan a licence, there would be a meeting of the other teams to vote on the issue; he said that if a Formula 1 team truly wanted a driver they would get him. Mr Rodriguez said Mr Missling indicated his agreement with what Mr Ravetto had said.

39. Cross-examined, Ricardo said he could not remember when he was told he was to attend the meeting and there was no discussion with his father of the subject-matter of the meeting beforehand. He said he was “not involved in Roldan’s things”. I cannot accept this evidence – he worked for his father; it was his father’s business which was to provide the sponsorship monies; there would have been no point in him attending unless he had a contribution of some sort to make. I have considered whether this evidence undermines Ricardo’s credibility and reliability and have concluded it does not. In answer to Mr Tregear, Ricardo said his witness statement contained his independent recollection of events; while his account in paragraph 6 of the statement is, in large part, in similar terms and some passages share identical wording to paragraph 11 of his father’s witness statement, I am not persuaded this undermines the credibility or reliability of either – the explanation is more likely to be that the statements were drafted by their lawyers. Ricardo was asked if Adrián Campos had said there was no need to look after the Super Licence because he would look after it; he replied that Adrián Campos confirmed it would not be a problem and probably said he knew everyone important in Spanish motor sport. He said that while he was not familiar with the arrangements, his impression was that the team would provide the Super Licence. My overall impression of Ricardo, as a witness, was favourable.

40. While Roldan was not present at any of the meetings at Silverstone and in Hungary, he said Adrián Campos told him he would have to drive 300 kilometres and the team





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would take care of the licence. He said he did not know he did not qualify automatically for a Super Licence and when he asked Mr Ravetto and Adrián Campos, he was told it was easy and he should not worry himself about it. He said he remembered asking Adrián Campos and Mr Ravetto why he had to drive 300 kilometres but he made no inquiry of the FIA rules. He said he knew the FIA granted Super Licences and he had to have a Super Licence. He said the sponsorship contract was conditional upon his getting the Super Licence but they (that is Spyker) always said he would be their driver. In answer to Mr Tregear, he first said he did not think he spoke to Adrián Campos about how to get a Super Licence but he then said he may have asked him in September/October time what he should do. He said he did not know the Spanish ASN had to make the application on his behalf.

Misrepresentation

41. The case for Mr Amando Rodriguez is that he was entitled to rescind the Sponsorship Agreement on 18 January 2008 because it had been procured by misrepresentations made at the pre-contract meetings at Silverstone between 5 and 8 July 2007. The representations relied upon are that Mr Ravetto orally represented that the Claimant (Spyker) was able to take care of obtaining a Super Licence for Roldan, would have no difficulty in doing so and had previously done the same for other drivers including Adrian Sutil and Sakon Yamamoto; it is said these representations were confirmed by Mr Missling at the first meeting and by Dr Kolles and Mr Missling at the second meeting. The issues are accordingly: -

i) Were the representations made?

ii) If so, were they relied upon by Mr Amando Rodríguez when he entered into the sponsorship agreement;

iii) If so, were the representations false?

iv) Was Mr Amando Rodríguez thereafter entitled to rescind the sponsorship agreement.

These are obviously factual issues.

42. On behalf of the Claimants, it was submitted that these misrepresentations were not put expressly to either Mr Ravetto or Dr Kolles and that the evidence of Mr Amando Rodríguez “was perhaps the most remarkable of the entire seven days of evidence”. It was submitted there is an absence of reliance upon the alleged representations in the parties’ subsequent dealings, that the Service Agreement expressly provided that it was for Mr Amando Rodriguez and Roldan to obtain the Super Licence, that at no stage of the Super Licence application process or in the contemporaneous aftermath of its rejection, was any suggestion made by Mr Amando Rodríguez or anyone acting on his behalf that the Claimant was responsible for the Super Licence application or that there would be no difficulty in obtaining one; it was submitted that the renunciation letter made no mention of any such representations and the first time the allegation was made was in the Defence.

43. My conclusions of fact, on the balance of probabilities, are as follows:





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i) While there were language difficulties, Mr Amando Rodriguez was able to explain what he wanted and to understand what Spyker was offering. More importantly, he was told and he understood that a Super Licence would present no problems. In a most telling piece of evidence, which I accept, Mr Rodriquez said that in long conversations at the second Silverstone meeting, it was easy to understand Spyker were saying there would be no problems with a Super Licence – “ ‘Mr Rodriguez, Super Licence no problem’, this is what I heard”.

ii) I reject the evidence of both Dr Kolles and Mr Ravetto as to the financial state of Spyker; I am satisfied that by June 2007, Spyker was in very serious financial difficulties, compounded by the loss of the Albers sponsorship monies. Furthermore, I am satisfied Dr Kolles and Mr Rivetto knew that was so. It is sufficient to identify only the exchange of emails Dr Kolles had with Mr Hugenholtz on 15/16 August 2007 [438/439], his email dated 20 August 2007 to Mr Stuijfzand [470] in which he wrote that without agreement as to “the pr strategy” with Mr Amando Rodriguez, “the contract would be terminated and it would jeopardise the company” and his email dated 14 December 2007 [886] to TV Lakshmi of Force India, in which, referring to the negotiations which led to the Rodriguez Sponsorship Agreement, he wrote – “the negotiations took place over a period of more than 5 months”. This deal had been approved by Spyker NV board because there was no other choice. There was no money in the team, we had to pay a substantial amount (eur 2m) to Ferrari which was already 5 weeks due and the only option was the Rodriguez/Supergenco deal” (emphasis added). In my judgment, all the negotiations between those acting for Spyker and Mr Amando Rodriguez relating to the Sponsorship and Service Agreements must be considered against the background of Spyker’s financially parlous state. The determined efforts on the part of Mr Ravetto and Dr Kolles to suggest otherwise bring into question their reliability as witnesses – I shall address later in this judgment my assessment of the credibility and reliability of Dr Kolles. I have an additional concern with Dr Kolles – he does have a financial interest in the outcome of these proceedings (see paragraph 7) and I cannot rule out the possibility that his evidence was tailored or influenced by that consideration. Spyker were desperate to find a replacement sponsor and driver but the priority was obtaining sponsorship monies; the exchanges of emails (paragraph 33 above) establish that Dr Kolles and others were aware when the contracts were signed of the imminent possibility of a change of ownership, that a new owner would be likely to want to revisit a Service Agreement with Roldan and that the sponsorship agreement would be jeopardised if there was a change of control clause.

iii) Mr Amando Rodriguez was only interested in a sponsorship agreement which would further the F1 ambitions of Roldan and this must have been apparent to Mr Ravetto and Dr Kolles, both of whom accepted that ‘pay-driver’ arrangements are not uncommon with the smaller F1 teams; I am satisfied Mr Amando Rodriguez made no secret of his ambitions to make Roldan the Rafael Nadal of motorsport and that the parties understood that the two agreements were ‘a package’.





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iv) To obtain a sponsorship agreement quickly, the early discussions were directed at Roldan driving for Spyker as early as the European Grand Prix on 22 July 2007; the clear impression I gained from the evidence was one of a sense of urgency on the part of those acting for Spyker.

v) As Roldan had not driven a F1 car before, he needed practice but above all he needed a Super Licence. In my judgment, it is inconceivable (given the pressures of time which Spyker introduced in an attempt to get sponsorship monies as quickly as possible) that there was no discussion about obtaining a Super Licence. Furthermore, given that Roldan could not qualify for a Super Licence save under paragraph 5.1.(iii) (h) (see paragraph 72 post), the obtaining of a Super Licence in so short a time scale would be an unusual course as Dr Kolles and Mr Ravetto well knew .

vi) Even though Roldan was required by Clause 5.3.6 of the Service Agreement to “use his best endeavours to obtain ... competition licences to enable him to take part in the Races and Tests”, Force India had a positive role to play in the obtaining of the licence. The evidence of Mr Ravetto, supported by Dr Kolles in many particulars, was there are many steps to be taken before a Super Licence may be issued but importantly, an individual cannot obtain one. A F1 team must enter into a Service Agreement with the driver, lodge that agreement with the Contracts Recognition Board (an agency of the FIA), provide proof to the FIA that it has lodged the agreement with the Board, provide the FIA with specific information about the driver, provide the driver’s national association with information and reports, arrange the 300 kilometres test and provide the car for that test. Mr Ravetto said “a massive amount of work” was required to put a driver into a F1 car.

vii) Mr Ravetto, Mr Missling and Dr Kolles gave Mr Amando Rodriguez and Roldan the clear impression that a Super Licence could be obtained without difficulty. Without such an indication, Mr Amando Rodriguez would not have entered into the Sponsorship Agreement. Mr Ravetto agreed that if Roldan failed to get a Super Licence, Spyker would lose both the service and sponsorship agreements, because the sponsorship went with the driver; he said he thought it was not impossible to get a Super Licence very quickly and was confident it could be done. His evidence was the team promised to use its “best endeavours” to help Roldan obtain a Super Licence. He said that if he thought that was not possible there would have been no point in the meeting and no point in organising a deal which would collapse in 48 hours if there was no Super Licence. The clear impression I gained was that Mr Ravetto was accepting that it was Spyker’s thinking that the Super Licence could be obtained in time for Roldan to join the team as early as the European Grand Prix. Further, in his evidence (see paragraph 38 above) Ricardo said Mr Ravetto had said that after Roldan had completed 300 kilometres in the team car during trials, “the team would then prepare a good report for the FIA” and if the FIA would not grant Roldan a licence “there would be a meeting of the teams to vote on the issue… (he) said that if a Formula 1 team truly wanted a driver, they would get it” (emphasis added). This detail of his evidence struck me as being truthful and not made up or imagined. Indeed, Mr Rubio said the FIA rules make provision for the





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committee to decide whether a licence could be given; that answer reflects paragraph 5.1(iii) (h) of Annex L (paragraph 72 post) which provides that if the Bureau of the F1 Commission cannot agree unanimously, the application is referred to the full F1 Commission – the full Commission comprises six representatives of the teams. I accept Ricardo’s evidence, I am satisfied this was said and the impression was given deliberately that the obtaining of a Super Licence would not present difficulties. This was a most telling detail in the evidence on the Misrepresentation issue.

viii) The evidence of Mr Ravetto that it was Adrián Campos who had the conversation regarding the Super Licence was not convincing and I reject it. Although he was not called as a witness, my view is that Adrián Campos, who had an interest of his own to serve in the negotiations between Mr Amando Rodríguez and Spyker, encouraged Mr Amando Rodríguez to accept the representations and to enter into the Sponsorship Agreement but that the representations with regard to the Super Licence were made principally by Mr Ravetto but with some support from Dr Kolles at the second meeting. Mr Ravetto gave Mr Amando Rodriguez the example of Sakon Yamamoto as someone Spyker had helped to get a Super Licence and Dr Kolles said that he had helped Adrian Sutil to obtain a Super Licence for the 2006 season; there would have been no purpose in mentioning these matters unless their intention was to provide some re-assurance to Mr Amando Rodriguez and/or Roldan.

ix) When, as a consequence of the negotiations, it was decided that the sponsorship and service agreements would be for the 2008 season only, neither Mr Ravetto or Dr Kolls said anything different to Mr Amando Rodriguez and/or Roldan about the Super Licence and so they remained under the impression that Spyker would obtain the licence. The evidence about the change of control clause (paragraph 33 above) and the media strategy (post), although post-dating the negotiations, provide support for my conclusion that Mr Amando Rodriguez was led to believe that Spyker would obtain a Super Licence for Roldan.

x) I am not persuaded that the failure on the part of Mr Amando Rodriguez and/or Roldan to refer to any of these mis-representations when Roldan was trying to get a Super Licence and/or in the renunciation letter provides evidence which undermines the Defendant’s claim. I was left with the clear impression that Mr Amando Rodriguez, although a successful businessman in his own right in the provision of health services, was a complete novice in the world of F1 and Roldan did not strike me as being commercially astute. By December 2007 (in the circumstances to be detailed later in the judgment when I consider the evidence about the test drives) I am satisfied the conduct of the Claimants had demoralised Mr Amando Rodriguez and Roldan. Mr Rodriguez said he felt – I quote him – “deceived and humiliated”; he said he only makes an issue when he can win something, not when he has lost the battle – he had known in December that Fisichella was going to be the driver. The renunciation letter was not written by Mr Amando Rodriguez. The evidence of Ricardo, which I accept, was that he had asked a lawyer friend to draft the letter, the purpose of which was to get the €3 million





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repaid; he said that in the circumstances it was difficult to complain about everything that had happened and that it was not possible to have a normal conversation with Force India – having listened to Dr Kolles, I can understand that viewpoint.

xi) Mr Ravetto did orally represent that Spyker was able to take care of obtaining a Super Licence for Roldan and would have no difficulty in doing so, having done the same for other drivers; Mr Missling, at both Silverstone meetings and Dr Kolles at the second meeting confirmed those representations. Mr Amando Rodríguez relied upon the representations. They were untrue because the obtaining of a Super Licence could not be taken for granted but importantly, it was not easy to obtain a Super Licence without the active support of the team and so, in the circumstances to be considered later in the judgment, Mr Rodríguez was entitled to rescind the Sponsorship Agreement.

The Team India takeover

44. The evidence of Mr Mallya was that the Mol family, who were shareholders in the Spyker F1 Team, told him they were having problems with Spyker Cars NV and were looking for another partner. His interest was in part because he believed the team could make a huge impact and become very popular in India, with its large middle class population and large growth rate. They decided to set up Orange India Holdings Sarl (OIH) to make a bid for Spyker F1 Limited, the owner of the team; as the beneficiary of a discretionary trust which owns a Mauritius company, he arranged for that company to acquire 50% of the share capital in OIH. He was aware from due diligence enquiries that the team had signed contracts with Amando and Roldan Rodriguez by which the team had agreed to nominate Roldan as a driver for the 2008 season, subject to him holding a Super Licence. He said there was a lot of activity after the purchase was completed concerning the team’s activities and some of what he said was “inevitably me thinking out loud and spontaneously rather than specifying team strategy”. He said that as a 50% shareholder, others had to be consulted and so there is no basis for inferring any kind of contractual intent from those interviews. The purchase was completed on 5 October 2007. Mr Mallya said one of the reasons why they agreed to pay more for the team was because of the lucrative sponsorship agreement with Mr Rodriguez.

45. In his witness statement, Mr Mallya referred to an article published by Reuters on 10 November 2007 [1391] in which he was reported as having said the team “can’t have rookies only” and needed a proven driver. He said those were his thoughts at the time but he had acknowledged in the same interview that Spyker had signed a contract with Roldan who was coming with significant sponsorship money but had yet to obtain a Super Licence; his evidence was that if Roldan had obtained a Super Licence the team would have abided by the terms of the contract with him and his father. He said the team would do nothing to jeopardise the receipt of the outstanding €9 million in sponsorship monies.

46. Cross-examined by Mr Toledano, he said he was aware that Spyker F1 was in a bad financial position. He was asked about an article in the Daily Telegraph of 21 October 2007, in which he was reported as having said he expected the management of the team to stay the same and was determined to keep the “highly rated German





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rookie driver Adrian Sutil as well” and said “We need a driver of some calibre to also improve the performance of the team. We can’t have rookies only ... for better performance I need a proven driver”. Mr Mallya challenged the accuracy of that report; he said he was not asked in specific terms about the second driver or about Adrian Sutil; he denied saying “we can’t have rookies only” and said he has often been misquoted and pointed to what he said were three factual inaccuracies – none of which I particularise because they were of no particular consequence; he said he did not think it necessary to correct the mistakes.

47. I am unable to accept these explanations – I observe that Mr Mallya did not challenge the accuracy of the Reuters article which was to similar effect. He said also that this was too early after the takeover for him to make any definitive decisions; he had been facing a barrage of questions and he expressed opinions for what they were worth at the time. He said he had to be guided through the process of taking over the team and that he learnt the ropes as he went along. I am not persuaded that a businessman as successful as Mr Mallya does not choose his words with particular care.

48. He agreed that he expected to have a big say in what happened but he said he relied upon Dr Kolles to a very large extent. He agreed that the team would need an experienced driver in 2009/2010/2011 but he said there would have to be a new car which an experienced driver would want to drive. He said he certainly would want an experienced driver “if there was a legal avenue to do it but that would have to be in 2009”.

49. Mr Toledano asked Mr Mallya to look at an email dated 31 October [565] from Mr Zanarini, the manager of Mr Fisichella to Mr Phillips in which Mr Zanarini said he had not yet written to VJ (Mr Mallya) and in which he was clearly advancing the case for Mr Fisichella’s selection as the second driver. He said it is quite possible that he was informed of this approach but he left it to Dr Kolles to decide on the best way forward. Asked to look at his own email dated 14 November 2007 [604] sent to Mr Zanarini in which he wrote “Good to hear from you. I also look forward to meeting you and Giancarlo in Jerez early next month”, he said it was quite possible that contact had been established between him and Mr Zanarini. He agreed that a draft Service Agreement between Force India and Mr Fisichella was sent by Mr Missling on 21 November 2007 [616]. Asked about that, he said he and Dr Kolles used to speak quite regularly and he would expect him to keep him posted.

50. Mr Mallya was asked to look at an entry dated 12 December 2007 from the Official Formula 1 website [1398] and so some 5 days after the test drives at Jerez (post). The entry reads –

“Force India plan to confirm their 2008 driver line-up at the end of the month, co-owner Vijay Mallya has revealed. Adrian Sutil, who raced for the former Spyker team in 2007, is expected to retain his seat but there are a plethora of potential candidates for the team’s second cockpit. At the recent Barcelona and Jerez tests Force India invited several established Formula One drivers to try out their car, including Christian Klien, Vitantonio Liuzzi, Ralf Schumacher and Giancarlo Fisichella. Mallya freely admits it was designed as a shoot out – and one that has left him with some tough questions to answer. “It will be a very difficult decision that I have to make” he told Formula1.com. “All of them are very good – they would bring different strengths to the team. Clearly we have Sutil on the one side and I need to make sure that the driver in the other car is able to raise the bar, so that both drivers keep raising the standard of performance all the time and help the engineering team along”. Mallya stressed that Force India are not interested in looking for ‘pay drivers’ who bring funds but little experience to the team. His criteria for driver





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selection are instead focused on the squad’s long-term future ... Asked when Force India would make a driver announcement, Mallya added: “At the end of December. I want to think very clearly about who will sit in the second cockpit. It is a very important decision for me and the team and I do not want to jump into anything. I will evaluate all the facts and then make my move”.

51. I observe that Mr Mallya, who did not challenge the accuracy of this report, expressed himself in the first person, giving the clear impression that although he was only a 50% shareholder, his was the controlling voice. In answer to Mr Toledano, he insisted, however, that he was not the decision maker. Asked about the report, he said the use of the phrase ‘shoot-out’ was the best way to describe it at the time; he agreed it was unusual to have so many drivers testing for the same team; he said Ralph Schumacher, who is his friend, test-drove for him as a favour; he said the feed-back from experienced drivers was useful but they also wanted to see who was fastest; he said that if the Team was looking only for experienced drivers, Klien and Liuzzi would not have been included; when asked if the reference to ‘pay drivers’ was to Roldan Rodriguez, he said that had he obtained the Super Licence he would have been the second driver. He said “I would not have been so imprudent as to tear up and throw away a lucrative contract”.

52. Mr Mallya agreed he was aware that Dr Kolles had signed the Service Agreement with Mr Fisichella and that there was a side letter dated 12 December 2007 [876] which provided that the Agreement would only come into effect if Adrian Sutil or Roldan Rodriguez should not be available as racing drivers for the team. He agreed that the team made the announcement in Mumbai on 10 January 2008 [960] that Mr Fisichella and Mr Sutil would be the drivers for 2008 with Mr Liuzzi as the test and reserve driver. The press release specifically referred to the experience of Mr Fisichella as a Formula 1 driver for 12 years, with various teams – it reads “With three wins, three pole positions and 267 points to his credit, he is one of the most successful drivers on the current F1 grid”; Mr Mallya was quoted saying “”Money is not the issue now: we need drivers who will push the team and give us direction”.

53. Mr Mallya said he does not believe he or Mr Mol would deliberately ignore a contract; he said that if Roldan had got his Super Licence, he would have had the car; asked how, he said he could have got rid of Sutil although in answer to a later question, he said Mr Fisichella would have had to be the one who was replaced. These were revealing answers. He said Roldan would have had to have had a Super Licence by the beginning of the season but this is contrary to the Claimant’s pleaded case and Mr Mallya had to agree cannot be right – the FIA rules allow for changes of drivers. My conclusion, on the balance of probabilities, is that by some time very shortly after Force India acquired Spyker, the decision was made that there had to be experienced drivers and so there was no place for Roldan in the team.

Media Strategy

54. The evidence demonstrates that Mr Amando Rodriguez was wholly unprepared for Formula One sponsorship. He had had no experience of it. He agreed that a note dated 24 July 2007 [242A] recorded a meeting between him, a friend of his son Ricardo, another friend and Mr Rubio at which a strategy for selling the advertising space to Santander and Telefónica was discussed. He did not have €12 million to pay Spyker and so he had to sell the spaces. He said that if he did not he would have to sell his





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house or his business. He said he could not remember having priced the spaces but when shown an email dated 31 October 2007 from Roldan to Benito which listed prices, he said he imagined he must have spoken to him and that by then they had some idea of the prices.

55. He was shown his own documents [245Ai/246Bi/247Bii] which he said contained his thoughts at the time of writing. Those thoughts demonstrate his concerns at having entered into a contract and what he perceived to be the pros and cons. He wrote “We did it too soon” and “It makes me feel sick”. He said these were no more than reflections and the thoughts of a good family man and that money would come from sponsorship in Spain with more time and work and by the beginning of the season. This was why the media strategy was so important.

56. There is no issue that there was an agreed media strategy. Mr Ravetto accepted there was to be no public announcement of the signing of the Service Agreement and the strategy was to keep publicity momentum so that the Spanish press would be interested. Dr Kolles was asked about an email dated 16 August 2007 [470] from Mr Campos to Mr Ravetto in which Mr Campos referred to the agreed media strategy, which he asked should be respected because it was very important to the image of the driver and to the sponsors. Further emails, prompted it seems by rumours of the Sponsorship/Service Agreements, provide the detail of that agreement. On 20 August 2007, Mr Ravetto emailed Dr Kolles and Lucy Nell (the press officer) – he stated [452] that the media policy, agreed between Mr Amando Rodriguez, Mr Campos, Dr Kolles, Mr Missling and himself at the Hungarian Grand Prix was that Roldan was to be invited for a test drive as soon as possible, that he would show “with the team’s help, obviously” extraordinary potential and driving skills in this test and that following his very good performance, Spyker F1 would offer him a testing programme/racing seat for 2008. In an email of even date, Mr Missling not only confirmed that agreement but said “It is crucial to comply with it”.

57. Mr Ravetto was shown two press releases. The first dated 12 September 2007 [1384] reported – “Upcoming Spanish GP2 driver Roldan Rodriguez tested today for the Etihad Aldar Spyker Formula One Team at Silverstone Circuit, UK. The 22 year old from Valladolid completed a 50km shakedown with the new B-spec F8-VII ... The Spaniard completed 18 laps of the 2.6km track, his first test drive in a 2007 Formula 1 car .... Team principal Colin Kolles added “We have been following Roldan’s progress since his GP2 podium in Hungary and were pleased to be able to give him the opportunity to drive a Formula 1 car this year. Roldan performed well ...”. The second dated 20 September [1385] reported – “The Etihad Aldar Spyker Formula One Team announces today that GP2 driver Roldan Rodríguez will join its test and development driver line-up over the 2007/2008 winter period ... Colin Kolles ... added “I’m pleased to welcome Roldan to the team as a test driver””. Asked about the second release, he agreed there was no announcement about the 2008 driver’s seat but said there was no breach of the media strategy agreement; he said there was a change of plan about announcing the driver’s seat for 2008, and the plan was to make gradual announcements to keep up the publicity momentum.

58. When shown a press release dated 22 August 2007 of Spyker’s Turkish Grand Prix preview [490], Dr Kolles agreed the claims that Spyker had made no decisions about the 2008 driver line-up and that they were watching Roldan but had no concrete plans for him were inaccurate and misleading but he said they could not disclose





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everything; he said a new driver had to be built up and it was the best way to help Mr Amando Rodriguez’s business model. He said he was contacted by Mr Rubio and told they (the Rodriguez family) wanted a media event in Madrid; he said Spyker had nothing to do with it and this change in the media strategy was on their part. He said there could be no announcement that Roldan was a driver until he had his Super Licence.

59. I am satisfied the Madrid event was an important part of the media strategy – it was intended to emphasise the Spanish credentials of Roldan and to attract Spanish sponsors for a F1 Spanish driver; it follows that the sale and purchase of sponsorship would have been conditional on Roldan being the driver and so there would have been no point in such an event unless Mr Amando Rodriguez and Jóse-Maíia Rubio, who organised it, had been led to believe that Roldan would obtain a Super Licence and so drive in F1. I am satisfied also that the agreed media strategy was to build Roldan’s image up gradually with the announcement of his Super Licence as the “PR” moment – it follows that Mr Amando Rodriguez and Roldan must have been led to believe that matters would progress by stages to the certainty of the Super Licence.

Discussion

60. I turn now to consider whether Clause 1.3 of the Sponsorship Agreement, properly construed was intended by the parties to be a condition precedent to the Sponsorship Agreement so that the failure by Force India to permit and nominate Roldan as one of its two race drivers for the 2008 season, pursuant to the Service Agreement, discharged the agreement, alternatively whether Clause 1.3 at the very least must be construed as a promise by Force India to permit and nominate Roldan as one of its two race drivers for the 2008 season and whether there were breaches of contract categorised as the Super Licence breach, the Test Driver breach and the Fisichella breach.

61. Clause 1 of the Sponsorship Agreement is in these terms:

1. Interpretation, general remarks.

1.1. The definitions and General provisions in Schedule 1 apply to this agreement

1.2. SPYKER operates a Formula One team competing in the FIA World Championship.

1.3. It is agreed that SPYKER will permit and nominate Roldan Rodrígus as its race and test driver subject to a separate service agreement. The Sponsor purchases sponsorship rights and sells such rights to third parties subject to the prior written approval of SPYKER and subject to the provisions of this agreement. The Sponsor warrants that such third parties fully accept and adhere to the provisions of this agreement. The Sponsor is aware and acknowledges that his payment obligations set out in clause 14 shall not be affected in any way by the circumstance whether or not or to which extent he is able to sell the sponsorship rights set out in this agreement to third parties

62. Mr Toledano submitted that the Court is required to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably been available to the parties in the situation in which they were at the time of the contract”: Investors Compensation Scheme Ltd v. West

Bromwich Building Society [1999] 1WLR 896 at 912H per Lord Hoffmann and that commercial contracts should, of course, be construed with regard to their commercial





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purpose. He relied upon the dictum of Lord Reid in Wickman Machine Tool Sales Ltd

v. Schuler A.G. [1974] AC.235 at 251E: “The fact that a particular construction leads to a very unreasonable result must be relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear”.

63. Mr Toledano submitted the evidence establishes that the Sponsorship Agreement and the Service Agreement were entered into as a package, a pay-driver arrangement. He submitted that on its true construction, Clause 1.3 had the effect of making Mr Amando Rodriguez’s obligations under the Sponsorship Agreement conditional on Force India permitting and nominating Roldan as its race and test driver. Once that condition was not fulfilled because Roldan did not obtain a Super Licence and because Force India had in any event chosen Mr Fisichella as its driver, the Sponsorship Agreement was discharged.

64. Mr Tregear submitted that the Claimant’s primary position is that Clause 1.3 is merely a recital, rehearsing the existence of the Service Agreement as part of the context for the Sponsorship Agreement; he submitted that Clause 1 is headed “Interpretation, General remarks” and that Clause 1.1 and Clause 1.2 are clearly recitals. He submitted that the Service Agreement was conditional on the Sponsorship Agreement being entered into and so it is only to be expected that the Sponsorship Agreement would record the effect of entry into the Sponsorship Agreement (which took effect immediately on signing) on the Service Agreement which did not take effect on being signed but on the execution of the Sponsorship Agreement. It is unnecessary to consider further the submissions of Mr Tregear on the ‘condition’ point because I have concluded that must be right. Further, Mr Toledano’s submission is undermined by his acceptance that the wording of Clause 2 of the Service Agreement is more obviously the language of a condition than the wording of Clause 1.3 of the Sponsorship Agreement and his acceptance that the only expressed right of termination of the Sponsorship Agreement relating to termination of the Service Agreement is Clause 15.5 which only deals with the situation where Roldan joins another F1 Team. Although, Mr Toledano made further submissions in writing, my impression (rightly or wrongly) during his closing submissions was his principal submission was that Clause 1.3 must at the very least be construed as a promise by Force India to permit and nominate as its race and test driver subject to the Service Agreement.

65. Mr Toledano submitted there are two questions of law: first, is Clause 1.3 to be construed as a promise and not a mere recital? Secondly, if construed as a promise, what is the effect of the promise and in particular does that promise carry with it any corresponding positive or negative duties on the part of Force India in relation to obtaining the Super Licence? He submitted that on a true construction of Clause 1.3, Force India promised to permit and nominate Roldan subject to the conditions relevant to permitting and nominating set out in the Service Agreement and that this construction works commercially because the promise, so far as permitting and nominating is concerned, is the same under both agreements and so there is no inconsistency and no attempt to import some wider obligation into the Sponsorship Agreement than is contained in the Service Agreement.

66. Mr Tregear submitted the terms of the Service Agreement cannot be construed so as to impose any obligation on Force India to use its best endeavours to procure a Super





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Licence for Roldan or to co-operate in any attempts to obtain a Super Licence or not to take any steps to prevent him obtaining a Super Licence; this is to re-write the contract to fit events which have occurred after the formation of the contract. As to best endeavours, while he accepted that Force India had to provide the facilities for the requisite 300 kilometres at racing speeds, he submitted it does not follow that such should be implied as a term of the Service Agreement; he argued that insofar as this was the subjective intention of the parties this is a matter of rectification, not construction. He submitted that the terms of the agreement are clear; the only requirement of Force India was to lodge the Service Agreement with the Contract Recognition Board, to provide the facility to drive 300 kms in accordance with FIA rules and to provide the FIA and Roldan’s national association with the relevant data to establish that this requirement had been met. He submitted clause 5.3.6 expressly provides that the obligation is on Mr Amando Rodriguez and Roldan to use their best endeavours to obtain the Super Licence and that if the intention of the parties was that the obligation should be that of Force India or a joint obligation, the parties could and would have so provided.

67. As to co-operation, he submitted a term requiring co-operation will only be implied if something that both parties have agreed should be done cannot be done unless both concur in doing it and that the extent of the duty and the degree of co-operation required will be determined by what is necessary and by the express obligations upon the parties in the surrounding circumstances: he cited Mackay –v- Dick (1881) 6 AC 251 at 263 and a number of decisions illustrative of the application of the principle - Mona Oil Equipment & Supply Co Ltd –v- Rhodesia Railways [1949] 2 All ER 1014, James E McCabe Ltd –v- Scottish Courage Ltd [2006] EWHC 538 (Comm), Taylor –

v- Rive Droite Music Ltd [2006] EMLR 4 and Robin Ray –v- Classic FM [1998] FSR 622. He submitted that on the facts of this case, there was no necessity for the Claimant to co-operate further than the extent set out above.

68. As to prevention, he submitted that while superficially attractive, the term is impossible to infer from the words of the contract because there are many circumstances in which the actions of the Claimant, in good faith and innocently, might have prevented Roldan obtaining a Super Licence and that the FIA is an independent institution responsible for the regulation of F1 and so capable of making its own informed decisions. There is obvious force in these submissions but the Defendant’s case, as advanced, became one of “sabotage” based upon the evidence of emails which emanated from those working for Force India (post).

69. Mr Toledano submitted “it is also necessary to step back and to ask, bearing in mind the relationship between the two agreements and the fact that this was a pay-driver situation, is it really commercially plausible that Mr Rodriguez would sign up to the sponsorship agreement without it at least being the case that Spyker was obliged to permit and nominate Mr Roldan Rodriguez subject to such conditions as are set out in the Service Agreement?” He submitted that this would not make commercial sense because without this promise, Mr Rodriguez would be entirely unprotected in the event that Spyker decided to breach the most basic of its obligations under the Service Agreement, namely the obligation to permit and nominate Mr Roldan Rodriguez as its race and test driver. This cannot be what the parties intended.

70. I agree with the submission that the Sponsorship and Service Agreements were entered into as a package but notwithstanding my decision as to the misrepresentation





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issue that Spyker represented it was able to take care of obtaining a Super Licence for Roldan and that there would be no difficulty in doing so and the positive role Force India had to play in the obtaining of the licence, I am not persuaded that the recital in clause 1.3 of the Sponsorship Agreement that Spyker “will permit and nominate Roldan Rodriguez as its Race and test driver subject to a separate service agreement” should be construed as a promise. My conclusion is that if it is not possible to construe a condition precedent, it is not possible to construe a promise. However, I am satisfied the recital in clause 1.3 of the Sponsorship Agreement should be construed as an acknowledgement of the ‘package’ and so pursuant to the statement of principle in MacKay –v- Dick, above at page 263 per Lord Blackburn:

“... where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on the circumstances”

I am satisfied there must be implied into the Sponsorship Agreement a term that the Claimant would use its best endeavours and co-operate in the obtaining by Roldan of a Super Licence.

71. I turn now to consider the evidence about the test drives and the application for the Super Licence.

The Test Drives

72. Appendix L to the International Sporting Code of the FIA provides, in its material parts:

“5. Qualification for the Super Licence.

5.1 The Super Licence is issued by the Formula One Commission, on its sole decision, following a specific request and recommendation from the driver’s ASN, accompanied by his/her record of results, and on the following conditions:

(i) the driver is party to an agreement with a team entered in the FIA Formula One World Championship to race a Formula One car in the Championship in the year of application as first, second or reserve driver,

(ii) the driver is the holder of a Grade A licence,

(iii) the driver:

either (a): has been classified in the first 4 of the final classification of

the GP2 Series within the previous 2 years

or (b): has been classified in the first 3 in at least 5 races, or in the first six in at least 10 races of the GP2 series, within the previous two years,

… or (h): (exceptionally), is a record of results which has judged sufficient,

unanimously, by the Bureau of the Formula One Commission and has driven at least 300km in a current Formula One car at racing speeds, over a maximum period of 2 days, certified by the ASN of the country in which the test took place. Only results obtained with single seater formula cars will be





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taken into consideration. Should the members of the Bureau not agree unanimous, the Commission in its entirety will be consulted.

In this case, the complete application must be received by the FIA at least 14 days before scrutineering for the first FIA Formula One World Championship event in which the candidate is to compete.

73. Roldan Rodríguez had a test drive in a Spyker car at Silverstone on 12 September 2007 in accordance with the agreed programme [505], following which there was the press release [1384] – see paragraph 57 above. On 16 October 2007, there was another test drive at Silverstone. There were team trials in Barcelona on 13-15 November and in Jerez on 4-7 December 2007. The evidence of Roldan was that he and Adrian Sutil test drove at Barcelona; he drove for one day only and Force India used Giedo van de Garde (who drove for one day) and Christian Klien and Vitantonio Liuzzi who both drove for two days. Following the test drives in Barcelona, the evidence of Mr Amando Rodríguez, which I accept, was that he complained to Adrián Campos – this provides support for my conclusion that he had actively encouraged Mr Amando Rodríguez to enter into the Sponsorship Agreement. Dr Kolles wrote to Mr Amando Rodríguez on 6 November [578] to say it was in Roldan and the team’s interests that he should have breaks between testing days “to digest the drives and the information”. In my judgment, this was dissembling.

74. Dr Kolles said Roldan would not have driven on all three days. He said that as a young and inexperienced F1 driver, he could not have physically driven on all three days, that he could have driven on two days but everything would turn on the circumstances. This evidence, at first blush, seemed reasonable – I accept there are considerable physical demands in driving at fast speed and the engineers need experienced drivers so they can find out what the limits of the cars are - but unless a driver is properly tested, his skills and abilities cannot be determined. My conclusion is that Dr Kolles provided a deliberately misleading explanation for the limited driving opportunities afforded to Roldan at Barcelona and Jerez.

75. At Jerez, although he was down on the Schedule [505] to drive for all three days, Roldan drove on only one day and that was the last day of the trial. His evidence was he could only complete 80 laps, of which 19 were entry/exit laps not at race speed. He said he was disadvantaged by the weather which was worse than on the previous two days; it was wet and cloudy in the morning and the track temperature 2˚C lower and so the tyres were less effective leading to lower times. He started with a set of tyres which had 4 laps on them; after a lap time 2.5 seconds faster than that of Giedo van de Garde, his tyres were changed for his and yet he was still faster. There was an engine breakdown mid morning which required a replacement engine to be fitted and he was consistently faster than Giedo van de Garde. He had problems with the configuration of the gear box which meant he could not use second gear but the team wanted to try a few things. He was only provided with one set of new tyres. He said that during the day he raced with 50 kilograms of fuel, save for his first exit with the used tyres in the morning and the 5 laps with new tyres when he raced with 20 kilograms – the lighter weight making the car faster.

76. Dominic Harlow is employed by Force India Formula One Team as Chief Race and Test Engineer. He was summonsed to give evidence and so there was in his case no witness statement but a witness summary. Nonetheless he adopted the witness summary as accurate and truthful. His evidence, which was directed entirely to the





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tests carried out in Jerez in December 2007, was that the testing was a very sizeable operation during which various testing programmes were carried out and monitored. He dealt specifically with various complaints made by and on behalf of Roldan – these were that he was not provided with slick tyres unlike Giancarlo Fisichella, that he was provided with only one set of new tyres whereas Giancarlo Fisichella was provided with four sets of new tyres over his two days of testing, that he was only allowed to go out twice with less than 50 kilos of fuel, that the gearbox of the car he was driving was not functioning well and finally that the car suffered an engine failure during the morning of the test and so a replacement engine had to be fitted.

77. He agreed that the lap times would be faster on slick tyres than on groove tyres and that 8 of the top 10 fastest drivers were driving cars fitted with slick tyres but he said that his records demonstrate that only laps driven by Giancarlo Fisichella on grooved tyres were used for comparison purposes. He drew attention to an e-mail dated 19 December 2007 [914] from Oliver Knighton, one of his test engineers, which reported “all F1 drivers completed their fastest laps on grooved tyres as we did not use blankets with the slicks”. He said that although the data [898B] records that Giancarlo Fisichella had four sets of new tyres and Roldan only one set, his records show that Roldan Rodríguez had in fact two sets – the possible explanation, he suggested, for the record [898B] maybe that testing before 0936 hrs was not included. He agreed that ideally drivers should have between four to five sets of new tyres for a full day’s testing at Jerez, that there was an allocation issue, that the use of 7 drivers for testing meant that there were fewer tyres to go round. As to fuel, he said that he had checked his records and was satisfied the drivers drove with similar weights of fuel. He agreed that Roldan’s car had gear box problems but one of the objectives of the testing was to test the gearbox and the problem resulted in a time difference as little of 0.1/0.2 seconds per lap, the difference viewed by engineers as an acceptable compromise. He agreed that Roldan’s car had an engine failure during the morning of the test and that a replacement was fitted but he said that despite that Roldan completed 82 laps or 355 kilometres (which is more than a Grand Prix distance). He said the other car run by the team (which did not suffer an engine failure) completed 81 laps or 351 kilometres. He accepted that Roldan drove only 61 of the 82 laps at racing speed and that the other laps were “in and out laps” but he said that even “in and out laps” were timed. He said that the engineers gave Roldan as much track time as they could; their objective was to complete the mileage and to get the data from the cars performance. But I am satisfied the evidence of Mr Harlow about the test drives themselves cannot be considered in isolation from the evidence of the email traffic relating to the Super Licence application (post) .

78. Asked why the decision was taken to compare Roldan’s performance to that of Giancarlo Fisichella rather than Ralf Schumacher (which were only marginally faster than those of Roldan) Mr Harlow agreed that they could have chosen Ralf Schumacher’s times and he couldn’t recall why they did not; he suggested that the explanation could be that Ralf Schumacher had driven on only the one day and had not driven a team car before whereas Roldan had driven one before albeit on 12 September at Silverstone over 50 km and on one day in Barcelona in October. The explanation, which I find more compelling, is that the Force India team made the decision to undermine Roldan’s Super Licence application. Mr Harlow said Giancarlo Fisichella drove for two days, Ralf Schumacher, Christian Klien, Franck Montagny, Vitantonio Liuzzi and Giedo van de Garde each for one day.





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79. When asked by Mr Toledano if the test drive was a “shoot out”, Dr Kolles said that was not “entirely right” and that the shoot out was only between the invited drivers to test the limits of the car; it did not extend to Adrian Sutil and Roldan who were under contract – a wholly unconvincing explanation. He said that you could not put a driver like Roldan in a “shoot out” with Ralf Schumacher. He then said they were looking to have experience in the team but he said that so far as he was concerned the purpose of the “shoot out” was not to decide who should have the second seat. I am unable to accept this evidence. Asked about the website entry of 12 December 2007 (see paragraph 50), Dr Kolles said that was Mr Mallya’s opinion, that he did not have a clue about motor racing and the decision about drivers was entirely his although he could not sign a contract with a driver without the approval of the board. He said that while he had discussed the drivers with Mr Mallya he had got the wrong idea of the purpose of the shoot out.

80. The impression I gained was that Dr Kolles was trying to distance himself from Mr Mallya. My conclusion is that while Dr Kolles’ contract [2] provided it was his task, subject to the approval of the board of directors of the company, to develop the team and to recruit its members, any decision of his would have been discussed with Mr Mallya. Having heard and seen Mr Mallya, I am in no doubt that while he would have relied upon the considerable experience of Dr Kolles, his was the final voice in the running of Force India. I am satisfied on the balance of probabilities that the press release [1398] expresses the thinking of the team and that the decision would be his. Importantly, there is this paragraph – “Mallya stressed that Force India are not interested in looking for ‘pay drivers’ who bring funds but little experience to the team. His criteria for driver selection are instead focused on the squad’s long term future”. There follows in direct quotations these remarks attributed to Mr Mallya – “In the past the team was looking for money, so money was the prime motivating factor for the driver line-up … Now that has changed. For me the prime factors are performance and the ability to give feedback to the engineers”. My conclusion is that those observations are an indirect reference to the unsuitability of Roldan as a driver in the new Force India team.

81. While there was no evidence that instructions were given to the engineers to provide less support, the email of 19 December from Ian Philips to Mr Harlow [916] which includes the instruction “Please chase the revised times just in case the FIA think he’s quick” suggests (at the very least) that Mr Harlow knew the Team was not supporting Roldan. I am satisfied on the balance of probabilities that the decision by Force India to test drive with so many drivers, all of whom had prior F1 experience, was intended, at least in part, to disadvantage Roldan and so the perception of both Mr Amando Rodriguez and Roldan that Force India was sabotaging Roldan’s opportunities to produce the required test results to support his application for a Super Licence was entirely justified.

The application for the Super Licence

82. It is necessary to consider further in a little detail the events of July/August 2007 and so some repetition is unavoidable. It is not disputed that at the Silverstone meetings the first proposal was that Roldan should drive for Spyker for the rest of the season, that is to say from the next Grand Prix in Hungary on 3-4 August; it follows that there was just one month to arrange a test drive and to process the application. As Roldan





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had no GP2 wins or podium finishes to his credit, the FIA would have to be satisfied on other evidence that he was a suitable candidate for a Super Licence. My conclusion (see paragraph 43(vii)) is that Dr Kolles, Mr Ravetto and Mr Missling, severally represented that Spyker would do everything it could to help Roldan get the Super Licence and that there would be no problem in obtaining a Super Licence and did so because of the pressing financial problems Spyker had. The decision of Roldan to stay with his GP2 team ended any consideration for the time being of the Super Licence.

83. By the end of the season in November 2007, Spyker was no more and Force India was running the team and I am satisfied was not interested any more in Roldan as a driver. As the evidence demonstrated, they did nothing to help him and a great deal to hinder his application.

84. The evidence of Mr Amando Rodríguez was that by December 2007 there were rumours that Giancarlo Fisichella had signed to drive for Force India. Those rumours were clearly based on fact – see paragraph 52 above. On 10 December 2007, two days before the press release [1398] and the service agreement and side letter relating to Giancarlo Fisichella, Force India sent Roldan by email an application form for a Super Licence for submission to the FIA with a copy of his track record and a certificate from an observer from the RFEDA who was present at the Jerez test to confirm the number of kilometres he completed at racing speeds during the test. The evidence of José-María Rubio, which I accept is he helped Roldan to submit the application via his national association. It is unnecessary to consider in any detail the progress of that application, which seems to have been dogged by problems of one sort and another; it is however necessary to consider the contribution made by Force India, as evidenced by a number of emails.

85. On 17 December 2007, Ian Phillips emailed [896] Ian Brown (the Head of the Safety Department at FIA) – “As discussed a few weeks ago you will very shortly receive a super licence application from the Spanish ASN for Roldan Rodriguez. For your further information, attached is his lap time comparison with Giancarlo Fisichella at the same test. Please give me a ring when you receive the application from Spain to discuss if it needs to go any further”. The lap time comparisons [898A] showed Giancarlo to be the faster driver. This e-mail raises a number of questions – why should Force India seemingly be offering information in respect of an application which they had not made? Why were they offering information which on its face disadvantaged Roldan? Why were they inviting discussion with the FIA should the application be progressed? Neither Ian Phillips or Ian Brown was called to give evidence but I am satisfied on the balance of probabilities that the only explanation for this e-mail viewed with others and in context is that Force India was determined to frustrate the attempt by Roldan to obtain a Super Licence.

86. On 18 December 2007, Ian Phillips emailed Enrico Zanarini [905] – “Need to talk to you tomorrow … if all goes well with FIA and Thursday night happens as planned, can GF (Giancarlo Fisichella) stay to do some media on Friday?” Six hours later Enrico Zanarini emailed Ian Phillips [906] to ask him what he had in mind for the media “assuming all ok with FIA”. Ian Phillips replied [906] – “I’ll speak to FIA in the morning and see what they think. If it looks good I’ll put you and Lucy (Nell – the press officer) together to discuss what to do”. Asked about these emails, Dr Kolles said Mr Phillips at no time discussed them with him; I found this a curious answer because these emails relate to a driver under contract with Force India and for whom





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Dr Kolles was responsible. My conclusion is these emails are related clearly to the decision to appoint Giancarlo Fisichella to the second seat in the Force India team in place of Roldan and so the question raised is to what event, the phrase “If it looks good” relates? I am satisfied that this email, considered in context, provides further evidence that Force India was frustrating the application for a Super Licence for Roldan.

87. When, on 18 December 2007, Mr Rubio emailed Dr Kolles [908] to tell him that he had been speaking with RFEA who had told him that after speaking to Mr Ian Brown they needed some information from Force India such as the conditions at Jerez in which Roldan had been tested, Dr Kolles forwarded it to Mr Ian Phillips. An email dated 19 December 2007 from Oliver Knighton [914] to Ian Phillips included the laptime summary for Roldan at Jerez with the lap times on grooved tyres of Giancarlo Fisichella added for comparison. Within minutes, Ian Phillips emailed Ian Brown [924] – “The Spaniards have blamed us for not giving you enough information about the test! Please find attached additional documentation which should seal his fate” (my emphasis). That documentation [926/7/8] showed Roldan to have been slower by some 2 seconds than Giancarlo Fisichella at Jerez and the slowest driver by some 5 seconds at Barcelona. Asked about these emails, Dr Kolles said Ian Phillips did not want the application to succeed but he did not know that; he said he could not control Mr Phillips and did not communicate with him unless it was to give him instructions. He said he is “the kind of guy who says things that are out of context or wrong or offend people”. He said he appeared to have been acting on behalf of Force India and maybe he should have emailed him to tell him they were not his instructions. I reject these explanations. I am satisfied Dr Kolles knew precisely what was going on – the organisation at Force India was such it is inconceivable he did not. I have commented earlier in this judgment on the reliability and credibility of Dr Kolles (paragraphs 31, 43(ii) 73 and 74) – my overall impression of him was that he would say anything to avoid accepting any matter adverse to the case for the Claimant or critical of his actions personally; he was not an objective witness and I have concluded he was not a reliable witness.

88. On 19 December 2007, Ian Brown emailed ANS [1007A] – “Following your requests of 14 and 18 December on behalf of the driver Roldan Rodríguez we note that his track record is not compatible with the requirements of Article 5.1(iii) of Annex L and, a priori, do not justify an ‘exceptional’ status. In accordance with Article 5.1 (iii) (h), the Formula One Commission can be consulted in its entirety but, it being understood that the time recorded at the F1 tests of 7 December are lower than the average for the same car”. When ASN informed Roldan of the decision, Mr Rubio asked Dr Kolles [985] on 20 December 2007 for his opinion and asked if he knew of any way to solve the matter. On 21 December 2007, Mr Rubio emailed Dr Kolles again [977] commenting on the unfavourable testing conditions at Jerez for Roldan and saying they were looking at the careers of other drivers who had poorer career results than Roldan before they obtained their Super Licences. Dr Kolles replied [977] – “It’s not in our hands! I am not going to comment on your unrealistic statements, so please stay calm … the reality is that not the test in Jerez or in Barcelona are the cause of this issue, the cause is the previous results where we have no influence, this is what the FIA has told us”. This response provides support for the evidence of Ricardo (paragraph 43(x)) about the breakdown in relations with Force India.





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89. When cross-examined, Mr Kolles said he spoke to Mr Max Mosley “in a friendly and kindly way” to find out if there was any possibility to find a solution and to obtain a Super Licence. Save that this informal approach suggested that there may be ways in F1 for making arrangements behind the scenes, I cannot accept that evidence. In his witness statement, he said he was told by Mr Rubio on 20 December that the ASN was requesting a meeting with the FIA Formula One Commission and on 1 January he asked Mr Ian Phillips to find out what was happening. He stated he chased him the following day as they needed to know the FIA decision prior to the planned announcement of the drivers for the 2008 season planned for 10 January. He stated “I also asked Max Mosley what was happening. I wanted to know if I could help the process along as I needed to know the decision”. There is nothing in his statement to show he made any effort to help Roldan to obtain a Super Licence; the statement is clear – all he was concerned to find out was whether there was any likelihood that the planned announcement of Giancarlo Fisichella and Aidan Sutil as drivers could not go ahead as planned. Consistent with my conclusion is that Force India was no longer interested in Roldan (see paragraph 91 post), it showed no interest in any appeal to the FIA.

90. I am satisfied that the grant of a Super Licence to Roldan would have frustrated Mr Mallya’s plans for Force India as evidenced by the press release of 12 December 2007 [1398/9]. The language of Mr Enrico Zanarini, the manager of Giancarlo Fisichella in his email dated 7 December 2007 [791] to Dr Kolles – “Thank you again for the news and for the trust that you have shown in Giancarlo and his management team. We will not disappoint you ... For the moment, as previously agreed, we will tell no one, but in general we will speak about our positive feed back from the test and our confidence in respect to a possible agreement” – on one reading suggests that Force India was keeping its options open so far as Roldan was concerned but the reference to “the news” is important. Dr Kolles said he had told Mr Zanarini that Giancarlo had done the best job out of the drivers who had been invited; while I approach the evidence of Dr Kolles with caution, there would seem to be no reason to reject this explanation, which, in my judgment, supports the conclusion that there was “a shoot out” at Jerez, which Roldan was unlikely to win.

91. Furthermore, there appears to have been at least one meeting on 12 December between Dr Kolles and Giancarlo Fisichella and his manager [819]; importantly, arrangements were made for a meeting at the Force India offices in Silverstone [899]. Asked about that email from Mr Zanarini, detailing flight times for him and Giancarlo Fisichella from Rome to London on 20 December, Dr Kolles said “The only reason I can think for them coming to London was the Christmas party at Silverstone”; he added he remembered them attending the party, as did Roldan and other drivers. This was untruthful evidence as the email of 20 December [930] in which Mr Zanarini said he had not met up with Dr Kolles established. I am satisfied on the balance of probabilities that the planned meeting did not take place because the result of Roldan’s Super Licence application had not been received – see the email dated 18 December from Ian Phillips to Mr Zanarini [905] “Need to talk to you tomorrow ... if all goes well with FIA and Thursday night (20th) happens as planned, can GF stay to do some media on Friday?”. The email dated 20 December [931] from Ian Phillips to Mr Zanarini provided compelling evidence that Force India had abandoned Roldan. He wrote

“After careful consideration I feel that we should delay the announcement until 11 January.





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The confirmation of Giancarlo as a driver is the strongest and most powerful statement by Vijay that Force India F1 is very serious in its intentions. You too know how this will change the perception of the team not just in Italy and the UK but globally. It is also a massive message to India that we are not here to make up the numbers any more.

If we make an announcement tomorrow, it will get lost. All the UK magazines closed their January 3 issues yesterday.

We need to plan this carefully and orchestrate it so that Vijay sees a real return.

I am investigating using the press day of the Autosport Show on 11 January ...

I hope you understand just how serious an announcement this is for the team and why we must present it in the most professional way we can.”

92. I have concluded that the emails establish that Force India was working towards the FIA decision to refuse Roldan a Super Licence (as it did on 8 January 2008 [951B]) so that the nomination of Giancarlo Fisichella could go ahead at Mumbai on 10 January 2008. On 4 January 2008, in anticipation of that decision, Mr Missling emailed Mr Amando Rodríguez [948], “ ... you are still in breach of contract since you failed to provide us with the bank guarantee ... In addition we understand that Roldan was unable to obtain the Super Licence ... If you should fail to provide us with the bank guarantee as set out in the Sponsorship Agreement by Monday 7th January 2008, 12.00 UK time, we will be forced to terminate the Sponsorship Agreement and the Service Agreement, and to sign another second driver ...” (emphasis added). Mr Missling was not called as a witness to explain this (and his other emails); Dr Kolles said he did not know on what basis he knew Roldan had not been able to obtain a Super Licence but I have concluded that he (Dr Kolles) must have known as well because there is his email dated 2 January [940] to Ian Phillips “Please call Ian Brown on the 7 Jan because we have to know how to act with Rodriguez before the announcement on the 10 Jan”.

93. There is no evidence that Force India was in the least bit interested in Roldan – I accept Ricardo’s evidence that Dr Kolles had deleted Roldan from his agenda and Roldan’s evidence that Mr Missling did not speak to him at Jerez. Indeed Dr Kolles agreed there was no communication with Roldan; he said he tried to reach him (which I doubt) but could not and he had more important things to do (emphasis added). An another instance of Dr Kolles giving contradictory and misleading evidence was his claim in his witness statement that it was announced at the Mumbai event that Roldan was to be the test driver; he agreed when cross-examined that this was wrong and I reject his explanation that he did not know the detail of the press release. Dr Kolles, I am satisfied, knew precisely what was happening. He knew the Service Agreement was still in force and that absent a Super Licence, Roldan was a test driver from 1 January 2008.

94. Mr Mallya gave what I consider were clearly contradictory answers – he said that if Roldan had been given his Super Licence, he would have had the car and he would have got rid of Adrian Sutil; he said that Roldan had to have a licence at the start of the season and it was highly unusual for a driver to obtain his licence in mid-season; but he agreed there could be up to four changes of drivers in the course of a season and so if he obtained his licence during the season he could have driven for Force India under the Service Agreement. He said that if that had happened the Team would have put him in the car and it would have been Giancarlo Fisichella who would have





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been replaced. If that had happened, it would have been an arrangement which flatly contradicted his plans (see above).

95. I have concluded that while it was for Roldan to apply for the Super Licence, that was an application which stood no chance of success without the active support and co-operation of Force India. On the evidence, the inescapable conclusion must be that such support was not provided because Force India no longer wanted him as a driver under the Service Agreement. I reject the submissions of Mr Tregear (paragraph 66) that the obligation on Force India was limited to the provision of the facility to drive 300 kilometres in accordance with the FIA rules and to provide the FIA and the national association with the relevant data. It cannot have been permissible for Force India (with knowledge of the link between the Sponsorship and Service Agreements) to actively frustrate Roldan’s attempts to obtain the Super Licence and then seek to enforce the terms of the Sponsorship Agreement.

96. I reject the Claimant’s submissions that their actions or omissions were not causative of Roldan’s failure to obtain a Super Licence because the FIA did not consider Roldan a suitable candidate for a Super Licence and his application was refused [950/955] not because of his performance at Jerez but because his GP2 results were not considered sufficient. There would be some force in that submission but for the evidence which has satisfied me on the balance of probabilities that the FIA was influenced by the attempts of Force India to sabotage Roldan’s application. In the absence of evidence from the FIA – I observe it is somewhat surprising the Claimant called no witness from the FIA – there is no evidence to explain what effect, if any, the various emails to and from Mr Ian Brown (see paragraphs 85 and 87 above) had on the FIA decision but I agree with the observation of Mr Toledano that common sense dictates that if Force India made it clear it did not want Roldan as a driver, the FIA would be unlikely to consider favourably his application for a Super Licence.

97. The issue, as Mr Toledano submitted, is whether the breaches were material and/or repudiatory and so justified termination of the Sponsorship Agreement. I agree that for a breach to be material, it does not have to be close to repudiatory but needs be serious and so more than trivial or minimal: see Dalkia Utilities Services Plc –v-

Celtech International Ltd [2006] 1 Lloyd’s Rep 599 at paragraph 102, Crosstown

Music Company 1, LLC –v- Rive Droite Music Limited and others [2009] EWHC 600 (Ch) in which, at paragraphs 96/99, Mann J cited both Christopher Clarke J in Gallagher International Ltd –v- Tlias Enterprises Ltd [2008] EWHC 804 (Comm) at paragraph 764 and the dictum of Neuberger J in Phoenix Media Limited –v- Cobweb

Information Unreported, 16 May 2000 that “Materiality involves considering the following: the actual breaches, the consequences of the breaches to [the innocent party]; [the guilty party’s] explanation for the breaches; the breaches in the context of the agreement; the consequences of holding the agreement determined and the consequences of holding the agreement continues”.

98. In my judgment, the breaches were material and amounted to a repudiation of the Sponsorship Agreement. My conclusion is that the events in Barcelona and Jerez must be considered in the wider context of the publicly stated ambitions of Force India and the approaches to Mr Fisichella as early as late October 2007 (see paragraph 46 above). Roldan, because of the record of his GP2 results, had no chance of qualifying for a Super Licence without good test results and to achieve good test results, he needed the active support of Force India; without such support it is not possible to





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decide how realistic his prospects were but he must, at the very least, have had some chance – why else would Spyker have looked to him as an almost immediate replacement for Christijan Albers?

99. I agree with the submission of Mr Toledano that it does not lie in the mouth of a party which has taken active steps to ‘sabotage’ or frustrate the application in breach of its contractual duty to use its best endeavours or to co-operate, to say that the FIA is an independent body and would have been uninfluenced by anything said or done by the Claimant – if that may be so, why did the Claimant try to influence the FIA in the first place?

100. In my judgment, and for the reasons I have set out at some length, there were clear breaches by the Claimants of its positive duty to use its best endeavours to assist Roldan to obtain a Super Licence or to cooperate in the making of the Super Licence application (the Super Licence breach). There were the Test Driver and Fisichella breaches also; it is unnecessary to say any more than this – those breaches are established by the history of the dealings between the parties, in the case of the Test Driver breach in paragraphs 72-81 above and in the case of the Fisichella breach by the concurrent dealings between Force India and Mr Fisichella at the very time of the Super Licence breach. I am satisfied that once the decision was made to appoint Mr Fisichella as the second driver, Force India, for all practical purposes, could no longer support Roldan and effectively abandoned him (see paragraphs 84-94 above). The appointment of Mr Fisichella under a Service Agreement which made no provision for termination in the event of Roldan obtaining a Super Licence during the currency of his Service Agreement provides clear evidence that Force India would achieve nothing by helping Roldan to obtain a Super Licence and so of the anticipatory breach.

Waiver

101. The law in relation to waiver is to be found in the opinion of Lord Goff in The

Kanchenjunga [1990] 1 Lloyd’s Rep 391 at 398/399. Mr Tregear submitted, and I agree, that the elements of the principle were summarised concisely by Aikens LJ in Tele2 International Card Company SA –v- Post Office Limited [2009] EWCA Civ 9 – “(1) if a contract gives a party a right to terminate on the occurrence of defined actions or inactions of the other party and those actions or inactions occur, the innocent party is entitled to exercise that right. The innocent party has to decide whether or not to do so. Its decision is in law an election (2) It is a prerequisite to the exercise of the election that the party concerned is aware of the facts giving rise to its right and the right itself (3) the innocent party has to make a decision, because if it does not do so then ‘the time may come when the law takes the decision out of [its] hands, either by holding [it] not to have elected the right which has become available to {it] or sometimes by holding it to have exercised it’ (4) Where with knowledge of the relevant facts, the party that has the right to terminate the contract acts in a manner which is consistent only with it having chosen one or other of two alternative and inconsistent rights open to it (i.e. to terminate or affirm the contract) then it will be held to have made its election accordingly (5) An election can be communicated to the other party by words or conduct. However, in cases where it is alleged that a party has elected not to exercise a right, such a right not to terminate a contract on the happening of defined events, it will only be held to have elected not to exercise that





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right if the party ‘has so communicated [its] election to the other party in clear and unequivocal terms”.

102. Mr Tregear submitted the email dated 14 December 2007 [834] from Mr Amando Rodríguez to Mr Patrick Missling constitutes a waiver of any breaches there had been in respect of the test drives. It reads – “As I told you, I have had some difficulties with the bank guarantee. However, as of this date we have pay 3,000,000 euros, and we will keep on facing the payments on the scheduled days, as accorded. Therefore, after the payments we have done, the outstanding bills that would be covered with the guarantee would be only 1,100,000 euros, that I will pay on the accorded dates. Note as well that we have not had any spaces in the car yet, and that there have been some delays in other pilots about closing their future. This is why we have not received any financing of our sponsors. The negotiations are done and we will have the support of Spanish institutions. We have accepted as well, despite not understanding it (specially Roldan), all the changes that had happened in the tests done. We had agreed to make all the tests at Barcelona and Jerez, and we finally did only one day each. And not only this, at Jerez we didn’t have new wheels to allow Roldan make his work as better as possible. Therefore, up to date, we have paid 3,000,000 euros for two days of tests, one of them without new wheels. and without spaces in the car. I think I am honouring all the circumstances”. It was submitted there could not be a more unequivocal statement by the Defendant to the Claimant that the defendant would not rely on any complaint about the testing and wanted the agreement to continue. It was submitted that as the renunciation letter [1043] made clear the intention of the defendant not to be bound by the Sponsorship Agreement so the claimant was entitled to treat itself as discharged from its own obligations.

103. Mr Toledano relied upon the dictum of Moore-Bick J in Yukong Line Limited of

Korea –v- Rendsburg Investments Corporation of Liberia [1996] 2 Lloyd’s Rep 604 at 607 setting out a number of undisputed principles as regards the law on waiver of which principles 6 and 7 are relevant as far as affirmation is concerned:

“(6) The injured party will not be treated as having elected to affirm the contract in the face of the renunciation unless it can be shown that he knew of the facts giving rise to his right to treat the contract as discharged and of his right to choose between affirming the contract and treating it as discharged

(7)A binding election requires the injured party to communicate his choice to the other party in clear and unequivocal terms. In particular, he will not be held bound by a qualified or conditional decision”

104. Mr Toledano submitted the wording of the email does not amount to an unequivocal waiver and this was confirmed by Mr Amando Rodriguez when he said in evidence that he was unhappy with Force India’s conduct at the tests and of their treatment of Roldan. Mr Toledano relied also on the reaction of Dr Kolles, as evidenced by his forwarding of the email to Supergenco, with a request that they speak to Adrián Campos to find out what the problem with the “wheels” was about. Mr Toledano argued that such an enquiry would be unnecessary if Dr Kolles read the emails as a waiver.

105. I agree that Force India’s case on waiver must be rejected. The history (see above) demonstrates that had Mr Amando Rodriguez suspected there was a prospect that Roldan would not be issued with a Super Licence, he would have repudiated the Sponsorship Agreement there and then but the email was sent on the very day that Roldan applied for the licence [892] and I am satisfied that although by then Mr





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Amando Rodriguez was concerned (because of the conduct of Force India) that a Super Licence may not be issued, he had not given up hope. The email was not an unequivocal election; rather it was, I have concluded, no more than an acceptance that the Super Licence application would have to be made without the benefit of full co-operation during the tests.

Relief

106. (i) I am satisfied on the balance of probabilities that Mr Amando Rodríguez was entitled to terminate the Sponsorship Agreement and that he is entitled to a declaration to that effect.

(ii) On behalf of the Claimants it was submitted that the Defendant had been provided with advertising spaces and all rights under the Sponsorship Agreement for 5 months and so there had not been a total failure of consideration – that submission fails on the ground that by the date of Mr Rodriguez’s 18 January letter, the 2008 season had not started and no advertising space had been sold. It was submitted that as the Claimant had provided test driving at Silverstone, Barcelona and Jerez, it had incurred significant expenditure in the performance of its obligations under the Service Agreement – the evidence is that the cost works out at about £2,000 per kilometre and so the entire cost was some £1 million – the parties cannot be put back in precisely the same position as they were in prior to the contract. While Mr Tregear accepted that pursuant to the doctrine set out in Erlanger –v- New Sombrero

Phosphate Co (1878) 3 App Cas 1218 at 1278/79, equity allows the court to make allowances for deterioration or provides for the taking of an account to do what is ‘practically just’ between the parties, it was submitted such flexibility does not extend to cases in which the benefit conferred is, by its nature, one that cannot be restored and this applies in particular where the benefit was the receipt of services. But, as Mr Toledano submitted, a total failure of consideration may occur even though the payee has incurred expense in partly performing his part of the contract; this is because redress depends upon the benefit conferred and not the detriment incurred. In any event, as I am satisfied that it was the deliberate breaches of the Claimants before, at and after the test drives at Barcelona and Jerez which entitled Mr Amando Rodríguez to terminate the agreement, I know of no authority which would permit the Claimants to rely upon that expenditure when defending a claim for rescission for misrepresentation.

(iii) It follows that the Defendant is entitled to a declaration that he validly rescinded and/or terminated to Sponsorship Agreement, the Claimant is not entitled to the payment of €9 million under the agreement and the Defendant is entitled to the return of €3 million, whether on the grounds of misrepresentation or for breaches of the implied terms – subject to the issue of restitutio in integrum it was not suggested otherwise on behalf of the Claimant.