David Haines' Version
(These affidavits are available in PDF only)
MR. DAVID HAINES, SWORN
EXAMINED BY MR. ALDOUS
Q. Mr. Haines, would you be given bundle B. Turn, if you would,
first, to tab 6. Do you have there a 41-page witness
statement, signed by you on 18th December last?
A. I do.
Q. Are there any matters in that statement you wish to correct
before confirming its contents as true?
A. No, none.
Q. Would you turn to tab 17, please. Do you have there a
14-page witness statement signed by you on 14th February this
year?
A. Yes.
Q. Again, are there any matters in that statement you wish to
correct before confirming its contents as true?
A. No, none.
MR. ALDOUS: Would you wait there, and you will have questions
put to you.
CROSS-EXAMINED BY MR. BOYLE
Q. Good morning.
A. Good morning.
Q. Can we go back to the time when you were recruited to work
for Vodafone. Is it correct you were recruited by Sir
Christopher Gent, Mr. Horn-Smith and Mr. Geitner?
A. They were part of a longer process, yes.
Q. Were you interviewed by them for that job?
A. At the end of that process, the very end -- there were a lot
of other people involved early on, but at the very end, yes.
Q. And did they tell you what they wanted to achieve for
Vodafone?
A. No. Well, Mr. Geitner did during the process. That was the
kind of conversation I had with Mr. Geitner. The
conversations with Sir Christopher and with Mr. Horn-Smith
were much more, I think, them trying to find out about me, to
be honest.
Q. What did Mr. Geitner tell you that Vodafone wanted to
achieve?
A. The objective of my job, if you like, was to turn what were a
number of disparate brands, different brands in different
markets with different names, into one single brand --
Vodafone everywhere -- and to try to turn that into one of
what we called at the time, the world's top 10 brands in a
matter of years, or within a period of a matter of years.
Q. Were you given a timescale for that exercise?
A. It was not a specific timescale. No one said it had to be
done by then and then. I think the understanding I had with
Mr. Geitner was about three to four years to do that task.
Q. Was this a post that was specifically created for you?
A. I do not think post was specifically createded for me. I
think the post was specifically created, and then there was a
recruitment process, that Vodafone tried to find the right
candidat.
Q. So there was no global brand director before you.
A. No, no. I was the first; I was the first.
Q. And was sports sponsorship discussed in the recruitment
process?
A. No, not that I recall.
Q. Did you actually start work on 1st January?
A. Yes, I did. No, sorry, sorry, excuse me. I started work on
1st December 2000.
Q. And were you attending the Dusseldorf office every day from
that date?
A. I am not sure I was actually in the Dusseldorf office every
day from that day, but I was employed. I had a formal -- if
you like, started my -- contract from that day on. I
couldn't say I was actually in the Dusseldorf office. I may
have been in other Vodafone locations from 1st December 2000.
Q. You refer in your statement to attending a meeting of the
Brand Steering Committee in late November or December. Can
we just try and work out which that was. Go to bundle C1 and
go to tab 14B, page 290B.
A. A slight logistic hang-up. The file is actually broken.
Q. Have you got open an agenda for the Global Brand Steering
Committee of 30th November 2000?
A. I have.
Q. The item at 5.15, "Any other business", is sponsorship with
the initials TG.
A. Yes.
Q. Which presumably stands for Mr. Geitner?
A. Yes.
Q. Do you think that could have been the meeting ----
A. I think.
Q. ---- which you recall?
A. I think that is very likely, yes.
Q. Just to be clear, was the view or consensus of the Global
Brand Steering Committee at that meeting that the potential
of a Formula 1 sponsorship should be explored?
A. Yes. If that is the meeting to which I am referring, which I
think it is, I think that was the general consensus, yes.
Q. Take bundle C2, tab 15B. You should have it open at page
323H.
A. Yes.
Q. This is the agenda for a meeting of the Global Brand Steering
Committee on 20th December. There are two items that have
your initials. One is "Phase 2 roaming programme sub
branding and naming" and the other is "Phase 3 creative
brief". Do you still think it was the earlier meeting where
this discussion about Formula 1 took place?
A. Well, I know those two items do not refer to Formula 1 or
sponsorship; so from the agenda, I think it's fair to assume
that was the case. I suspect under AOB, we see it at
1 o'clock ----
Q. Yes.
A. ---- sponsorship, a verbal update, someone would have had two
or three words on sponsorship, given that it was a topic that
people were interested in. To be honest, I am not 100% sure
which of the two it was.
Q. Would it be fair to say the Global Brand Steering Committee
was a sort of sounding board for opinion within the company?
A. Slightly more than a sounding board. It was to get the
opinion of our colleagues, to make sure we had buying; so
that if something was then subsequently implemented, the
actual markets would do it. The danger that you agree
something in a meeting and they would not.
Q. Could you explain what phase 1, phase 2, and phase 3 are in
that agenda?
A. Yes. As I explained earlier, we were trying to take
different brand names to a Vodafone brand and we worked out a
four-stage process. Phase 1 was when, say, in Germany the
original German brand, which was called D2, had a big logo
and there was a small Vodafone basically saying, "We are
introducing Vodafone." D2 was introducing Vodafone. Phase 2
had the same logo, but then there were specific products
which came from Vodafone. It was a gentle introduction to
the consumer. Phase 3 was a flip of those logos, so a big
Vodafone and a small D2, once people had kind of got used to
it. That was, if you like, the framework that we put behind
the migration.
Q. And phase 4?
A. Phase 4 would be the removal of any reference to D2, where it
would just purely be single brand Vodafone.
Q. So this was specific to D2, was it?
A. No, no, no. I have explained it using the example of one
company but it was actually a framework that applied to all
of the markets which were migrating to the single Vodafone
brand.
Q. Had you yourself had experience of Formula 1 before you
joined Vodafone?
A. Business experience, no. I had been to one or two races.
Q. Was it a sport you actually had quite an interest in from a
leisure point of view?
A. Yes. I used watch the races on television.
Q. And you went to Grand Prixes from time to time?
A. I had been to, if I am not mistaken, three previously.
Q. And had you had experience at your previous employments of
sports sponsorship?
A. Mars were involved in the Olympics. I personally was not
managing that project, but I had been, if you like, within
the company, the recipient of the things that went on.
Coca-Cola were quite heavily into sports sponsorships - once
again, a recipient involved in one or two activities.
Q. When you started to work for Vodafone, in which office were
you based?
A. In the Dusseldorf office.
Q. And you had your own office and a secretary there, did you?
A. Not immediately, as it was a start-up. It was a new
organisation. I think my PA arrived in January, if I am not
mistaken, and I think I had an office from about the middle
of December.
Q. Did you also have an office in Newbury?
A. No. There was no office in Newbury. We used to use what was
called a visitors' space.
Q. But you had to go and visit Newbury quite frequently, did
you?
A. Yes. I was in Newbury quite a lot - throughout.
Q. And what happened at Newbury in terms of the company's
organisation as compared with Dusseldorf?
A. I am not sure I understand the question, sorry.
Q. What functions of the company would be performed in Newbury -
just briefly?
A. Of the overall company?
Q. Yes.
A. The main functions of the company were in Newbury.
Q. So that was the head office, was it?
A. Absolutely, yes.
Q. So why was your job based in Dusseldorf?
A. I think a couple of reasons. One, my boss was based in
Dusseldorf -- Thomas Geitner, who you met last week -- and
the organisation that he was responsible for was therefore
based in Germany. Number two, we had an awful lot of office
space in Germany, which we had acquired also through the
Mannesman takeover. I think the company had made commitments
to the civic community in Dusseldorf to keep a certain amount
of so-called "central functions" there. There was a personal
point - my wife is German and I lived there.
Q. Now, in terms of running your life and your working methods,
did you keep a diary?
A. Yes.
Q. And was that an electronic diary?
A. Yes.
Q. Was that maintained on a computer in your office in
Dusseldorf?
A. Yes.
Q. And did you have access to that diary remotely?
A. In the early days, we had some difficulties with remote
access. In fact, we still have some difficulties with remote
access.
Q. But is that how you would run your diary, by remote access
when you were there or not?
A. No. I would take paper copies. When my PA arrived, she
would give me a folder with my tickets, and what I was meant
to be doing; and any updates would then happen over the
phone.
Q. And did you keep a personal diary as well?
A. No. I would note down on individual bits of paper for the
day any changes.
Q. And what happened to those pieces of paper?
A. They were destroyed. Whenever I went back, I would give my
expenses back to my PA, and those bits of paper would be
destroyed. They were just individual bits of paper like
this.
Q. And when you went to meetings, did you take notes?
A. Often not. I used to try and do it through the electronic
system.
Q. You mean you took notes through the electronic system?
A. No, no, I would write down on a bit of paper various bits of
things for me to do and they would go into the electronic
system. In the calendar there is a "to do" list.
Q. That is in Microsoft Outlook, is it?
A. That is correct.
Q. So those notes, you say you took on pieces of paper, but then
the pieces of paper would be destroyed when the note had been
incorporated into the electronic system; is that correct?
A. Correct.
Q. And is that how you still run your system?
A. More or less, yes.
Q. Is it run in conjunction under Microsoft Outlook with an
agenda as well, which keeps you up to date with sort of a
running record, not a diary as such, but the running of
record of tasks?
A. No.
Q. Do you use that function?
A. No. Actually, these days I tend to take some notes again
because it did not really work.
Q. Did you have a laptop as well?
A. Yes.
Q. And did you run Microsoft Outlook on your laptop?
A. Yes.
Q. And did you take notes into that?
A. No. No, no, I used to write them on a bit of paper.
Q. And how would they be incorporated into the Outlook system
based in Dusseldorf?
A. When I went back to Dusseldorf.
Q. You would give them to your PA to do?
A. Yes. Either she or I would put them into the "to do" list.
Q. Do your notes and "to do" list still exist on your Microsoft
Outlook system?
A. I think we have declared everything that is on the system.
I think they get deleted after a certain time.
Q. What about e-mail; did you use e-mail?
A. A lot, yes.
Q. Could you collect your e-mails remotely on your laptop?
A. Not in the period governing these discussions that we were
having.
Q. So when you were away from the office, what did you do about
receiving your e-mails?
A. I would get basically either paper copies or I would have to
wait till I got back to the office.
Q. Did you send e-mails as well?
A. Yes.
Q. Would it surprise you that in the period we are considering
in this case, which roughly speaking goes from 1st January
to, say, the end of May 2001, there is not a single document
authored by you in the bundles?
A. That does surprise me. They must have been deleted. I used
to delete my e-mails regularly when I was back in the office
because there were so many.
Q. You deleted your e-mails, did you?
A. Absolutely. I used to keep mainly big presentations as the
record of the big decisions we made. I used to delete my
e-mails frequently.
Q. So you deleted received e-mails or sent e-mails, or both?
A. There is a button that you can delete all received/sent in
Outlook and I used to clear it out as often as I could.
Q. Would it be fair to say that your main method of
communication was by e-mail?
A. No, that would not be fair.
Q. Your main method of written communication?
A. Actually, I used to receive a lot of presentations by post as
well, but it was probably fifty-fifty.
Q. But you were not a great letter writer, were you?
A. No, I am not.
Q. So if you needed to communicate something, you would send an
e-mail?
A. If I had to send it in a written form, yes. I tended to make
phone calls.
Q. How many e-mails on average would you receive per day?
A. I do not know. A dozen.
Q. And how many would you write per day?
A. One or two.
Q. Do you think you wrote e-mails in connection with the
Formula 1 sponsorship project?
A. I do not recall any. The main method of my communication was
by telephone.
Q. We know that you attended a meeting with McLaren -- sorry,
just before I go on to that, have you still got bundle C1
open? Go to divider 14. At page 151 you will find a letter
to Tim Brown which encloses a Formula 1 research data report
and the report itself begins at page 153. It is a
substantial document consisting of about 125 or more pages.
Do you remember reading that document?
A. Not in November, I do not.
Q. Do you remember when you first saw it?
A. I think it was some time in the spring, so after the
Christmas break 2001.
Q. You mean January?
A. No, I do not think it was January; I think it was later.
Q. Were you aware that a very substantial report on Formula 1
research had been commissioned by Vodafone?
A. No, I was not aware early on that it had been done.
Q. But you had dealings with Tim Brown to whom this was
addressed, did you not?
A. Correct.
Q. Would this not be an important piece of information for you
in considering Formula 1?
A. Yes, it would.
Q. It is a very detailed report on the sort of coverage that you
can get from sponsorship of a Formula 1 team. Is that not
the sort of information it would be necessary for you to
have, if it existed within the company?
A. It would.
Q. In what month do you think you first saw this report?
A. I think I first saw it at about the end of February.
Q. Did you then take a close interest in it?
A. I knew by that stage that Mr. Harris was coming on board and
this was his area of expertise.
Q. Did you take a close interest in it?
A. No, I did not.
Q. If you just look at page 158, there is a heading "Formula One
Promotes Brand Value." Given that you were the global brand
director with the responsibilities you have mentioned, was
that not something you would have been interested to read
about? I think you were nodding; is that a yes?
A. Sorry, yes.
Q. When you saw the report in late February, did you read it?
A. I did not read all of it, no. I probably glanced through it
and looked at some of the headlines.
Q. If you turn on to 14A, page 290A, there is one page of a
report which appears to be by Periscope. Did you know who
Periscope were?
A. No, I do not.
Q. It says "Periscope for Springpoint". Do you know who
Springpoint were?
A. Yes, I do.
Q. Who were Springpoint?
A. Springpoint were an agency that had been involved with the
brand migration up until then that Vodafone had employed.
So they were acting on Vodafone's behalf.
Q. Did you have dealings with Springpoint?
A. Yes, I did.
Q. Did that have anything to do with Formula 1 sponsorship?
A. No. Springpoint were engaged with these four stages that we
talked about earlier - stage 1, stage 2, stage 3, stage 4.
I do not recall them being involved with the Formula 1
sponsorship at all. They knew of our sponsorship programmes
that we had in the company, but I do not recall them being
involved with Formula 1.
Q. You can put bundle C away for the moment. I have been asked
if you would not mind keeping your voice up because the
shorthand writer is having a little difficulty hearing some
of your answers?
A. Sorry, of course.
Q. We have seen that you attended a meeting with McLaren on
15th January 2001. That is right, is it not? That was a
meeting with Mr. Sami?
A. That is the meeting that is in my diary?
Q. You referred to it in your witness statement that you have
confirmed the truth of.
A. Yes.
Q. It may be that there is a diary entry as well. Do you want
to see your diary?
A. No, that is fine.
Q. It is bundle C10, tab 77, page 2132. Is there an entry for
15th January that relates to a meeting with McLaren?
A. No, there is not, so far as I can see; but I remember
actually, through the pickup of the car, seeing McLaren that
day.
Q. This was a meeting at Woking, was it not?
A. Yes.
Q. You went with Tim Brown, who had been dealing with the
proposal for sponsorship of McLaren for the 2001 season?
A. Yes.
Q. You met Ron Dennis, the team principal?
A. Yes.
Q. And Ekrem Sami, who was the managing director?
A. Yes.
Q. Was a presentation made to you at that meeting?
A. As best I can recall, yes.
Q. If you have bundle C2 there, there is one at tab 18 and there
is one at tab 15. The one at tab 18 is dated January 2001.
Would you like to just have a quick look and see if you can
identify it for us. Is that the one?
A. I think that's the one, the January.
Q. The January one. If you turn to page 350, under "Image
Branding," there is a description of what they were offering.
Do you remember in general terms it was really related to the
driver and very small exposure on the car?
A. I remember that yes.
Q. Did they quote financial terms for that?
A. I do not recall specifically financial terms, but I remember
we did have numbers from McLaren.
Q. Did you explain to Mr. Sami that you wanted to make Vodafone
one of the top ten global brands?
A. Certainly.
Q. Did you think that McLaren's proposals could possibly deliver
that?
A. I thought at the time that the McLaren proposal was not
sufficient to help us do that and it was only one proposal
that we had on the table, and that to make an informed choice
we would need a number of others.
Q. The exposure they were offering was very small, was it not?
A. It was.
Q. If you had gone forward with a deal of that sort, it could
not possibly have delivered the sort of global impact that
you were trying to achieve for Vodafone?
A. It would depend in the end on our strategy. My issue there
was far more one of not being rushed into anything than
anything else, and in fact, the impact was limited.
Q. Was this the first meeting you had had with any Formula 1
team?
A. I think so, yes.
Q. If you could take bundle B, I will just show you what
Mr. Sami has said in his witness statement about this. It is
tab 9, page 137. In paragraph 17 he says: "David laid out
in that meeting some of the parameters for what he would want
in a partnership. He told us what his brief from the
Vodafone board was in terms of what he had to achieve from
the perspective of the brand.
"His mission, as I understood it, was to help make
Vodafone a household brand, with equal recognition to
Coca-Cola to within, I think, a three-year timescale."
Did you tell McLaren that that was your brief from the
Vodafone board?
A. I recall saying that we were trying to make Vodafone a
household name and a global brand. The timescale seems
correct, yes.
Q. Did you tell McLaren that that was your brief from the
Vodafone board?
A. I do not recall saying that.
Q. If you look at 19: "What was obvious there that meeting was
that a strip on the visor of Mika Hakkinen and
David Coulthard was not going to achieve Vodafone's
objective." Would that be fair?
A. I think that would be fair as regards to the team element,
yes.
Q. You can put bundle B away again for the moment. If you would
now go in bundle C2 to tab 17, do you see a letter of 19th
January from McLaren at page 328?
A. I do.
Q. He then encloses three earlier presentations. Did you
receive those presentations at that time?
A. I think we must have, if it says so in the letter.
Q. Yes, it has got a date stamp ----
A. Yes.
Q. --- of your secretary. She would put a stamp on incoming
mail?
A. Absolutely, yes.
Q. Can I just draw your attention to where it says December
2000.
A. Yes.
Q. "Our response following discussions with Vodafone after the
decision by Vodafone not to progress with the major levels in
branding/investment proposed in the October 2000 document."
Did you understand that Vodafone had actually rejected the
idea of investing at major levels and had gone for a much
smaller proposal?
A. From the document it seems like that.
Q. You had arranged to have a another meeting with them, had
you?
A. Yes, I had.
Q. So that was your first Formula 1 meeting. Then, on
17th January you went to see Ferrari.
A. That is correct.
Q. You have your diary ----
A. I recall that meeting.
Q. This one is mentioned in your diary, because it has got the
travel details to Milan, and so forth. Did you ascertain at
that meeting that Ferrari could not offer title sponsorship?
A. Yes. It was well-known that Ferrari could not offer title,
although there had been a rumour that they might be able to.
Q. But you were told, were you, that there might be some
secondary space available on the car?
A. We were told that there was an opportunity to be one of three
major partners and that Vodafone could take one of those, if
you like, packages.
Q. That was just another exploratory meeting rather like
McLaren, was it?
A. Yes, but the Brand Steering Committee had been very keen on
Ferrari from the outset, so there was, if you like, more
anticipation and excitement around that meeting. That is why
I went with Mr. Colao to that meeting, who is the CEO of our
Italian subsidiary and a very senior person within Vodafone.
Q. Did you at this point start to discuss the Formula 1 project
with Peter Harris?
A. Yes. I had spoken to Peter about F1 quite early on.
Q. He was not yet employed by Vodafone?
A. No, he was not.
Q. Who was he employed by?
A. By Coca-Cola.
Q. You had known him working in Coca-Cola?
A. He had worked for me at Coca-Cola.
Q. Had you discussed, by this time, in the middle of January,
recruiting Mr. Harris to help you?
A. Yes.
Q. And had that, in effect, been approved by Mr. Geitner?
A. Yes, it had; the previous year.
Q. Could you look at C2, tab 16. This is a memorandum from
Peter Harris to you on the subject of Ferrari. It is the day
after your first meeting with Ferrari. Was this prepared at
your request?
A. I think it was. I think I asked Peter for his thoughts.
Q. And do you see he attaches a list of rights that could be
acquired from Ferrari?
A. Yes.
Q. If you go to page 326, there is a heading "PROPOSED RIGHTS".
Do you see that?
A. Yes.
Q. And he says: "Term. 3 year deal with option for additional
2 years. 2. Title Sponsorship. 'Ferrari/Vodafone Team'
(Ideal but probably not available)". Did you read that at
the time?
A. Yes, I did.
Q. Did you understand from that, that Mr. Harris's view was that
the ideal situation would be to obtain title rights?
A. Yes, absolutely.
Q. And was that your view as well?
A. Given that we were trying to get maximum, if you like, media
exposure, that would have been the ideal.
Q. And if you look over the page, at page 327, "Branding".
"Prominent lead branding on Ferrari". Was that also how you
saw it, that you should try to obtain prominent lead branding
on the car?
A. Certainly try and get prominent branding, yes.
Q. Just looking back to page 324, there is a swot analysis.
Do you see where it says "very high cost of entry", under
"Weaknesses"?
A. I do.
Q. Had you got a perception of how much it would cost Vodafone
to become the title sponsor of Ferrari?
A. I do not think we had at that stage. I think it was a
perception more than based on a number that anything with
Ferrari, probably based on the numbers we had heard from
McLaren, would be very expensive; and, frankly, using common
sense, they are the number one team in the world.
Q. He also identifies as a weakness association with a tobacco
sponsor, Marlboro. Did you think that was a weakness?
A. I did at the time, yes.
Q. Can we come on to the instruction of Brown. Was this
something that happened through Peter Dart?
A. It was.
Q. Was Peter Dart at that time a long-standing personal friend
of yours?
A. I had worked with Peter for many years and over the years we
had become friends, yes.
Q. So was he the person you first spoke to with a view to
bringing Brown into the project?
A. Either him or David Wheldon, who was my primary contact at
Tempus.
Q. Peter Harris has not yet joined Vodafone and is not going to
do so for some time. In terms of the Formula 1 project, did
you have any backup or people you could turn to within
Vodafone in January 2001?
A. No, I did not.
Q. So you were completely on your own, were you?
A. I was.
Q. There was no department within Vodafone which dealt with
sports sponsorship or matters of that sort?
A. The department that had previously dealt with sports
sponsorship were the corporate communications group, the
group run by Mr. Tim Brown, but there had been a decision
that it would move into our area. I think when I was
recruited in December/January there was a handover. That was
that handover meeting at McLaren.
Q. So you were the only senior executive really dealing on a
day-to-day basis with the Formula 1 project, is that right?
A. Early on, yes, which is why we went out to recruit
Mr. Harris.
Q. And Mr. Geitner, who was your boss, was someone who was sort
of a marketing man, if I can put it that way; is that right?
A. He was my boss.
Q. Yes, but he was not a marketing man, was he?
A. No, he does not have a marketing background.
Q. So you were brought in as the marketing expert to lead the
global branding project, were you not?
A. I was brought in to do that, yes.
Q. And it had become clear by January 2001 that the Formula 1
project was going to be a major part of that exercise?
A. I do not think it was clear by the end of January it was
going to be a major part. We had agreed to go on a journey
to look at the options available. I do not think it became
clear that it would be a major part until some time later in
the year.
Q. What was your own view in January 2001 as to the attraction
of Formula 1 as a means of making a big global splash for the
Vodafone brand?
A. My view was that Formula 1, of all the sports sponsorship
available, was the most interesting, given the facts that
were available to us at the time. I was not an expert on
Formula 1 and therefore needed to go on a learning journey.
That was my view, that we needed to understand more, get some
facts to make a fact-based decision, which is what we went
about doing during those early months, to go on a window
shopping tour to get the facts.
Q. Do you recall meeting Mr. Perring on 19th January, the day
after the memo from Mr. Harris we were just looking at?
A. I recall meeting Mr. Perring mid-January.
Q. What was the purpose of that meeting?
A. Mr. Dart had said to me that he had someone in his
organisation, Mr. Perring, with Formula 1 experience.
Q. Mr. Dart told you he had Formula 1 experience?
A. He did. Sports sponsorship and Formula 1 experience.
Q. Was the purpose of the 19th January meeting to discuss how to
carry forward the Formula 1 sponsorship project?
A. I think the purpose was just to say how can we take this
project forward like on our learning journey and ascertain
the facts.
Q. Was there a discussion at that meeting of what Vodafone's
criteria were for Formula 1 sponsorship?
A. I think there was, yes.
Q. And what can you recall of that discussion?
A. First of all, I do not think they were so much Vodafone's
criteria as more my criteria. I think the criteria I was
interested in at the time was to get -- there were about
three, if I am not mistaken. The first one was to get
maximum media exposure for the brand; so to get as many
people to see it on TV as possible. The second one was to
get a commercial venture together, to get some pay-back.
And the third one was to get buy in from our operating
companies, who at the end of the day were going to have to
pay for this.
Q. Can you just take bundle B, at tab 25, and go to page 223.
This is part of Mr. Perring's witness statement. In 2.5, he
says: "This migration to globalise the Vodafone brand was
David Haines' raison d'etre." I take it you would agree with
that?
A. I think that is slightly overstating it.
Q. Your main function in your working life?
A. I think that is probably a better description, to be honest.
Q. "His view and that of Vodafone was that 'owning' an F1 team
was the means to achieve this objective". Is that correct?
A. No, I do not think that is correct. I think what I was after
was media exposure, which you can measure in a very
fact-based manner. That was, if you like, my primary
consideration. That, in my mind, I translated in the early
days to getting as close to what was called "maximum
branding" on a car or team as possible. I do not recall a
specific discussion about owning a team.
Q. He goes on in the last sentence: "He now wanted to assess
what current opportunities were available for title
sponsorship for the 2002 season and onwards." Is that true?
A. I do not recall just focusing on title. Obviously the closer
you could get to title, the more you would have of a car.
So that was, if you like, the best state to have.
Q. If you look at the next paragraph, he says that you explained
that there were three essential criteria, and he sets them
out - title sponsorship not secondary sponsorship so that
Vodafone could achieve perceived ownership; dominant Vodafone
branding on the car; and no association with tobacco.
Is that true?
A. As I said, I do not recall the absolute emphasis on title.
I think by this stage I had already been to see Ferrari and
knew there was a pretty good secondary package available --
sorry, a partner package. To the second point, yes, I was
keen to get branding on the car as much as possible.
The more the better was my simple thinking process at the
time. I had a personal feeling about tobacco. That was very
much a personal point. At that stage I did not really want
the brand to be associated with tobacco, in those early days.
Q. Which you would be if you went as secondary sponsor with
Ferrari?
A. Which it would have been.
Q. Because Marlboro were the title sponsor?
A. Correct.
Q. If you look at the top of the next page, did you explain that
you had a budget of around $200 million for a three-year
term?
A. No, I did not. I have no recollection of saying that
whatsoever. I am just checking the date. We may have talked
about how much it might cost, but I did not have a budget.
Q. Would you just read through paragraph 2.7 to yourself?
(Pause for reading) Did you ask Mr. Perring to put together
a team?
A. I think Mr. Perring offered. I am just reading, if I may.
(Pause for reading) I think Mr. Perring offered to put
together a team. That is the way agencies work.
Q. Did he come back and tell you, after a break, that he had
started contacting people?
A. I do not recall that specifically.
Q. And he also says, if you look at 2.8, that in that second
meeting, he would arrange a brainstorming meeting to come up
with ideas and proposals?
A. I do not remember if it was actually at that level, but I do
specifically remember the setting up of a Brian storming
meeting.
Q. And the purpose of that meeting would be to generate ideas
for Vodafone's benefit.
A. Yes. There was a product that Tempus had, which they called
the idea generator. It is one of the things they try to
sell, where they get people together in a specific room.
They have a specific building for it. So what he was doing
was selling me one of his standard Tempus projects, to get
people around brainstorming for a few hours and they come up
with a list -- Post-its on the wall -- of things. These are
some ideas. It is a classic brainstorming session, which
I thought could do not any harm.
Q. Did you say anything to Mr. Perring about the way in which
Vodafone would actually process a decision?
A. I think at that stage, probably not. It was not clear how we
would get to a decision at that very early stage. That
became much clearer later on because we were there at that
stage simply on a learning journey. We were nowhere near any
kind of decision. We were at the phase of, well, at the
time, we called it "window shopping".
Q. Did you know that there was a season for renewal of or making
of sponsorship contracts in Formula 1?
A. No, no.
Q. I think Mr. Perring says that that was discussed, if you look
at 2.10.
A. I am sorry ----
Q. I will just read it to you.
A. Sure.
Q. "It was also recognised that there was a certain amount of
urgency in selecting a team as this was the time when teams
would be negotiating current sponsors where options may be
exercise and new sponsors for the 2002 season. This could
impact on the choice available to Vodafone." Was that
discussed?
A. Not that I recall. I mean, I do not recall urgency at all.
The very fact that the board decided at some stage not to go
with McLaren was to give us a whole year to sort this out, so
I dispute urgency.
Q. Because he says: "Vodafone set a tight timetable." Is that
not true?
A. I do not think it's true, no.
Q. Do you remember hearing the outcome of the brainstorming
meeting?
A. Not specifically, but I have seen in the documents that I was
sent a note. I do not recall a specific conversation. That
is my point.
Q. Did Mr. Perring not come back and see you on 31st January?
A. He may have done. I do not remember a specific meeting.
Q. You do not remember that? You do not remember that meeting
with him on 31st January?
A. I cannot remember the specifics.
Q. You have told the court that you were, in a sense, on your
own and there was no one within Vodafone who could carry this
forward with you and, therefore, you were going to be reliant
on such help as Mr. Harris could give you while he was still
at Coca-Cola and you had been reliant on Brown and their
team, would you not?
A. I had asked Brown to help me ascertain some of the facts,
yes.
Q. You were going to look to them for advice, were you not?
A. Fact gathering, design, a bit of advice.
Q. Could you look at bundle C6 at tab 69, page 1422. It is
called "Project fast. Vodafone & Formula One. The starting
grid". Do you recall whether you saw this document in
January 2001?
A. I do not recall.
Q. If you go to page 1425, do you see there is a section called
"Ideal World", which says: "Ownership, Vodafone XYZ team,
Composite logo, Exclusive team sponsor, Ownership of Red, The
right to create a Vodafone livery through the team". Did you
become aware that this had been identified by Brown's
brainstorming session as the ideal world for Vodafone?
A. At some stage I became aware that that was what they came up
with in their brainstorming. I cannot recall the exact date
when I became aware of that. The brainstorming sessions have
to be seen as they are - brainstorming sessions.
Q. Is not the purpose of the brainstorming to generate ideas
which are then considered?
A. Absolutely. That is absolutely right.
Q. Would you have been discussing Formula 1 with Peter Dart at
this time as well?
A. I am sure I discussed it with Peter at this stage, yes.
Q. Was he giving you advice about it?
A. He was offering his opinion. The way I worked with Peter
over the years is we bounced ideas off each other; it was
more than just advice.
Q. We have seen that you met Mr. Perring on 19th January in
Dusseldorf. There were then to be the second meetings with
McLaren and Ferrari, were there not, the following week?
A. Yes.
Q. And we know that you went to a meeting with Ferrari on 25th
January, and that that was preceded on the 24th by a
breakfast meeting with McLaren; so those would be the second
meetings with Ferrari and McLaren that you had attended?
A. Yes.
Q. Do you recall asking Mr. Perring to come to those meetings
with you?
A. I recall asking him to come to the Ferrari meeting.
Q. But he also came to the McLaren meeting, didn't he?
A. I think he did.
Q. Could you go in bundle C2 to tab 19. This is a fax addressed
to you as a guest at the Metropolitan Hotel. Is that where
you normally stayed when you came to England from Dusseldorf?
A. At that stage, yes.
Q. It is dated 23rd January, which is the day before the
breakfast meeting with McLaren, which took place on 24th
January at that hotel. That is right, is it not?
A. Yes, it is.
Q. There was a breakfast meeting at the hotel where you were
staying.
A. That is right.
Q. And he says: "Attached are my thoughts on how to approach
our meetings on Wednesday and Thursday." Those are the
McLaren and Ferrari meetings, are they not?
A. It would have been those two, I would have thought, yes.
Q. Had you arranged to meet Mr. Perring with Stephen Townley at
7 a.m. the next morning, if you look at the last paragraph?
A. Yes.
Q. That was to have a pre-meeting, was it, to discuss how to
approach McLaren?
A. I think we had quite an early breakfast; it was a busy day.
Q. Do you recall reading this fax at the Metropolitan Hotel
before the meeting?
A. I remember going through it.
Q. If you turn to page 363, there is a section called "Role
play" which sets out the roles to be played by you, Stephen
Townley and Charles Perring.
A. Yes, it does.
Q. You are said to be the representative of Vodafone and the
company's ambitions. Is that a fair description?
A. In this light.
Q. And that you were entitled to sanction the investment. Is
that fair?
A. It is not true. I think those were Charlie's early thoughts.
I think that is what he says, if I am not mistaken, on his
coverage note, "Attached are my thoughts," on page 361. At
no stage was I able to sanction the investment.
Q. Was the choice of Formula 1 team, in effect, your choice
within Vodafone?
A. No. My role was to facilitate getting the facts, put them
forward to the various committees to make a decision.
Q. If you look at Charles Perring's description of his own role,
it says project manager. Was that a fair description?
A. I think that is a pretty fair description.
Q. Item 2 is delivering to deadlines and maximising benefits and
keeping David Haines appraised of the process. Is that a
fair description of his role?
A. I would have put more emphasis on "delivering to deadlines"
and keeping me appraised.
Q. Would you turn to page 397?
A. Is that a different tab?
Q. No. It is still part of tab 19?
MR. JUSTICE LANGLEY: Which page?
A. Which page? You said 397.
MR. BOYLE: Sorry, page 367. Have you got that page?
A. Yes.
Q. It is a part of what is called "The approach". He says:
"This week is about building a relationship and establishing
'trust'. I think we should avoid talking in too much detail
and need to focus ton following: One team's focus and
principal sponsor. 1. Team's principle/title sponsor". Did
you agree that that should be the approach?
A. I did not disagree, put it like that.
Q. "2. Brand exposure that reflects the investment." Is it not
fair to say that the approach being considered by you and
Mr. Perring at this stage was very much in terms of looking
for title sponsorship and maximum brand exposure?
A. I think my overall approach, as I said earlier, had three
clear criteria, the first of which was media exposure. That
translated in, I think my mind and Charlie's mind, very much
towards title. We were also looking, as you can see from our
discussions with Ferrari, at other things as well.
Q. If you look at page 368, the penultimate bullet point, he
says: "We need to gain an idea of timings. How quickly
discussions can move forward". Were you not considering with
Mr. Perring the pace at which the discussions would have to
move forward at that time?
A. As I say, these were Mr. Perring's initial thoughts and I did
not feel under any particular rush, given that we were a year
away from having to implement this.
Q. You could not have thought you had another year to decide
this, could you?
A. No, absolutely not. The concept that we were in a rush is
just wrong. We are keen to make speedy progress, the
telecoms industry works at quite a pace, but we were in no
rush.
Q. Then you met McLaren for breakfast on 24th January, the
second meeting with them in quite a short space of time. Did
you at that meeting indicate that Vodafone would not be
interested in a sponsorship deal for 2001?
A. I had had lots of discussions with Mr. Geitner, and I think
his view was -- my view was, our view was -- that he would be
recommending not to go ahead with McLaren, for the reason I
have just outlined, not to get ourselves into any .... You
know, it was too rushed.
Q. Why would you close off the 2001 sponsorship proposal?
A. Because we had not, we did not .... As I said, we were in a
fact-finding phase. As I discussed with Mr. Geitner, we
needed to go on a learning journey to get the facts on
various options. It was a little bit like buying a car. You
do not just get the first car. The whole point was to have a
look at what options were available. Therefore, there was no
need for us to get into anything for 2001. The brands had
not migrated - we walked of the process earlier -- to stage 3
or 4 of that process. It would not be happening for a year.
Therefore the benefit would not have accrued in 2001 to those
brands. The financial returns would not have been very good.
Q. Why did you take a decision to close off McLaren for 2001?
A. First of all, I did not take a decision. I think the group
board took a decision. I think Mr. Geitner made that
recommendation based on a discussion he and I had, which was
about not getting into .... We did not need to, because we
did not want to get into a rush. We had been rushed into
something we did not want to get rushed into.
Q. This proposal had been under consideration for four months,
had it not?
A. Yes, but, as we discussed earlier, I had just joined the
company maybe six weeks, seven weeks, previously. We were
formulating our overall brand strategy, those three phases,
four phases, we were talking about. We had to see how
Formula 1 would fit into that overall strategy. There was no
clear connection at that stage. It was almost an ad hoc
project earlier on. We were trying to fit it into an overall
company strategy for marketing, so there was no rush.
Q. Now the McLaren meeting over breakfast on 24th January, did
you say that what Vodafone really hoped to secure was the
team sponsorship position currently occupied by West?
A. I do not recall that specifically, but I can well believe I
said that.
Q. And was that the case, that you really wanted to get team
sponsorship?
A. If our objective was to have maximum media exposure, which it
was, there were basically two choices - to get on the best
team you possibly could and have the maximum you possibly
could. Therefore, to get on one of the best teams, which is
McLaren, in terms of media awareness, the best possible
position would have been ideal.
Q. You see, if you look at C2, tab 37, page 467, you will find a
fax from Mr. Perring from Ekrem Sami, which refers to the
meeting we have just been looking at: "My thanks to you and
Stuart for your time last week, it was a pleasure meeting you
both and I enjoyed learning more about the McLaren Team and
the sponsorship opportunities which exist in 2002." Then in
the penultimate paragraph: "As David Haines mentioned, what
Vodafone really hope to secure is the Team Sponsor category
currently occupied by West." That is the basis on which I
was suggesting to you that you must have said that at the
meeting.
A. With which I agreed.
Q. And it goes on: "I fully recognise that you need to retain
your integrity in any discussions with them, but an
indication of their position" -- that is West's position --
"from 2002 onwards is essential in order for us to fully
maximise any association." Was it essential, as Mr. Perring
says here, to have an indication of West's position from
2002?
A. Certainly Mr. Perring thought so, otherwise he would not have
written it. I do not recall discussing it as essential.
Q. On 25th January, you went to Marinello for a second meeting
with Ferrari and met Jean Todt on that occasion?
A. Yes.
Q. And you had Charles Perring and Jeremy Summers with you from
Townleys?
A. Yes.
Q. Did you make clear at that meeting that what Vodafone really
wanted was title sponsorship?
A. Well, we already knew from Ferrari that we could not get
title from our meeting on 17th January, so, as I recall, we
spent most of the time looking at the space that would be
available from the four or five sponsors that would be
available to us and we talked about, I believe, the
opportunity already at that stage of replacing Marlboro when
they were to leave as title sponsor.
Q. Just look at page 466, which is behind tab 36. In the third
paragraph from the end, he says: "Whilst I appreciate at
this stage that Philip Morris is likely to remain Ferrari's
team sponsor for the near future, it is ultimately Vodafone's
wish to occupy this position if it becomes available. In
this regard, it would be helpful to understand if and when
such an opportunity may present itself." Was that ultimately
Vodafone's wish?
A. I think that is consistent with what I just said here.
Q. I am not suggesting it is not. Was it Vodafone's wish?
A. I do not know if it was Vodafone's wish. It was certainly my
point of view at that time, to get one of the best teams.
Title would have given us the most exposure and, therefore,
that is correct.
Q. What sort of impression did Jean Todt make on you at that
meeting?
A. It was the first time I had met Jean without his boss, and he
made the impression that he was a man of extremely high
integrity. I remember him and I having that very specific
discussion. He is a bit Gallic, so, you know, he is very
French. He and I hit it off extremely well at, I think, a
professional and also personal level. We had a long
discussion about partnership and actually had a discussion
about values - personal values.
Q. Could you go again to bundle B, tab 25. Go to page 230.
This is Mr. Perring's account of that meeting. If you look
at paragraph 6.3 he says: "There were no negotiations over
rights. Ferrari did not make any specific proposals. We
were told that Philip Morris had the first right of renewal
of the title sponsorship at the end of 2002 and that Ferrari
was not thinking of Vodafone as a team sponsor." Is all of
that correct?
A. I recall a discussion about space on the car. I do recall
some proposals being made, so that is not correct. We were
told that Philip Morris had the first right of renewal, so
that is correct. Ferrari were thinking of Vodafone, as what
we called already in the meeting of the 17th, one of three
principal sponsors.
Q. Behind Marlboro, behind Philip Morris?
A. One of three principal sponsors. Marlboro is title and then
two other principal sponsors with Shell, equal to or greater
than Shell.
Q. So there was a discussion about the possibility of Vodafone
becoming a secondary sponsor of Ferrari. Is that right?
A. We called it a principal sponsor.
Q. Secondary. I am using the terminology "secondary" sponsor to
indicate sponsors who are subsidiary to the title sponsor.
A. And I am using the term "principal" sponsor deliberately
because it's something which is slightly different, possibly,
to secondary sponsor. It was something we discussed with
Mr. di Montezemola on 17th January.
Q. Is what you are terming "principal" sponsor one that is a
secondary sponsorship but more important than other secondary
sponsors?
A. I think that is a fair description, yes.
Q. Were they, at that time, saying to you that you could get
equal partnership with Shell or equal prominence with Shell?
A. There were various discussions - equal to or better.
Q. Did you get equal to or better in your final contract?
A. Absolutely. We got better, we believe, and the media data,
the analyses, would show that is exactly what we got.
Q. If you still have it open, Mr. Perring's statement, at 6.4:
"David Haines made it clear that Vodafone's aim was title
sponsorship". That is correct?
A. Yes.
Q. And in 6.5, the last sentence: "Jean Todt also made it clear
if Vodafone wish to progress the matter, it would have to
make proposals to Ferrari rather than the other way round."
Is that correct?
A. I recall that. Ferrari were playing, for want of a better
phrase, "hard to get".
Q. And then 6.6: "After the meeting I told David Haines that
Ferrari did not meet Vodafone's criteria in that it was
strongly associated with tobacco and title was not
available." Did Charles Perring say that to you?
A. I do not recall that.
Q. He said that Ferrari would be difficult to deal with and
Vodafone could not come close to perceived ownership.
A. I do remember the "difficult to deal with" theme, if you
like, from those early days from Mr. Perring. I think that
was certainly his perception. By the way, it has never
proven to be true and certainly was not my perception. It
may be Mr. Perring was not that experienced in dealing with
international, sort of non-British people, but I had lived
abroad for the best part of the last 20 years and is used to
the fact that they do not have the same approach.
Q. And he goes on to say that Vodafone would be dominated by
Ferrari, Marlbro and Shell. Do you recall him saying that?
A. No, I do not.
Q. Wasn't Ferrari in itself a very big brand?
A. Ferrari is a phenomenal brand, yes.
Q. If one is talking about getting the Vodafone brand to stand
out, would that not be a problem?
A. None whatsoever. In fact, quite the contrary. The whole
point of associating with a brand like Ferrari was to get
some transfer of the positive image of Ferrari on to a
Vodafone. This is a point that I thought was just nonsense
that Mr. Perring put out - just nonsense. That was exactly
one of the benefits, what we were paying the big money for,
to get this what is called in the business "image transfer".
Q. Have you got bundle C2 there? Go to divider 24. The meeting
we have just been looking at was a meeting on 25th January.
Do you recall talking to Peter Dart about Ferrari on the 26th
January?
A. No, I do not.
Q. In this e-mail, which is dated the 27th, which was a
Saturday, it reports on a long talk which Mr. Dart said he
had with you last evening and again this morning. Do you see
that in the third paragraph?
A. Yes. No, I see that. I do not dispute I spoke to him. I do
not recall it, though.
Q. "It looks like the F1/Ferrari deal is going to happen. Had a
long talk to Haines last evening and again this morning. He
was wobbling a bit but have urged him to pursue this and
clock a lap record." Were you wobbling a bit?
A. What an agency calls wobbling, if you are working on the
client's side, may be called true deliberation. That's the
way agencies speak.
Q. He goes on in the next paragraph to say: "We are already
doing design work on the car (which is tricky - at first
sight the logo gets totally lost on the red car)." Was that
discussed between you and Peter Dart?
A. As I said, I do not recall specifically that discussion, but
I do know that getting stand-out was very important.
Q. Then it says "Haines has asked for Joe Kieser to help conduct
the really gritty last lap or two of the negotiation." Had
you asked for him to conduct the really gritty last lap or
two of the negotiation?
A. No. What I think Peter offered Joe to do was to try to draw
out proposals.
Q. The really gritty last lap or two of a negotiation is more
than drawing out proposals, is it not?
A. Those are Mr. Dart's words, not my words.
Q. He is talking about a conversation with you. That is why I
am putting it to you.
A. I do not recall that. I recall we were in the window
shopping phase, as we were until a lot later and that we
asked ----
Q. You knew that a point would have come when you would have to
have nitty-gritty negotiations over terms, did you not?
A. Oh, yes, but in my mind we were months away from that. We
would need to make a strategic decision first. Once that had
been made, then we would get into contractual discussions.
Q. You knew that a time would come when nitty-gritty
negotiations over commercial terms would have to be held, did
you not?
A. Of course, yes.
Q. And is it not the case that in this conversation with Peter
Dart, you were indicating that you wanted Joe Kieser to be
involved in that part of the exercise?
A. I do not recall it that way.
Q. Did you have a fee agreement in place with Brown at this
time?
A. We did.
Q. What were the terms of that agreement?
A. It was based on a conversation that I had with Mr. Dart
actually for Tempus, which covered Brown as well, in, I think
it was, December of 2000.
Q. And how were Brown going to be remunerated for their services
on this project?
A. Because we had worked together with Tempus and Brown for many
years at Coke and at Mars, in my previous jobs, and the same
way, which was basically an hourly rate at cost (which were
transparent) plus an agreed margin of 125% to cover their
fixed costs, and costs at cost (so no margin) plus, and this
is an important point, that intellectual property rights
belong to Vodafone, not to the agency.
Q. So there was no agreement in place for the payment of a
percentage agency fee for negotiating a deal with a Formula 1
team.
A. Absolutely not, no.
Q. At this time, 27th January, had you had any discussion at all
with Peter Dart or anyone else at Brown about paying such a
percentage fee?
A. Not that I can recall, no.
Q. Would you turn to tab ----
MR. JUSTICE LANGLEY: Mr. Boyle, would this be a good moment for
a break for the shorthand writer?
MR. BOYLE: Of course, yes.
MR. JUSTICE LANGLEY: Five or ten minutes.
(A short break)
MR. BOYLE: Would you turn in bundle C2, to tab 25, please?
A. Yes.
Q. This is an e-mail of 29th January from Charles Perring to
yourself, page 388. Do you recall receiving that e-mail?
A. I do not specifically recall receiving it, but I am sure
I did.
Q. Did you receive a draft of a rights package with that e-mail?
A. As I say, I do not specifically recall receiving that e-mail.
If it was sent in the documents to say that it was received,
I am sure it was.
Q. Do you recall receiving a rights package from Mr. Perring?
A. As I just said, I do not specifically recall receiving this
specific e-mail, but I am not disputing that I got it.
Q. It refers in the first paragraph to a rights package. I am
asking you whether you recall receiving at the end of January
a rights package from Mr. Perring?
A. And I have just said I do not specifically recall receiving
the rights package, but I am not disputing that it came
through on the e-mail system. I do not recall the minute
that I received ----
Q. I do not want to trick you, but if you just look at tab 20,
you will see another e-mail that is dated the following day.
A. Tab 20?
Q. Tab 30.
A. Yes.
Q. And at page 405 do you see a rights package?
A. Yes, I do.
Q. Did you read that at the time?
A. I think I went through it. I glanced over it, yes.
Q. You knew that Townleys had advised on the rights package, did
you?
A. I knew that Townleys had been involved. From the e-mail,
I could read that they had given their point of view on the
rights package, yes.
Q. And you knew that the aim was to send that out to the teams?
A. Yes. I knew the aim was to send the rights package out so we
could have, if you like, apple for apple comparisons.
Q. And if you would look at page 405, under "Partner Status", it
says "Preferred Option. Team Sponsor & Commercial Partner.
Team to be named; 'Vodafone XYZ'". Was that Vodafone's
preferred option at that time?
A. I do not think it was Vodafone's preferred option. I think
it was certainly the preferred option coming out of this
workshop that we talked about earlier, and I think I would
have agreed with that at this stage as well. Equally,
I would have said secondary, as it says here, "preferred and
secondary." Where it says "Equal Sponsor not to exceed
times three", I think that is the reference to the Ferrari
discussion, but if we could have got title, that would have
been even better, I agree.
Q. If you look back at page 388, back at divider 25, the third
paragraph, do you recall being told by Mr. Perring that
Eddie Jordan had been in touch with him?
A. I vaguely recall that, yes.
Q. And that he was asking for a meeting?
A. Yes.
Q. Do you recall being told the title rights for the Jordan Team
were available from 2002?
A. I recall that title was available from Jordan, yes.
Q. And do you also recall being told that there were ongoing
discussions with Benson & Hedges which needed to be finalised
by February 14th?
A. Yes.
Q. Do you see what is offered in the middle of the page. He is
offering title rights, car livery in Vodafone colours and
brand, driver suits in Vodafone colours and brand, keen to
explore partnership opportunities, especially with Honda,
guaranteed driver appearances, a deal structured around
incentives and team performance. When you had read that were
you interested to explore that with Jordan?
A. For the price, which at the time was 90 million for a
three-year deal, it looked interesting, yes.
Q. And were you aware of the timeframe that Mr. Perring was
referring to in this e-mail?
A. I am not sure I understand what you mean by the timeframe.
Q. The proposal was to have discussions about title sponsorship,
was it not?
A. Yes, it was.
Q. And you knew that the existing title sponsor of Jordan was
Benson & Hedges?
A. Yes, I did. Yes, absolutely.
Q. So if Vodafone was going to replace Benson & Hedges as title
sponsor, you would need to be sure that they would not do a
deal with Benson & Hedges in the meantime, would you not?
A. I am not sure I understand what your question is.
Q. You cannot have two title sponsors, can you?
A. That would be hard.
Q. So if Vodafone was going to get title sponsorship from
Jordan ----
A. I see where you are going.
Q. --- then the fact that they were having ongoing discussions
with Benson & Hedges would be a factor you would need to take
into account?
A. Yes. That is the commercial reality of life. I would not
have let it influence what we were trying to do.
Q. If it turned out that Jordan was the best choice because they
were offering title sponsorship, you would not want to lose
out because they did a deal with Benson & Hedges, would you?
A. Actually, I have a different view on that, and it is a
principle one: it is nothing to do with Benson & Hedges here.
It is not to let yourself be put under pressure -- it is like
when you are buying a house -- because somebody else might do
something else. As I recall actually saying to Mr. Jordan,
if he had to go and do something with Benson & Hedges, then
he should do it.
Q. So you would be content to lose the house, even though you
wanted it?
A. Absolutely.
Q. Would that suit Vodafone's interests if Jordan was the best
deal?
A. We never got that far.
Q. Perhaps I can help you with your diary. If you go to C10 and
go to page 2136, if you look at the entries for 31st January,
did you attend a meeting of the European board in Dusseldorf
and was that followed by a meeting of the global Brand
Steering Committee?
A. I did attend the European board meeting and it was followed
by a global Brand Steering Committee in the afternoon.
Q. But you do not have a very good recollection of the second of
those meetings? I think you said a moment ago that you could
not really remember your discussion with Mr. Perring on
31st January. Is that right?
A. Correct.
Q. If you still have C2 open, we can see the agenda at 33B for
the European board meeting. At 32C, there are the minutes of
that meeting and at 432H, at the bottom, it shows you as
making a comprehensive presentation on the status and
progress of the brand.
A. Is this 32C?
Q. It is 32C, page 432H at the bottom?
A. Yes.
Q. You gave a presentation at that meeting?
A. Yes, I did.
Q. Was any reference made to Formula 1 in that connection?
A. Not that I can recall. I think at that meeting we were
discussing these four stages that we talked about earlier.
Q. If we now look at 33A, you will see the agenda for the global
brand Steering Committee Meeting. There is an item
"Sponsorship" at 5.30, which is stated to be Tempus.
That would be Brown?
A. That would be Brown.
Q. Was that a meeting with Mr. Perring and Mr. Townley and
Mr. Geitner?
A. I think Mr. Geitner is the chairman of the Steering Committee
and Mr. Perring and Mr. Townley -- I do not actually recall
being there, but they would have been the people who would
have represented Tempus, and there were the CEOs of our key
regions - Germany, Italy and a couple of other markets who
would have been represented at the Brand Steering Committee.
Q. I know your recollection is not very good about this
particular meeting, but just to give you the opportunity to
comment, if you go to bundle B at tab 25, on page 228,
paragraph 4.2, this is Mr. Perring's account of that meeting.
He says, "I would describe it as a 'top line' meeting ----"
A. Sorry ----
MR. JUSTICE LANGLEY: Just a moment, I do not think he has quite
got there.
THE WITNESS: Which page, please?
MR. BOYLE: Page 228.
MR. JUSTICE LANGLEY: Paragraph 4.2.
MR. BOYLE: He says, if you just look at the previous page at the
bottom, "I went with Stephen Townley and the meeting was
attended by Thomas Geitner who is on Vodafone's Board."
A. Yes.
Q. "I would describe it as a 'top line' meeting by which I mean
we discussed first principles. I believe the criteria were
repeated." Do you think that could have happened?
A. I think it is highly likely, yes.
Q. "We looked at the benefits wish list which David Haines
thought was an impressive document ..." Could that have
happened?
A. It could well have happened.
Q. "... and that it concurred with what Vodafone were seeking.
I pointed out that it was ultimately only a wish list and
that Vodafone may not be able to obtain everything it
contained. I cannot recall specifically going through every
item on the list and as David Haines is not a detail man, he
may not have read the document line by line. I also
presented the 'starting grid' document. I was instructed to
start a negotiating process with Jordan whom I said had title
available."
Did Mr. Perring present the starting grid document?
A. I do not recall him presenting that. I do not dispute it,
but I do not recall it specifically.
Q. Did you or Mr. Geitner instruct him to start a negotiating
process with Jordan?
A. I do not recall him being instructed to start a negotiating
process with Jordan. As I said, we were at the window
shopping phase, trying to ascertain the facts to a number of
teams. If he was instructed to start a process, I would
have thought it would have been for a number of teams, not
just specifically Jordan.
Q. You had already had four meetings by this time - two each
with McLaren and Ferrari. It would be logical to go and meet
Jordan as well, would it not?
A. Yes, absolutely, but there were also a number of other teams
at that stage who we were still considering.
Q. Who?
A. Toyota was one that was actually on the radar screen and
I think Benetton probably came along a little bit later.
Q. Can we just look back, please, to tab 32, page 421.
A. Sorry, is this a different bundle?
Q. C2, this is. Do you recall seeing that document before?
A. Yes, I do.
Q. Where do you think you first saw it?
A. Probably in that meeting, in January. It is the kind of
presentation that is used in those kind of meetings.
Q. So who do you think prepared this document?
A. I do not recall who prepared it. I assume it must have been
Brown.
Q. And the starting grid at page 422 identifies five teams, does
it not?
A. It does.
Q. Were there any other teams apart from those five under
consideration at this time?
A. No.
Q. If you look at key points at page 425, you were aware of the
sort of deal that would be available from Jordan, were you
not?
A. I was.
Q. Were you also aware, if you look at page 427, of the various
issues surrounding the question of strategic fit?
A. Yes.
Q. One of the bullet points associated with Jordan was that it
was ownable.
A. Yes.
Q. That is the idea of perceived ownership, is it not?
A. I think that was what was meant, yes.
Q. And of course the Ferrari and McLaren key points are
identified at 423, are they not?
A. Yes.
Q. You would have known from your attendance at the two meetings
with each of them that this was a fair summary of the
position for each of those teams?
A. Indeed.
Q. You would have regarded this as a fair and objective
presentation of the information which had so far been
obtained?
A. I think these were Charlie's. This was Charlie's work.
Q. And did you regard it as a fair and objective presentation of
the information which had been obtained?
A. I think it probably was.
Q. And you were aware, were you not, that the next step was for
Brown to send the benefits wish list to Jordan, Ferrari and
McLaren?
A. Yes; to get apples for apples comparisons, yes.
Q. Would you turn to tab 35. This is a fax from Mr. Perring
Mr. Jordan and he attaches the benefits wish list which we
have just been looking at. He goes on: "The Vodafone
meeting in Dusseldorf was extremely positive." He is
referring there to the meeting that we have just been talking
about the previous day. Would that be a fair description of
the meeting?
A. I think it probably was.
Q. And he says: "I've been given the remit from the European
Board to progress our conversations to a stage where we have
a refined proposal on the table by the mid next week."
Was that true?
A. I think Charlie inflated the European board. I do not recall
anything being discussed at the European board. I think he
is referring to the Brand Steering Committee. He may just
have the names wrong.
Q. But apart from that, that is true, is it?
A. I do not recall the deadline by middle of next week, but
I think it is fair to say that based on the rights list we
were trying to get proposals in to be able to compare them.
Q. He is suggesting a meeting with yourself on 6th February to
discuss the opportunity more thoroughly.
A. I remember that meeting being talked about before it was set
up, yes.
Q. Were you aware that Mr. Perring was actually going to go and
have a first meeting with Jordan the following day, the day
after this fax?
A. No, I was not aware of that.
Q. Are you saying Mr. Perring did not tell you he was proposing
to do that?
A. I am, yes.
Q. Then he sets out Vodafone's key criteria for 2002. Could you
read those to yourself, please?
A. (Pause for reading) Yes.
Q. Was that an accurate statement of Vodafone's key criteria for
2002?
A. For Jordan, given that we knew that team sponsor was
available, yes. The letter is addressed to Jordan.
Q. You mean that Vodafone had different criteria for different
teams?
A. Given that we knew that title was not available at some
teams, Ferrari, for example, I think a secondary element of
the rights package would have been more relevant, so
partner/principal. The criteria, to repeat, was maximum
awareness. He interpreted it as title sponsorship. At that
early stage it was my point of view of mine. It changed over
time.
Q. What I suggest to you is that what Mr. Perring is setting out
here were Vodafone's key criteria not referable to any
particular team, but what were the criteria which would
govern Vodafone's choice of team. Is that not right?
A. I think that is putting it too strongly. The situation, if
you like, was very fluid. We were trying to get, as I said,
the three criteria: maximum awareness; commercial model to
get a return; and buy in from our OpCos. Of the bullet one,
maximum awareness, I naively, I suppose, at that stage
believed the bigger the better and learnt later on that
actually it was a bit more complex than that.
Q. When do you say you learnt that?
A. I cannot attribute it to a specific date, but a lot of input
came in various meetings in February. One specific one
I remember was on 15th February with Mr. McNally.
Q. Was not the availability of title sponsorship critical to the
decision-making throughout the period until March?
A. If we could have obtained title, that would be the best
situation to possibly get, yes; but it was not critical to
decision-making throughout the period until March, no.
Q. Would you take bundle C4 and go to tab 20. Do you have page
923?
A. Sorry, I did not hear which tab?
Q. Tab 20, page 923. Do you recognise that document?
A. No. I mean, I have seen it since we have been in court, but
I had not seen it previously.
Q. Someone has written on it "selection criteria 22 March",
which we have been told is the date of the computer file.
Can you assist the court at all as to how this document came
into existence?
A. I think this is something that either Charlie prepared or
Peter prepared and I think the writing on it, if I am not
mistaken, looks like Mr. Harris's PA.
Q. So you think it could have been Peter Harris or it could have
been Mr. Perring, but you do not know.
A. Correct. As the rights list said, there were always various
options: one was title and one was what we called principal
sponsor earlier on.
Q. Do you under see where under "Branding & Marketing" it says
"Title Sponsorship Availability".
A. I do.
Q. And there is as asterisk.
A. I see the asterisk.
Q. And if you look at page 924, beneath the total it says
"* Scores count as double as being critical to decision
making".
A. Yes.
Q. Was the availability of title sponsorship critical to
decision-making of Vodafone as at 22nd March 2001?
A. No, I do not think it was. We had a proposal from Ferrari
already from 9th February, which I certainly thought was
quite good, and I do not think we had any formal discussions
around the criteria or approved them in any of our committees
as of that date; and as of that date, 22nd March, the third
of the criteria which I mentioned, which was the buy in from
our operating companies, we had had quite considerable input
on 15th March from our colleagues in Italy, Greece and, as
I recall, Germany at the Brand Council Meeting on 15th March,
that they were very keen on a deal with Ferrari.
Q. You can put C4 away again for the moment. Can you recall
when you first met Mr. Kieser?
A. I cannot recall the exact date of meeting Mr. Kieser the
first time. It must have been around early February.
Q. And do you remember where the meeting happened?
A. I think it was in Peter Dart's office.
Q. At Hampton Wick?
A. I think so.
Q. Do you still have bundle C10 available? Page 2136.
A. Yes.
Q. The meetings on 29th January were in Geneva, were they?
A. Yes. That was a training programme, a Vodafone training
programme, yes.
Q. And you were still in Geneva on 30th January?
A. Yes.
Q. And then in Dusseldorf on the 31st?
A. Yes.
Q. Then you went to London on 1st February?
A. Yes.
Q. And you were back in Dusseldorf on 2nd February.
A. Yes.
Q. And in Maastricht on 5th February, and not back in England
until the 6th. Is that right?
A. Yes.
Q. So you had an opportunity, at any rate, to meet Mr. Kieser on
1st February when you were in London. Do you think that is
when it could have been?
A. It could well have been. I honestly do not recall when I
first ....
Q. What was the purpose of the meeting with Mr. Kieser?
A. I can only imagine it was a -- I do not recall. I would be
speculating. An introduction I would have thought.
Q. While we have got the diary open, did you have a meeting with
Sir Christopher Gent on 6th February?
A. No, I did not.
Q. Are you sure about that?
A. I am very sure.
Q. I am not suggesting to you that there is an entry in your
diary about it.
A. No, I understand you. I think I recall. I am very sure.
Q. In fact, on 6th February you had a meeting at Silverstone,
did you not?
A. In the evening.
Q. In the evening, which is not in your diary?
A. This is part of the problem: we were talking about earlier
about remote access when I was abroad, yes.
Q. Do your schedules change ----
A. Quite a lot.
Q. --- from what is recorded in the electronic diary?
A. Absolutely. I am quite clear I did not have a meeting with
Sir Christopher.
Q. But when you were in Dusseldorf, you would have regular
meetings with Mr. Geitner, your boss, would you not?
A. Yes.
Q. And report to him what you were doing?
A. Yes.
Q. We see that on 2nd February, for example, you had a meeting
with him then, or at least it is in your diary.
A. Yes.
Q. Going on to 5th February, you had a conference call with him
in the evening?
A. With him and a few others.
Q. Can we take it that as you made progress with the Formula 1
project, you would be telling Mr. Geitner what was going on?
A. Yes.
Q. I am going to come on to the Silverstone meeting on
6th February. We have looked at the e-mail from Mr. Perring
of 29th January, which told you what Jordan were offering,
and we have looked at the starting grid of 31st January, or
I think it may be dated the 30th, which set out some key
points for Jordan. So can we take it that by the time you
actually went to meet Jordan, you were at least aware of that
information?
A. Yes.
Q. How did you get to the meeting?
A. We were driven, I think, by Mr. Dart's driver.
Q. You were with Mr. Dart, Mr. Perring and the driver, were you?
A. I do not recall whether Mr. Perring was with us on the way
there. I do recall on the way back.
Q. If you go to bundle B, tab 25, page 234, he gives an account
in 9.11. Would you just like to read that to yourself?
A. Sorry, 224?
Q. Sorry, page 224.
A. Sorry.
Q. Do you have 9.11?
A. I do. (Pause for reading) Yes.
Q. Did you say you needed some time to get over to some other
matters that you had been dealing with that day?
A. I do not recall that. Actually, I do recall the meeting he
is referring to and it was not with Chris Gent.
Q. Who was it with?
A. It was with Peter Bamford. I just checked in the diary.
Q. And who is Peter Bamford?
A. Peter Bamford is the CEO of Northern Europe, a colleague of
mine. I do not recall saying I needed time. We have about
an hour's drive from Newbury to Silverstone.
Q. Were you late for the meeting?
A. I do not recall being late.
Q. Why had you asked Peter Dart to come to the meeting?
A. As president of Tempus and one of my two main contacts, I
thought it would be interesting for Peter. I think actually
he asked to come to the meeting. I did not have anything
against it, I thought it would be interesting for him to meet
Mr. Jordan.
Q. Did he not want to assess -- this would be your first meeting
with Mr. Jordan, would it?
A. Yes.
Q. You had never met him before?
A. Correct.
Q. If this was going to lead to a three year sponsorship
contract, that would be an important relationship.
A. Meeting any of the team principals was important, and I
think, pragmatically speaking, this was the one that was in
England and, as I recall, Peter wanted to come along and I
did not have any particular reason not to have him there. He
was a member of our team, but I do not think there was any
particular reason for having Mr. Dart at this meeting and not
any of the others.
Q. When you got to the meeting, did you describe your role in
Vodafone?
A. At some stage during the evening, I did, yes.
Q. Could you just look back in bundle B to tab 2, page 19.
A. Page 19?
Q. Yes. If you look at paragraph 41, he says: "David Haines
introduced himself as Vodafone's global brand director."
That would be true would it?
A. Yes.
Q. "He told us that the Vodafone board had decided that
Formula 1 sponsorship was to be central to global brand
building of Vodafone." Did he say that?
A. No.
Q. Hadn't such a decision in effect already been made?
A. Absolutely not, no. That decision got made much later. The
Brand Steering Committee decided to evaluate the
opportunities and sent me on a learning journey, which was
the phrase I think I used that evening.
Q. And he goes on: "He had been specifically recruited to build
Vodafone's brand, which included dealing with Formula 1
sponsorship." Is that right? Did you say that?
A. I told them I had been recruited to build the brand, yes, and
that my job included dealing with F1. I think I called it
managing the project.
Q. You see, in 42 he says: "David Haines made it unequivocally
clear during the course of the meeting that Vodafone had made
a decision to sponsor Formula 1, had approved a budget, and
delegated the negotiation of the choice of team to him. Is
that not what you say?
A. Absolutely not. That is simply wrong.
Q. Can we agree at least on this, that there was no one else
employed by Vodafone who would actually be conducting
negotiations with Formula 1 teams apart from yourself?
A. No, we cannot agree on that, I am afraid. The whole point of
recruiting Mr. Harris was that when it came to a point where
we had made a strategic decision, which direction we kind of
wanted to go, so the learning journey was over, the person
that would actually conduct the negotiations was Mr. Harris.
That was one of the very points of recruiting. That was his
expertise, not mine.
Q. Mr. Harris had not joined Vodafone by then, had he?
A. No. We were a long way from making a decision. The timing
was actually working quite nicely.
Q. Until Mr. Harris joined the company, the only person who
could in fact, the only employee of Vodafone, who would in
fact conduct any negotiations, would be yourself.
A. Yes. I was reacting to the word "negotiation". I would call
them more "discussions".
Q. Are you saying that what took place on 6th February was
properly described as negotiations?
A. I certainly had them in the realm of discussion, not
negotiation.
Q. Is that really your evidence?
A. Yes.
Q. That it was a discussion, not a negotiation? What do you
understand by the term "negotiation"?
A. I understand a detailed contractual negotiation, where you go
through the details of a potential contract with lawyers
involved, where you get to a long document which covers all
the key elements. That is what I understand by negotiation.
Q. But it is not a negotiation until lawyers are involved. Is
that what you are saying?
A. In my mind. The meeting on the 6th was a jovial banter-like
discussion.
Q. Surely lawyers get involved when you have a deal which needs
to be incorporated into a written contract.
A. That is not the way things work in a large public limited
company, I am afraid.
Q. What is the point of instructing lawyers until you know that
there is going to be a deal?
A. Well, the whole point of writing a contract means that you do
not have a contract and, therefore, it's not obvious that you
are going to actually agree terms.
Q. You had had experience of commercial negotiations while
working at Coca-Cola, had you not?
A. Yes.
Q. With outside parties?
A. Pardon me?
Q. With outside parties?
A. Oh, yes.
Q. Doing deals?
A. Discussions.
Q. Well, had you been involved in commercial negotiations which
led to deals on behalf of Coca-Cola?
A. Hiring advertising agencies, if that is what you mean by
doing deals, then, yes, hiring mainly third party agencies
like Brown, or similar.
Q. Had you been involved in negotiating on behalf of Coca-Cola
contracts of this sort of magnitude that we are talking about
in Formula 1 sponsorship?
A. No, not of this magnitude. It was quite unique.
Q. But in approaching the task of negotiating a deal of this
magnitude, would it not be logical to start with the most
important terms of the deal?
A. That is what we were trying to do in this phase. We were
trying to get the facts on the table.
Q. So what would be the most important points of a sponsorship
deal?
A. The key terms, I would have thought, would have covered many
areas in many detail.
Q. No, but the headline terms, what would be the things you
would start with in a negotiation?
A. I find it difficult to differentiate between the headline
terms and the detail terms because, for example, with
Ferrari, we were negotiating until the very last minute,
until 25th May, where something you could consider to be a
detail actually turned out to be quite important. It was
about the revenue split on a sim card, the cards that we
sell. It would be quite easy to begin to think that is not
important. If you think about the fact that you sell
millions of these things over a period of time, the revenue
split is very important. I find it quite hard to
differentiate between what could be considered a detail or
the headline terms, albeit there were some elements that we
were trying to get facts on the table, at that early stage,
for everyone to be able to compare.
Q. You recall Mr. Phillips made a presentation at the
Silverstone meeting?
A. I do.
Q. If you look at tab 38, you will find that presentation.
A. Which bundle, please?
Q. In bundle C2. Do you remember that being presented by
Mr. Phillips?
A. I do.
Q. And do you remember becoming impatient during that
presentation?
A. I do.
Q. Would you turn to bundle B, tab 4, and go to divider 4, which
is a witness statement by Mr. Paul Marshall. Look at
paragraph 10. Paragraph 9 is where it begins, talking about
this meeting. In 10 he says: "The Vodafone party was made
up of David Haines who I met for the first time and Charles
Perring, Joe Kieser and Peter Dart from Brown. The meeting
started with a presentation by Ian Phillips in the Jordan
board room, which was more formal than I had expected or
intended. I noticed that Haines seemed to be fidgeting
during this 20 to 30 minute presentation. Then David Haines
and Eddie Jordan started talking directly, interrupting Ian
Phillips. David Haines liked to cut to the chase. He said
to Eddie Jordan, 'What figure do you want? The first figures
appeared high'." Is that true?
A. I do not recall it like that.
Q. Is not the true position that you wanted to get down to the
commercial nitty-gritty, rather than having a marketing sell
from Mr. Phillips?
A. What I wanted to try and do, as I recall, was to try to
re-introduce a degree into the discussion. A couple of days
earlier, I had heard for the first time from Jordan, and they
were quoting to us that they could do everything for us with
a red car for about $90 million. Here we were, I do not
know, a couple of days later, ten days later or so, and
suddenly there was a red and yellow car, or an all yellow
car, and the price had doubled. It had gone to $184 million.
Something here was not squaring for me. I was not interested
in getting into the commercial nitty-gritty at all. I was
interested in getting to a degree of realism and squaring
those two positions. It was clear to me that nitty-gritty
would come much, much, much, much later.
Q. Is it not true that you wanted to talk about money and
livery?
A. It is true that I wanted to get past, if you like, or get a
degree of realism, on livery and money, to get on to all the
other important issues which were of equal importance.
MR. BOYLE: My Lord, would that be a convenient moment?
MR. JUSTICE LANGLEY: Yes, certainly. Five past two.
(Adjourned for a short time)
MR. BOYLE: Could you take bundle C2 and go to tab 38, please.
This is the presentation that Mr. Phillips made, is it not?
A. That is the one, yes.
Q. Do you remember him showing the cost at page 498? Did you
see that page at the meeting?
A. I am just seeing. I think he got to that page.
Q. And the total was 179 million, including agency fees. Do you
see that in the middle of that page?
A. I see that, yes.
Q. Was there any discussion what was meant by including an
agency fee?
A. At that meeting?
Q. At that meeting?
A. Not that I recall, no.
Q. Is it not something that you would have been interested to
know about?
A. Absolutely, but there was no discussion at that meeting. I
was there listening and learning.
Q. Was that all you were doing?
A. Being engaged on this part of the presentation?
Q. Listening to the presentation. I think you have accepted
that there came a point where you became impatient and that
the presentation was then interrupted.
A. I have accepted that there came a point that I interrupted.
I have not accepted that I became impatient.
Q. We can check the transcript. At all events, you accept that
Mr. Phillips did not get to the end of the presentation.
The reason was that you interrupted the presentation.
A. The reason was that Mr. Jordan was giving me a funny look
across the table because it was obvious that some of the
content of the presentation was not actually as engaging as
it possibly could have been. I may have said the first word.
I cannot actually recall. In meetings, these things happen
across the table. There was a need for .... I think it was
Mr. Jordan who interrupted Mr. Phillips. It is not crystal
clear in my mind, but someone interrupted Mr. Phillips.
Q. And didn't that lead to a discussion of two main topics, the
livery of the car and the money?
A. It led to a discussion of livery, certainly, of ....
I remember some numbers being mentioned, yes.
Q. On livery, had Brown brought with them some illustrations of
a Jordan car with a Vodafone logo?
A. Yes, I think they had.
Q. What colour were those?
A. I do not recall. I think they were predominantly red,
variations on the theme with red in them, but I do not recall
the specifics of those presentations, of those
drawings/designs.
Q. Do you recall any comments that you made about the
colouration of the car?
A. Of which car?
Q. The Jordan car, sponsored by Vodafone.
A. Of ones that Mr. Phillips had presented or ones that came
from Brown?
Q. I am asking when you recall making any comment about the
colour that would be adopted for the car.
A. I remember discussing that the car colour should be red.
Q. Do you recall expressing a personal opinion about the colour
red?
A. I remember discussing the fact that I did not like to wear
red. I remember on red discussing the fact that it was one
of the strongest colours in marketing, and I remember
discussion around .... I thought it was ironic, having just
come from Coca-Cola, which is predominantly red, a red band,
if you like, around the world, that I was with red again.
Q. Did you say that you did not personally like the colour red?
A. As I recall, I remember saying that I did not like wearing
the colour red or I did not wear the colour red or use the
colour red, or something to that effect. I do not remember
discussing the colour red in negative terms in association
with marketing activities. It is a well-known fact that red
is the strongest colour available in marketing. A lot of the
leading brands in the world are, funnily enough, red.
Q. But we have already seen that Brown had tried apparently to
put the Vodafone logo on a red Ferrari car and had found some
problems in getting it to stand out. Is that right? Do you
remember I showed you the e-mail.
A. I recall you showed me the e-mail. That is always the
balancing act that you have to go through to get that
absolutely right.
Q. In fact, do you recall the discussion of the colour of the
car led to reference being made to Ferrari?
A. I do recall talking about Ferrari that evening, yes.
Q. Do you remember Mr. Jordan, in fact, referring to Ferrari?
A. I do.
Q. What did he say?
A. He said that we probably ought to go, given our colour red,
with Ferrari, given the fact that they were red, and I think
he referred to Manchester United, and it is well known that
we also sponsor Manchester United, which are predominantly
red.
Q. You said that you had already been to visit Ferrari, did you
not?
A. I do not recall if I said I had been to visit Ferrari.
Q. Did you say you had already considered Ferrari?
A. Yes. I recall saying we had considered Ferrari. I cannot
recall if I said we actually visited them.
Q. Have you got bundle B still there?
A. I do.
Q. If you go to page 20, behind tab 2, at paragraph 46,
Mr. Phillips says, and this is in the context of 45, which is
discussion about the colour red we have just referred to ----
A. Yes.
Q. At 46 he says: "This was discussed for a few minutes and it
became apparent from David Haines and the Brown contingent
that Ferrari had been considered and disregarded because
title sponsorship was not available." Was that said?
A. I do not recall that being said. I do not recall
"disregarded" being said. I recall talking about
problematic.
Q. The absence of title sponsorship was referred to by him, was
it not?
A. I do not recall that, no.
Q. "Moreover, it had a strong continuing connection with Philip
Morris, owner of the Marlboro brand of cigarettes. David
Haines repeated that Vodafone would not be associated with
tobacco." Did you say that?
A. I do recall that. I do recall talking about the association
with tobacco, which in my mind, at that stage, was an issue.
Q. And 47: "The clear message was that Vodafone would never
achieve its desire of perceived ownership of Ferrari. The
Ferrari brand would always overshadow the Vodafone brand.
Thus it would be impossible to achieve perceived ownership
even as title sponsor." Was that said?
A. I do not recall that at all. I made some comments on the
relativity of the brands this morning.
Q. Just look at 48: "We went on to talk about the livery of the
car in a little more detail. I said that whilst our
obligations to Deutsche Post regarding livery were not
contractual, it was a relevant consideration that Deutsche
Post required a significant part of the car to be a yellow
background with its black logo. I repeated that we would
send some information on sponsors through to Brown regarding
ongoing sponsorship commitments. It was agreed Brown would
produce some further designs for our joint consideration."
Is that correct, that account?
A. I recall that the discussion around Deutsche Post being one
of a contractual obligation. My understanding was that
Jordan had a contractual obligation to deliver the Deutsche
Post logo, if you will, on a yellow background and,
therefore, a considerable part of the car would be yellow.
Q. It would be those parts of the car in respect of which
Deutsche Post had the right to place their logo?
A. It was not actually clear in my mind whether it was just
limited to the space literally around the logo, or where it
was a bigger space. That was not clear in my mind. What was
clear in my mind was it was contractual, it was yellow, and
it was linked to Deutsche Post.
Q. Could you go to tab 4 of bundle B. This is Mr. Paul
Marshall's statement again. At paragraph 11 he says:
"During the meeting Eddie Jordan asked David Haines why he
did not do a deal with Ferrari. David Haines' response was
that title would be a problem. He seemed to dismiss Ferrari.
He certainly did not make it a requirement that the car be
red and keeping the car yellow for a season was discussed."
Can you recall a discussion of keeping the car yellow for a
season?
A. I cannot.
Q. Just while we have got it open, do you see that in paragraph
12 he says that a meal was served and we took a break. He
says that he went to the lavatory with you. "I think he saw
me as some kind of broker for the deal. He asked me, 'What
is going to get the deal?' I said I thought that 'if you get
to US$150 million, you will get deal.' I believed that
Jordan's bottom line was lower than this." Do you recall
having that discussion with Paul Marshall in the lavatory?
A. I recall we were in the lavatory at the same time and I
recall some discussion with him. I do not recall the
content.
Q. If you were asking him "what's going to get deal?" , that
would have been because you were interested in getting the
deal?
A. As I say, I do not recall the content of that conversation.
Q. You see if you look back to Mr. Phillips again, in paragraph
49, page 20, he says, towards the end of the meeting: "David
Haines, pretty much out of the blue, made the following
statement to me as he held up a brown livery. I am going to
challenge you if you can accept this design and 150 million
over three years, you have a deal tonight." Did you say that
to Ian Phillips?
A. I do not recall saying that verbatim. I do recall, as I
said, just before lunch, in the conversation saying, "There
is a challenge here," which was designed, as I said before
lunch, to get a degree of realism back into the room, and I
remember the challenge having three key elements. The first
element was $140 million dollars, the second element being a
completely red car; the third element would be strong
Vodafone branding, and I remember saying that is the basis on
which any potential deal could be done in the future.
Q. What Mr. Phillips specifically recalls you saying is that if
the Brown design were accepted, plus 150 million over three
years, "You've got a deal tonight."
A. As I said in my witness statement, frankly, that is
ludicrous. This was an initial meeting. We were having
dinner. We were getting to know each other. We were at the
early stages of our learning journey. No one at the time
took anything to mean let us have an agreement tonight.
The first I heard about that being interpreted in that kind
of way was months, months later.
Q. What Mr. Phillips says his response to you was that he had to
ensure -- this is paragraph 50 -- "that Jordan had sufficient
annual income from its various sponsors. This required
co-ordination of each sponsor's requirements regarding
livery. This the real challenge was to agree on a livery
design of the car. I said I could provide Vodafone with
Jordan's contractual obligations within 24 hours." Do you
recall him responding like that?
A. I do not recall any response. I recall the offer from
Mr. Phillips to come back with his contractual situation with
other sponsors more in the context of the Deutsche Post
discussion that we were having earlier on, not in response to
the challenge.
Q. Do you recall that when this was first said Mr. Jordan was
not the room?
A. No, I do not.
Q. Because what Mr. Phillips goes on to say in paragraph 51 was
that when Mr. Jordan came back, you repeated it. Do you see
that? Paragraph 51.
A. I do not recall repeating it.
Q. Do you accept that there was a discussion about when the
appropriate time would be to announce Vodafone's sponsorship
of Jordan?
A. No, I do not accept that at all. We had come nowhere near to
agreeing to sponsor anybody, let alone Jordan. We were on
our learning journey, as I said. We were not in a rush. We
were 12 months away from having to do anything. However, I
do recall some discussion around Monaco. That was the kind
of timing that we were looking towards, but not in the
context of any specific team whatever, and I certainly do not
accept in relation to Jordan.
Q. Do you recall Mr. Phillips suggesting, as he says in
paragraph 52, that the announcement should be made at the
Monaco Grand Prix?
A. No, I do not.
Q. Would you look on to paragraph 54: "We stressed that
Gallaher were keen to continue as Jordan's title sponsors for
2002/2003 seasons and that we had a deadline to work to as
Gallaher's option expired on 28.02.01." Was that said by
Jordan?
A. I do not remember the exact words. I do remember a
conversation around Gallaher and I do recall there was a
deadline.
Q. Because he goes on: "David Haines' reaction was that a deal
between Jordan and Vodafone would be tied up within that time
frame." Do you say that?
A. No, that is nonsense. I remember quite clearly stating, as
I said before lunch, that if Jordan needed to go ahead and to
something, they should go ahead and do whatever they needed
to do. I was not going to be put under any pressure to agree
to something at stage in our learning journey.
Q. Could you read paragraph 53 to yourself? (Pause for reading)
Did you say Lucent will have to go?
A. I do not recall saying the exact words "Lucent will have to
go". I do recall saying that were we ever to do a deal, that
Lucent would be a problem for us.
Q. Did you say it would be a feather in your cap?
A. Once again, I do not recall verbatim. It does not sound like
me, to be honest. It is not the kind of words I normally
use. What I remember about Lucent is saying that were we to
do a deal, it would be a problem. We were in litigation with
Lucent -- they have a similar kind of logo as we do -- and
that were we to do a deal for 2002, it was an issue that
would have to get sorted out. I left it at that. I do not
recall feather in the cap, no.
Q. Do you remember a figure being mentioned by Mr. Phillips of
8 million?
A. No, I do not actually. I have seen subsequent correspondence
where 8 million was raise during the course of these
proceedings, but I do not remember him saying that that
evening.
Q. Just look on to paragraph 56 while we have got it open.
Mr. Phillips says "On leaving David Haines repeated his offer
to us, 'If you can accept US$150 over three years the deal
is yours'". Did you say?
A. I do not recall that.
Q. And he also says, referring to Brown, that you said "You can
deal with these guys, they know what I want".
A. I remember saying about Brown. I do not recall those exact
words. I do not recall these things verbatim, I am afraid,
two and a half years later. I remember saying about Brown
that Brown were on our side, that they could work on the
details of logistics, organising things, project manage
things. That is what I remember saying about Brown.
Q. Do you remember the car journey back?
A. Yes, I do.
Q. Who was in the car?
A. Mr. Dart, Kieser, myself and Mr. Perring.
Q. Did you have a discussion amongst you about the outcome of
the meeting?
A. We did.
Q. Did you express enthusiasm about Jordan?
A. We did.
Q. Did you?
A. Sorry; yes, I did. I liked Eddie Jordan.
Q. And did you say that you wanted to do a deal with him?
A. No, I do not recall saying that.
Q. Mr. Perring, if you go to page 236, behind divider 25 ----
A. Same bundle?
Q. Yes. Do you have 9.18?
A. I have 9.18, yes.
Q. I put this to Mr. Kieser. His recollection was, when I put
this to him -- I said that he wanted to do a deal with
them -- answer: "Yes, perhaps." That was Mr. Kieser's
evidence about this conversation, as well as Mr. Perring's
evidence. This was your first meeting with Jordan.
A. Yes.
Q. But it had been a successful meeting, had it not?
A. It had been as good a meeting as my first meeting with
McLaren or with Ferrari.
Q. But the difference was that Jordan were offering title
sponsorship?
A. Absolutely, yes.
Q. And you knew that there would be no association with tobacco
assuming that you replaced Gallaher?
A. Correct.
Q. And you were going to get dominant branding on the car, were
you not?
A. Correct; further down the grid compared with Ferrari and
McLaren.
Q. Yes.
A. So less media exposure.
Q. That would be a question, would it not, as to what media
exposure you would get if you had dominant branding on a
Jordan as compared with secondary branding on a McLaren or a
Ferrari, would in not?
A. It depends on how often the cars are actually featured on
television. Usually those are the front are featured more.
You are right, there is the trade off discussion that you end
up having.
Q. Anyway, can you now recall discussing in the car whether you
expressed the view that you wanted to do a deal with Jordan?
A. Yes, I can recall, and I did not say I wanted to do a deal
with Jordan. I said a deal with Jordan would be a good
possibility. It could be done and I was enthusiastic. To me
there is a big difference between being enthusiastic and
saying we will do a deal.
Q. Did you discuss figures in the car?
A. I do not recall discussing numbers in the car.
Q. Do you accept that you may have discussed figures?
A. I accept I may have, absolutely.
Q. Then if you look at 9.19, Mr. Perring says, "As we parted at
the end of the journey, David Haines said words to the effect
that we ie. Brown should 'go get it'". Did you say that?
A. I do not recall that.
Q. And he goes on, "This really was a repeat of something
David Haines had said to Eddie Jordan as we were leaving
Silverstone. David Haines said that he would make the
decision but Brown knew what he wanted and would do the
detailed negotiations." Were you not conveying to Brown that
you wanted them to conduct detailed negotiations with Jordan?
A. No, absolutely not. Brown's job was clear. They were to try
and get the best proposal from Jordan, not get involved in
detailed negotiations.
Q. So you did not want them to get involved in detailed
negotiations?
A. Absolutely not.
Q. If they did get involved in detailed negotiations, that would
have been contrary to your instructions, would it?
A. Detailed negotiations, as I explained to you just before
lunch, in my mind what I would call contractual negotiations.
I wanted them to draw out Jordan to get the best possible
proposals, as I say, to re-introduce some reality into where
we had been.
Q. Peter Dart was there in the car, was he?
A. Yes, he was.
Q. And Peter Dart you had dealt with for years?
A. I had known Peter for years, yes.
Q. Peter Dart would have heard the conversation on the way back
on 6th February. Would you look at C2, tab 44.
A. Tab?
Q. Tab 44, page 539. Halfway down the page, Peter Dart sends an
e-mail to Andy Westlake and David Stubley, copied to Joe
Kieser and Charles Perring.
"Dear Andrew, Dear David
"Things are moving very fast on F1. It is an excellent
team effort and thanks for your help to date. BrownKSDP are
now emersed [sic] in the detailed negotiation and design
across a number of different teams and Charlie Perring will
give you all the detail."
So you are saying that if they were immersed in the
detail of negotiation, then that was contrary to your
instructions?
A. No, I am saying there is a difference in interpretation of
what negotiation is. If you are an agency and you are
drawing out teams, you might call that negotiation. If you
are someone who is actually on the company side who is going
to sign a contract with someone, you understand that
negotiation is something far more complex.
Q. He goes on, "Importantly, our client, David Haines, has a
meeting with Chris Gent on 19th Feb ...". Did you tell Peter
Dart that that meeting was to take place?
A. I probably did say that we had a meeting lined up with
Chris Gent. It probably could have been from my PA, to be
honest, but it probably would have been me.
Q. And he says "... we are helping him with his presentation
covering a widespread of issues including advertising etc AND
F1." Was that true?
A. Yes.
Q. And he goes on, "David Haines will be making a
recommendation". Did tell Peter Dart that you would be
making a recommendation to Chris Gent on 19th February?
A. Yes, I did. The recommendation was about the whole
migrations - advertising, as it says there, and an overview
of the teams.
Q. You do not think that means recommendation as to which
Formula 1 team to sponsor?
A. No, absolutely not. It says advertising, etc. The main part
of the recommendation on that day or the discussions on that
day with Chris were around those four stages of migration and
a new advertising campaign we were developing. The F1 part
was a part of the broader conversation. We were ages away
from making a recommendation of a team.
Q. Are you sure about that?
A. What, ages away?
Q. That it was not the intention at this time, 7th February,
that you would make a recommendation to Chris Gent about
which Formula 1 team to sponsor on 19th February?
A. Absolutely positive. Positive.
Q. What he goes on to say is, "We need your help and guidance on
the media value/analysis of the deal. You need to tell us,
also, how much this will cost as we will need to invoice it
from BrownKSDP. We will need it by the middle of next week.
"Chris Gent is going to ask 2 basic questions.
"1. Is F1 sponsorship the best way to spend circa
£100M over 3 years to satisfy certain objectives of brand
awareness, brand building, global presence, product sales
etc. What would have been the media alternatives ie. how
many global OTS would we have got with a 30 second ad.
Obviously some of the comparisons can be made directly;
others are more indirect eg the excitement spin off from F1
into the brand personality." Were you not telling Peter Dart
that one of the things that was going to be debated with
Chris Gent was whether Formula 1 sponsorship was the best way
to spend £100 million?
A. We were going to be discussing that with Chris, yes,
absolutely.
Q. So that would be the in principle question as to whether
Vodafone should be entering the Formula 1 sponsorship world
with this sort of money?
A. That was one of the in principle questions (one of many) that
we were discussing that day.
Q. Then 2. "If F1 seems like it's the right idea, then the next
question he", that is Chris Gent, "will ask is, which is the
best car/team to partner." Did you not tell Peter Dart that
you anticipated that Chris Gent would ask you that question
at the meeting on 19th February?
A. Not that I can recall.
Q. How would he have known this was going to be the
subject-matter of your meeting?
A. Peter is an intelligent man. He would have worked this out
for himself. We had a list of four or five alternatives.
Q. He goes on to say exactly that: "Currently we have 5 in
play".
A. Quite.
Q. Looking back again, David Haines will be making a
recommendation, is that not a recommendation about which
would be the best car or team to partner?
A. No, it would be about recommendation of the way forward on
the number of these issues that we have just talked about.
The meeting with Chris Gent that turned out to be the
21st was not a decision-making forum. Chris had come over to
Dusseldorf to see Mr. Geitner's area, as Mr. Geitner said the
other day, to have an update. It was not one of the official
bodies of Vodafone where decisions get taken. It was a more,
I cannot say informal, but it was more of "this is what's
going on", looking to the books of the things that are going
on.
Q. Did Brown's instructions from you encompass helping you to
make a presentation to Chris Gent on 19th February?
A. Yes, they did, although the meeting ended up not being on the
19th but on the 21st.
Q. I am asking about the situation as it was at 7th February,
which is the date of this e-mail. Did Brown's instructions
include assisting on question number 2 on page 540?
A. Yes, it did, certainly.
Q. Would you turn to tab 48. This is a fax from Charles Perring
to you dated 8th February.
A. It is.
Q. The document we have actually got is a fax which was sent on
9th February; do you see at the top?
A. Yes.
Q. And there is a stamp saying your secretary has received it on
the 8th, and there are some hand writing, "Peter please
call". Is that your hand writing?
A. That is my terrible writing, yes.
Q. And did you write on the document "Peter please call" and
then asked your secretary to fax it on to Peter Harris?
A. It looks like that ,yes.
Q. And did you do that on 9th February?
A. It looks very much like the fax was sent on the 9th.
Q. In fact, it looks from your diary as if you spent all of the
8th February with Sir Christopher Gent in Brussels.
Could you confirm that by reference to your diary? It is
bundle C10, page 2147, or maybe 2137. It is the entry for
8th February.
A. Yes, I recall that date clearly. It was a big presentation
in Brussels.
Q. So you must have gone back to Dusseldorf, did you, after
that?
A. Yes. It say with Chris Gent. What it was is that there were
about 200 people there and I was giving a presentation on
project momentum. So all the things we were doing in
Mr. Geitner's area was the first time we had all of the
managers from our Europe. I drove back to Dusseldorf in the
evening.
Q. When you received this fax at tab 48, did you read it?
A. Yes.
Q. And did you read the section dealing with team discussions,
Ferrari McLaren, Toyota and Benetton?
A. Yes.
Q. So far as the Jordan section is concerned beginning page 547,
in the middle of the page, he says, "However, as part of our
remit from you to undertake these negotiations, I am hoping
you could give us a mandate to progress the Jordan
discussions a stage further, based on our conversation in the
car on the way back from Silverstone." Did you respond to
that by saying yes you can progress the Jordan discussions a
stage further?
A. I do not recall a specific response, but from subsequent
actions, I must have had a conversation with them, that they
went ahead and discussed with Jordan.
Q. You were aware from this fax that they would base the
negotiations on the terms set out on page 547 and 548?
A. Yes.
Q. You must have realised that the total sum for 2002-04 that
was under consideration was 150 million.
A. Yes, although we always had a fundamental issue. It was a
matter of principle about this bonus thing. The number
I remember discussing on the 6th was 140 million with Jordan.
Q. If that was so, would you not have gone back to Browns and
said, "No, I want you to negotiate on 140"?
A. I cannot recall going back to Brown, let us put it like that,
because, as far as I was concerned, it was just drawing out a
proposal ready for Chris Gent's meeting.
Q. Did you appreciate that the rights being proposed were those
set out at pages 551-554?
A. Yes. This was the rights list that was prepared for what
I called the apples to apples comparison.
Q. You knew when you had been to see Jordan on 6th February that
they had already received that document, did you not?
A. I did not specifically know that they had received it.
Q. You knew that the Brown was sending it.
A. Yes, I knew Brown was sending it.
Q. And nothing was said at that meeting to suggest to you that
Jordan could not deliver the rights set out in the rights
list?
A. No, there was not, but the rights list was in no way
comprehensive. It was, as I said, designed to be a basis
from which we could compare various teams - apples to apples
comparison. I remember having a fax discussion or even a
phone discussion with Mr. Harris about the rights list.
There was a starting point, but there was no way it reflected
actually what we might end up wanting to do. It was good for
our learning journey.
Q. Was not the position that the rights list was intended to set
out comprehensively all the rights which Vodafone would wish
to have?
A. No. I am sure that was the case in the eyes of Charlie
Perring who put it together. It was, if you like, the first
stab of putting a comprehensive list of things together that
we may or may not, when it actually got down to it, discuss
a contract, be interested in having.
Q. Some of the teams might not be able to give you everything in
the list?
A. Correct, and there may be other things that had that were not
on the list. That was the whole point at some stage of
getting involved in contractual negotiation.
Q. Can you think of anything you wanted that was not on the
list?
A. I can actually. For example, joint product development.
One of the things from the outset that I thought Vodafone
could do very differently, for example, to a tobacco company
was develop products that we would then sell, things like
games down the mobile phone. It was not on the rights list.
Livery definitions were not on the rights list. Rights to
renewal was not on the rights list. As I say, it was meant
as a document to be able to compare offers.
Q. Did you have a discussion with Peter Harris in response to
your fax to him?
A. I do not recall a specific discussion. I am sorry. Sorry,
to this fax? I do not ----
Q. You sent the fax asking him to call you?
A. I do not recall a specific telephone conversation about this,
although I am sure we did at some stage discuss it, but I do
not recall the content of that. My only recollection of the
rights list was that Peter, whose area of expertise this was,
was insistent all the time -- this is the big lesson from
Coke -- that people go out and buy rights that they never
actually use and therefore you are wasting the company's
money. His point of view was this was fine to get apples for
apples, but once we decided which kind of direction we wanted
to go, we should then get into being very specific and
detailing each right that we wanted and putting a notional
value to that to end up not wasting our company's money.
I think Coke -- and that is one of the reasons we hired Peter
-- is one of the most advanced companies in the world at
doing this kind of thing, because you can waste an awful lot
of money quite quickly if you are not careful.
Q. Just looking at the list, if we could, for a moment, at
page 551, you wanted category exclusivity for the technology
rights listed, did you?
A. Sorry, where are you now?
Q. Page 551, technology rights.
A. Yes, that was that Jordan would commit itself to use our
products.
Q. Sorry, could you repeat that? Could you repeat what you just
said; I did not hear?
A. For Jordan to use these products, to use our products.
Q. Is that what it means, category of exclusivity?
A. That is what I took it to mean.
Q. It is not dealing with other sponsors, then?
A. No.
Q. There are a number of items called "image", which start at
page 552 and go to page 553?
A. Yes.
Q. Team, race car, replica race car, drivers, branding and
merchandise. Those would all have been important features of
the sponsorship contract from Vodafone's point of view?
A. I would like to say yes, but to be very honest, this whole
area of rights was the one I wanted Peter to manage because
it was his area of expertise rather than mine.
Q. "The right to develop in conjunction with the team, a
suitable car livery with maximises Vodafone's brand
standout." Was that not important to you, Mr. Haines?
A. Absolutely. I was referring more to the detail than the .....
Q. And you knew, did you not, that Jordan would have no problem
in providing Vodafone with all of these rights?
A. I came to be aware of the fact that most of these rights
would be available from Jordan, but I would like to repeat to
you that was good from our apples to apples comparison basis,
but that is it, because there may have others in there that
we wanted that were not in there.
Q. At all events, you were not aware of Jordan ever having been
asked if they would agree to something that was not in this
list?
A. No, we never got to that stage with any team, apart from
Ferrari.
Q. Could you look at page 548 under "Designs and Presentation".
"In advance of your meeting with Chris Gent, I will be
feeding a design brief into the studio tomorrow that covers
the likely livery we will obtain through Jordan." That
meeting with Chris Gent referred to was the one originally
scheduled for 19th February, was it not?
A. Yes, I think so, yes.
Q. The purpose of putting the design brief the Jordan car, as he
says, was so that you could be aware of the proportion of
Jordan awareness?
A. I have lost you; I am sorry.
Q. I am just paraphrasing the last sentence, "The designs will
not be the finished version, but an indication of the
proportion of the Vodafone awareness."
A. I really cannot find you; I am sorry.
Q. Do you see where it says "Designs and Presentations"?
A. Yes, I have got "Designs and Presentations". Yes, I have
you. I have found it. Yes, I have got it.
Q. Do you remember receiving further liveries from Brown of a
Jordan car?
A. Yes, we had liveries flying back and forth all the time.
Q. And you received those by e-mail?
A. Actually, I usually received them in terms of a presentation.
Brown were quite particular about not wanting me to get what
they perceived to be their, if you like, intellectual work to
be whacked across in an e-mail. They used to like to come
and present them. So I usually get them in forms of pictures
mounted on boards.
Q. Are you saying they did not e-mail images to you?
A. I am saying primarily the way that Brown would present work
to me was on pictures on boards. I am not saying they never
e-mailed me images, no, I am not.
Q. Anyway, to the extent they did send you e-mails, you deleted
all those e-mails?
A. Yes. They take up so much space in the filing system.
Pictures take up an awful lot of space. I try to get rid of
them as quick as I could.
Q. So what was the point of Brown sending you designs for the
purposes of your meeting with Chris Gent? What did you
understand was the purpose of that?
A. I am sure that Brown were keen for us to show some of those
designs to Chris. That would have been the point. As often
happened with meetings at Vodafone, the time available to us
got crunched in the end. I am sure you will ask about the
meeting with Chris in a minute.
Q. Then he goes on: "Team Comparisons.
"Early next week, I should have met with every Team for
the second time and have had responses to all our enquiries.
"With all this information, I'll be able to compile a
rights comparison, which at a glance will allow you to check
all the different criteria (cost vs awareness vs opportunity
vs benefits etc)".
What would be the purpose of giving you the rights
comparison?
A. I think that was what I was referring to earlier - this
apples for apples comparison, so, basically, name of team
what was available, indication of consideration. So that at
a simple glance you would see it was the window shopping put
on one page, for a want of a better phrase.
Q. Then he says:
"Peter has also asked our colleagues at CIA to
undertake a media valuation ...".
Do you know who CIA were?
A. Yes, CIA were the Tempus media agency. They were experts in
areas of media.
Q. Do you recall receiving a media valuation from them?
A. I do not recall receiving it at the time. I have
subsequently seen the media valuation in the trial documents.
I do not recall receiving it at the time.
Q. Would you just look at the next paragraph.
"In terms of your own timings, I will have as much
information and supportive design work for your meeting with
Chris Gent, where hopefully there will be a clear Team
opportunity which suits Vodafone's strategic ambition."
Was it not the purpose of the meeting with Chris Gent,
with the benefit of the comparisons which you have spoken
about here, for you to make a recommendation to Chris Gent
about which team would most suit Vodafone's ambitions?
A. No, it was not. The purpose of the meeting with Chris Gent
was to show him what was available, discuss with him what was
available, get any thoughts he may have on what was available
and, in fact, discuss a process by which we would make that
decision at a later stage on F1. There were other issues we
discussed with them at length as well.
Q. You can put away bundle C2 for the moment. Could you go to
bundle C3, at tab 55. This letter is stated at page 569 to
have been copied to you. Did you receive a copy of this
letter?
A. Yes, did.
Q. You knew, did not you, from the first paragraph that a
further meeting had been held with Mr. Jordan over the
weekend; in fact at his London home on the Saturday?
A. I did.
Q. You must have appreciated that the reason that meeting had
been held was that you had given the mandate which Brown had
requested in the fax of 8th February.
A. As I said, I do not recall specifically giving a mandate, but
I must have agreed with him for Joe to have gone ahead with
this.
Q. Did you receive a report from Mr. Kieser about what had
happened at the meeting on 10th February with Eddie Jordan?
A. I do not recall receiving a specific report other than one
which is contained in this letter.
Q. In the second paragraph, Mr. Kieser writes: "We await your
written confirmation regarding the Jordan sponsorship deal
for 2002/2003/2004. I emphasise that as Vodafone needs to
conclude their total marketing plan, including sponsorship,
by the morning of Friday 16th February, we do request that
you respond as promptly as possible. We would anticipate
that by Thursday 15th February, Jordan could confirm the
sponsorship package detailing full sponsorship apparel and
livery, auxiliary applications, costs and reassurances
regarding the possible settlement with conflicting sponsors.
We would welcome a meeting with our legal council, Steven
Townley, in order to draft in principle, Heads of Agreement.
Vodafone would finalise a decision by Friday 16th February,
and in turn obtain Board approval by Monday 19th February."
Did you tell Brown that Vodafone would finalise a
decision by Friday 16th February?
A. No, I do not recall telling them that at all.
Q. Did you tell Brown that Vodafone would obtain board approval
by Monday 19th February?
A. I do not recall telling Brown that at all.
Q. If you had not told Brown that, when you received a copy of
the letter, would you not wish to correct that?
A. I was preparing my presentation for Sir Christopher the
following week and I probably interpreted that in the sense
that Joe had got it wrong, a board-level meeting with
Sir Christopher. I did not see the need to correct it, no.
Q. You see, if that last sentence is correct, it indicates, does
it not, that the decision would precede the board approval.
A. The last sentence is not correct. It is simply not correct.
Q. You see, what I am suggesting to you was that this in fact is
information that you yourself had provided to Brown?
A. I am saying I did not. I certainly do not recall it. I
think the e-mail from Mr. Dart sets out quite clearly what
you referred to earlier, that, if anything, we were making
recommendations, not decisions.
Q. Was it true that Vodafone needed to conclude their total
marketing plan, including sponsorships, by the morning of
16th February.
A. I do not think it is true that Vodafone needed to complete
its marketing plan. I think it was true that we needed to
have a content for presentation ready -- that is the only
thing I can think of anyway -- for the following week with
Sir Christopher. I do not know where he got the marketing
plan from at all. We do not even write a marketing plan. It
is not even the date that is wrong; the context is wrong.
Q. Anyway, you knew that this was what Mr. Jordan was being told
by Brown.
A. I was not consciously aware of it, but by copy of the letter,
I had read the letter.
Q. Would you turn back to tab 54. That is a letter from Eddie
Jordan to Charles Perring. It says: "Dear Charlie and Joe",
Perring and Kieser. Did you see that letter at the time?
A. No, I did not. I certainly do not recall seeing it.
Q. If you go to tab 56, Mr. Kieser replies to Mr. Jordan on 12th
February acknowledging receipt of a fax at 2 o'clock that
day: "We have noted the content and will revert to the
client." That fax appears to be copied to you.
A. It does. I think they put the content of that note in one of
the schedules for the meeting of the week afterwards. That
is the only thing I can think of.
Q. At about this time, were you discussing budgeting matters
with Mr. Geitner?
A. We had various discussions of budget proposals in
February/March.
Q. Could you take your diary in C10, tab 77, and go to page
2138. Do you see for 12th February it says: "Meeting re
budget with David Wheldon and Anthony Kendall".
A. I do.
Q. What budget would that have been?
A. Given that David Wheldon was in the room, who was the other
person there in the Tempus business for our side, and was not
involved Formula 1, all the other areas of advertising, that
would probably have been involved putting together our
proposal for advertising expenditure and production
expenditure. We make advertisements for which we have to
pay, and we book media - so for our media expenditure,
advertising and media. I do not recall whether it had any F1
content in that meeting, whether there was any F1 content in
that meeting, or not.
Q. Look at 13th February. Did you have a meeting with
Mr. Geitner on 123th February?
A. I did, 11.30.
Q. Was that about budgeting?
A. Budget proposals, yes.
Q. And would that have included Formula 1?
A. I suspect that would have included Formula 1, yes.
Q. And can you recall what the discussion was at that meeting?
A. I think the way it normally works is that we work out how
much budget, if you will, that we want to spend (everybody,
each of Mr. Geitner's reports) and you make a proposal, go
through it with Mr. Geitner, and that is probably what we
were doing on the 13th with Mr. Geitner, going through our
proposal. The fiscal year starts in April, so for the
following fiscal year.
Q. The year April 2001 to March 2002?
A. Exactly that.
Q. And that would have included, therefore, the initial period
of any Formula 1 sponsorship?
A. It included the Formula 1 sponsorship for the existing
relationship that we had with Benetton, and track side for
that calendar year, and then the first quarter in the next
fiscal year for anything else that we were to do, yes.
Q. At that meeting, did you have a perception of what sort of
money Vodafone might wish to spend on Formula 1 sponsorship
in the following season?
A. By 13th February, I had a point of view or a proposal, yes.
Q. And what was that?
A. I think our first number that we put in to the proposals
would have been around US$ 200 million for the following
fiscal year; so April 2002. Sorry, no, wrong. Yes.
Q. Could you just tell us the answer you wish to give, and then
I will ask another question.
A. We had a proposal for the following fiscal year, which only
had the first quarter of whatever it would have been, with
the full sponsorship; so three-quarters with our small
Renault Benetton relationship and one quarter of a larger
relationship.
Q. And the larger relationship would have amounted to
$200 million over a three year period.
A. Exactly. We would have taken that proportion back to an
annual period and then, given that it was only quarter, it
would have been a quarter of that sum.
Q. So that was the figure you were discussing with Mr. Geitner
on 13th February as being the potential amount of Vodafone
sponsorship spread over a three year period.
A. Exactly, sorry to keep confusing it, yes.
Q. That was in fact the figure that Mr. Perring remembers you
mentioning when you first met on 19th January. Do you
remember that? I showed you that this morning. Do you think
that is a coincidence?
A. No, I do not. I do not know whether it's a coincidence. It
was a number that I recall first coming up with, a
guesstimate I called it at the time, after our meeting with
Ferrari. I think it was on the 25th January, when Mr. Todt
showed us those four or five places that would be available.
I do not know where Mr. Perring got it on the 19th. The
first time I recall that number, thinking it to myself,
actually, was after 25th January at Ferrari; but it was a
back of the envelope guesstimate.
Q. Now it has actually been incorporated into Vodafone's
internal budgeting process in a meeting between you and
Mr. Geitner.
A. I do not think it was incorporated in the Vodafone process at
that stage. The way it works is you have an initial
discussion. Then it gets consolidated into a proposal from
our group, Mr. Geitner's group, and then goes in. I think
that happened at still some later stage, but it would all
have been around February/March.
Q. Can we just go back to tab 55.
A. Which bundle, please?
Q. C3. In the second paragraph, in the middle sentence, it
says: "We would anticipate that by Thursday, 15th February,
Jordan could confirm the sponsorship package detailing full
sponsorship apparel and livery, auxiliary applications, costs
and reassurances regarding the possible settlement with
conflicting sponsors."
Is that what you wanted Jordan to do?
A. That is what Brown have asked them to do.
Q. Yes. Is that what you wanted them to do?
A. What I was keen for Jordan to do was to come back and give us
a realistic point of view on costs, so that we could get them
into our overall schedule. This takes it further than I
would necessarily required.
Q. What did you understand, when you read this, by the
expression: "Reassurances regarding possible settlement with
conflicting sponsors"?
A. I did not react to that at all. I remember the discussion
that we had had at Silverstone about Lucent, which is what I
assume it is referring to.
Q. That is what I was asking. You understood it to be a
reference to Lucent?
A. And possibly the contractual terms with Deutsche Post. We
talked about the design issues.
Q. Well, if you look at the next paragraph, it says: "As
suggested on Tuesday evening, David Haines would prefer
Jordan to terminate their current sponsorship with Lucent".
That is a reference to what you said at Silverstone, was it
not?
A. Absolutely. I was quite clear. Were we to go ahead from
2002, then Lucent would have been a problem for us, given our
situation and the potential clash. We never did agree to go
ahead, so it never became an issue.
Q. But what was under discussion with Lucent, surely, was taking
them off in 2001. Is that not right?
A. No. What I had said was were we to go ahead in 2002, it
would be an issue. I remember Mr. Jordan offering to do
something in 2001, and I remember being very reluctant to
commit because we had an ongoing relationship with Renault
Benetton. I, frankly, did not have, at the top of my mind,
whether we had any exclusivity clauses with Renault Benetton.
That was an offer from Mr. Jordan upon which he seemed quite
keen in 2001. I had not even thought about 2001, because we
had, as I say, our Renault Benetton thing. I was concerned
that were we to go ahead in 2002, I really thought the Lucent
thing would be a clash. I was not focused on 2001 at all.
Q. Just look at page 561, would you. It is behind divider 2.
This is Mr. Jordan's letter, the actual letter. Page 567 is
the actual letter. The second paragraph on page 567:
"Regarding 2001, David requested that we look at our position
with Lucent which was a potential stumbling block for
Vodafone." Do you see? Do you see the Lucent contract was
for 2001 and 2002.
A. I do not recall discussing it as a request from our side for
2001. As I said, we had a relationship with Renault
Benetton, and I only recall discussing Lucent once, which was
on February in Silverstone. I just did not know what our
Renault Benetton contract said about exclusivity.
Q. You see, if you go back to 568, behind divider 55, the third
paragraph, this is Mr. Kieser's report on the meeting of 10th
February, telling you: "At the meeting, it was confirmed
that the sponsorship with Lucent would expire at the end of
the season 2001 and would certainly not pose a conflict for
the intended 3 year sponsorship deal with Vodafone." You
must have appreciated that on receipt of this letter.
A. I did not consciously appreciate that. I mean, I can see it
is in the letter. Lucent was not, as I say, a major issue.
In 2002, we never came to any agreement.
Q. You see what this paragraph goes on to say is: "David Haines
would prefer Jordan to terminate their current sponsorship
with "Lucent", i.e. the 2001 sponsorship: "Vodafone
acknowledges that this would require Vodafone to substitute
the Lucent sponsorship, commencing as early as March/April of
t his year." Is that not completely clear?
A. Do I recall Mr. Jordan offering to do this or even
suggesting? I said that were we to do a deal for 2002 and
were we not to have any contractual obligations with our
Renault Benetton deal, then we could look at this for 2001,
but it was left very up in the air. There were so many
hypothetical conjunctives, it never became an issue.
Q. If you look at 569, the middle paragraph, you knew, did you
not, that the result of the meeting on the 10th had been that
there was not yet agreement on a realistic sponsorship
figure?
A. Sorry, where are you now?
Q. At page 569, the middle paragraph, towards the end: "The
meeting could not conclude a realistic sponsorship figure and
team Jordan would rework th 3 year budget to respond no later
than Monday 12th. Jordan would present the optional cost of
termination and substitution of the Lucent Technology
sponsorship for the current year". Did you know what
happened next after this letter?
A. I have subsequently found out. I think there was another
meeting, but I am not sure what happened after this letter.
Q. Didn't Mr. Kieser take instructions about what to do next?
A. I am sure we discussed trying to get a proposal from Jordan
that we felt was realistic in terms of cost, so that we could
put it in our schedule for the meeting of the 21st. I do not
recall it specifically.
Q. At this date, 12th February, were you still keen to do a deal
with Jordan?
A. I was enthusiastic about Jordan, as I was about Ferrari, from
day one.
Q. Could you look at the last paragraph on 569: "Brown KSDP
confirmed that the various design proposals were currently
being prepared to be presented to both client and team Jordan
by Thursday afternoon." Did that happen?
A. I do not recall that happening. I have seen lots of e-mails
of designs that were going back and forth.
Q. Lots of e-mails?
A. I have seen in the bundles, during the course of the last few
weeks, lots of e-mails of designs going back and forth. I do
not recall that meeting on Thursday afternoon.
Q. It does not suggest there would be a meeting on Thursday
afternoon. What it suggests is that by Thursday afternoon
the design proposals would have been prepared and presented
to both client and team Jordan.
A. Yes. I am saying that I do not recall those being presented.
As I said to you, I think it was earlier on this afternoon,
Brown preferred to present to me in terms of physical boards
or to Vodafone, their client, rather than just sending an
e-mail. The designers used to hate the fact that with all
the precise work they do, just put it on an e-mail, they felt
it was unbecoming of thier hard work. They were trying to
have a meeting and show us on boards that were sprayed with
glossy spray to make it all look very exciting, just the way
an agency works. It is their thing, if you will.
Q. Were you aware that Jordan was suggesting that they might
retain Jordan yellow in the first year of a three-year
sponsorship deal?
A. I remember there was some discussion of Jordan yellow and it
was a contentious point throughout. Our brand guidelines at
Vodafone that had been developed were quite clear about the
fact that our brand was to be red. I remember that this was
a contentious discussion that never got resolved throughout
this whole period.
Q. Just look at what it says, if you would, in the letter in the
middle paragraph: "We do record your concern, as expressed
at the meeting, that if the new team design called for a base
application other than the current yellow, Jordan might wish
to retain the team Jordan identity in year one, utilising the
Jordan yellow in your logo type. You did however emphasise
that th is was not an imperative, but merely a request."
What is contentious about that?
A. I do not have you at all.
Q. Page 569, the middle paragraph.
A. Yes.
Q. "We do record your concern, as expressed at the meeting, that
if the new team design called for a base application other
than the current yellow, Jordan might wish to retain the team
Jordan identity in year one, utilising the Jordan yellow in
your logo type. You did however emphasise that this was not
an imperative, but merely a request." My question to you is
what is contentious about that?
A. Yellow was contentious for us.
Q. But he is saying it is merely a request, not an imperative.
He is not insisting upon it.
A. No. I understand. Many of the designs we saw, however,
contained an awful lot of yellow.
Q. Are you talking about Jordan designs?
A. The first Jordan design and subsequently some of the Brown
designs had an awful lot of yellow in, even though they were
coming from Brown, who had obviously been in contact with
Mr. Jordan.
Q. We will come to look a bit later at those.
A. Sure.
Q. Did Mr. Kieser request your instructions about what to do
next after this letter of 12th February?
A. I do not recall him specifically requesting my instructions.
Q. Did you know that a further meeting was going to be held on
14th February with Jordan?
A. I am not sure I knew at the time. I do know another meeting
has been held. It would have been quite likely that we
discussed it at the time. I just cannot remember
specifically where and when and how we discussed it.
Q. Could you take your diary again, which is at C10, 77, page
2138. On 13th February, after your budgeting meeting with
Mr. Geitner, did you fly to London in the afternoon, as shown
by your diary?
A. Yes.
Q. And stay the night at the Metropolitan Hotel? I think you
are nodding.
A. Sorry, yes, yes.
Q. And then on 14th February, could you identify where those
places are? They are all in England, are they, in London?
A. No. Actually they are in Newbury. They are in England, but
they are in Newbury.
Q. And then you stayed the night again in the Metropolitan
Hotel?
A. Yes.
Q. And meanwhile, as we know, Mr. Kieser was negotiating with
Mr. Jordan at Heathrow Airport.
A. Yes.
Q. And then the next day, Thursday the 15th, and using your
diary, could you tell us what you did that day?
A. Sure. I had a meeting in the morning with Fiona Gilmore.
That is the lady who ran Spring Point, the agency to which I
referred this morning, who was helping us early on, in the
offices of one of our other advertising agencies in Golden
Square in London, which is WCRS. Then I met David Wheldon,
Peter Dart and Charlie Perring in the same offices for a
meeting. Then I met Mr. McNally of Allsport and Mr. Townley,
in the same offices, WCRS. In the evening I flew to Milan.
Q. And was Mr. Kieser at the meeting with Mr. McNally?
A. I remember Mr. Kieser joining the meeting with Mr. McNally.
Q. And do you recall discussing with Mr. Kieser on 15th February
the possibility of now pursuing discussions with Benetton?
A. I do not. I do not remember that. I do not remember having
a lot of time for Mr. Kieser because, as I recall .... I do
not remember speaking to him beforehand, and I recall having
to leave quite promptly to get to the airport.
Q. For your 8.10 flight?
A. Yes. I always leave an hour to get to Heathrow and then an
hour before the flight, especially in the rush hour.
Q. Well, the meeting was a meeting at 2 o'clock, was it not?
And what were you discussing with Mr. McNally?
A. With Mr. McNally, who is, as I understand it, the CEO of
Allsports, we were discussing a number of issues. Primarily
we were there to discuss trackside advertising. At the time,
we were switching what had been German D2 advertising to
Vodafone.
Q. Trackside?
A. Trackside advertising. During that discussion, the subject
of Ferrari came up. We had quite a lengthy discussion around
Ferrari and Philip Morris. Mr. McNally used to work at
Philip Morris many, many years ago. He is one of the more
more insightful people in Formula 1, so we were in listening
mode about his views on Formula 1. He was one of the first
people, for example, who said to me to be careful about just
going title sponsorship on a team which does not get on to
the television screen so often, and he was keen to push us
towards Ferrari. I am not sure if it was at that meeting
that he used the example of Orange, which were one of our
competitors, who were always at the back of the grid. It
looked great on a still car, but actually they never got the
TV coverage because they were always at the back of the grid.
Q. Was it at this meeting on 5th February that you learnt that
Philip Morris owned the skin of the Ferrari car?
A. Yes, it was.
Q. So Ferrari had not told you that?
A. No, not in that many words, they had not.
Q. And you needed Philip Morris to say yes before you could get
on to the car at all?
A. I am not sure if we needed Philip Morris to say yes before we
could get on to the car at all. That is the point I am
referring to. I think it was probably better for us to have
a good relationship with Philip Morris. Their agreement to
kind the kind of presence that we wanted, that would have
suited our "principal" requirement as opposed to just a pure
secondary sponsor, if we had just been doing a secondary
sponsorship deal, a small one, I do not know in fact whether
we would have needed their agreement. To do the kind of
thing you were after, Mr. McNally pointed out that it would
be better to talk to Philip Morris.
Q. Did Patrick McNally agree, on 15th February, to help set up a
meeting with Philip Morris?
A. He did.
Q. Did you, on 15th February, have an opportunity to discuss
with Mr. Kieser the strategy to be adopted in negotiations
with Formula 1 teams?
A. I do not specifically recall discussing that with Mr. Kieser
on the 15th, but equally I cannot rule it out because I know
he was not at that meeting with Mr. McNally.
Q. You see, if you would turn in bundle C3 to tab 65, you will
find a letter from Mr. Kieser to you.
A. 65?
Q. Tab 65, page 589.
A. Yes.
Q. "After our meeting with Patrick McNally, I wish to confirm
that we will pursue discussions with the 'Benetton' Renault
team. As things stand, Charlie Perring has arranged to meet
them this afternoon at 4.30 p.m. in Oxfordshire, and will
report back next week."
First of all, was that discussed between you and
Mr. Kieser on the 15th February?
A. It looks like it, yes.
Q. You see, our meeting with Patrick McNally is the meeting on
15th February, is it not?
A. I think it must be, yes.
Q. He is saying: "I wish to confirm" -- that is to confirm a
discussion you had already had with Mr. Kieser about pursuing
that. Is that right?
A. It certainly looks that way, doesn't it, yes?
Q. And what was your understanding as at 15th February, as to
the nature of the intended discussions with Benetton? For
what rights would that discussion take place?
A. I think we had asked Charlie to manage the transition of the
D2 advertising, so the German D2 advertising, which was on
the Benetton car, to Vodafone. As I said earlier, we had an
existing relationship with Benetton which .... Yes.
Q. The existing relationship with Benetton was for a secondary
sponsorship, was it not for D2.
A. Yes, it was quite a small secondary sponsorship. Given the
transition to Vodafone, we had asked to have that changed and
agreed with our German subsidiary to have that changed to
Vodafone.
Q. And that was happening independently of what might be termed
the wider Formula 1 sponsorship project to negotiate a
three-year deal.
A. More or less it was, yes. I had not actually met
Mr. Briatore of Benetton yet. I do not think I did that for
a few days. About a week later, I think, I met him for the
first time.
Q. Were you not aware on 15th February that the intended subject
matter of further discussions with Benetton was for title
sponsorship?
A. I do not think I was at the time. I think that only came up
once I had met Mr. Briatore on the 23rd. It may have been
that Charlie was preparing that ground. I really cannot
recall. I do know he was specifically tasked with managing
the transition. That I do recall clearly - of the secondary
sponsorship.
Q. You met Mr. Briatore for dinner on 23rd February, didn't you?
A. Yes, I did.
Q. That was the first meeting you had with him.
A. It was, to the best of my knowledge, yes.
Q. And you do have a recollection that title sponsorship was
discussed at that dinner.
A. As I say, it was a dinner conversation. To the best of my
knowledge, title sponsorship was discussed there, the
opportunity of getting into discussions with Renault about
title sponsorship; so it was not, if you like, a detailed
discussion; it was about setting up a process by which that
could be discussed.
Q. Title sponsorship was being discussed at that dinner in the
context of Vodafone wishing to do a major project in
Formula 1 for the 2002 seasons onwards, was it not?
A. Yes.
Q. And that dinner, as we saw, only took place on 23rd February.
A. It took place on the 23rd, yes.
Q. You see, if you would just turn for a moment to tab 72 in C3,
you will see a presentation dated 21st February. If you will
go to page 604, you will see the grid team sponsorship
setting out five teams. Under "Benetton" it says "Vodafone
Renault Formula 1". That would be team or title sponsorship
of Benetton, would it not?
A. Yes, it would be. It would indeed.
Q. So the possibility of a title sponsorship deal with Benetton
must already have surfaced by 21st February.
A. They must have come up before 21st February as a possibility.
Q. If you go back to tab 5, page 589, what I am suggesting to
you is that as at 15th February, it was already under
discussion between you and Mr. Kieser that discussions with
Benetton were being pursued and that what you were interested
in was title sponsorship.
A. Yes. As I said, I do not recall that specifically being
discussed at that time with Mr. Kieser.
Q. Well, it would be consistent ----
A. It would be consistent.
Q. ---- would it not, with the criteria which we looked at
earlier, that Vodafone were applying, or you were applying.
I think you drew a appendix.
A. I did. I drew the distinction that it would be consistent.
If we were going to go with the second team, a team that
would not be on the podium, or were not likely to get on the
podium very often, the title route would be the route that we
would try and go. I think I was saying that overall our
objective was media exposure.
Q. Mr. Kieser was asked about this on day 6, and I perhaps do
not need to show you the exact words. Just reading from page
884 of the transcript .... I am going to do that, I need to
show you the transcript, so I think I had better -- I will
come back to that in a moment. I do not want to put a
misleading question. Do you see at page 589 ----
A. Yes.
Q. ---- the second paragraph.
A. Yes.
Q. "I fully concur with your suggested strategy of 'going
underground' for a week or so." Did you suggest to
Mr. Kieser on 15th February that you should go underground
for a week or so?
A. Yes, I did.
Q. Why did you suggest that?
A. I think we were having our discussion with Sir Christopher a
week later, so this was the previous week, and we were having
our discussion with Sir Christopher. I had a lot to discuss
with him on our projects - the rebranding, the migration, the
new global advertising campaign and the F1 project. As you
will recall, I was on my own more or less at the time --
new colleagues were just joining -- and I thought it would
be a good time to catch our breath, if you will, on this and
other projects rather than starting new detailed discussions
to get Sir Christopher's input and decide afterwards how we
were going to move forwards, what the process would be.
Q. I suggest to you that the reason for going underground was
that it had now been decided to have discussions with
Benetton, as referred to in the first paragraph of the same
letter. Is that not right?
A. I do not recall the two being connected.
Q. When you saw Mr. Kieser on 15th February, did he not tell you
what the outcome had been of his meeting the previous day
with Jordan?
A. I do not recall him specifically telling me that. It would
be quite normal that he did, but I do not specifically recall
him telling me the output.
Q. Did you know that Mr. Phillips had written an e-mail
confirming the points discussed at that Heathrow meeting?
A. I do not believe I did, no.
Q. The e-mail in question is at tab 64.
A. I think the first time I saw this e-mail was in these
documents.
Q. Just look at tab 69, page 595. This is a fax from
Charles Perring to Eddie Jordan, which was copied to you, if
you look at page 596, and it says "Joe and I have forwarded
the revised offer to David Haines." When you read that, what
did you think was being referred to?
A. I cannot recall, I am sorry. What I can recall is the
presentation that we did for the 21st, which had the outlines
of all the five teams next to each. I think we have already
looked at the page. That is, to the best of my recollection
at the same time, how I was looking at those proposals.
Q. If Mr. Perring, on receipt of the e-mail at tab 64, had
clicked forward on his computer and typed in your e-mail
address, it would have come to you by e-mail. That would be
one way for him to have done what is described at page 595,
namely to forward the revised offer. Do you see what I am
putting to you?
A. Are you asking whether he e-mailed it to me ----
Q. If that had happened, that e-mail would no longer be
available because you would have deleted it, would you not?
A. Correct.
Q. Because you knew from the letter that we looked at before, in
tab 55, second paragraph, that Brown were trying to get
confirmation of the full sponsorship package offered by
Jordan, did you not?
A. I knew they were trying to draw out a proposal from Jordan to
get the best possible parameters or premise as clear as
possible, yes.
Q. Mr. Kieser's evidence on this point, which was given on day
6, at page 867, was this. It was about the meeting on
14th February at Heathrow, and I asked him who attended the
meeting and he identified persons who attended. I said:
"Was the purpose of that meeting to try and close the gap
between the parties on the money?", and he said "Amongst
other issues, yes." Then I asked him, "With a view to
defining a set of terms which you knew Jordan would accept,
which could then be put to Vodafone for a decision on
16th February?", and he answered yes to that. If that is
correct, was it not your understanding that you now had on
the table a set of terms that Jordan would be prepared to
accept?
A. No, absolutely not. There are all sorts of terms that were
never clear from Jordan's perspective, certainly from my
perspective. I cannot speculate whether Jordan could have
accepted them or not.
Q. Surely the purpose, as you knew, was to get from Jordan a
statement of a set of terms which Jordan would be prepared to
accept?
A. The purpose was to get a proposal from Jordan, as we had from
other teams, that we could get, if you like, into our grid,
that we could propose looking at the five teams the following
week in our update discussions with Sir Christopher.
Q. Were you not also aware that at this time Jordan was
continuing to have discussions with Benson & Hedges?
A. I was not aware. I only ever discussed Benson & Hedges and
Gallaher once with Mr. Jordan, and that was on 6th February
where I made my position quite clear. I was not aware of any
other.
Q. Can I remind you of the fax at tab 69, which was copied to
you. The third paragraph: "Needless to say, I will call you
as soon as I have any information and I will keep David
appraised on your own renewal deadlines with Benson & Hedges,
which I understand need to be answered, one way of the other,
by the end of this month." Did you read that on 10th
February?
A. I do not recall being consciously aware of this section
reading this out. As I said to you, when we discussed it on
the 6th, my opinion was if Jordan had to go ahead and sign
Gallaher, they should.
Q. You may say that you said that, but it is not what you wanted
to happen, is it, Mr. Haines?
A. If that is what Jordan needed to do, that is what they needed
to do. We were at the beginning of our learning journey.
We had not even made a decision to get into Formula 1 at all.
That was going to happen at some later stage. We were window
shopping. We were not going to react to somebody's threats.
If that is what he needed to do, that is what he needed to
do.
Q. I think you have told the court today that you were keen on
doing a deal with Jordan.
A. I think what I said was I was keen and enthusiastic on
Jordan. I do not think I said on doing a deal. Those were
your words, not my words.
Q. What were you enthusiastic about?
A. I thought Jordan was a good proposal, just as I thought
Ferrari was a good proposal. As I came to think, Benetton
was a good proposal and actually McLaren as well. To be
quite frank, I was quite surprised as we got into this
process how many teams -- from approaching the thing, it was
all grey and quite nebulous -- over the course of three or
four weeks, or six weeks, suddenly popped out of the woodwork
and were available for quite good sponsorship deals.
I always thought Jordan was a good proposal. I thought
others were good proposals as well. It was not about what
I thought. It was about trying to get the facts and getting,
as I said earlier, our operating companies on board.
Q. We know that you went to see Ferrari on 9th February.
That was your third meeting with Ferrari.
A. Yes.
Q. Did Ferrari make financial proposals at that meeting?
A. Ferrari were much too clever to make financial proposals, so
the answer is no.
Q. Could you go back to tab 65, page 589, the fourth paragraph.
Mr. Kieser says to you, "I would appreciate it if I could
join you at the meeting with Patrick McNally that he wishes
to facilitate." Was the meeting with Patrick McNally that he
wishes to facilitate a proposed meeting with Philip Morris in
Lausanne?
A. It was, indeed, yes.
Q. But Mr. Kieser did not go to that meeting, did he?
A. No, he did not. Mr. Harris and I went to that meeting.
Q. Mr. Kieser goes on, "Hopefully I will be able to pursue
negotiations with the Ferrari team on your behalf."
Following the meeting with Philip Morris, you did not give
instructions to Mr. Kieser to negotiate with Ferrari, did
you?
A. No, because when it came to the point to negotiate beyond
that which we had achieved on 9th February, Mr. Harris was on
board and was able to negotiate himself, in April.
Q. That was after 5th April, was it?
A. Correct.
Q. Have you got your diary there at page 2139?
A. 213?
Q. 2139. It is the week of 19th February.
A. Yes.
Q. On Monday the 19th, can you tell from your diary what you
were doing?
A. I was in Newbury and I was in a global integration workshop
with some of the consultants that we were using and I had
various meetings through the day. It looks like I flew back
to Germany that evening.
Q. Did you attend a VEL board meeting on 19th February?
A. No.
Q. Then you went to Dusseldorf in the evening. What about
Tuesday the 20th; did you see Peter Harris on Tuesday
the 20th?
A. Our offices are next door to each other. It is in the diary,
so I would assume so. I mean Peter's potential office at the
time was next door to mine.
Q. Then did you have a meeting with Sir Christopher Gent on the
afternoon of 20th February?
A. Actually, I did not. Sir Christopher and Thomas had meetings
with some of my colleagues. The meeting had started, but I
was not actually, so to speak, on until the day afterwards,
but we had dinner together, I remember, in a restaurant where
everyone was presented, and Sir Christopher and Mr. Geitner.
Q. Then the presentation that you did make, you made on
21st February; is that not right?
A. That is correct, yes.
Q. Can we take it that what you presented was the document at
tab 72?
A. This is the sponsorship element of it.
Q. If you would look to the previous tab, tab 71C, you will see
an e-mail of 20th February, the day before that, from
Charles Perring, and it is to Rosella Potter at Benetton with
a copy to you and Mr. Kieser. Do you remember seeing that on
20th February? I think we have established that you were in
the office on 20th February.
A. Yes.
Q. Do you see the second paragraph, "I have spoken with David
Haines and he has asked me to relay the following through for
you for consideration"?
A. Yes, I see that.
Q. Did Charles Perring speak to you to this effect?
A. I have no reason to dispute that.
Q. There are three things. There is the D2/Vodafone branding;
there is a branding upgrade; and there is a meeting proposed.
A. Yes.
Q. Was not the meeting that you were looking for a meeting to
discuss a title sponsorship proposal with Benetton?
A. It was a meeting to discussion further sponsorship with
Benetton. It looks like from the presentation the day
afterwards that title was already on the agenda.
Q. Could you look at page 602 behind tab 72. Were you the
author of the text on this page?
A. I think I probably was.
Q. Did it represent your own view of the rationale for
sponsorship?
A. Yes.
Q. Did you present that rationale to Chris Gent at the meeting
on 21st February?
A. I think probably yes. Yes.
Q. Did he accept that rationale?
A. I do not think we discussed it at length, to be honest.
I think we spent most of the time looking at pages 604 and
605.
Q. Can you just look at 603 first. Are you the author of the
text on that page?
A. Yes.
Q. And does it correctly identify what you saw as the pros and
cons of Formula 1 partnership not sponsorship?
A. Yes. The partnership idea was certainly something I authored
as an idea.
Q. What did you mean by the words "Crowded sponsorship market"?
A. That there were many companies involved, basically, in
Formula 1.
Q. In sponsoring Formula 1?
A. Sorry; in sponsoring Formula 1, yes. Many companies
sponsoring.
Q. What did you mean by "Significant variations in
opportunity/cost by team"?
A. We had not used the phrase yet, but small on big/big on small
actually came in about a month later. This was like the
embryonic development of that concept. This is what I was
trying to explain earlier. If you went for a secondary team,
the idea would be to get title, to get maximum awareness, but
you had to really wheel that off against going for one of the
top teams (McLaren and Ferrari) where we now knew that title
was not available, but the media benefit, because they were
so often in the headlines and in the press, would be greater
than just looking at a car with a big brand on. This is part
of my changing, as I said earlier, my perspectives as we went
through this process. That is what it tries to lay out,
which it then does on the next on this page, showing clearly
that there were title sponsorships available from some teams,
secondary sponsorship from others; however, the benefits
needed to be "offweighed" against the cost.
Q. Would you look at page 604. Was it your understanding,
looking at the Jordan column, that Jordan was willing to
enter into a three-year deal for title sponsorship at a cost
of 39 million for 2002, 50 million for 2003 and 52 million
for 2004, with bonuses of 3 million per season for the top
eight in the constructors' championship?
A. It was my understanding that that was what Jordan would
accept. Whether we would accept it was a completely
different matter. This was just state of play as of
21st February.
Q. You knew, did you not, that meetings had been held with Brown
at which these terms had been negotiated?
A. Discussed, yes.
Q. You knew what the starting figure was from Jordan, did you
not, because it was put in the document you saw at
Silverstone?
A. The starting figure I had in my mind was 90 million.
Q. You knew what figure Jordan had sought at the first meeting
you had with Jordan?
A. Correct.
Q. Which was 179 million, including an agency fee?
A. Plus bonuses of 184. Yes.
Q. And you now knew, as a result of Brown's efforts, that figure
had come down to 150 million, including a bonus?
A. Yes, indeed. Still a long way from 90.
Q. That is a figure that you regarded as realistic for those
rights, is it not?
A. No, it's not.
Q. Is that not the very figure that you yourself mentioned at
the Silverstone meeting?
A. No. I mentioned a figure of 140.
MR. BOYLE: My Lord, would that be a convenient moment?
MR. JUSTICE LANGLEY: Yes, it would. 10.30 tomorrow.
(Adjourned until 10.30 tomorrow morning)
MR. DAVID HAINES, RECALLED
CROSS-EXAMINED BY MR. BOYLE (CONTINUATION)
Q. Mr. Haines, could you be supplied with the transcript for
yesterday, please. Could you first of all go to page 1148 at
line 19.
A. Where are the page numbers? I have it. 1148?
Q. The page number appears in the bottom of each quarter. Have
you got page 1148 at line 19?
A. Yes.
Q. I put a question to you: "Did you or Mr. Geitner instruct
him," that is Mr. Perring, "to start a negotiating process
with Jordan?" Your answer was: "I do not recall him being
instructed to start a negotiating process with Jordan."
Now would you look on to page 1161, line 23, just to
introduce it. "Can we agree at least on this, that there was
no one else employed by Vodafone who would actually be
conducting negotiations with Formula 1 teams apart from
yourself? (A) No, we cannot agree on that, I am afraid.
The whole point of recruiting Mr. Harris was that when it
came to a point where we made a strategic decision, which
direction we kind of wanted to go, so the learning journey
was over, the person that would actually conduct the
negotiations was Mr. Harris. That was one of the very points
of recruiting. That was his expertise, not mine. (Q)
Mr. Harris had not joined Vodafone by then, had he? (A) No.
We were a long way from making a decision. The timing was
actually working quite nicely. (Q) Until Mr. Harris joined
the company, the only person who could in fact, the only
employee of Vodafone, who would in fact conduct any
negotiations, would be yourself. (A) Yes. I was reacting to
the word 'negotiation'. I would call them more
'discussions'. (Q) Are you saying that what took place on
6th February was properly described as negotiations? (A) I
certainly had them in the realm of discussion, not
negotiation." I think my question may have had a "not" in
it, but the sense is there?
A. Sorry, are you saying ----
Q. The question at line 19.
MR. JUSTICE LANGLEY: Yes, I follow.
MR. BOYLE: "(Q) Is that really your evidence? (A) Yes. (Q)
That it was a discussion, not a negotiation? What do you
understand by the term 'negotiation'? (A) I understand a
detailed contractual negotiation, where you go through the
details of a potential contract with lawyers involved, where
you get to a long document which covers all the key elements.
That is what I understand by negotiation." Then you repeat
that the meeting on the 6th was a journey of discovery rather
than a negotiation.
Then if you go to 1183, I put to you, at the bottom of
1182, an e-mail from Peter Dart and quote from it: "'Things
are moving very fast on F1. It is an excellent team effort
and thanks for your help to date. Brown are now immersed in
the detailed negotiation and design across a number of
different teams'." I put to you on line 10: "So you are
saying that if they were immersed in the detail of
negotiation, then that was contrary to your instructions?
(A) No, I am saying there is a difference in interpretation
of what negotiation is. If you are an agency and you are
drawing out teams, you might call that negotiation. If you
are someone who is actually on the company side who is going
to sign a contract with someone, you understand that
negotiation is something far more complex." The general
tenor of that evidence was that substantive negotiations with
Jordan never really started. Is that right?
A. Correct.
Q. And you adhere to that evidence, do you?
A. Yes.
Q. And you would not, therefore, describe the process that was
being engaged in between Vodafone and Jordan as trying to
find acceptable terms?
A. What I was trying to do was draw out a proposal.
Q. Could you now take up bundle C6 and go to tab 49. Is that a
letter you wrote to Eddie Jordan on 6th June?
A. It is.
Q. Would you read out the last paragraph on page 1323?
A. "Both parties' conduct and course of dealing throughout our
negotiations has been to try and achieve a framework and
acceptable deal terms, in what we both accept is a very
complex rights area. Unfortunately, at the end of the day a
agreement could not be achieved."
Q. When you wrote that, did you believe that negotiations had
taken place between Vodafone and Jordan?
A. Not contractual negotiations, no.
Q. When you wrote that, did you believe that the purpose of the
negotiations was to try and achieve acceptable deal terms?
A. As I said, a framework proposal was what we were trying to
get to. That is why I think the word "framework" is in
there.
Q. I will put the question again. Did you believe that the
purpose of the negotiations was to try and achieve acceptable
deal terms?
A. To achieve a framework and acceptable deal terms.
Q. So you agree to the addition of the word "framework"?
A. Yes. The whole point of the framework or proposal, if you
can decide on the wording you are using, we were trying to
draw them out to get, as I say, a framework or proposal so we
could make a strategic decision so we could enter into
whatever decision we made, and then detailed contractual
negotiations.
Q. Is it not absolutely clear in this passage that at this
stage, 6th June, you regarded the position as one in which
Vodafone and Jordan had engaged in substantive negotiation
about the terms of the deal?
A. I think "substantive" is your word. It says "trying to
achieve a framework and acceptable deal terms". We were
trying to draw all the teams out, not just Jordan, to get a
framework, so we could make a strategic decision as to which
direction to go.
Q. You used the expression here "our negotiations". On what
dates did the negotiations to which you refer take place?
A. I would be referring to various discussions that we had with
Jordan in that period.
Q. On what dates?
A. The discussions we had. Personally I met Jordan on 6th
February and on 9th March. There were various other
telephone conversations through that period. Those would be
the dates.
Q. So the 6th February was something properly described as a
negotiation?
A. In my mind it was an opening discussion, as I said yesterday.
Q. What about the meetings with Brown which you knew to have
taken place? Was that included in what you were talking
about as "our negotiations"?
A. In its broadest sense, they were holding negotiations on our
behalf, yes, as I say, to get a framework. It was quite
clear at this stage what we were trying to do was to get a
framework of a number of teams so that our bodies at the end
of March, early April, could make a decision as to which
route we wanted to go.
Q. By this date, you had had four meetings with Mr. Jordan, had
you not?
A. By 6th June?
Q. Yes.
A. 6th February, 9th March, 23rd April, in the Pelham, where we
said it was Ferrari's to lose; and then we met him on his
boat. Four is correct.
Q. Four meetings?
A. I think it must have been 25th May, the day we actually
signed with Ferrari.
Q. And you had had three telephone conversations with him, one
on 1st March from Melbourne, one on 22nd March, when you were
in your car in Germany, and one on 27th March, when the
letter of 26th March was discussed.
A. If I am not mistaken, I think there were other calls as well,
specific dates of which I cannot remember. I remember having
more than three telephone conversations with Eddie.
Q. If you look two paragraphs up, you say "I do not know what
you are suggesting in your note of June 1st by focusing on
one telephone conversation almost three months ago out of the
30 or more points of contact between our organisations." Did
you count the points of contact before writing that?
A. Sorry, did I count them?
Q. Did you count the points of contact before writing that?
A. It was a number that was in my mind, that there must have
been about that many, if you added up all the telephone
conversations and various discussions and e-mails. I did not
count specifically, go back and check the documents - no, I
did not. I was trying to make a general point that there had
been a lot of contact.
Q. Could you take bundle C5 and go to tab 64, please.
A. Was that 64?
Q. Yes, C5, tab 64. This is a certified extract from the
minutes of a meeting of the executive committee of Vodafone
held on 5th April 2001. In the last paragraph it says:
"After discussion it was agreed that the first preference was
to pursue a relationship with Ferrari. If that proved
impossible, then a deal with Jordan should be sought." When
did you first hear of that decision?
A. When did I first hear? I think I spoke to Mr. Geitner whilst
I was away. I went on holiday on the 4th for ten days, a
long way away, and I remember I had one conversation whilst I
was away on vacation with Mr. Geitner, who would have been at
that meeting; so I suspect he told me then.
Q. On what date did you return from holiday?
A. If I am not mistaken, it was the 16th, Easter Monday, the
16th. May just architect my diary? I do not know if you
have checked it already and you know. I think it was the
16th.
Q. We can check that in a moment. At all events, you learnt of
the decision recorded in the last paragraph here - page 1153.
A. I learnt of the decision recording, in the last paragraph, a
deal with Jordan, probably on the telephone. I think it was
either through the telephone with Mr. Geitner, as I just
said, or when I came back.
Q. Can we be absolutely clear what that meant, just looking at
the language of it?
A. Sure.
Q. The first preference was to pursue a relationship with
Ferrari. Right? Negotiations were going to go ahead with
Ferrari.
A. Basically, this moment in time, we had come to the conclusion
of what we called our "window shopping". We had put to the
various bodies -- there were a number of meetings about the
same time -- the various options. We had made a
recommendation as well, the recommendation of small on big,
with Ferrari. That had been accepted by the various bodies,
so we had achieved, if you like, Mr. Harris and myself, the
mandate to go away and conduct what I would call, in layman's
terms, detailed negotiations. The preference for those
detailed negotiations was now with Ferrari, so we had a
mandate to do that, to enter what I call proper or detailed
negotiations.
Q. But the mandate included the second sentence of page 1153,
that if it proved to be impossible to pursue a relationship
with Ferrari, then a deal with Jordan should be sought.
A. Yes. In practical terms, what that meant is go away and see
if you can, you know, sort out the Ferrari thing. If for any
reason that does not work out, then we would go back to the
drawing board and start the same detailed negotiations, or
what I would call contractual negotiations, with Jordan. We
never actually started that phase with Jordan, in my mind.
Q. It is quite clear that other teams had been eliminated at
this stage and it was now Ferrari first and Jordan second.
Is that right?
A. As of 5th April, yes, that is absolutely correct. I think we
ended up presenting five on the 4th and the 5th - five
options. So we had gone down from five to a clear
preference, but with an alternative should that not work.
Q. Could you go on to tab 96 in the same bundle, where we have
an extract from the minutes of a meeting of the executive
committee on 10th May. This refers to a letter of intent
with Ferrari, and in the second paragraph it says,
"After discussion the meeting agreed that it would be
appropriate to pursue the opportunity with Ferrari although
it was noted that there were no funds in the current
financial year budget for expenditure of this nature and the
negotiations with Ferrari should seek to ensure that payments
were deferred until the next financial year if possible."
Then if you look at the immediately preceding paragraph, just
at the end of that paragraph, it says "It was believed that
Telecom Italia Mobile had a right of first refusal over
Ferrari and if either they sought to exercise that right or
if Ferrari sought to bid up Vodafone using TIM as a lever the
meeting agreed that Ferrari discussions should be
discontinued and a deal sought with Jordan." Did you come to
that decision shortly after 10th May?
A. I do not recall it specifically, but I think I must have done
because Mr. Harris at the time was the one who was working
for me, the one who was involved with our various lawyers in
the detailed contractual negotiations with Ferrari, which had
led to this whole point about TIM being raised. I do not
recall the exact time, but I am sure I did.
Q. Can we take it from this, that at this stage it was by no
means a foregone conclusion that a deal would be concluded
with Ferrari?
A. I am a great believer that until a contract is signed, it is
not signed, so I think at one level that is true. I think it
is fair to say there was always a risk that until a contract
is signed, it is not signed. Having said that, I remember
when Mr. Geitner and I met Mr. Di Montezemolo, I think it was
11th May when we actually signed the letter of intent, we
went down to their offices in Italy, this issue came up and
Mr. Di Montezemolo assured Mr. Geitner that the right of
first refusal -- TIM is the local Italian mobile operator --
would not be a problem. Certainly we left under the
impression that it would not be a problem, but a contract is
not done until it is signed in my opinion.
Q. Is it not absolutely clear from the passage we were just
looking at that it was only Jordan that was being considered
as an alternative to Ferrari?
A. It is indeed, yes.
Q. Then if you go to C6, tab 26, you will find an extract from
the chief executive's report from the group board meeting on
22nd May. "We have signed a three year sponsorship agreement
with Ferrari with rights to take the whole team once
Malborough [sic] withdraw, which we hope to announce at the
Monaco Grand Prix. It is dependent upon Telecom Italia
Mobile coming off the car next year and not matching the 3
year cost of [blank, which has been redacted]. Should they
do so, then we will switch to Jordan Racing rather than enter
a bid battle with Ferrari." So was it not clear also at that
date that the strategy was to endeavour to complete the deal
with Ferrari, but that if that failed, then Jordan would be
chosen?
A. I think what was true at that time, and throughout this
period, was that our intention was to try and conclude the
negotiations with Ferrari and get to a signed contract.
Were that not to be possible for the reasons outlined in this
document, or other reasons -- there were other reasons as
well why it may not have been possible -- then we would go
back to the drawing board and enter into similar kind of
negotiations as we had with Ferrari. In the end those
negotiations with Ferrari took about seven weeks and the
contract was, if I am not mistaken, about a hundred pages
long. There were three different contracts and an umbrella
contract holding them all together. It was a detailed piece
of work, which we would have had to do with Jordan.
Q. Between the dates we have just been looking at, which span
the period from 5th April to 25th May, there were no
negotiations with Jordan at all, were there?
A. No, there were not. There were discussions with Jordan -- my
definition of discussions versus negotiations. The main one
was on 23rd April.
Q. But that was not to discuss the terms of a proposed deal, was
it?
A. No. That was to tell Jordan if Ferrari was to lose.
Q. You knew what deal with Jordan was prepared to offer, did you
not?
A. We knew the proposal from Jordan, just like we knew the
proposal, the early proposal, from Ferrari. We did not need
to get into negotiations with Jordan because we were still
pursuing Ferrari.
Q. Is it not clear from the passages we have now looked at in
three board minutes that Jordan throughout that period was
not considered merely as an option amongst other teams should
the Ferrari negotiations fail, but was in fact already chosen
as the team who you would do a deal with if you could not do
a deal with Ferrari? Is that not right?
A. I think it is fair to say Jordan were second choice.
Were the negotiations with Ferrari to fall through, then we
would have commenced negotiations with Jordan.
Q. Could you go back to bundle C6, at tab 49.
A. Tab 49?
Q. Yes. If you look at the top of the second page, 1324, you
say, "In the spirit of an open, honest process and in
recognition of what, I thought, had become a good
relationship, I have attached a separate note outlining our
position to you to share with your existing potential
partners if you so choose." If you look over the page to tab
50, you will find that letter.
A. Yes.
Q. In the second paragraph: "As you know, after a very
intensive decision making process and careful review of all
potential agreements, terms and options, we have decided to
pursue a relationship with Ferrari. However, I really do
want to stress how close this decision was and had we not
opted to go with Ferrari, Jordan would have been a genuine
choice." Jordan was in fact the choice, was it not?
A. It was the second choice was the phrase I just used.
Q. You said "a genuine choice". It was much more than that,
was it not, and you knew that, Mr. Haines?
A. It was a genuine choice versus Ferrari.
Q. Why were you not prepared to say in this letter that Jordan
was in fact chosen as the alternative to Ferrari?
A. To be honest, I thought that more or less conveyed that
point. I was not in the slightest trying to be evasive.
I thought that point came across clearly.
Q. Do you not see a difference between saying Jordan would have
been a genuine choice and Jordan was the choice?
A. I see a semantic difference. The point I was trying to make
to any of Jordan's sponsors was that they were seriously in
the running. I do not see a huge difference, to be honest,
in the context of this kind of letter.
Q. You repeated similar language at page 1323, behind tab 49:
"When we met in Monaco last week we explained that we had
indeed decided to pursue a team deal with Ferrari. We also
explained that our assessment and selection criteria made it
a very close decision between Ferrari and Jordan. I want to
stress again that had we not opted for Ferrari, Jordan would
have been a genuine option".
A. I am sorry, when I read "We also explain that our assessment
... made it a very close decision between Ferrari and
Jordan", that lays it out pretty clearly I would have
thought.
Q. Were you not prepared to reveal even at this stage that a
decision had in fact been made within Vodafone to go for
Jordan if a deal could not be done with Ferrari?
A. No, not in the slightest. As at 6th June when this letter
was written, we had done a deal with Ferrari and I must say
even when I read that today, that explains it pretty clearly
from my perspective.
Q. In the paragraph I just read "We also explained that our
assessment and selection criteria made it a very close
decision", what assessment and selection criteria were you
referring to in that letter?
A. I was referring to the very original criteria that we talked
about yesterday, of which there with three. One was media
exposure; one was return on investment or to generate revenue
by selling products; and the third was buy in by our
operating companies who actually in the end have to pay for
this whole thing - so Germany, Italy, UK, the markets -
which is why these meetings with those companies were so
important.
Q. Was any attempt made within Vodafone to put the assessment
and selection criteria into writing?
A. I think, if I am not mistaken, the presentation that we
showed to the Brand Steering Committee on 29th March, and
I think to the EIOC on 4th April, laid out both the process
and the criteria that we were using, and had a plan in there
of how we would use it. That is the way Vodafone works.
As I think Mr. Geitner said, we work in terms of
presentations. Those are our key documents to those bodies.
Q. Are you referring to tables scoring the various teams
according to different criteria?
A. No, I am not. I do not recall those tables ever being used
in any of the official forum.
Q. Do you recall why they were prepared?
A. I think they were Mr. Perring's idea around about mid-March,
or at least Brown's idea. I do not know whether the actual
idea originated from Mr. Perring. Given that Brown at that
stage were clearly focused on just the title route, I think
they were prepared to introduce what is a degree of
objectivity into what at the end of the day was quite a
subjective process, but they only ever dealt with a very
small section of the overall process. I know, and I have
seen in the documents, that Mr. Harris .... Sorry, I now
know that Mr. Harris also had a look at some of those tables
when he was in Atlanta. They clearly were not the key
criteria that we were working to.
Q. Can we look again at that paragraph. It says, "When we met
in Monaco last week". That was the meeting on Mr. Jordan's
boat in Monaco, was it not, on 25th May?
A. Yes.
Q. That meeting was attended by you and Mr. Harris, as well as
Mr. Jordan and Mr. Phillips, is that right?
A. Yes.
Q. Was reference made at that meeting on 25th May to a telephone
conversation which had taken place on 22nd March?
A. I do not recall that.
Q. Would you take bundle B, divider 2, and go to page 42,
paragraph 139: "David Haines said that if Jordan required
any assistance to explain the position to sponsors to help
restore good faith he would do so. He accepted that he had
put us in a hugely difficult position and that he would do
anything he possibly could to help Jordan and try to
compensate for the harm he had created." Did you say that?
A. No, absolutely not. I have a completely different
recollection of that discussion.
Q. "He said I should come back to him next week with some ideas
how we thought this should be achieved. Peter Harris was
clearly nervous and highly embarrassed. He kept silent,
looking into his bag on the floor, avoiding any eye contact
and fiddling with a telephone. At one point David Haines
angrily told him 'put that bloody phone away and pay
attention to what's going on". Did you do that?
A. I do not recall Mr. Harris being nervous. I remember him
that weekend being exhausted. I think he had just moved
house from Atlanta in the US to Dusseldorf in Germany.
I think he had done a couple of all night sessions on the
contract. I remember some comment to him through the
meeting, but I do not remember those words verbatim. I am
sorry, it is hard to recall verbatim conversations two years
later.
Q. "David Haines was clearly looking for some support from
Peter Harris which was not forthcoming. In response Eddie
Jordan said to Peter Harris 'Are you fully aware David rang
me on 22.03.01?' (and I chipped in and said 'at 6.20 p.m.')
and said 'We had the deal'. He replied with words to the
effect 'Yes I know' in a very resigned tone." Did that
happen, Mr. Haines?
A. I do not recall that happening at all. I recall Mr. Jordan
saying he had got himself into a pickle, he had opened his
own big mouth, it was his fault, and he had told his
sponsors. I have a very different recollection of that
conversation.
Q. But if Mr. Harris did know that that conversation had taken
place, he must have known it from you, must he not?
A. Which conversation?
Q. The one referred to here.
A. The 22nd of the 3rd, you mean?
Q. Yes.
A. I think Mr. Harris learnt about that conversation from
Mr. Jordan.
Q. Then he talked to you about it, did he not?
A. We spoke to that conversation after we spoke to Mr. Jordan.
Q. You must have told him what had happened?
A. In the conversation of the 22nd?
Q. You must have told Mr. Harris when you heard about what had
happened from Mr. Harris about what had taken place in the
telephone conversation on 22nd March with Mr. Jordan?
A. I did, indeed. I was shocked and horrified, and in no way do
I have the recollection that this happened and I did not on
the conversation with Mr. Harris say that we had got a deal,
as far as I can recall.
Q. Have you got bundle C6, there? Go back to divider 48 in C6.
A. Yes.
Q. This is a letter from Mr. Jordan to you, marked "Private and
Confidential" and in the third paragraph he says: "I believe
that we were always correct with you and that our proposal
met all the parameters that you outlined on your visit to
Silverstone. Your telephone call to Ian and I on 22 March at
6.20 p.m. confirmed this when you categorically stated
"you've got the deal." My letter to Peter on 23 March, on
your instruction reflected this."
If you would then turn over the page, to tab 49, you
refer to that note in the fourth paragraph, where you say,
"I do not know what you were suggesting in your note of June
1st by focussing on one telephone conversation almost 3
months ago, out of the 30 or more points of contact between
our organisations." I am just going to pause there. Did you
not know what Mr. Jordan was suggesting in his note to which
you are here replying?
A. I think what I am trying to say is I do not know what he is
trying to insinuate or suggest.
Q. You do not know what he is trying to insinuate?
A. Absolutely, yes.
Q. Did it not occur to you that what he was contending was that
the conversation on 22nd March brought into existence a
contract between Vodafone and Jordan?
A. As I say here, I could not recall the precise terms of those
conversations. I have a completely different recollection of
the gist of that conversation with Mr. Jordan than Mr. Jordan
himself.
Q. Did you not understand Mr. Jordan's letter of 1st June to be
contending that by reason of that conversation a contract had
come into existence between Vodafone and Jordan?
A. No, I did not. For me, we were never anywhere close to
having a contract with Jordan.
Q. No. What I am putting to you is your understanding of
Mr. Jordan's note of 1st June.
A. I think I am questioning what he is trying to suggest in my
note.
Q. I will take you back to it. It is page 1321 in the previous
tab.
A. 1321?
Q. Page 1321, in tab 48. "Your telephone call to Ian and I on
22 March at 6.20 pm confirmed this when you categorically
stated 'you've got the deal'. My letter to Peter of
23 March, on your instruction, reflected this." When you
read that for the purpose of replying to it on 6th June, was
it not your understanding from that letter that Mr. Jordan
was claiming that that conversation had brought into
existence a contract between Jordan and Vodafone?
A. No, it was not. As I have said a number of times, we were a
long way from getting a contract with Jordan.
Q. Could you take bundle B, at page 82, behind divider 6.
If you look at paragraph 207, on page 82 -- this is your
witness statement -- "The first I ever heard of the fact that
Eddie was claiming that the conversation of the 22 March
constituted a binding contract was in his letter of the
1st June, two and a half months later." Do you stand by what
you said in your witness statement?
A. Yes. Yes, I do, and certainly when I wrote this response,
I did not think that we had entered into any kind of binding
contract. That is why I was questioning the suggestion here.
Q. But you did understand that that was what Mr. Jordan was
contending?
A. By the time I had come to write this witness statement,
I absolutely understood it, which was some time later.
Q. Did you not understand that on 6th June when you wrote your
letter at tab 49?
A. No. That is what I am saying, "I do not know what you are
suggesting."
Q. On the 6th June, was it not the case that you could not
recall the precise terms of that telephone conversation?
A. Correct.
Q. Could you go back to bundle C5, tab 64. I have shown you the
last paragraph: I am just putting this back in front of you
to remind you of the occasion.
A. Sure.
Q. I think you told the court that you had gone on holiday the
previous day, but that you learned about this decision while
you were away on holiday from Mr. Geitner?
A. I think it was either when I was away or when I came back,
yes.
Q. Did you make arrangements before you left to go on holiday
for Jordan to be told the outcome of that meeting, the
executive committee meeting?
A. No, I did not make arrangements for any of the teams to be
told the outcome.
Q. We saw yesterday that you knew that Jordan had been told to
expect a decision in February, had they not, on 16th
February, in fact?
A. I recall the note that Mr. Kieser wrote.
Q. Yes. Then you had had a conversation with Mr. Jordan on
27th March, had you not?
A. On the 27th or the 28th, I spoke to Mr. Jordan on the phone.
Q. And you made reference in that conversation to a board
meeting?
A. I recall talking about a process that we were going to go
through over the next few days.
Q. And you must have realised that Jordan would want to know
what the outcome of the meeting was?
A. I would have thought all of the teams would want to know what
the outcome of the meeting was because all the teams were
very keen to know what our decision would be.
Q. Would you agree that if Vodafone chose to inform Jordan about
the situation following that meeting, it would be important
to give a truthful account of what happened?
A. Absolutely.
Q. Just look again at tab 64, the last paragraph. If Jordan
were told that a decision was going to be made in two weeks,
do you think that would be a fair account of the outcome of
that meeting?
A. Sorry, I did not understand your question.
Q. If Jordan were told that a decision was going to be made in
two weeks, do you think that would be a fair presentation of
the decision ----
MR. JUSTICE LANGLEY: Told when?
A. Told when? I do not understand when.
MR. BOYLE: If Jordan were told on 5th April that the outcome of
the meeting was that a decision was going to be made in two
weeks, do you think that would be a fair presentation of the
decision?
A. No, I do not think it would.
Q. Could you take up bundle C9 for a moment and go to page 1853.
This is a page from Mr. Phillips' notebook.
A. Yes.
Q. Towards the right-hand side it says "Peter Harris." Do you
see that?
A. I do.
Q. And it reads: "Cannot tell you very much in frame. Solid
position. Decision within 2 weeks." Mr. Phillips has
identified this as 5th April, which is the very day of the
board meeting we were looking at. Do you see that?
A. I do not see 5th April, but I am sure ----
Q. No, that is not on there.
A. I am sure that is correct.
Q. I was telling you that he has identified it as a conversation
that took place on 5th April. If it had been you speaking to
Mr. Phillips, would you have thought it a fair thing to say
that a decision was going to be made within two weeks?
A. I cannot speculate. I did not speak to Mr. Phillips.
Q. If it had been you speaking to Mr. Phillips, would you have
thought it a fair thing to say that a decision was going to
be made within two weeks?
A. I have just said I cannot speculate. I did not speak to
Mr. Phillips.
Q. It would not be fair, would it, Mr. Haines?
A. If the facts are as they are, it would not have been fair,
but I cannot speculate on that comment because I was not --
I was actually twelve hours away.
Q. Obviously we will need to ask Mr. Harris what he knew when
this conversation took place.
A. Of course.
Q. But I would like to give you the opportunity of saying what
you wished to do.
A. Sure.
Q. If you were going to tell Jordan anything on 5th April, would
you wish to tell them what the actual decision was?
A. As at 5th April, my understanding from Joe was that
Mr. Jordan knew of the actual position because he had a
telephone conversation with Mr. Kieser. I can only speak for
myself. The moment I came back from vacation, which I think,
as I said earlier, was the 16th, I set up a meeting with
Mr. Jordan the subsequent Monday -- so the first available
date -- and we told him. I told him. Mr. Harris told him
the accurate position.
Q. Is it not true that the criteria that had been given to
Jordan on 1st February, Vodafone's criteria, had now changed?
A. I think the criteria always were, if you like, in the broader
sense the same: Media exposure, return on investment and buy
in from the OpCos. I think as we went on this learning
journey, we learnt more about what was going on. You have to
imagine the following situation. As at 1st February we knew
nothing. We did not know anything what was available.
We went through this window shopping process and suddenly
more and more things kept popping out of the woodwork.
I think the criteria stayed the same. Our perception on how
to best achieve for Vodafone the best of those criteria
I think certainly changed.
Q. Jordan were told, were not they, as we saw yesterday, that
included amongst Vodafone's key criteria were title
sponsorship?
A. Yes.
Q. To your knowledge, after 5th April, did anyone tell Jordan
that that had changed?
A. No, because for a secondary team, small on big/big on small,
so for that, if you like, box, big on small, the criteria of
title stayed the same. It is just that overall we had got a
different perspective, so I am not aware of anyone telling
him after 5th April.
Q. I showed you earlier the three minutes of various board or
executive board meetings. Was it not from 5th April to
25th May the commercial strategy of Vodafone to try to keep
Jordan on the hook?
A. Absolutely not. That is just not the case. Our strategy was
to try and pursue a deal with Ferrari. If those contractual
negotiations were to fall through, we would go back and start
the same process with Jordan. As I said, that process with
Ferrari took seven weeks. I have no idea how many iterations
of the contract there were. There must have been very many.
We would have had to go through the same process with
Mr. Jordan and his team.
Q. If ----
A. If Ferrari ----
Q. --- they had not done the deal with somebody else?
A. If?
Q. If Jordan had not done a deal with somebody else?
A. Correct. Absolutely.
Q. So the decision which had clearly been made to pursue a
contract with Jordan if the Ferrari contract fell through
would be frustrated if Jordan in the meantime had signed up
with someone else, would it not?
A. Of course. Then we would have had to go back to the drawing
board and reactivate some of the other options that we had.
Q. What I am putting to you is very simple. Vodafone did not
want that to happen.
A. I am putting to you that that is not the case. I am sorry,
that is just not the case.
Q. Do you remember having discussions with Mr. Kieser about what
Vodafone's commercial strategy was between 5th April and
25th May?
A. No, I do not.
Q. Is it not likely that you had such discussions with
Mr. Kieser?
A. I absolutely cannot rule them out, but I do not recall
specifically.
Q. Have you still got bundle B there?
A. Sure.
Q. Would you go to tab 25 and turn to page 244.
A. Page, sorry?
Q. Page 244. This is Mr. Perring's statement.
A. Yes.
Q. 9.54, third sentence: "I recall Joe Kieser would tell me
from time to time that the Ferrari negotiations were very
fraught and difficult and that Jordan had to be kept as an
option should those talks fail. I was told there was a
problem dealing with TIM, a current Ferrari sponsor.
The words I recall being used were 'Jordan have to be kept on
the hook." We have had some evidence from Mr. Kieser about
that as well. I put this message to him. Can you offer any
explanation as to why Mr. Kieser would have been telling
Mr. Perring that Jordan had to be kept on the hook?
A. No, I cannot. It certainly did not come from us. Most of
the time Charlie Perring would by and large have been
excluded from what we were doing.
Q. One more passage, if I may, at bundle B, tab 2, page 41,
paragraph 137. Mr. Phillips says, "On Friday, 25.05.01 at
about 12:15 pm I met Joe Kiezer in the lobby of the Meridian
Beach Plaza Hotel when he told me that a deal had been struck
with Ferrari. He said he was personally very unhappy about
how Jordan had been treated. He said he had no control over
the bad manners of his client or the way it behaved.
He accepted that Vodafone had made an offer of sponsorship to
Jordan at the 06.02.01 meeting and that after negotiations
Jordan had been told that it had the Vodafone sponsorship.
He agreed Vodafone kept Jordan on the string for two months
whilst it negotiated with Ferrari telling Brown that Jordan
were front runners. With hindsight he agreed that this was
possibly a deliberate tactic to avoid Jordan contracting with
Gallaher. He said Brown would still like to be considered by
Jordan for a branding contract."
Some of that was accepted by Mr. Kieser and some was
not, and in due course we are going to invite the court to
make a finding that that conversation took place as recorded
there. Did you tell Mr. Kieser to tell Jordan that they were
the front runners?
A. Pardon me? I am sorry, I could not hear.
Q. I will show you again here: "He agreed Vodafone kept Jordan
on a string for two months whilst it negotiated with Ferrari,
telling Brown that Jordan were front runners."
A. Sorry, I am trying to find where you are.
Q. It is in paragraph 137, I have already read the whole of it.
A. Yes.
Q. This is the third sentence from the end. I will read it
again: "He agreed Vodafone kept Jordan on a string for two
months whilst it negotiated with Ferrari, telling Brown that
Jordan were front runners." My question is, did you tell
Brown to tell Jordan that they were front runners?
A. Absolutely not. Mr. Kieser knew the position. He was in the
meeting when we told Mr. Jordan that it was Ferrari's to
lose. I certainly did not Mr. Kieser that.
Q. Looking at that passage now, do you accept that anything you
did deserved the comments which Mr. Kieser is recorded as
making here about the treatment of Jordan?
A. No, I do not. Absolutely not.
Q. Would you therefore have been content if, prior to or at the
Monaco meeting, it had been announced that Jordan had signed
a fresh deal with Gallaher?
A. Would I have been content?
Q. Yes.
A. I cannot speculate whether I would have been content or not
content. I am sorry. That is pure speculation whether I
would have been content or not content.
Q. Supposing the Ferrari negotiations had broken down because
Ferrari sought to exploit the position to get more money, for
example. If when that happened Jordan had already signed up
with someone else, you would have lost out on what you
wanted, would you not?
A. Yes, but as I said yesterday, we always knew that was the
risk. We told Jordan on the 6th to go ahead and do whatever
they needed to do. In the world of commercial reality, we
would have then gone back to the drawing board. We had other
options on the 4th and 5th April that we then chose to narrow
down, and we would have gone back to that stage of our
discussions. Let us not forget, we are talking May here.
The whole thing did not start until the following March, so
it was not as if our backs were against the wall.
Q. What I am putting to you is very simple, that Vodafone had
clearly reached, as we saw in the minutes, a decision that if
a deal with Ferrari could not be done, then a deal with
Jordan should be done, and that decision would have been
frustrated if Jordan had gone and signed with somebody else.
A. I have agreed with you that that was the case in the minutes.
I agree with you that it would have been frustrated, but I do
not think it would have been terminal. I would have gone
back to the drawing board. You have to remember that this
was one small part of a huge brand migration exercise. Let
me just put it into context. The stock market value of the
companies we were migrating to a single brand was in excess
of £70 billion or £80 billion. It would have been
frustrating, I agree, but it would not have been terrible.
Q. So that $150 or $200 million was pretty small beer for a
company of that size.
A. That is not what I said. I said it was part of a larger
project. I did not say it was small beer. Of course it is
not small beer; it is an awful lot of money.
Q. And the Formula 1 sponsorship project was something in which
you had invested a considerable amount of your time since
coming on board with Vodafone in December the previous year,
had you not?
A. It had taken quite a lot of my time earlier on - less so as
Mr. Harris came on board.
Q. Can we be clear. If there were discussions with Brown about
Jordan's position, it would either have been you or
Mr. Harris who would have had those discussions. Is that
right?
A. I am not sure I know what you mean when you say Jordan's
position.
Q. About Jordan's position in the decision-making with Vodafone
with regard to awarding a sponsorship contract?
A. It would probably have been myself or Mr. Harris who were the
main contacts with Brown, absolutely.
Q. Just going back to the conversation on Mr. Jordan's boat on
25th May, do you recall reference being made at that meeting
to difficulties in connection with reaching agreement with
Gallaher?
A. No.
Q. If you go on in bundle B to page 41 ----
A. Yes.
Q. The meeting is referred to at paragraph 137. Then in 138,
over the page, at the top of 42: "Eddie Jordan said not only
had this spoiled a good relationship with Gallaher; it had
put Jordan in a difficult position with Deutsche Post, Honda,
MasterCard and Lucent. All this put Jordan in a difficult,
commercial position, and there would now be difficulties in
reaching agreement with Gallaher." Was that said?
A. I remember Mr. Jordan saying that he had opened his mouth and
spoken too soon, or words to that effect, with his other
sponsors, and that it was his fault and he was in a difficult
position. I do not remember specifically the names of the
sponsors being mentioned.
Q. I am just going to pass to another topic. You can put bundle
B away. Could you take up the transcript for yesterday. Go
to page 1119.
A. 1109, sorry?
Q. 1119. It is the top right hand quarter.
A. Yes.
Q. At line 14 I put a passage from Mr. Perring's witness
statement. Then at line 22 I put this question: "(Q) 'His
view and that of Vodafone was that "owning" a F1 team was the
means to achieve this objective'. Is that correct?" You
said, "No, I do not think that is correct. I think what I
was after was media exposure, which you can measure in a very
fact-based manner. That was, if you like, my primary
consideration." By "fact-based manner", did you mean that it
is capable of objective assessment?
A. Media exposure?
Q. Media exposure.
A. Yes, I think that is exactly what I meant.
Q. And you regarded this as something of importance ----
A. Yes.
Q. ---- and accorded it primary consideration?
A. It is one of the three key criteria.
Q. I think your evidence was that this was a criterion at the
end of January 2001.
A. Yes.
Q. If that factor was of such significance, can you tell the
court what you did to obtain objective evidence about the
media exposure of a Formula 1 team that you might be minded
to sponsor?
A. I did the most obvious thing, I think. I went out and hired
a recognised media expert, media and sponsor expert, which
was Mr. Harris, and asked him to look into the subject. That
is exactly the thing that Mr. Harris does - media and
sponsorship. That is his title, director of ----
Q. Are you saying that Mr. Harris conducted research on this
topic?
A. I am saying that Mr. Harris will have reviewed the research
that we had in-house and he will have looked at the data
available and he would have, as far as I am aware, spoken to
our media agency, which was called Carat, to give us some
analyses. Mr. Harris's title is director of media and
sponsorship.
Q. You referred in that answer to in-house research. What were
you referring to there?
A. Research that we had received from third party companies.
Q. That is what you meant by "in-house", was it?
A. That we had physically there. There was one report you
referred to yesterday, which had gone to Mr. Brown's
department, which I know we had received by then.
Q. You also referred in the answer to a media agency. Which
agency were you referring to?
A. Our media agency that we used was Carat, C-A-R-A-T.
Q. Are you saying that they did research on this?
A. My recollection is that at the time Peter mentioned to me
that Carat had done some work.
Q. When did he say that to you?
A. At some time during that process.
Q. Did you ever see a document produced by Carat?
A. Not that I can recall. I mean, that was Peter's area of
expertise, so that is what he was doing.
Q. Did you not ask Brown to do research on this topic?
A. I remember one conversation with Mr. Dart at some stage as
well. This was before, I think, Peter arrived. They also
owned a media agency and said, "Could you have a look at the
subject as well?" That would have been earlier in the
process.
Q. Can you recall when that was, that conversation?
A. Not specifically. Probably February.
Q. I will just help you once more on this. I did show you this
yesterday. At C2, tab 44, page 539 ----
A. Do I need this transcript still?
Q. No. We can put that away.
A. Yes.
Q. This is asking Andy Westlake and David Stubley in the third
paragraph towards the bottom: "We need your help and
guidance on the media value/analysis of the deal." This is
dated 7th February. Do you think that you had given
instructions to Mr. Dart to get guidance on the media value
and analysis of the deal?
A. I think this is what I was referring to when I said earlier
in the process, yes; I mean, not the specific e-mail, but
this subject at this particular time.
Q. You can put away bundle C2 and take up bundle C4A. Go to tab
38, page 976. Is that a document that you recall seeing
prior to 5th April 2001?
A. Yes.
Q. Did you discuss it with Mr. Harris?
A. I remember a discussion with Mr. Harris, who was quite
critical of this document.
Q. And can you remember the date of that discussion?
A. No, I am sorry, I cannot.
Q. Let me try and help you. If you look at page 975, this
document appears to have been e-mailed to Peter Harris on
28th March.
A. Yes.
Q. Did you have a discussion with Mr. Harris about this document
on 28th March?
A. I cannot recall that it was 28th March. I can recall we had
a brief discussion around media value, and it would have been
around this time. I cannot specifically say it was 28th
March, I am sorry.
Q. What did you understand this document to be?
A. This was a very specific methodology about value analysis of
the various teams that were available.
Q. Who did you understand to have written this document?
A. My understanding is that it came through the Tempus Group,
which was the parent company, once again, of Brown, but also
their media agency. To be honest, it never crossed my mind.
I never thought about who wrote it. It must have come from
somewhere through Browns, if it came through Charlie, or
through the Tempus Group, because Charlie was, if you like
the conduit to Peter getting it.
Q. Do you think it is possible that you saw the document earlier
in the process than this?
A. I cannot rule it out. I mean, I do not recall when I saw the
document. I cannot rule it out.
Q. Just turn to page 982. Did you read the recommendations on
that page?
A. Not that I can recall.
Q. Is that not the most important part of the document?
A. Yes. As I said, I mean, I would have discussed these things
with Mr. Harris. This was his area of expertise. If
anything, we are supposed to look at the numbers; so not just
the recommendations, the verbatim, but also the actual facts.
Q. Are not the facts linked to the recommendations?
A. Hopefully, if you get an agency come up with a
recommendation, they will often try and look behind and see
what was the raw data.
Q. You see, Mr. Phillips has a recollection of being shown this
document by Mr. Perring on 28th March.
A. Mr. Phillips?
Q. Yes. I will just show you the passage. It is in his fourth
witness statement, which is in bundle B, at tab 23.
A. Tab 22?
Q. Tab 23, page 209. In paragraph 15 he says: "On 28th March
2001 when I met Charles Perring together with Eddie Jordan to
discuss a branding contract for Brown, Eddie Jordan and I
made manuscript notes. At that meeting Charles Perring
handed me the independent Brown document" -- which he gives a
reference for -- "and said words to the effect that this
document had swung it for Jordan. If that happened, it
suggests that the report had been taken into consideration by
Vodafone prior to 28th March.
A. I do not recall that.
Q. But you accept that it is possible that you may have seen it
earlier? I think you accepted just now that you may have
seen it earlier.
A. I think what I said was I cannot rule it out. I do not
remember when I saw it. I cannot rule out when I saw it
earlier.
Q. Is there any document, other document, that you have seen in
the trial bundles which represents an objective measurement
of the likely media exposure which would be generated by
Vodafone's sponsorship of a Formula 1 racing team?
A. Yes. The only other one that I can recall, and there are two
others, I think, is the rather large document to which you
referred yesterday quite early on, when it shows the
exposure -- it is quite a thick thing -- of the various teams
through -- it is quite a detailed analysis -- the one that
went to Mr. Brown. It showed clearly that in Germany, Italy
and the UK Ferrari were well ahead.
Q. C1, tab 14, sports marketing surveys?
A. That is the one we looked at yesterday. That is one. There
was quite a lot of certainly verbatim data in some of the
proposals from McLaren. I remember seeing somewhere
something from Carat. I think it was part of one of the
presentations. The fourth document I can recall is a media
analysis of a couple of Grands Prix from early 2001. Those
are the only ones. Do not, please, ask me where they are.
Q. But the specific issue which you needed to consider was this,
was it not, which was whether dominant branding on a Jordan
car that did not do particularly well in the races would
generate more or less media exposure than a Ferrari car that
won but only had a small amount of visible space with the
Vodafone logo on it. That is the issue, is it not?
A. What we were trying to get to was how much media exposure we
would get from the various options - absolutely (a); (b) how
much of the image transfer, which then gets into the
qualitative area, how much image transfer you would get.
That is what this document would try and do - or these
documents would try and do.
Q. The only cars considered in this report were Ferrari, Jordan
and Renault, were they not, if you look at it? It was based
on only the analysis of two Grands Prix, was it not, the
Japanese Grand Prix on 8th October and the Malaysian Grand
Prix in Kuala Lumpur on 18th March?
A. I do not have the thing at the top of my mind, I am afraid,
so I would have to .... I can see Kuala Lumpur. Oh yes, the
Japanese. I have it, from the previous year.
Q. And then at 947 -- I do not know which version of this you
are looking at -- there is one at tab 29. Are you at tab 20?
A. No, I am on 38.
Q. I think they are the same.
A. Are they?
Q. I will give you the page number in the one you are reading.
It is page 981.
A. As I say, this whole subject is Mr. Harris's area of
expertise. 981 - I have it.
Q. Is it not odd that the only report we seem to have that
specifically addresses the question at issue, which I
identified a moment ago, as between Ferrari and Jordan, comes
down strongly in favour of Jordan?
A. My understanding of this -- as I say, you ought to ask
Mr. Harris -- my recollection, is that this was a value
analysis. If you look actually at page 981, if you look at
the little table there, I think it is showing Ferrari still
ahead, is it not, the values of exposures? Maybe I have
misunderstood it. It does not cover McLaren, which, as at
28th March, were very much in the framework.
Q. Are you interpreting that table as showing that Vodafone,
with secondary sponsorship on the Ferrari, car would get
$23 million worth of exposure?
A. No, no. First of all, I think I explained yesterday that the
Ferrari proposal was not what you are calling secondary
sponsorship; it is what we called then and still call one of
three principal sponsors. I am simply looking at the
numbers. I am not actually making any judgment. I am just
saying that Ferrari has 23 million, Jordan has 18 and Renault
has 4. I am not making any judgment beyond that. I mean, I
would need to -- if you wanted know do that -- read it
properly. On this subject, as I said a couple of times, I
relied heavily on the advice of Mr. Harris.
Q. Is it possible that what happened was that on 28th March, you
had a discussion with Mr. Harris in which he persuaded you
for the first time that Ferrari was a better prospect than
Jordan?
A. No, it is not at all possible. From the outset, I had been
quite keen on Ferrari and Jordan. I think the minutes of our
various bodies reflect that.
Q. As at 22nd March, was it your view that Jordan was the front
runner?
A. I think on 22nd March, as I said yesterday, I was
enthusiastic about Jordan. I was enthusiastic about others.
I think it is fair to say that, in my mind, we just had the
input from the Brand Council, which caused me to reflect a
lot, who were very clearly in favour of Ferrari. We had a
proposal that day from Renault. McLaren were giving us
proposals virtually on a daily basis. But still in my mind,
on the 22nd, despite all of that ongoing, Jordan probably had
the nose ahead; so I suppose you could say just the front
runner - or the front runner.
Q. The most likely partner?
A. In my mind, on the 22nd, they had their nose ahead, yes. Ask
me another day, somebody else might have had their nose ahead
but, on that day, I think that is right.
Q. Would you take bundle C4 and go to tab 10, please. This is
an e-mail of 20th March, just two days before the disputed
telephone conversation.
A. Correct.
Q. It is to mate99, which is the e-mail address of Peter Harris,
with a copy to you and Mr. Kieser, and it is about selection
criteria. Do you recall receiving the selection criteria
from Mr. Perring at that time?
A. I do not specifically recall it. I do not dispute that I got
it, but I do not specifically recall it, no.
Q. Would you not, at this point, have been interested to
consider the question as to what criteria should be applied
for the selection of a Formula 1 team?
A. Yes, but not so much from Charlie Perring at this time. This
was already after we had had discussions with Joe Kieser
about Charlie's impartiality. At the end of the day, it is a
subjective process.
Q. Well, let us see what became of these criteria. First of
all, do you remember reading this e-mail?
A. No. I mean, to be honest, by that time I was not taking what
Charlie Perring said too seriously, given that he was not
involved in the scope of our activities. He was involved, by
this time, more or less only with the Jordan option. He did
not know what was going on with McLaren at McLaren's request.
I do not think he was up to speed on Renault, and we were
basically not inviting him to meetings any more, so he was
very focused on one particular option.
Q. Let us see what became of this criterion. Page 878 is the
attachment, which scores Jordan 43 points. Do you see that?
A. I see that, yes.
Q. Benetton 30, Ferrari 33 and McLaren 32. Could keep your
finger in there ----
A. Sure.
Q. ---- and go back to tab C4 at tab 5. This is a presentation
dated 20th March, which is the same date as Mr. Perring's
e-mail we were just looking at.
A. Sorry.
Q. Tab 5?
A. Yes.
Q. Do you see it says "Executive summary 20th March"?
A. Yes.
Q. Would you look at page 830. If you have kept your finger in
page 878, you will be able to see, I hope, that the Jordan
score has moved from 43 to 47.
A. I can.
Q. And McLaren has been shifted to the second column and now
scores 45. Do you see that?
A. Yes.
Q. Benetton now scores 41 and Ferrari scores 36.
A. I can see those.
Q. Do you see that one of the criteria which has been added is
TV exposure? If you look down page 830 ----
A. Yes, I can see that.
Q. That was not on Mr. Perring's list, was it?
A. I have never compared the two, so I will take your word ----
Q. I am putting to you that there was added in TV exposure as an
additional criterion.
A. Well, this is a document in tab 5, which stems from
Mr. Harris. It would be perfectly normal for him to add in
TV exposure.
Q. Yes. What the document at tab 5 represents is a reworking by
Mr. Harris of Mr. Perring's selection criteria, was it not?
A. I do not know. You will have to ask Mr. Harris. My
understanding of these documents, which I have seen for the
first time in these bundles, is that it was some work that
was done by Mr. Harris whilst he was in Atlanta and was never
actually presented anywhere, not in this form anyway.
Specific charts were taken out and put in the later
presentations, but my understanding is that this work is his
preparation, if you will, for meetings he had with me the
week after.
Q. Can we take it that if the source of the scoring of the teams
were Mr. Harris rather than Mr. Perring, you would have
regarded that as reliable?
A. If I had seen this at the time, I would have regarded it as
reliable, absolutely.
Q. And he also appears to have added "Location" at the bottom.
Do you see that?
A. Yes.
Q. Can you account for the increase in the score of McLaren
under the topic "Title sponsorship - availability"? Its
score has gone up from 1 to 2.
A. No, I cannot account for the 1 to the 2, I am afraid, because
I did not write this. I can tell you that around this
time -- can I just check the date -- McLaren were being
considered by us both for a secondary and also a title
sponsor opportunity.
Q. A fact which was well-known to Mr. Harris?
A. Oh, absolutely was well-known to Mr. Harris, sure.
Q. And must therefore, one would assume, account for the
promotion of McLaren's score on title sponsorship
availability.
A. (No audible response).
Q. Were you not aware that as at 20th March, Mr. Harris was
applying his mind to the selection criteria and coming up
with the conclusion that, as is stated in bold type at the
top of page 830, Jordan was first choice?
A. I was not aware that he was doing this as at 20th March. As
I told you, these were some documents he had prepared in
Atlanta. You can see that by the format on the left-hand
side, the key elements of which found their way into our
presentation to the Brand Steering Committee on 29th March;
so key charts from this document we took and adopted and put
into what we then presented to our Brand Steering Committee.
Q. Mr. Harris was working for you, was he not?
A. Yes.
Q. And you were in regular contact with him at this period about
this very topic.
A. Yes, we were.
Q. If he had reached the conclusion that Jordan was first choice
having applied his mind to these criteria, is it not
extremely likely that that is something he would have told
you?
A. I am sure, when we sat down, I think it was the week
afterwards, to prepare the big on small, small on big, we
discussed one of the versions of this document.
Q. Were you in regular telephone contact with Mr. Harris at that
time?
A. I spoke to him frequently on the phone, yes.
Q. Would you keep your finger at page 830 and move at the same
time through the bundle to divider 16 at 896.
A. Yes.
Q. Just to show you 16, the beginning, the previous one we were
looking at was dated 20th March. This one is dated 21st
March. That appears on page 886.
A. Yes.
Q. Do you see that at page 896, the table which was previously
at 830 has been reworked again? Do you see that?
A. I do. That is consistent with what Mr. Harris, I think, was
doing, preparing our presentation for the week after.
Q. He still scores Jordan at 47. McLaren has gone down in this
table to 41 on the basis of a title sponsorship availability
score of 1. Benetton has come up from 41 to 43 and Ferrari
are still last with 36. Do you see that?
A. Yes, I see that.
Q. The conclusion that Mr. Harris appears to have expressed is
that Jordan is first choice if McLaren cannot provide title
sponsor.
A. I see that.
Q. If you look over the page, there is a second alternative at
897. Jordan is still scoring 47. McLaren here is scoring 50
because the score for title sponsorship availability has been
increased, amongst other reasons.
A. There must have been some others as well, must not there, to
go from 41 to ----
Q. Benetton has gone down to 41 and Ferrari is still on 36.
A. (No verbal response).
Q. Now this is 21st March.
A. (No verbal response).
Q. Did Mr. Harris communicate to you on that date that he
regarded Jordan as the first choice if McLaren could not
provide title sponsorship but McLaren was the first choice if
they could deliver title sponsorship?
A. No. As I said to you, this was work Mr. Harris was doing in
preparation for our meetings we were having the following
week when he was coming back from Atlanta, and where we would
prepare our presentation for the Brand Steering Committee.
All of these are variations on the same theme.
Q. If you would look on in C4, tab 20 -- I showed you this
document yesterday ----
A. Yes.
Q. --- this document is said to be dated 22nd March. Did you
know who prepared this document?
A. I think I said yesterday the only two -- I do not know who
prepared it. The only two people I can assume may have
prepared it are either Mr. Perring or Mr. Harris.
Q. Do you see that as at 22nd March, McLaren has now dropped off
the table?
A. I can see that McLaren are not on here. Whether they have
dropped off, I do not know. That would indicate to me this
is probably more likely to be from Mr. Perring, because
Mr. Perring did not know anything about the McLaren
proposals, at the express request of McLaren.
Q. Do you see that there are four items with an asterisk -
title sponsorship availability, category rights availability
----
A. Yes, I have the four.
Q. ---- likely success in 2002 and cost of entry?
A. Yes.
Q. Do you agree that those four factors deserved to be counted
double in the scoring because they were critical to the
decision-making?
A. No, not necessarily. I have already explained my point of
view on title sponsorship. Title sponsorship for a secondary
team like Jordan or Renault was very, very important.
Overall, we were about media exposure, which we believed we
could get through principal on Ferrari and something similar
on McLaren, although it was less on McLaren. Likely success:
yes, you would want the teams to be in the cameras. Category
rights would be important, but I do not think they support
double scores, so to speak.
Q. Would you go back, please, in bundle C4 to tab 104A?
MR. JUSTICE LANGLEY: What page did you want?
MR. BOYLE: It is page 820A. Has that not been added?
A. I do not have it. I have an 820.
MR. JUSTICE LANGLEY: You and me both, Mr. Haines. I do not have
it either.
MR. BOYLE: I think I know the explanation for that. It does not
matter and I will just pass to where the document is in
another file.
MR. JUSTICE LANGLEY: Fine.
MR. BOYLE: Could you take bundle D. Go to 2. It should be
page 1.
MR. JUSTICE LANGLEY: Yes.
A. Yes, page 1.
MR. BOYLE: You have got that document.
A. Yes.
Q. Can we just get clear the background to this. On 14th March,
you were aware that Mr. Sami telephoned Mr. Harris, were you
not?
A. I was.
Q. That was a new development in the discussions with McLaren?
A. It was.
Q. What he said, is this right, to Mr. Harris, as you must have
found out shortly afterwards, was that McLaren wanted to
discuss very confidentially a proposal for title sponsorship?
A. That is correct.
Q. We went through this yesterday. You had previously attended
meetings with McLaren at which you had asked whether title
sponsorship would be available and you had been told that it
was not. That is right, is it not?
A. That is correct.
Q. The January meetings.
A. That is correct.
Q. You were aware that that telephone conversation led to an
immediate meeting between Mr. Sami and Mr. Harris at the
airport in Dusseldorf on 14th January?
A. Yes, I am aware of that. There were loads of meetings with
Mr. Sami between then and 4th April.
Q. You knew, did you not, that Mr. Harris then continued
discussions with Mr. Sami about that proposal?
A. We both continued discussions with Mr. Sami.
Q. You also spoke to Mr. Sami, did you not?
A. At various points in that period up until the 4th.
Q. If you have now got bundle D, tab 2, page 1 open, do you
recall receiving this document from Peter Harris?
A. I do.
Q. Did you it by e-mail?
A. Very probably. Very probably. It could have been a fax, but
very probably by e-mail. The only reason I am saying fax is
because of the private and confidential at the top.
Q. We have never been supplied with any fax from Vodafone's
records?
A. Then it is probably e-mail. We have supplied everything we
have.
MR. BOYLE: (To Mr. Aldous) Can we have, please, an unredacted
copy of this?
MR. ALDOUS: I do not know whether it would be possible for my
learned friend to explain why he needs to see it. If he
wishes to see it, whether ----
MR. JUSTICE LANGLEY: There is a lot of excitement behind you.
MR. ALDOUS: There is. Mr. Sami is present here in court. If it
would be possible to be seen at first instance on lawyers
eyes only and then perhaps there would be discussion between
us. If it is a matter that needs to be adumbrated in open
court, we could perhaps we could understand why after he has
seen it with his lawyers ----
MR. JUSTICE LANGLEY: I will rise for five minutes for you to do
that.
(A short break)
MR. BOYLE: My Lord, I am grateful for that bit of time.
What has happened is that we, that is to say counsel and
solicitors, have been supplied with an unredacted copy of the
document at bundle D2, page 1, and it is agreed that we will
proceed on the basis that that document will go into the
confidential bundle immediately after the existing page 1,
perhaps being called page 1A. My Lord, the status of the
confidential bundle, as I understand it, is that there is an
express confidentiality undertaking binding solicitors and
counsel, together with anyone else who signs such an
undertaking, so anyone else who wishes to see the bundle
first has to sign that undertaking. My Lord, what I have
agreed to do on this basis is to proceed to ask questions on
the basis of the document, but avoiding, without any further
notice to the other side, making any reference to the
specific figures which are now clear from looking at the
unredacted copy of the document.
MR. JUSTICE LANGLEY: And Mr. Aldous is content with that, is he?
MR. BOYLE: I believe so, my Lord.
MR. ALDOUS: I am content that there will be no mention of any
figures.
MR. JUSTICE LANGLEY: Does the unfortunate witness have a chance
to see the unredacted version?
MR. ALDOUS: He certainly does, and it will go in the bundle D as
well.
MR. BOYLE: Can the witness's bundle D have this added to
page 1A. Does your Lordship also have a copy?
MR. JUSTICE LANGLEY: I do now, thank you, yes.
MR. BOYLE: I am going to use the redacted version in order to
prevent myself from mentioning any figures, but while I am
doing that, can you also be looking at the unredacted
version.
A. Sure. Can I just have a quick chance to read it?
Q. I think that would be a good idea. If you would just read
the whole of the unredacted document to yourself.
A. (Pause for reading) OK.
Q. Do you think you received this document on 20th March?
A. I think I received it, yes.
Q. On 20th March?
A. I personally do not recall the exact date. I am going by the
date on here. I have no better knowledge that it is not
20th March, so, yes.
Q. And was it your understanding that Mr. Sami was putting
forward a proposal along these lines?
A. No, it is not. It is my understanding that Mr. Harris and
Mr. Sami had spoken about title and my recollection is this
was a construction, if you will, that Mr. Harris put
together, to discuss with Mr. Sami, as opposed to the other
way around.
Q. But this stemmed from Mr. Sami's original approach?
A. Yes, absolutely, sure.
Q. Making a ----
A. Of course.
Q. --- pitch?
A. Yes.
Q. If I can put it that way ----
A. Yes.
Q. --- for a title sponsorship deal?
A. Yes.
Q. And you knew, did you not, that they were doing that at a
time when they had an existing contract for title sponsorship
with West?
A. Yes.
Q. Did that strike you as normal in the world of Formula 1?
A. Actually, Mr. Sami explained to us at the time that there may
be, I think, a change in the ownership or a change in the
management at the parent company that owned the title sponsor
and they may be quite open to having someone replace
themselves with an alternative title sponsor. You can see a
situation, can you not, that a company has signed a long-term
contract and they might want to get out of it, which is
basically what I understood that to be.
Q. This was a proposal for a four-year deal for title
sponsorship deal, was it?
A. Yes.
Q. That was being put by Mr. Harris?
A. Yes.
Q. And there would be a guaranteed amount per year, which you
can read there?
A. Yes.
Q. That was to go up by a certain percentage every year, was it?
A. Yes.
Q. The proposal also included a certain amount for each point
over 60?
A. Over 60 points, yes.
Q. And an additional bonus amount if there was a win and a
further additional bonus amount for a championship?
A. Correct.
Q. Can we take it from that, that Vodafone did not have any
deep-rooted aversion to making bonus payments related to
performance?
A. No, you cannot take it from that. This is a proposal that
Mr. Harris is putting forward. I had always had a point
about bonuses.
Q. Had Mr. Harris had a point about bonuses as well?
A. I am not sure I had discussed bonuses before with Mr. Harris
because he had not really been that close to the details of
the bonus proposal that Jordan had put forward to that date.
Q. Without mentioning the figures, do you see there is a table?
A. Yes.
Q. Is your understanding that that table was designed to show
how much money Vodafone would have had to pay if this deal
had been in place in each of the years mentioned?
A. Yes, it is.
Q. Then under the table you see the average price under these
terms for the last five years has been blanked. Do you see
that figure?
A. I can.
Q. Can you multiply in your head that figure by four? Do you
see the figure I am putting to you?
A. I do.
Q. Without mentioning the figure, multiply it by four in your
head.
A. Yes.
Q. Because it is a four-year deal?
A. Correct.
Q. Did Mr. Harris have authority to make a proposal of that
magnitude?
A. A proposal?
Q. You have told the court that this document records a proposal
which Mr. Harris put to McLaren for title sponsorship and
I have asked you to multiply the figure which appears in the
paragraph immediately under the table, the five-year figure,
by four and hold that figure in your head.
A. Sure.
Q. And I am asking you whether Mr. Harris had authority to make
a proposal for a deal of that magnitude?
A. Neither Mr. Harris nor I had authority to approve or
authorise those kind of numbers, as we have discussed
previously.
Q. I am not asking whether he had authority to make a contract
at that level, but whether he had authority to make a
proposal at that level?
A. I do not think it was a problem for him to discuss those
numbers in the hypothetical sense, which is what a proposal
is.
Q. Would you read on: "Ekrem is willing to go to his board and
Ron if: " Who was Ron?
A. I assume he means Ron Dennis, who is the team principal of
McLaren.
Q. His points are, "1. If we include the [blank] increase per
annum against all aspects of the deal & not just the [blank]
million. (Minor point) 2. We add an additional [blank]
time signing payment of [blank] million", and that is
identified as a major point. If you add the sum which is
there stated in number two to the figure for the year 2000,
which would have been a payout in the immediately preceding
year, have you got now a figure which could well have been
the amount you would have had to pay in one year for this
deal?
A. I do. I hope my maths is as good as yours.
Q. "3. We propose McLaren as our recommended option to Thomas,
Chris the and Board." Was Thomas, Thomas Geitner?
A. I assume so yes.
Q. And Chris was Chris Gent, the chief executive?
A. (No verbal response)
Q. And board was the board of Vodafone?
A. (No verbal response)
Q. And TBD means to be discussed?
A. To be discussed, yes.
Q. Did you discuss that with them?
A. I remember we discussed with Mr. Geitner the McLaren
proposal. I do not recall it going beyond that level apart
from at the Brand Steering Committee on the 28th or
29th March. Actually, I think we discussed it just with
Mr. Geitner.
Q. On 21st March?
A. No, not on the 21st; at some stage during that period.
Q. You see what is being said by Mr. Sami is that he would go to
his board if those four conditions were satisfied. So you
had to agree to get the deal that McLaren would be
recommended to Mr. Geitner, Mr. Gent and the board. That did
not happen, did it?
A. No, that did not happen. That is why I think this whole
subject of title of McLaren folded just before our steering
committee meeting, which I think was the 29th, because we
could not get agreement about any of these points, or some of
these points.
Q. Read on: "I have told Ekrem that I would give him an answer
by noon". Assuming that the date is correct, that would
require an answer on 20th or 21st March, would it not?
A. If this were correct, yes. I do not believe we gave an
answer at those times to this on the 20th or the 21st.
It was another one of those trying to put us with our back
against the wall in terms of timings. I think it took us a
few days to resolve this. My recollection of the title
sponsorship being withdrawn from both sides was I think
28th March.
Q. He ends this communication by saying, "Let's talk early
morning my time." That would be the following morning, would
it not, 21st March?
A. It would.
Q. And the purpose of that discussion would be to consider this
proposal and decide what to do in the light of it?
A. Yes, what our next steps would be, how we were going to take
it forward, yes.
Q. This was a most significant development, was it not, in the
Formula 1 sponsorship project with Vodafone?
A. It was a significant development.
Q. If you have bundle D still open.
A. Yes.
Q. Do you see D5?
A. Yes.
Q. This is said to be dated 22nd March.
A. Yes.
Q. It is a partnership summary. Do you see it proposes partner
status with McLaren, title partner effective 2007? Do you
see that?
A. Yes, I do.
Q. Do you recall that proposal being made?
A. If I am not mistaken, it is one and the same thing. I do not
think Ekrem wanted documents flying around, given the
sensitivity with his current title sponsor. Even if they
were open to moving, I do not think he wanted documents
flying around with anything other than the period post the
current contractual relations with his sponsor on them.
Q. We have just looked at such a document, have we not, which is
the one at page 1?
A. Yes, that was an internal Vodafone document. Sorry, are you
talking about tab 1 now, or tab 2? The letter, or the note,
from Mr. Harris?
Q. Let me put my suggestion to you, which is that what tab 5 is
is a different and inconsistent proposal for title
sponsorship only beginning in 2007, after West's position as
title sponsor had come to an end?
A. I do not recall it as that. I recall it as being the same
sponsorship arrangement, but with a desire not to have
anything in terms of date on there that would cause any
embarrassment to anybody - I think mostly to the current
title sponsor of McLaren.
Q. Can you go back to page 1 and help the court as to whether
Vodafone was in fact ready to agreeing to the four points
identified as being required by Mr. Sami?
A. This came in. In the end we were not. As I say, McLaren
were not able to deliver either, so it came to a mutual,
almost grinding halt, if you will, around 28th March in
our preparation for the meeting of the Brand Steering
Committee.
Q. Could you go back in bundle C4, please. Keep bundle D there.
A. Sure.
Q. If you go back to C4, tab 20, which I showed you a moment
ago - the selection criteria dated 22nd March - I suggest to
you that the reason that McLaren has dropped off this table
is that by 22nd March a decision had been reached to reject
the conditions made by Mr. Sami and therefore their title
sponsorship proposal was no longer in play.
A. I suggest to you it is because this is probably written by
Mr. Perring ----
Q. You do not know that, do you?
A. No, I do not. Probably. I am saying probably.
Q. You are speculating?
A. I am saying probably. As you can see, under point 4 of
Mr. Harris's letter, and I remember this quite specifically,
we were asked not to share this with Mr. Perring or other
external parties at that time, because I do recall
specifically that this title proposal was alive for about 10
days, 10/12 days, and I think just before the Brand Steering
Committee rejected it on a mutual basis. So it was very much
alive on the 22nd, if that is what you are ....
Q. Could you take bundle B, at tab 23, and go to page 209.
A. Tab 23?
Q. Tab 23, page 209. I am just going to show you paragraph 16
of Mr. Phillips' fourth witness statement. He says, "At the
Monaco Grand Prix I met Ekrem Sami of McLaren, he said he was
astonished that Vodafone was to sponsor Ferrari because he
had thought the deal was Jordan's because we were the only
ones who could offer title. I said we had a deal on
22 March 2001. Ekrem Sami said 'that was when they told us,
no'". Obviously you were not there when Mr. Phillips was
talking to Mr. Sami, but on the basis of that, what I suggest
to you happened was that on the very day when you spoke to
Mr. Jordan in the disputed telephone conversation, you told
Mr. Sami that the title sponsorship deal proposed initially
on 13th March was rejected?
A. I cannot obviously comment on that note. I can comment
clearly, however, that it was not rejected. I can also
comment, and you can ask Mr. Sami when you see him, that
Mr. Sami was insistent throughout our discussions that even
if we were not to go with McLaren that Vodafone should go
with a big company. He was insistent about the small on big
option and that we should not go with Jordan. He was very
specific about that. That was his advice to us throughout
the process.
Q. You spoke to Mr. Sami on 22nd March on the telephone, did you
not?
A. Yes, I think I did.
Q. Would you turn to bundle 4A, tab 27, page 939. Do you see
call number 110?
A. I do.
Q. Was that a call that you made to Mr. Sami?
A. It was.
Q. And it lasted 15 minutes?
A. It did.
Q. And did you discuss with Mr. Sami in that telephone call
McLaren's title sponsorship proposal?
A. I am sure we did. I do not recall the specifics of that
call. I am sure we talked about the title sponsorship
proposal. There was also a secondary sponsorship proposal on
the table.
Q. While we are looking at this, was call 99 a call to
Mr. Harris in Atlanta?
A. Yes, it was.
Q. And did you discuss with Mr. Harris in call 99 the McLaren
title sponsorship proposal?
A. I do not recall. We probably had a general update. I would
not be surprised if we talked about it. It was a lively
subject, or a live subject.
Q. Look at bundle C10, your diary, at tab 77, and go to
page 2143. Did you have a meeting with Mr. Geitner on
21st March?
A. Yes.
Q. And did that include a discussion of McLaren title
sponsorship proposal?
A. I think I mentioned it to Thomas at the end. The discussion
that I had with Mr. Geitner on that day was actually not
about Formula 1; it was about other issues. I think
I mentioned it to him at the end and his comment to me was
"We need to work out if we go ahead with this what we would
do with Hakkinen", who was at that time advertising for our
competitor in Germany, T-mobile, "so we need to think through
the consequence, David, of how we deal with that."
Q. The title sponsorship proposal, can we agree, without
mentioning figures, involved an outlay of very substantial
sums?
A. Absolutely.
Q. And you have agreed that it was a very important development
in the Formula 1 sponsorship project.
A. Correct.
Q. And is it not overwhelmingly likely that you would have taken
the opportunity on 21st March, when you saw your boss,
Mr. Geitner, a main board director of Vodafone, to bring him
up to speed with the state of the discussions with McLaren
about title sponsorship?
A. I just said I mentioned it to him.
Q. Well, did you bring him up to speed with the state of the
discussions?
A. I have just said I mentioned it to him.
Q. Did you tell him what the proposals were as set out in the
document at D2, page 1, that we have just been looking at?
A. I do not specifically recall. I am sure I mentioned to him
that we had a title offer from McLaren and we were working
through it.
Q. Is it not overwhelmingly likely that having received that
document on 20th March by e-mail, you would have shown it to
Mr. Geitner on the 21st as being a very important document
which he needed to know about?
A. I would have certainly talked him through it. I would not
have talked him through the details. I would have said, "We
had a title sponsorship proposal from McLaren." His comment
was, "Think through what you would do with this one
particular driver, who was advertising in Germany, where
Mr. Geitner lives, for our competitor."
Q. We have seen the sort of figures that were being discussed.
Are you saying that Mr. Geitner's only interest was in the
driver?
A. No, I am not saying that. I am saying we would continue the
dialogue. I was meeting with Mr. Geitner on a regular basis,
and he and I knew we were preparing the Brand Steering
Committee at the end of the month, and the executive
committee preparations for the week after. The subject was
live throughout that period.
Q. And all the e-mails which you were receiving and sending
during this period you were habitually deleting from your
computer.
A. I always delete most e-mails when I go back to the office.
Q. So we do not know what else Mr. Harris may have said to you
by e-mail or what your reply was.
A. If e-mails are deleted, they are deleted.
Q. When these proceedings were threatened, did you inform your
superiors at Vodafone that that is what your practice had
been with your e-mails?
A. When these proceedings were instigated?
Q. Yes.
A. We gave everything that we had to our lawyers. They came
over and got everything off our files, off our e-mail
systems.
Q. Did you inform your superiors that you had been deleting your
e-mails?
A. No, I was not asked. No one asked me and it was not
something that was ever discussed, to be honest. We dealt
with our legal department. It is quite standard practice to
delete e-mails when you get a lot coming in, of the size of
the files we get.
Q. Yesterday I asked you some questions about the position with
Benetton. Just to remind you of the context, could you take
bundle C3 at tab 65. I showed you Mr. Kieser's letter ----
A. You did.
Q. ---- which led to a strategy of going underground for a week
or so. What I suggested to you was that the purpose of that
was so that you could pursue discussions with Benetton.
A. I recall disagreeing with you.
Q. I do not want to cover ground we have already debated.
A. OK.
Q. That is just to give you the context. Did you know that
Mr. Perring met Ted Brezina at Benetton the following day?
A. I knew that Mr. Perring was dealing with Benetton on the
switch of the brands. I do not specifically recall he met
him the following day.
Q. Well, it is actually stated the first paragraph of the letter
we were just looking at.
A. OK, fine, yes.
Q. Then you had dinner with Mr. Briatore on 23rd February, did
you not?
A. Yes, I did.
Q. At that meeting, was there a discussion about Benetton
providing title sponsorship?
A. Yes, there was. There was a discussion about Benetton, about
extending the relationship we currently had, which we thought
was a good one, for the future into more broad sponsorship
terms. I think title was mentioned. I cannot absolutely
remember whether title was mentioned, but it probably was.
Q. And did you then meet Mr. Briatore again on 8th March with
Peter Harris in Dusseldorf?
A. Yes. He came to our offices and we had a discussion around
sponsorship - in our offices.
Q. And was he making a pitch at that meeting for a title
sponsorship deal with Benetton?
A. I think he was.
Q. And was that of interest to you and Vodafone?
A. Of course. We had a good relationship with Benetton and we
were keen to see if they could provide us with what we were
looking for for the following year, as one of our options.
Q. And isn't the reality that you were still putting title
sponsorship as one of the important criteria for your
selection decision?
A. For a secondary team, which even Mr. Briatore would have
agreed at the time is where they were, they did not have much
chance of getting on the podium, title was important, we
thought.
Q. Did Mr. Briatore talk to you at that meeting about his
contractual position with Mild Seven?
A. I do not recall that specifically.
Q. Is that not something you would have wanted to check, as to
whether he could in fact offer title sponsorship?
A. I took what Mr. Briatore said at face value throughout on
Mild Seven and his ability to offer title sponsorship.
Q. Did he tell you that a week earlier he had offered to swap
Vodafone and Mild Seven with Eddie Jordan?
A. I do not recall that.
Q. If you had known that that offer had been made, would that
have affected the way you dealt with Mr. Briatore?
A. It's hard to answer that question. Probably not. He was
offering us title sponsorship for the following year, not for
that year.
Q. And then on 13th March you met Mr. Briatore again at the
factory in England, did you not?
A. That is correct.
Q. And that was also a discussion about title sponsorship for
Benetton.
A. It was.
MR. BOYLE: My Lord, would that be a convenient moment?
MR. JUSTICE LANGLEY: It would. Five-past two.
(Adjourned for a short time)
MR. BOYLE: Mr. Haines, do you still have bundle D there?
A. Yes, I do.
Q. Could you open it again at tab 2, page 1.
A. Sorry, tab 2?
Q. Tab 2, page 1.
A. Yes.
Q. You are looking at the redacted version, I think.
A. I am.
Q. Were the four conditions for Mr. Sami to go to the board
agreed to by Vodafone?
A. They were not. They were not.
Q. None of them?
A. Well, it never got that far in the end, because this proposal
around the 28th was withdrawn, before we could take it on to
the bodies that could have agreed that.
Q. You are saying that McLaren withdrew the proposal?
A. Around the 28th March. We just could not get the two to
connect. It was a kind of we did not take it forward, they
did not take it forward, so we agreed to drop it.
Q. Well, I think the answer you gave a moment ago was that
Vodafone did not agree to the four conditions.
A. That is correct.
Q. So is that not the reason that Mr. Sami was unable to go to
his board?
A. That is what I mean. We could not reach agreement to the
reasons for him to go. Because we could not agree, he could
not agree. Therefore the whole thing became a bit pointless.
Q. So within Vodafone, a decision was reached not to accept
those four conditions. Is that right?
A. Yes, I think that is fair.
Q. Who took that decision within Vodafone?
A. I think that happened in discussions with myself, Mr. Harris
and Mr. Geitner in the preparation of our Brand Steering
Committee on the 28th.
Q. Was it not your decision, Mr. Haines?
A. No, it is not my decision to take this proposal forward.
Q. Well, if it was not your decision, whose decision was it?
A. I think, as I said, it happened in discussions with myself,
Mr. Harris and Mr. Geitner. When we went through our
preparation meeting for the Brand Steering Committee, as I
recall, before the 28th or 29th March.
Q. We have heard Mr. Geitner give evidence in this case, and no
doubt, in due course, we will consider again the evidence he
gave on this topic. I am bound to suggest to you that it
must have been your personal decision not to proceed with
this.
A. No. In the end the proposal, as I say, was withdrawn because
our organisations could never come to the agreement that we
would take it forward based on these conditions, and McLaren
could not take it forward if we could not agree. Therefore,
as I say, the whole thing became superfluous.
Q. Well, it was a very important issue for Vodafone, was it not,
whether these discussions would proceed or not with McLaren
for title sponsorship?
A. We had the backup of the secondary sponsorship proposal from
McLaren, so a small on big, as we called it.
Q. Why didn't McLaren come forward with a title sponsorship
proposal, do you suppose?
A. I am sure it was because they knew, based on conversations
that we had had previously, that if we could get a big team,
what essentially would have big on big, that was the best of
all options.
Q. They knew, did they not, that you were not satisfied so far
as they were concerned with small on big?
A. The original small on big, if you like, that McLaren put
forward to us in January was very small on big. The final
small on big that McLaren came up was quite different.
Q. Can we just have a look for a moment at the commercial
realities here.
A. Sure.
Q. Word had got round, had it not, in the Formula 1 community
that Vodafone, a major company, wished to enter the Formula 1
sponsorship field in a big way. That is right, is it not?
A. We had been very open, as I said I think yesterday, almost to
the point of being naive, about being open with people that
we were going on this learning journey. Knowing what I know
now about the Formula 1 world, so with the benefit of a year
and a half hindsight, I am sure that word had got round - I
am sure.
Q. And all the major teams were therefore interested to put
forward proposals to try and catch you as their sponsor - you
being Vodafone.
A. Not all of them. That was one of the points that I was
surprised at, that a few months after starting this process,
basically half of the teams in F1, five or six, I think there
are eleven or twelve teams, depending, had put forward some
kind of proposal.
Q. Now, we were talking before lunch about Mr. Briatore and your
meetings with him. I think you have accepted that certainly
at your meeting on 8th March, Mr. Briatore made a pitch for
title sponsorship. I think we then went on to refer to the
visit you had to the factory on 13th March, when you met
Mr. Briatore again. Was that the last meeting that you had
with Benetton before 22nd March?
A. To the best of my knowledge, yes.
Q. And did you discuss with Mr. Briatore what their position was
vis-a-vis Mild Seven?
A. I cannot recall that. I recall Mr. Briatore offering us
title sponsorship. I cannot recall the Mild Seven point.
Q. Have you got bundle B there for a moment. Take tab 3, page
45.
A. Tab 3?
Q. Tab 3. This is Paul Jordan's witness statement. In
paragraph 2 he says: "After I left Benetton I kept in touch
with my successor Ted Brezina. I recall hearing about
Vodafone wishing to sponsor a Formula one team for 2002 and
that Jordan and Benetton were front runners. On about 22nd
March 2001 Ted Brezina called me to say that he had heard
that Benetton would not be sponsored by Vodafone and that
Jordan were to be sponsored." He passed that information to
Ian Phillips. Now, Mr. Brezina took over as sponsorship
manager at Benetton, according to this witness statement. I
think when he says, "My successor Ted Brezina," he must be
referring to commercial director, as in the second sentence.
If that is true, can we take it that Benetton were told that
their title sponsorship proposal was not going to proceed and
that they were told that on 22nd March?
A. Well, I completely dispute .... I have never met, to the best
of my knowledge, neither Mr. Jordan nor Mr. Brezina. I
completely dispute that. The Benetton proposal for title, as
you can see in our documents, was included in our lineup that
we took to our Brand Steering Committee on the 29th. In
fact, if I am not mistaken, actually on the 22nd (or
21st/22nd, one of those days) a renewed proposal actually
came in from Benetton to us. To my knowledge, as of the
22nd, Benetton was a very live option for sponsorship.
Q. If that is true, what I just read to you, then 22nd March was
turning into quite a busy day in the Vodafone sponsorship
project, was it not?
A. I mean, you can see from my diary, not more or less busy than
any other days.
Q. Go to C4, tab 15. Do you know who prepared that document?
A. No, I do not. I think it came from Benetton. I could not
tell you the name.
Q. What about tab 25? Do you know who prepared that?
A. No, sorry.
Q. Do you know what the figures are that have been redacted? I
am not asking you to name them, but do you know?
A. No. I do not have them in my head, I am afraid, sorry.
Q. We have discussed McLaren and we have discussed Benetton.
That leaves Ferrari. The position so far as Ferrari were
concerned, looking at the matter of 22nd March, which is a
pivotal date, was that you had not had a meeting with Ferrari
since the Maranello meeting on 9th February. That is right,
is it not?
A. I had not met Ferrari directly since the 9th. I discussed
Ferrari at two other meetings I think I mentioned yesterday,
on the 15th with Mr. McNally, that is when we discussed the
skin, and then subsequent to that, based on that decision,
had a lengthy discussion with Philip Morris on, I think, the
23rd February.
Q. Did you verify with Philip Morris that their permission would
be needed if Vodafone was to come on the Ferrari car?
A. I would like to be careful with the phrase "permission
needed." I am not sure it was ever that black and white,
that it was permission needed. I cannot rule that out, but
in my mind if essentially we were going to take the position
as a principal sponsor, so one of the three big ones, and
Philip Morris on the skin and we had plans to do much more
with that relationship than Shell did, because Shell were
quite passive, they are the third sponsor, then it made sense
for us to have a good relationship with Philip Morris.
I think they did need to agree. Whether it was permission,
I may be splitting hairs here, but I think it was better to
have them agree, and that is why we went to see Philip Morris
on the 23rd.
Q. The ultimate deal with Ferrari that you did do, do you say it
put you in a better position than Shell?
A. Certainly it is our belief that it put us in a better
position in total than Shell and the facts subsequent in
terms of media exposure and being able to measure, certainly
those of which I am aware, show that we got a better presence
or recollection or share of the media than Shell have.
Q. Just look for a moment, would you, in bundle D at tab 20.
Is that the contract with Ferrari signed on 25th May? It is
signed at page 72.
A. It certainly looks like it.
Q. Just look at 1(b) on page 41?
A. I am just checking 62, if I may, first.
Q. Yes.
A. Yes.
Q. "Vodafone acknowledges that FERRARI had entered into
agreements (hereinafter, the 'PM Agreements') with Charles
Stewart & Company (Kirklady) Ltd, London, a company of the
Philip Morris group ... which grant to Philip Morris the
title of first sponsor of the Team and, as a consequence of
such first sponsorship status, the highest category of rights
to sponsor the Team." So far so good. Philip Morris had the
highest category of rights?
A. Yes, I think that is undisputed.
Q. Vodafone did not have anything like Philip Morris's rights as
a title sponsor?
A. No, undisputed.
Q. "In addition, VODAFONE acknowledges that FERRARI has entered
into an agreement with Shell International Petroleum Company
Ltd, London (hereinafter, 'Shell'), which grants to Shell
certain sponsorship rights in relation to the Team." Then
(c) "FERRARI hereby represents to VODAFONE that, with the
exception of the current or future Philip Morris and Shell
sponsorship packages, no sponsorship packages will be created
encompassing individual rights greater than those granted to
VODAFONE hereunder." Do you see that?
A. Yes.
Q. So is this not right, that you got a deal with Ferrari under
which they could not grant a better package to anyone else
than Vodafone, but there was excepted from that the existing
packages with Philip Morris and Shell?
A. Undisputed. That is correct.
MR. JUSTICE LANGLEY: Are you going to draw the conclusion from
that that Shell did better than Vodafone?
MR. BOYLE: My Lord ----
MR. JUSTICE LANGLEY: I think if I was drafting this contract,
I might have drafted it like that regardless, but who knows.
MR. BOYLE: It is a matter I may take up again.
MR. JUSTICE LANGLEY: Are we getting the unredacted version?
MR. BOYLE: That is what I have in my hand, my Lord.
MR. JUSTICE LANGLEY: The same rules?
MR. ALDOUS: The same rules. It should go in the D bundle, my
Lord, rather than be put in the C bundle because the D bundle
is known as confidential. So we will have to have a new tab.
I suggest at the moment we can probably shove it in at the
very back of this.
MR. BOYLE: My Lord, may I make a plea that it goes in behind the
existing document at tab 15. It is true that it is not then
in bundle D, but it is recognised. The reason for that is
pure convenience is that is a good place for it.
MR. ALDOUS: I think there is a prospect that something can slip.
We can put a flyer in there saying "go to D" whatever the
page is, but if we keep all the confidential documents in one
bundle, then there will be no doubt if there has been any
disclosure on them there should not be any excuse for it.
I am not suggesting for a moment my learned friend would do
that. We will give you a fly-sheet to go in there to cross
refer to the D bundle.
MR. BOYLE: My Lord, may I hand this to the witness and to your
Lordship as well. (Same handed)
(To the witness) So this was the 21st March proposal,
at least that is what it says on the document, but you are
unable, even with the unredacted version, to help the court
as to how it came to be prepared. Is that right?
A. Yes. It is not clear to me where you want me to put it?
MR. BOYLE: We have not got a place for it.
MR. JUSTICE LANGLEY: I have a feeling you had better hand it
back. Someone can come and collect it from you.
MR. ALDOUS: Either that or it goes in the D bundle.
MR. BOYLE: If I can request that a place be identified in the D
bundle.
MR. JUSTICE LANGLEY: I think the suggestion is that you are
going to have a lovely coloured piece of paper saying "See D"
or something or other.
MR. BOYLE: If that could be done. I would also repeat my
request that we apply the same treatment to the document at
25. (To the witness) Would you look in bundle C3, for a
moment, at tab 89.
A. Was that tab 89?
Q. Tab 89, yes. This is an e-mail from Mr. Dart to Charlie
Hiscocks and Joe Kieser and Charlie Perring, saying,
"We understand there is going to be another Gent meeting next
week on branding." This is an e-mail dated 13th March.
That is to say, that was a Tuesday and the following week was
therefore the week of Monday, 19th March.
A. (No verbal response)
Q. Did you tell Peter Dart on or before 13th March that there
was going to be another Gent meeting next week on branding?
A. I have no recollection of that whatsoever.
Q. The subject of the e-mail is "Gent next week/F1"?
A. I can see that.
Q. Do you recall whether there was a meeting with Chris Gent on
Formula 1 in the week commencing 19th March?
A. I do recall; there was not.
Q. You can put bundle C3 away again. I showed you in C4 some
presentations. Just so you have them in mind, if you go to
C4, they are at tab 5, 6, 16 and 17.
A. Yes.
Q. And two of them are dated 20th March and two of them are
dated 21st March. Given that we know that you had a meeting
with Mr. Geitner scheduled for 21st March, is it not clear
that these documents were prepared in anticipation of that
meeting?
A. No, it is not. As I said to you, I think this morning, my
recollection of these documents is that they were done by
Mr. Harris and not presented to anyone. Equally, there are
individual pages, as I go through these documents, that I
recall being incorporated into the later presentation that we
used.
Q. Mr. Geitner was asked questions about this. This is page 708
of day 5. "(Q) David Haines, I think as you said this
morning, would not provide you with any formal reports at
all. He would only report to you orally, would he not?
(A) Well, he would report orally to me and he would also
provide these type of presentations which we then would
prepare for any kind of board meetings going forward.
(Q) If there is a presentation, it would be in connection
with a meeting? (A) Yes."
MR. JUSTICE LANGLEY: Mr. Boyle, my note on tab 16 is that
Mr. Geitner did not recall seeing this. I must have got that
from somewhere. No doubt it can be checked. My reference is
to T5, 106, but I suspect the numbering had changed as I
would have taken it off the screen at the time. It can be
checked.
MR. BOYLE: My Lord, I am not purporting to give the witness a
complete account of the evidence given by the witness at the
time.
MR. JUSTICE LANGLEY: No, but if you are putting to him, which I
rather thought you were, that Mr. Geitner would have seen
these, I also have a note on tab 5 that Mr. Geitner said he
never saw it. So I am not sure what you are putting to him.
MR. BOYLE: I am putting to the witness -- I hope I made this
clear -- that these documents were prepared for the purposes
of being presented to Mr. Geitner on 21st March.
MR. JUSTICE LANGLEY: Despite the fact that his evidence was that
he had not seen them?
MR. BOYLE: Yes. I will address your Lordship in my closing
submissions obviously on the overall effect of Mr. Geitner's
evidence on this topic.
MR. JUSTICE LANGLEY: It is just simply to put the questions
fairly to the witness. I had the impression you were putting
to him that Mr. Geitner had actually had these, as it were,
shown to him by Mr. Haines. If that is what you are putting,
you should make clear. In fairness to the witness, I think
you should make clear that that is not what Mr. Geitner said,
if my note is accurate.
MR. BOYLE: My Lord, there were things about 21st March which
Mr. Geitner clearly could not recall and to which more has
been added to what he could not recall ----
MR. JUSTICE LANGLEY: Mr. Boyle, I am not going to stop you
asking questions. My only concern is that you have put to
this witness something you said Mr. Geitner said in a passage
in the transcript. It seemed to me that reading the whole of
what he said, if my note is accurate, what you were putting
to him was a rather unfair way of asking the question.
That is all.
MR. BOYLE: (To the witness) Can I ask you if you agree, as a
general point, that what Mr. Geitner said is correct; namely,
that if there was a presentation, it would, generally
speaking, be in connection with a meeting. That was how
these matters were communicated by you to him.
A. I would either report orally, so we were sitting down in his
office and I would give him an update of where we were, (a);
or (b), in preparation for the big meetings that we had (and
they were scheduled, they were known), we would go through
the draft presentations using presentation documents.
Q. These documents have been preserved in the records of
Vodafone as having particular dates, have they not?
A. Yes.
Q. What I am trying to get at is what the significance of
preserving these documents was. If they were merely drafts
of documents which manifested later as completed drafts,
I cannot see why these would have been preserved in this form
as having been prepared.
A. It is very simple. It is really very simple. The moment
this action started, our lawyers came to our offices and said
"Anything to do with this subject, save it, print it", and
I think these are Peter's (Mr. Harris's) drafts, and they
were printed and saved. It is no more complex than that.
Q. From what computer?
A. Mr. Harris's.
Q. In his office? In Dusseldorf?
A. I do not know. You would need to ask Mr. Harris which
computer. I know the way it was said to me. I assume it was
said the same way to Mr. Harris. "Anything to do with this
subject, please, save, from whichever source". So I assume
it was said the same way to Mr. Harris. I was not there when
it was said.
Q. Can we come to the telephone call on 22nd March. Was that
the first call you had ever made to Mr. Jordan?
A. No.
Q. When previously had you telephoned him?
A. I cannot remember. I called him a few times.
Q. What about?
A. All sorts of things. We spoke a number of times about the
various state of play of the proposals that were ongoing.
Q. In summary, what you say about that call is really two
things, is it not: one, you had not in fact reached a
decision to award the deal to Jordan and, two, that you did
not tell Mr. Jordan that you had reached such a decision.
Is that fair?
A. I think in my witness statement I was a little bit more
precise than that.
Q. I think you also say in your witness statement that it was
just one more phone call, that it had no particular
significance. Is that right?
A. Correct.
Q. You do recall receiving a telephone call the following day,
do you not, from Peter Harris?
A. I do.
Q. Did he tell you in that conversation that he had just
received a call from Eddie Jordan?
A. He did.
Q. And did he recount to you that Eddie Jordan had said Vodafone
has decided to sponsor Jordan?
A. I do not recall the exact terms of what he said.
Q. Was that the gist of it?
A. I remember him being shocked at the content of what
Mr. Jordan said. I am not sure that was the exact gist.
Q. I will just read to you from Mr. Harris's witness statement:
"After my conversation with Eddie, I immediately phoned David
and told him that I had just had a call from Eddie who said
that Vodafone had decided to sponsor Jordan." Does that
accord with your own recollection of what he said?
A. Broadly speaking.
Q. If on the previous evening you had merely said to
Eddie Jordan that it was looking good for Jordan, or words to
that effect, that news that you got from Peter Harris must
have been of considerable importance to you, must it not?
A. It was, absolutely.
Q. In fact, what was your reaction to that on being told that by
Peter Harris?
A. I was pretty shocked and horrified.
Q. What shocked you and what horrified you?
A. The fact that Mr. Harris was telling me Mr. Jordan thought
that.
Q. How did you think, after that conversation, that it had come
about that this was being reported to you?
A. The only explanation that I could give to myself was that
Mr. Jordan had heard what he wanted to hear and not heard
what was said.
Q. You thought it was a misunderstanding?
A. Absolutely.
Q. And your evidence is that you had been in frequent telephone
contact with Mr. Jordan?
A. I had spoken to him several times.
Q. And you yourself had initiated a number of calls to him?
A. Absolutely, yes.
Q. This misunderstanding needed to be cleared up straight away,
did it not?
A. It needed to be cleared up clearly.
Q. Then why did you not lift the phone again to Mr. Jordan and
just clear it up?
A. Because I thought it would be much better to get a note sent
out, and I had been badgerd the day before by Mr. Jordan on
the phone and, frankly, I did not want to get badgerd again
and getting it in writing was, I thought, the right thing to
do.
Q. What I put to you is that if you really had believed on
23rd March that you had not told Eddie Jordan that Vodafone
had decided to sponsor Jordan, you most certainly would have
wished to telephone him straight away. Is that not true?
A. No, it is not true. I wanted to get it out, to be absolutely
clear, to have it in writing, where we were in this overall
process.
Q. Did Peter Harris ask you for your account of the conversation
with Eddie Jordan?
A. Not that I can recall.
Q. Surely, he must have done.
A. An account is a blow-by-blow .... I am taking account to
mean blow-by-blow, if you like, word for word, description.
Q. But you ----
A. I told him we had come to no such conclusion.
Q. Did he not want to know what you had in fact said?
A. Yes, he did, which is why I said we had come to no such
conclusion.
Q. Did you tell him what you remembered saying to Eddie Jordan?
A. I cannot remember a blow-by-blow conversation with
Peter Harris about the conversation with Mr. Jordan.
Q. Did you summarise for Mr. Harris's benefit what you
remembered telling Eddie Jordan the night before?
A. I said we had come to no such conclusion as Mr. Jordan put
forward to Mr. Harris.
Q. Did Mr. Harris suggest to you that you had jumped the gun?
A. No.
Q. Do you recall, after the letter of 26th March had been
written, speaking to Mr. Jordan on the telephone?
A. I remember a conversation.
Q. Could you take bundle B and go to tab 1, page 7.
At paragraph 32 he says: "I could not understand why this
letter had been sent by Peter Harris given that it totally
contradicted the conversation I had with David Haines when
the agreement was made. I was prepared and very annoyed.
I decided however that confrontation was not the answer, but
we should first find out what was going on. I got hold of
David Haines on the telephone and he told me that
Peter Harris had been concerned about his call to me and my
letter of 22.03.01 and that David Haines had in effect jumped
the gun. David Haines said that he had told Peter Harris
that his decision was that Vodafone would sponsor Jordan and
that I should not worry and that everything would be sorted
out. He confirmed that he was the boss and that it was his
programme and his responsibility."
Can I direct your attention to the middle of the
sentence there, where he says "I got hold of David Haines on
the telephone and he told me", that is you, "that Peter
Harris had been concerned about his call to me and my letter
of 22.03.01 and that David Haines had in effect jumped the
gun." Did you tell Eddie Jordan in this conversation that
Peter Harris had expressed that concern?
A. Not that I can recall. I recall a different content of this
discussion.
Q. Just so you can be clear, the other conversation that relates
to this, if you go on in the bundle to tab 2, page 37, this
is Mr. Phillips' account of a parallel conversation with
Mr. Harris at 119: "I asked Peter Harris why he had sent his
letter .... He said it was not a delaying tactic but there
was a board meeting the following Wednesday ... when David's
decision would be formally presented. He said it was a lot
of money and a lot of people internally had to be convinced.
By this I took it that he meant people on the Vodafone board.
He said that David Haines' telephone call and our letter had
jumped the gun." Then, finally, before I ask you a question
about this, if you could look at bundle 4A, tab 36, at
page 973 you will find some manuscript notes which we think
were made by Jane Graves within Jordan. At the bottom,
"Vodafone - decision tomorrow by the Board. David Haines -
Global Director confidentially told EJ and IP - JGP are the
ones - not rubber stamped by board. Letter advising jumped
the gun." I know you would not have seen this note at the
time, of course.
A. No.
Q. What I am putting to you is this, that if it is true that
Peter Harris thought you had jumped the gun, that could only
be because you had said what Jordan allege you did say.
Do you follow?
A. I follow. I disagree, but I follow.
Q. Your evidence in your witness statement is, in summary, that
Jordan were simply the most likely partner and that is
(inaudible).
A. I had a bit more in my witness statement, I think.
Q. It is simply saying that Jordan, the most likely partner,
would not be jumping the gun, would it?
A. I did not hear that, sorry?
Q. It is simply saying that Jordan, the most likely partner,
would be jumping the gun, would it?
A. No, it certainly would not.
Q. And did you tell Eddie Jordan in conversation about the
letter that the decision was going to be approved by
Vodafone's board?
A. No. First of all, there had been no decision. Secondly, we
were going to various meetings - the Steering Committee, the
Brand Steering Committee, the Executive Committee meeting -
and there is no way that I could have predicted what was
going to happen in those meetings. You have to remember that
at those meetings this whole migration project was discussed,
not just Formula 1, and it could have been possible that the
whole migration would have been moved back a year, and the
people in those meetings are senior members of our team who
all have a strong opinion. There is no way you can predict
what they are going to say.
Q. If you have still got bundle 4A open, Jane Graves' minute at
page 971?
A. 971?
Q. Yes. "Vodafone team choice decision to be made 29/03 by
Vodafone - JGP have been confindentially told this just needs
to be rubberstamped only by the Vodafone Board meeting on
weds 4th April." This is the day after the telephone
conversations between you and Mr. Jordan and between
Mr. Harris and Mr. Phillips. Do you accept that reference
was made to the board meeting that was going to be held in
that conversation?
A. In which conversation?
Q. Your conversation with Mr. Jordan.
A. I accept that there was a reference to a process which we
were going to go through over the coming days. I do not
recall the board being mentioned. I do not dispute it, but
I do not recall it specifically.
Q. That must have been uppermost in your mind, must it not, the
fact that there was to be a board meeting?
A. The fact that there were going to be several meetings over
the course of the next few days was high on my agenda,
absolutely.
Q. Just look at Mr. Jordan's account again, back at page 7 in
bundle B1, paragraph 33. "He said he would discuss the
matter at a board meeting the following Tuesday". Did you
say that?
A. I do not recall.
Q. And he did not want any paperwork showing a decision had been
made.
A. I certainly do not recall saying that. Paperwork is not the
kind of phrase I would use, and we had not made a decision.
Q. Do you remember how long the telephone call on 22nd March to
Eddie Jordan lasted?
A. Not specifically. It must have been, I do not know, 10-15
minutes.
Q. Had you been told that Mr. Jordan and Mr. Phillips were
waiting in the office for your call?
A. No, I had not actually. Mr. Perring had called me earlier in
the day asking me to give them an update.
Q. Did the call begin with Eddie Jordan extolling Jordan's
virtues?
A. I cannot recall specifically how .... At some stage during
the conversation, he was extolling their virtues, yes. I
cannot remember whether it was at the beginning. At some
stage he was extolling their virtues.
Q. And did you cut that short by interrupting?
A. I remember saying that we were getting very close in terms of
moving forward to a decision, in terms of our process. I do
not remember specifically cutting him short or cutting him
off.
Q. Your evidence is that you referred to your process.
A. No. I said we were getting very close.
Q. Did you refer to your process? Was that the evidence you
were trying to give just now?
A. I do not know whether I mentioned the word "process" in the
call.
Q. Do you wish to withdraw that piece of evidence?
A. I think what I am saying is what I said on the call is that
we were getting very close.
Q. Do you or do you not have a recollection of mentioning
process in the call ----
A. I do not have the recollection of mentioning process on the
call.
Q. And did you say, "Eddie, stop, stop, you've got the deal."
A. I do not remember using those words. My colleagues, who were
in the car with me, do not recall me using those words.
Quite frankly, it would have been inconsistent with the facts
at the time.
Q. Are you saying that your recollection is good enough to be
able to tell the court that you did not say, "Eddie, stop,
stop, you've got the deal"?
A. I am saying that I do not believe I used those words.
Q. Is your recollection good enough to enable you to say to the
court, "I did not say to Eddie Jordan, "Stop, stop, you've
got the deal"?
A. I have just said that I do not believe I used those words.
My colleagues do not believe I used those words, who were in
the car with me, but my recollection is absolutely, clearly,
not good enough to remember every conversation verbatim and,
therefore, I cannot rule out the small possibility that those
words were said. However, I do not believe that I used the
words. It would have been very inconsistent with the facts
at the time.
Q. Did you ask Jordan to send a draft contract to Peter Harris?
A. I did ask Mr. Jordan to send a draft to Peter Harris.
Q. And that was in reference to the conversation that you had
just had.
A. It was part of the overall conversation. It was not in
reference to. It was designed, as we had with Benetton, to
get a draft of a contract from an F1 team to see where they
were coming from, so we could look at one of their drafts.
Q. And did you say, "You can sort out the formalities with
Peter"?
A. I do not recall that.
Q. Was there a discussion about keeping this conversation
confidential?
A. I have no recollection of any discussion about keeping
anything confidential.
Q. Do you recall that there was a discussion about Gallaher in
that conversation?
A. No, I do not.
Q. Mr. Phillips says in his witness statement the following:
"Eddie Jordan spent some time in explaining to David Haines
that Gallaher had been very good to Jordan over the past
years and he wished to take time to prepare a dignified exit
for them." Was that said?
A. I have no recollection of that being said at all.
Q. Mr. Phillips goes on: "David Haines acknowledged this as the
correct approach and he would expect to be dealt with in the
same way." Did you say that?
A. I have no recollection of that.
Q. Did you also discuss the forthcoming meeting with Bernie
Ecclestone in this conversation?
A. I have a vague recollection of the meeting with
Mr. Ecclestone being mentioned.
Q. And did Eddie Jordan say that he thought that it would be
helpful to Vodafone's position, vis-a-vis Bernie Ecclestone,
if Vodafone were able to tell him that they were Jordan's
title sponsor?
A. I do not recall exactly as you put it just there. I recall
Mr. Jordan saying it would be good if Mr. Ecclestone knew we
were going to be a team sponsor. I do not recall the Jordan
title comment, which I thought we were covered anyway because
Mr. Briatore set that up, with whom we already had this
commercial relationship at Renault Benetton. Our team, if
you want, for want of a better phrase, actually set up the
meeting with Mr. Ecclestone in our presence.
Q. Your conversation with Peter Harris on 23rd March, what time
was that?
A. I have no idea, sorry.
Q. Can we take it that in that conversation, the conversation
with Peter Harris on 23rd March, no reference was made to a
letter having been received?
A. I do not recall, I am sorry.
Q. I am putting that to you because in his witness statement,
Mr. Harris refers to the call with Eddie and then the call
with you and then to receiving the letter.
A. As I say, sorry, I do not recall.
Q. If you would go to bundle 4A at tab 30, we can see the e-mail
from Dawn Simpson at Jordan, timed at 15.44 to Peter Harris.
It is both his AOL e-mail address, which is, we think, where
he was receiving e-mails in Atlanta, and also his Vodafone
e-mail address: "Letter as discussed earlier today." Then
the letter appears. When did you first see that letter?
A. I do not recall the exact date or time, I think, when I first
saw that.
Q. Did Mr. Harris show it to you?
A. He was in Atlanta.
Q. Yes, but he came back, did he not? He came back that
weekend.
A. Yes, I think he .... What was the date again, sorry? It was
the 23rd?
Q. The 23rd was a Friday.
A. Yes, I think he came back that weekend.
Q. We have got his diary if you want to just have a look at it.
A. That is OK.
Q. Did you not see him in the Newbury office on the Monday
morning?
A. I think so.
Q. Did he show you the letter then?
A. I think he must have done, probably.
Q. And did you together draft a reply?
A. No. I asked Mr. Harris to draft a reply.
Q. And when did you ask him that?
A. Pardon?
Q. When did you ask him to draft a reply to the letter?
A. I do not recall when I asked him. I do not recall whether it
was in response to this letter or in response to the
telephone conversation.
Q. When did you first know of the existence of the letter?
A. I am sorry, I do not recall.
Q. What I am suggesting to you, so it is clear, is that the idea
of writing the letter of 26th March must have arisen after
receipt of Mr. Jordan's letter.
A. I do not recall when the idea was had; whether it was after
the phone call or after receiving the letter.
Q. There was a meeting with Bernie Ecclestone on the afternoon
of Monday, 26th March.
A. There was. Well, there was a meeting on the 26th. I am not
sure whether it was the afternoon.
Q. Let us just get out C10 for a moment. Go to page 2144. Can
we take it that you flew from Dusseldorf early in the morning
and then went to the Newbury office? Would you like me to
repeat that?
A. Sorry, I did not realise you had asked me a question, sorry.
Q. Can we take it that on 26th March you flew from Dusseldorf
early in the morning ----
A. Yes.
Q. ---- and then went to the Newbury office?
A. The diary suggests that, yes.
Q. Could you go back to page 2108.
A. 2108?
Q. Yes. This is Mr. Harris's diary. In fact, if you look to
page 2107 -- well, 2106, 22nd March has got US; 23rd March
has got US, and then 2107, 24th March, has got US, and 25th
March has got UK.
A. Yes.
Q. And then 2108, 26th March, has got UK, then it appears to say
8 or H30, presentation Newbury office. That would be David
Haines, would it not?
A. I would assume so.
Q. Can we take that it you were in the Newbury office with Peter
Harris on the morning of 26th March?
A. Well, my diary says I was in the 26th, but I do not have a
meeting recorded with Mr. Harris. I was meeting with the
internal communications group.
Q. You went in the afternoon to see Bernie Ecclestone with
Mr. Harris, did you not?
A. Indeed.
Q. And was there a discussion at that meeting of sponsorship by
Vodafone of a Formula 1 team?
A. There was. The meeting - we discussed a couple of things.
Mr. Ecclestone was keen to sell us, if you will, the 3G
rights for Formula 1. 3G is the new technology over the
mobile phone, where you can make a bit more money. That was
about half the meeting, as I recall. He then spent some time
suggesting to us that we should sponsor Renault. I suppose,
looking back, that is hardly surprising, given that
Mr. Briatore had set the meeting up. I recall him -- almost
as we were at the end of the meeting, it was not a very long
meeting, meetings with Mr. Ecclestone are never very long,
certainly mine are not anyway -- mentioning Ferrari, saying
that Ferrari would be a good option too.
Q. And did he draw a comparison between Ferrari and Jordan?
A. Did "I", sorry?
Q. Did "he"?
A. Not that I recall. I do not recall him mentioning Jordan in
that meeting.
Q. Was there not a discussion of Honda as the engine supplier of
Jordan?
A. I do not recall that discussion of Honda as the engine
supplier of Jordan.
Q. I am basing this on Mr. Phillips' note, which of course you
would not have seen, but it is in bundle C8 at 1814. This is
a note made by Mr. Phillips of a conversation with Peter
Harris on 27th March. The first word is "Honda". Then:
"Was he there BE meeting? Show you Honda contract." Do you
see that?
A. I see that at the top.
Q. Then at the bottom, "BE" alluded to Honda. Very close with
BAR. Realised you cannot trust anybody in this business,
only the horse's mouth. Offered to show him the contract."
Are you saying that you just cannot recollect a discussion
about Honda and Jordan, or are you able to deny that such a
conversation took place?
A. I cannot recall such a conversation. If there was one, it
could not have been of much significance, otherwise I would
have thought at least it would have stuck in my mind that it
was discussed.
Q. But you do recall that Mr. Ecclestone, after referring to
Benetton, also referred to Ferrari as a possible team for
them.
A. I remember him, as we were leaving, saying that Ferrari would
not be a bad option either, after Renault. He was clearly on
a Renault "trip", if you will, that afternoon. He was
concerned to expand. He was concerned that as a car
manufacturer, they had a good title sponsor.
Q. Did you regard Mr. Ecclestone as an influential person in the
world of Formula 1?
A. Yes.
Q. Whose views would be entitled to weight?
A. No. His views would be interesting to know, but he was not
really going to influence what our executive committee would
decide.
Q. What about your own thinking? Did it have an influence on
your own thinking?
A. Looking back and thinking about it, no, we did not go ahead
with Renault, which is what he was suggesting, and I had
always thought that Ferrari were a very good option for us,
from the very first time I met Ferrari; as I thought others
were as well, including Jordan. We did not buy the 3G rights
either, just for information.
Q. And Mr. Harris went to see Jean Todt of Ferrari in Paris the
following day, did he not?
A. Yes, he did.
Q. And he came back very enthusiastic about the Ferrari.
A. He had had a lot of his input about Ferrari had come either
from me or from Charlie Perring. Charlie, I think, had done,
you know, explained that Ferrari were difficult to work with.
As I said yesterday, I found Mr. Todt a little bit Gallic but
I had always had a good relationship with him. I think
Mr. Harris had a lot of his concerns removed when he actually
met Mr. Todt himself for the first time, which was on the
27th.
Q. Did Mr. Harris come back expressing enthusiasm for Ferrari?
A. Yes, he did.
Q. And is it fair to say that from then on, he was an advocate
for a deal with Ferrari?
A. No, not an advocate just for Ferrari. As we went towards our
presentations, we had many discussions. Now we were getting
into the 27th/28th/29th, the peak, or, if you like, the
culmination of our window shopping phase. We had many
discussions of going back and forth, looking at the options.
He was enthused about Ferrari, but he also saw the benefits
of other teams as well, just as I did.
Q. And were you an advocate for Jordan?
A. I think by that time I was keen on a number of teams. As we
got towards the Brand Steering Committee, which was the 29th,
and we thought about our recommendation, we went back to our
first principles, media exposure, commercial return and
buy-in from our OpCos. As we sat down, I remember as we sat
down and kind of reflected on everything that had happened,
we could not ignore what had happened at our Brand Steering
Committee, which was 15th March, where you have the German
representative clearly pro Ferrari, because of Schumacher.
He is the equivalent in Germany of someone like David
Beckham, I suppose, is the best example you could think of.
The Italians were keen on Friday because it is a national
icon, and that is why, in the end, that was the
recommendation that we put forward as the small on big
option.
Q. The Brand Council had already expressed views about Ferrari
on an earlier occasion, had it not?
A. It was the 15th March was the council.
Q. And that had not prevented the preparation, you say, by
Mr. Harris of presentations which stated Jordan as first
choice.
A. Based on the criteria he was using, which did not have, I do
not think, the input as one of the criteria.
Q. Mr. Harris would surely have been aware what the criteria
were when he was working with these documents, would he not?
A. You need to ask Mr. Harris, and he was ----
Q. Did you not tell him?
A. Sorry?
Q. Did you not tell him?
A. We did not have a discussion about the criteria.
Q. What, none?
A. Sorry?
Q. You had no discussion with Mr. Harris about ----
A. Those individual points that he raised, we did not discuss
that long list that you showed me earlier.
MR. JUSTICE LANGLEY: You mean the point-scoring document?
A. Yes. The point scoring document, yes.
MR. BOYLE: What about when he came back? Did you not discuss it
then.
A. The 27th now, you mean, when he came back from Atlanta?
Q. We have seen his diary, which says that on the 26th he met
you.
A. Yes. Yes, we ----
Q. "Presentations" is the word in the diary.
A. In that week we were putting together the Brand Steering
Committee presentation that we were going to hold on the
29th. In there, the criteria, we did discuss the original
criteria, and I think they were in that document.
Q. Did you sit down with Mr. Harris and go through the
presentations dated 20th and 21st March?
A. Not that I recall.
Q. Why do you think he prepared them then?
A. I think they were drafts to get his own mind clear, as input
towards our Brand Steering Committee. We certainly picked
out some of the charts, some of the individual slides, the
same slides between the two documents, so I think he would
have come forward with some of them.
Q. I suggest to you that the true explanation for the telephone
call you had with Eddie Jordan on 27th March was at that time
it continued to be your view that Vodafone should sponsor
Jordan and not Ferrari. Did you not think about that?
A. I have not disputed that I was very much in favour of Jordan,
as I was of other teams. I also do not dispute that on the
22nd, Jordan were a nose ahead in my mind. But, equally, the
facts were we were in a window shopping phase going towards
these decisions which I had set up and agreed with
Thomas Geitner and Sir Christopher in February. We knew
about the decision, as were the dates, the 29th and the 4th,
and that was not the reason for that telephone conversation.
There were a number of teams in play on the 22nd.
Q. I do suggest to you that there was no team in play by the
evening of 22nd March offering title sponsorship apart from
Jordan?
A. That not my recollection of the situation. My recollection
was that we had Renault Benetton and that we had McLaren,
albeit with more difficult circumstances in play, but,
equally, we had a good secondary or an excellent secondary
principal sponsorship offer from Ferrari on the 22nd. So we
had four teams in play on the 22nd still.
Q. If an informal decision could be arrived at between you and
Mr. Geitner to reject McLaren's conditions for title
sponsorship, would the same not also have applied to Ferrari;
that you could, between you, have made an informal decision
simply to say "we will not go with Ferrari"?
A. No, I do not think so because the Ferrari proposal was the
first one that we had on the table. It was well documented
throughout the company. Many people were interested in it.
It was a completely different situation to the McLaren one,
which was a hypothetical that we could not work out. The two
were not comparable in my mind.
Q. I suggest that at 22nd March it continued to be your view
that Vodafone should have title sponsorship and that the true
explanation for what happened on 22nd March is that on or
before that date, you realised that you could not get title
sponsorship from McLaren or Benetton on terms that were
acceptable to Vodafone and therefore decided to go with
Jordan, who were offering title sponsorship, and you knew
that involved ruling Ferrari, which you were happy to do,
because they were not offering title sponsorship. Is that
not true?
A. That is absolutely not true, no. Not in the slightest bit
true.
Q. But it would be logical, would it not, if title sponsorship
was still one of your main criteria?
A. Title sponsorship was not; media exposure was, and I do not
see the logic because Renault were available on the same day
as well. If we wanted to go title, we would have had two
options there, as were McLaren. I had been a big fan of
Ferrari, as I had of Jordan -- I must be fair, balanced --
from day one.
Q. Could you take bundle C4 and go to page 898. You should have
a colour photograph there?
A. Yes, I do.
Q. Do you recall seeing that page in about March?
A. I do not recall this specific page. I do recall the
photograph; yes.
Q. Can you recall when you first saw that?
A. The page or the photograph?
Q. Let me point out what I am talking about.
A. I am asking because this is a photograph which has been
superimposed on a page with a computer, so I ----
MR. JUSTICE LANGLEY: You can remember seeing the photograph, but
not the page.
A. Exactly, yes.
MR. JUSTICE LANGLEY: So it is a question when did you first see
the photograph.
A. That design I saw some time in March. I could not tell you
the exact date, I am sorry.
MR. BOYLE: Did you know when you first saw it who had prepared
that design?
A. I would assume Jordan, but probably more likely Brown.
Q. You knew, did you not, that Brown were preparing proposed
designs on behalf of Vodafone for a Jordan car?
A. I knew they were doing that, yes.
Q. And did you know that they were in discussion with Jordan
about those designs?
A. I knew that design proposals were flying backwards and
forwards between Brown and Jordan, yes.
Q. If you go to tab 17, page 913, it is another colour page.
Do you remember seeing the design A2, which is shown there?
A. I do.
Q. Was it your understanding that that was a design created by
Brown for a proposed Jordan car?
A. It was.
Q. Can you recall when you first saw that one?
A. I am sorry, I cannot recall the exact date.
Q. Would you go to bundle C3, tab 79. This is an e-mail which
Mr. Perring sent to Mr. Phillips attaching some designs,
which are said to be "purely conceptual and not necessarily
what we can deliver in terms of other sponsors in keeping
true to the Jordan brand .... we are however moving toward
the incorporation of yellow and need to do some work on the
engine cover to incorporate the DP.
"I have a batch more which I will send on to you
through the day so you and Eddie can view them tomorrow.
I will identify on these which ones David H [Haines] thinks
are in line with 'ownership' in terms of VF [Vodafone]
impact." Were you in touch with Charles Perring at this time
about the Jordan designs that were being prepared by Browns?
A. I do not recall specifically being in touch with
Charles Perring at this time about these designs. It is
quite possible that some of these were shown to me by
Charlie Perring. In fact, it is quite probable, on boards --
as I explained yesterday, I tended not to get them on e-mails
-- and/or Joe.
Q. Brown appeared to be quite happy to e-mail these to Jordan.
You say they would have been doing that but not e-mailing to
you?
A. I know they had a lot of e-mail contact with Jordan with
designs that were not necessarily shown to me or anyone else
at Vodafone in advance.
Q. What was your understanding of what Brown were trying to do
at this time?
A. I think at that time they were just, as it says here,
preparing what I call conceptual boards -- "show and tell"
was the phrase -- whatever kind of broad parameters of a car,
looking at various alternatives.
Q. Did you -- you personally -- not want a design which gave a
perception of ownership by Vodafone of a car?
A. If we were to go with a secondary team and go the title route
or big on small, then we wanted to try and get that as big as
we could on the car, yes, using our Vodafone colours.
Q. So inasmuch as you were looking at designs, your interest
would be to ensure the maximum impact of the Vodafone name
and logo on the car?
A. And the use of the Vodafone colours, as the red discussion we
had yesterday.
Q. Ian Phillips wrote an e-mail, at tab 81, acknowledging some
of these artworks and saying, "Somewhere in there is the
combination which will satisfy everybody. The important
thing is that we can convince David that he will get dominant
branding." You had made it clear, had you not, in your
meeting on the 6th February at Silverstone that you wanted to
get dominant branding?
A. Yes.
Q. And Brown must have been aware that that is what they had to
deliver to you in the designs?
A. Yes.
Q. If you go to tab 84, there is another e-mail to Ian Phillips
with some more designs. Would you look at the ones at 668 to
671 and say whether you remember seeing any of them?
A. I vaguely remember seeing something. I could not say it is
absolutely this, but something in this kind of direction.
Q. What about page 668; do you remember seeing that?
A. Vaguely. I think it was put under my nose at some stage, but
it was never the subject of any kind of discussion or
substantive discussion.
Q. Did you tell Charlie Perring that you found that an
interesting design?
A. I might have done. I cannot rule it out. I do not recall.
Q. That is what he says in the middle of page 667?
A. Is it? Yes.
Q. Go on to tab 89. It is an e-mail we looked at in another
context. This is Mr. Dart again. In the third paragraph he
says, "Haines says he is keen to have the design with the bit
of yellow on it (not the one we did in his office)!"
Were you expressing views about the designs to Peter Dart?
A. This e-mail would suggest that I made some comment to him.
I do not recall the comments, but that is what the e-mail
would suggest.
Q. Were you not having your own input into the design process as
it was going forward?
A. From time to time, they would have shown me what they were
doing. As you can see, I was travelling a lot at the time.
There were e-mails going backward and forward to Jordan.
We never got to the conclusion of this process. I will have
commented on individual points, I am sure.
Q. It suggests, does not it, that they had actually been in your
office where they were doing a design. Do you recall that?
A. I think it suggests they were in my office when they showed
me something. I doubt they were doing the design in my
office.
Q. It says "not the one we did in his office".
A. To do a design, you would need a big computer, a Mac and
things, and I do not have one in my office, not one of those
computers anyway.
Q. Just to complete this, C4, tab 4. This is an e-mail of the
19th March from Charlie Perring to Ian Phillips, enclosing
what he calls the latest design. ".... hope it complies with
other sponsor requirements and is beginning to look like a
Jordan again!" Did you understand that Brown were trying to
produce a design which would enable Jordan to satisfy its
contractual obligations to other sponsors?
A. I am not sure I do. It has gone very yellow, that design.
Q. And did you know what Jordan's response was to that design?
A. No.
Q. If you go to tab 9: "Charlie, I think it's probably too much
like a Jordan!! Obviously it suits us perfectly but is it
too much in our favour? I would still be prepared to develop
A2 which may give David more of his stated 'Dominant'
branding." Was that reported to you?
A. I cannot recall, I am afraid.
Q. If you just go back to bundle3, and look at tab 79, page 647,
do you see there is a design there called A2?
A. I do.
Q. Were you aware that Jordan were content that that should be
developed as an alternative to the other design?
A. To be honest, not that I can recall. As I say, there were so
many of these going backwards and forwards.
Q. So you saw lots of designs, did you?
A. Lots.
Q. Can you just keep that page open for a moment at 648. If you
have C4 still open, can you go to tab 17, page 913.
A. I did not get the page number, sorry?
Q. Page 913 in tab 17.
A. 913, yes.
Q. Have you still got page 648 open?
A. Yes, I do.
Q. Although the colours appear to have come out differently, do
you accept that they are the same design, both called A2?
A. I think they are a same design.
Q. We looked at the design work that was going on in connection
with a Jordan car. Was any similar design work carried out
by Brown for any of the other cars on the starting grid?
Do you remember the teams on the starting grid?
A. I think they did a little bit of work on Ferrari.
The positions were quite clear on the Ferrari. I think they
did some work on the Ferrari as well. I do not think they
did any work on McLaren because McLaren had their own big
in-house design team and wanted to keep control of that
themselves. And I cannot recall if they did any work on the
Benetton. I remember seeing designs for the Benetton, but
I do not recall who actually did them; whether it was Brown
or whether they were done by Benetton. We never got to the
stage of doing any designs with our late entrant, BAR.
We never even got to that stage.
Q. Would it be fair to say that BAR were never seriously in
contention?
A. I think that is fair.
Q. What is the colour of a McLaren Mercedes, normally speaking?
A. They are black and silver base colour.
Q. Did you get as far as discussing with Mr. Sami how a Vodafone
logo would be placed on a car of that colour?
A. On their secondary sponsorship proposal, we had all the
drivers in red suits and given that we never got beyond this
kind of stalemate on the title sponsorship, we did not, no.
Q. Because the secondary sponsorship proposal did not really
involve having Vodafone branding on the car, as such, did it?
A. The whole secondary sponsorship proposal on McLaren was
focused around the celebrity of the driver, with some
branding on the car, but it was almost a different strategy.
It was to focus on, as you say, the human being as opposed to
on the vehicle. It was quite unique in that sense.
Q. But in terms of a title sponsorship proposal from McLaren,
you never got around to discussing with Mr. Sami how the red
Vodafone logo would have been placed on a silver car?
A. We never got around to discussing it. Whether or not the car
would have stayed silver or not, we never got into that phase
of discussion. That is fair to say, yes.
Q. Thinking about it now, looking back over the course of events
between 19th January and 5th April, would you be prepared to
accept that that was a period during which detailed
negotiations were held with Jordan with a view to a
sponsorship deal?
A. I tried to explain the way I see detailed negotiations.
For me, they were discussions that we were having with
Jordan - detailed negotiations, as a layperson, when you get
down to looking at all the contractual elements.
Q. Would it be fair to say that during the same period (that is
to say 19th January to 5th April), no such negotiations took
place with Ferrari?
A. We had from Ferrari what we needed in terms of discussions.
That is why they are comparable in my mind, which we got from
them between 9th -- in fact, it was 17th January actually
when we had our first meeting through that period.
MR. BOYLE: My Lord, in the light of answers given by the witness
in relation to the document at bundle D, tab 5, we have asked
to see an unredacted version of that document.
MR. JUSTICE LANGLEY: Bundle D, tab 5?
MR. BOYLE: Yes.
MR. JUSTICE LANGLEY: That is the partnership summary.
MR. BOYLE: It is the one which says effective 2007.
MR. JUSTICE LANGLEY: I see. You are really looking at the
second page where it has been redacted.
MR. BOYLE: Yes. There are some redactions on the second page
and on the third page.
MR. JUSTICE LANGLEY: The ones on the third page do not look
terribly important at first blush, but who knows?
MR. BOYLE: My Lord, I have been told that that document is not
in court.
MR. JUSTICE LANGLEY: Ah!
MR. ALDOUS: Up to now, where documents have been requested in
advance, we have had them in court and then if they are
required, they are made available. This was not a document
that had been requested in advance. It was requested by my
learned friend today and I have put in train that it would be
obtained, but it cannot be obtained, as I have told him, this
afternoon. Hopefully, by tomorrow it will be.
MR. BOYLE: My Lord, until the witness gave the answers that he
did ----
MR. JUSTICE LANGLEY: I do not need you to explain. It is going
to be got for you.
MR. BOYLE: All I am indicating is that if having seen it there
were some questions arising out of it that I wish to put to
Mr. Haines, I might ask for him to be recalled for that
purpose tomorrow.
MR. JUSTICE LANGLEY: Does that mean that you have ended now,
subject to that?
MR. BOYLE: Yes, my Lord.
MR. JUSTICE LANGLEY: Subject to that, is that a problem?
MR. ALDOUS: I do not think it is a problem at all. The only
problem would be if Mr. Haines cannot be released as such so
that he is no longer in purdah for I do not know how long it
may be.
MR. JUSTICE LANGLEY: Mr. Haines, can you be here tomorrow,
should it arise?
THE WITNESS: I was intending. I would rather be released of
this in purdah thing, if that is all right.
MR. JUSTICE LANGLEY: I can understand that. How long is it
going to take to get this document here?
MR. ALDOUS: I will find out. When my instructing solicitors get
back to the office, it will take between half an hour and an
hour to retrieve it, so there is no reason why that document
cannot -- and I am looking behind me when I say it -- be made
available on the same understanding as before to my learned
friend and his solicitors.
MR. JUSTICE LANGLEY: There is no reason why your solicitors
should not push off now and get on with it.
MR. ALDOUS: No.
MR. JUSTICE LANGLEY: Why does he not?
MR. ALDOUS: He was going to, I think.
MR. JUSTICE LANGLEY: Good. Obviously, the sensible thing is if
when you have seen it you have no questions, you let
Mr. Aldous or someone on his team know ASAP and then
Mr. Haines will be out of purdah. The alternative, assuming
Mr. Aldous is going to re-examine to the extent he is
now ----
MR. ALDOUS: Yes, and hopefully we will be finished, and if he is
not required tomorrow, that is the end of it.
MR. JUSTICE LANGLEY: That would indeed be the end of him and you
might feel notwithstanding that you can release him from
purdah at least overnight if this is the only matter that is
outstanding, but I will leave you to think about that when
you have heard the re-examination. Right.
RE-EXAMINED BY MR. ALDOUS
Q. I have just a number of questions Mr. Haines, so you will
have to focus because we will be switching from subject to
subject to pick up points that have arisen from your
cross-examination. Do you remember you were asked questions
about Ferrari in the context of the budget figure of
$200 million? Do you remember that?
A. Yes.
Q. And do you remember you said you thought that that was a
guesstimate arrived at after your January meeting with
Ferrari?
A. Yes.
Q. When you said that Mr. Todt had explained to you, I think,
four or five sponsors which Vodafone could replace for 2002.
A. Yes.
Q. Do you recall who those sponsors were?
A. I do. It was TIM, the Italian mobile company; Tic Tac, the
sweet company; FedEx, which was FedEx; and Tommy Hillfiger,
the clothing company. And, in addition, he made a comment
that there was a fifth sponsor that had actually gone away
that year that had previously been on a certain part of the
car. Those were the five.
Q. Just stay while I look at the document, would you, and see
whether I need to show it to you. Could you look at C2,
please, and go to tab 30, page 409. Perhaps we should look
first at 404, which is the covering e-mail from Mr. Perring
to yourself of 30th January.
A. Yes.
Q. Do you see in the second part of the paragraph he says,
"I also attach some notes from our meeting at Maranello for
your interest." Go to 409, please. Tell me, first, whether
you think you have seen that document before?
A. I think so, yes.
Q. And would you look, please, at the fifth bullet point.
Are those the sponsors that you told his Lordship about?
A. I did not mention Magnetti Marelli and I do not think
Magnetti Marelli in the end came off the car.
Q. Right. You can put C2 away, then. But whilst we are on the
topic of Ferrari, you said you saw Ferrari on 9th February?
A. I did.
Q. You were asked by my learned friend if they made any
financial proposals at that time and you said they were far
too clever to make financial proposals. Do you remember?
A. I do.
Q. What I want to ask you about is what was discussed at that
meeting and what, if any, progress was made so far as
Ferrari?
A. Once again we talked about space on the car and Mr. Todt had
been thinking about things since the last time I had met him
on the 25th. Actually, I think that is where the fifth
package -- this team that had gone away and came back; Asprey
it was -- over the engine vents came up. We went through the
essential rights that would be available, so confirming the
nature of principal sponsor, how we would work together and
all these kind of things.
Q. Could you be given D6, please -- bundle D, tab 6. Tell me,
first, have you seen that document before?
A. I have.
Q. When do you think you first saw that document?
A. At the 9th February meeting.
Q. Do you want, just in a sentence or two, to summarise or
encapsulate what you wish to derive from that document?
A. Yes. Using our window shopping phrase that I have been
using, this outlined in some detail, as you go through it,
what was available for Ferrari and what we needed to know in
terms of our window shopping for Vodafone going forward.
It gave us the principal sponsor relationship, which I was
trying to explain earlier, one of three; it talked about
terms; had renewal options; and it gave us the rights to be
able to compare apples for apples with the other teams that
were going on at the time.
MR. JUSTICE LANGLEY: You mean this is what was in the Ferrari
window?
A. Essentially, yes. That is exactly the way I see it, yes.
MR. ALDOUS: You can close that file, then. There was, as you
know, a further meeting with Ferrari on 27th March, which
Mr. Harris went to.
A. Correct.
Q. Do you know when arrangements for that meeting were first
made?
A. I remember talking to Mr. Todt the previous week --
if I am not mistaken, it is the 23rd -- and saying to Jean
"You ought to meet Peter", who was coming over the following
week. And I said to Peter when he arrived, "I have arranged
for you to go and see Jean. Give him a call and fix it up."
So the meeting was actually set up on either the 22nd or the
23rd with Mr. Todt, not with Mr. Harris -- Mr. Harris when he
came back from Atlanta.
Q. You also said in the context of Ferrari that contractual
negotiations with Ferrari took about seven weeks and resulted
in three contracts which you thought were about 100 pages in
length; do you recall?
A. I do.
Q. And you also said that if Vodafone did not conclude an
agreement with Ferrari, then you would undertake similar
contractual negotiations with Jordan; do you remember?
A. I do.
Q. Could you just take bundle D, again, please, and just look at
two documents, one of which I think you have seen before.
It was shown to you when you were being cross-examined.
Can we just look at the document at D2, tab 20.
A. Yes.
Q. Is that one of the agreements?
A. It certainly looks like it.
Q. Was that the principal sponsorship agreement?
A. I think it is.
Q. I will not go through the detail with you. Go to page 88 of
it. Do you see there a licence agreement?
A. Yes.
Q. If you go on, please, to tab 23, is that the commercial
agreement between Vodafone and Ferrari.net SPA?
A. Yes. These were the three bullet points that I had been
talking about - media exposure, commercial return and buy in
from our OpCos. This was delivering on bullet point 2,
commercial return - how we were going to be able to generate
revenue, which was very much the innovative thing that we
were trying to do with this partnership programme: generate
revenue as part of the positive RIs, as we call it.
Q. And are those the agreements that you were referring to?
A. Yes.
Q. You can put D away now. Just move your mind back to the time
that the rights list or the benefits wish list was prepared.
You should have C2, I think.
A. Yes.
Q. Just go to C2 and remind yourself of a document that I think
you were shown at tab 48, would you. My note may be wrong;
just bear with me a moment. That is one of the documents you
were shown, do you remember. I think it was at page 581.
We have seen it in a number of places, the wish list.
A. Yes.
Q. Do you remember you were asked whether it represented all
that Vodafone wanted and you said that you remembered having
discussions or e-mail correspondence with Mr. Harris about
it? Do you remember saying that?
A. I do.
Q. That is just to remind you of the document. We need to look,
please, at a document in C3, and I am sorry for moving you
about between the bundles, and we need to look at a document
at tab 53. I do not know whether it is an e-mail or fax from
Mr. Harris to yourself, dated 12th February. Do you know
whether you received and read that?
A. I received and read it, yes.
Q. Just remind yourself of the document, would you, just for a
moment or two? It is a single page document. Again, in
general terms, what was your reaction to that having received
it from Mr. Harris?
A. I was pleased because this is what Mr. Harris was being
brought on board to do and he is asking, in my opinion, all
the right questions. Do we have a strategy? What is our
strategy? Are we clear on exactly what rights we wanted to
buy? Are we clear on the negotiation strategy? Do we have a
term sheet? That is what I was trying to refer to earlier
when I was saying that the rights list that we had was kind
of just apples for apples. There were an awful lot of things
in that rights list that we did not actually want when we
worked out what our strategy was and he was saying before we
go ahead and do anything proactive, can we please be clear
about what it is we actually want, to have a clear process of
working out what it is we want.
Q. Then look, if you would, below the numbered paragraphs. He
says: "These are all questions I would like to work through
with the appropriate parties as soon as I am officially on
board." Do you see that below the numbered paragraphs?
A. Yes.
Q. Then: "David, please let me know involved you would like me
to be in working through these issues." Can you just tell
his Lordship how matters were taken forward with Mr. Harris
after 12th February?
A. Mr. Harris, I am not sure whether he actually signed his
contract to come on board but I knew that his official start
date was 1st April. I know that he had various meetings with
us here in Europe and with me in Europe. I am pretty clear
that he had a brainstorming session, or a big meeting, with
Mr. Perring at the end of February. From that moment
forward, if you like, in the background, Peter was starting
to shape the rights that we needed and took over, I think,
managing Mr. Perring about a week later when I introduced him
to Mr. Perring and Mr. Kieser. I think that was 19th
February, if I am not mistaken. He, de facto, was involved
from that moment forward.
Q. I want to ask you a question about fees and bonuses which
were being prepared by Jordan and what you understood as
acceptable to Jordan and what or would not be acceptable to
Vodafone. Do you understand? You were shown, I think, a
document at C3 at tab 64. Look at it, would you. Would you
look particularly at the bottom of 585, fees net to team.
A. Yes.
Q. Remind yourself, because we have seen the document before, as
to what the contracted fee was proposed to be, page 586.
A. Yes.
Q. And then move on, would you, to 587, where you see the
performance bonuses set out. You see at that stage in type
they are all in dollars. Just remind yourself of the makeup
of the bonuses which were being proposed.
A. Yes.
Q. With that in mind, you need to take C4, please, and would you
go to tab 23. This, you see, is an e-mail from Mr. Phillips
to Mr. Perring, but note it is 22nd March. Read it to
yourself and note that it is converting the dollars into
pounds sterling with some rounding up and down. Just read it
to yourself.
A. (Pause for reading) Yes.
Q. You see the various performance bonuses set out but converted
to sterling.
A. Yes.
Q. Were those proposals which Jordan were putting forward at
that time acceptable to Vodafone?
A. The bonuses were never acceptable. I cannot recall any
discussion going from dollars to sterling, which would have
been another issue that we needed to debate, given the
dollar/sterling fluctuation.
Q. The next point that I want to move you to, if I may, is you
were shown, if you recall, various presentations which
Mr. Harris was preparing around 20th March and following. Do
you remember?
A. Yes, I do.
Q. Because you have bundle C4 there, just remind yourself of
two, I think, which were put to you as examples.
A. Yes.
Q. They were tab 5 and tab 16.
A. Yes.
Q. Take tab 5 as an example, if you would.
A. Yes.
Q. You said, if you remember, that those draft presentations
were being prepared, you thought, by Mr. Harris in Atlanta
and you went on to say that the documents showed that. Do
you remember saying that?
A. Yes.
Q. Can you point out how you can tell that those documents were
produced by Mr. Harris in Atlanta?
A. The format, with these pictures down the side, was not
something that was a Vodafone format. It was something that
Mr. Harris had come up with whilst he was in Atlanta.
Q. I gave you two examples, tab 16 as well. It does not come up
very well, of course, in the black and white photocopying,
but these are the pictures in strip form, am I right, down
the left-hand column of the page?
A. That is what I have been referring to. I recognise that.
Q. Do you recall that you were questioned about media exposure
and what research was being done for Vodafone? Do you
remember? By media exposure, I think the questions were
directed to analysis and reports done about the relative
exposure that you may get from particular types of
sponsorship in Formula 1 cars. Can you recall?
A. Yes, I do.
Q. You said in part your answer was that you engaged Mr. Harris
because that was his area of expertise, but you also said
that Vodafone would have received information from agencies
such as Carat.
A. Yes.
Q. Do you recall?
A. I do.
Q. And you mentioned, of course, the survey report, the original
one, which was the Carat report. Do you remember C1, 14?
A. I do.
Q. But there are two documents or three documents I would like
to show you, if I may. One is in C4A, so you will need the
second version of C4. Could you go, please, to tab 41 and
spend a moment or two looking at that document. Tell me
whether you may have seen that document before.
A. Yes, I have.
Q. And Carat International, is that the company that you were
referring to?
A. Yes, that was the company I was referring to.
Q. I do not know whether this particular page, which we have
here, is meaningful so far as the points of relevance in the
case that we are talking about at the moment. Is there
anything you wish to explain about that page?
A. I will not go into the technical detail, but it's comparing
GRPs, which are gross rating points, as to how effective is
an ad versus sponsorship basically.
Q. And then we need also to look in bundle C6, if you can go
there. Could you just look at a couple of tabs there, 60
and 61.
A. I have those tabs.
Q. Have a look at both. Tell his Lordship whether you think you
would have seen material like that at the time, and then we
may just dwell for a moment or two on each and you can tell
his Lordship what information that told you which was
relevant to the decisions which were needed to be taken on
4th and 5th April.
A. It was indeed the document you just showed me, Carat and
these two I was thinking about when I was asked earlier on.
Q. Let us take them in turn. You speak to them.
A. The first one shows, if you like, the elements in an F1
environment have the biggest impact, car, badge, pits,
bridges or panel. I take that to be the hoardings at the
side of the track. We have a lot of Vodafone sponsorship of
those; so basically the source of media exposure, if you
will. Secondly, this happens to be a very specific piece of
data. This is within Germany, so the TV ratings in Germany
is in the German stations, and that is what it says here, RTL
and ARD. Those are the German equivalent of BBC and ITV. It
is referring to one specific Grand Prix, the Grand Prix of
Australia in Germany, and it is showing you how the various
teams compare. This Ferrari number, 35.4% of all broadcast
time, versus, say, the Jordan at 14.9, this is one of the
inputs. When one talks about media awareness, what this
means is that in Germany, one of our key markets, on the
equivalent of ITV in the UK fee, the Ferrari was featured
just over a third of the time, 35% of the time.
Q. We see that information in relation to the Australian Grand
Prix. Who would have been providing that information and was
it peculiar to the Australian Grad Prix or would you be
gaining information for each Grand Prix in similar form?
A. No. That would have been provided by Carat. It was not
peculiar to the Australian Grand Prix. We would get that for
every Grand Prix. This happens to be the Australian Grand
Prix. We could have it for every market as well. It was not
particular to Germany.
Q. I do not think we need C6 any more. I want to move on and
just ask you a question or two about McLaren. You said, if
you recall, that there were "loads of meetings", I think was
your expression, with Mr. Sami between 14th March and, I
think, you said 14th April. Did you mean 14th April or 5th
April?
A. Sorry, if I said the 14th; I meant 4th April.
Q. I think it came up on the transcript as 14th April.
A. I meant the 4th April.
Q. You said "loads of meetings". Do you remember using that
expression?
A. I do.
Q. Again, very approximately, can you just tell his Lordship the
number, so we can get some order of magnitude on it.
A. It must have been about a dozen.
Q. Did you attend some of those meetings?
A. I did.
Q. Were meetings held both before and after 22nd March, or only
before or only after?
A. Before and after.
Q. You said that the McLaren proposal was very much alive on
22nd March. Do you remember?
A. I do.
Q. What reasons do you have for saying that?
A. Well, we were in the middle of discussions with Mr. Sami on
that particular date, you know, beforehand, and we were
afterwards. We had quite a lot of meetings right up until
4th April with Mr. Sami for this package I was talking about
earlier. In fact, I remember, on the evening of the 3rd, so
before our executive committee meeting, Mr. Sami visiting us.
He even had hand-delivered to Newbury at about 6.30 that
early, life-sized mockups of these characters in red Vodafone
suits. It was quite funny to see it at the office that
morning.
Q. Would you take your diary at C10. We need to go to tab 77
and we need to look at page 2144. Would you look at the
entry for 26th March. Although mine is by the punch hole,
there is an event or meeting scheduled ending at 17:30 with
Ekrem Sami at the Metropolitan Hotel. Do you see that?
A. Yes , I do.
Q. Do you recall if it was a meeting or what was it?
A. I think it was a meeting.
Q. Do you recall the meeting?
A. I do not recall it specifically.
Q. Do you recall whether it was to do with the sponsorship
issue?
A. Sorry, no, it was to do with the sponsorship issue, yes.
That was the only reason we were meeting Mr. Sami.
Q. Lastly, I want to ask you about the Pelham Hotel, if I may.
You mentioned the meeting with Mr. Jordan at the Pelham
hotel, which I think was 23rd April, but do you remember when
it was?
A. It was 23rd April.
Q. You said you set it up on your return from holiday. Do you
remember?
A. Yes.
Q. Could we just look at your diary to confirm when you went and
when you came back, please. You need to go to C10 and go to
2147.
A. Yes.
Q. Look, would you, at your entry for 16th April. When was it
you returned from holiday and where had you been?
A. I had been to Mauritius and I returned back into Frankfurt
airport on that evening at 6.15.
Q. I think you said you set up the meeting with Mr. Jordan. Did
you, or who did?
A. It may have been me. It may have been set up by Mr. Harris.
Q. Vodafone set it up, did they?
A. Oh, yes.
Q. What was its purpose to be?
A. It was to debrief Mr. Jordan on where we were. On 4th/5th
April, I had gone straight away and wanted to sit down and go
through the things with them.
Q. And who was there at that meeting at the hotel?
A. There were five people Mr. Jordan, myself, Mr. Kieser,
Mr. Harris and Mr. Dart.
Q. And do you remember what was said about Ferrari and Jordan's
position at that meeting, and if so by whom?
A. I remember that I said at that meeting that it was Ferrari's
too lose. I remember that being repeated by Mr. Kieser as
well.
Q. To Mr. Jordan?
A. To Mr. Jordan.
Q. And how did he respond?
A. He was agitated.
Q. Was anything said by Mr. Jordan at that meeting about any
agreement on 22nd March?
A. No, nothing, not a word.
MR. ALDOUS: Thank you very much.
MR. JUSTICE LANGLEY: Mr. Boyle, may he be released from purdah
or would you prefer that he was not? Can you undertake to
have an answer? Do we have any further news about the
document?
MR. ALDOUS: No. What normally happens is that I will contact my
learned friend by telephone if he is going back to his
chambers immediately and we will set up a system by which he
can tell me. I will get that immediately communicated to
Mr. Haines.
MR. JUSTICE LANGLEY: I am happy to leave it to the two of you.
It would seem excessive if you have a few questions for him
to remain in purdah; but it is up to you.
MR. BOYLE: What I would do, my Lord, as soon as I get the
documents, is give an indication to my learned friend whether
I wish Mr. Haines to be recalled. If I do not wish him to be
recalled, I will give an indication to my learned friend that
I am content for him to be released from purdah.
MR. JUSTICE LANGLEY: What I mean is if you do wish him to be
recalled, is it sensible for him to be kept in purdah
overnight on one document?
MR. ALDOUS: He has colleagues, as one understands. It is quite
arduous having given evidence, and it is simply quite nice to
be able to socialise with one's colleagues.
MR. BOYLE: My Lord, as soon as I get the document, I will be
able to take a decision about it.
MR. JUSTICE LANGLEY: 10.30 tomorrow.
(Adjourned till 10.30 tomorrow morning)
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Jordan Vs. Vodafone
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