Jordan vs. Vodafone: The Judgement
On August 4th 2003, the Honourable Mr. Justice Langley of the London High Court of Justice, submitted his judgement in the case of Jordan Grand Prix Limited (claimant) and Vodafone Group PLC (defendant). In a nutshell: Jordan lost, and the judge spares no criticism of the team boss, Eddie Jordan. Atlas F1 brings you the full version of this important judgement
1. It is the claim of Jordan Grand Prix Limited ("Jordan") in these proceedings that in the course of a telephone conversation held shortly after 6pm on 22 March 2001 and lasting some 10 to 15 minutes between Eddie Jordan, the managing director of and majority shareholder in Jordan, and David Haines, then global brand director of Vodafone Global Commercial Services Limited ("Vodafone Global"), a wholly-owned subsidiary of Vodafone Group plc ("Vodafone Group"), Vodafone Group agreed to be the Formula One (F1) grand prix title sponsor of Jordan for the three seasons 2002 to 2004 for payments by Vodafone Group to Jordan of US$ 39m in 2002, $50m in 2003 and $52m in 2004, plus bonuses of $9m, a total of $150m. Jordan claims damages for breach of this alleged contract. In the alternative Jordan claims damages for misrepresenting in the same conversation that Jordan would be sponsored by Vodafone.
2. Vodafone denies that any such agreement was made and contends that even if there was some accord it was incomplete and far too uncertain and in any event Mr Haines had and indeed was known by Jordan to have no authority to commit Vodafone Group to such a contract.
3. The inherent improbability of an agreement of such a nature for payments of such a size being made in such a manner is obvious. At the conclusion of the evidence the inherent improbability was more than fully matched by the reality. Jordan's claim was in my judgment plainly demonstrated to be without foundation and false.
BACKGROUND AND CAST LIST
4. Jordan has been a participant in F1 for many years. In terms of size it is one of the smaller teams. It is also one of the few teams which is not owned or part-owned by a major motor manufacturer. Sponsorship is of great importance to all teams. "Title" (or "team") sponsorship in general terms entitles the sponsor to have its name associated with the team and to dominate the space on the car and drivers' clothing with the sponsor's name and brand. For the 2001 F1 season Jordan's title sponsor was Gallaher plc, and the team name was "Benson & Hedges Jordan Honda". Honda supplied the engines for the cars. "Secondary" sponsorship, again in general terms, entitles the sponsor to limited space on the car and clothing and other benefits as may be agreed.
5. The main players involved at Jordan are, and were in 2001, Eddie Jordan and Ian Phillips, the director of business affairs. Both gave evidence. Others whose names appear in the documents are Mark Gallagher, sponsorship manager, and Dominic Shorthouse, the representative of Warburg Pincus on the Jordan board. Warburg Pincus owned a substantial minority shareholding in Jordan.
6. In 2000 Vodafone Group's business consisted of a number of telecommunications companies operating under different brand names in many countries. Two of the major operating companies were Mannesmann/D2 in Germany and Omnitel in Italy. The managing director of Omnitel was Mr Colao. It was Vodafone Group's aim to "globalise" the Vodafone brand. F1, with its worldwide audience and grand prix in several countries in each year, was seen as a potential component in achieving that aim. D2 as such was a secondary sponsor of the Renault Benetton team in 2001.
7. The main players involved at Vodafone at the time were Thomas Geitner, David Haines and Peter Harris, all of whom gave evidence. Mr Geitner is and was chief executive officer of Vodafone Global and an executive director of Vodafone Group. He was also until 1 April 2001 chief executive officer of Vodafone Europe Ltd. David Haines was recruited by Vodafone Global in late 2000 as global brand director (a new post) for the purpose of co-ordinating the globalisation of the Vodafone brand. Peter Harris was officially employed from April 2001 as director media and sponsorship, but was assisting Mr Haines on some F1 matters from late February. Mr Haines reported to Mr Geitner and Mr Harris reported to Mr Haines. They were based in Dusseldorf. The chief executive officer of Vodafone Group was Sir Christopher Gent. Others who play some part in events are Andy Moore, consumer insights director and Jost Schulte, global brand manager. Mr Moore and Mr Schulte gave evidence about the 22 March telephone conversation. Vodafone's head office is and was in Newbury, Berkshire.
8. It is, as stated, part of Vodafone's case that even if there was a sponsorship agreement Mr Haines was not authorised to make it and that both in fact and as a matter of commonsense Jordan knew Mr Haines did not have such authority. It should therefore be recorded that the unchallenged evidence is that the relevant corporate structure of Vodafone Group included a Brand Steering Committee chaired by Mr Geitner (of which Mr Haines was a member), which had its last meeting on 29 March 2001. The Brand Steering Committee was succeeded by the Brand Council which, although it had its first meeting on 15 March 2001, had not then succeeded to the functions of the Committee. Mr Haines was chairman of the Council. The members of the Brand Council included representatives of the Vodafone operating companies. Neither the Committee nor the Council was empowered to make a decision on a contract of the magnitude under consideration for F1 sponsorship. Vodafone's written procedures provided for a recommendation to be made by the Committee to the European Operations Integration Committee (EOIC), the Group Operational Review Committee (GORC) and the Executive Committee, a delegated committee of the full board of directors of Vodafone Group. Mr Haines' personal authority to enter into contracts of the nature of the one in issue in these proceedings was limited by a formal "Schedule of Authorisations" to £3m. Mr Haines had received a copy of the written procedures both by e-mail and in hard copy by (at the latest) 2 February 2001.
Brown KSDP ("Brown")
9. Brown was a global branding and design network. Its parent company was Tempus Group plc (Tempus). In 2000 Tempus was already engaged by Vodafone to assist it on the global branding exercise. It is not as clear as it should be what Brown's precise role was save that Brown was undoubtedly appointed by and to act for Vodafone and in general terms the brief was to identify and evaluate the opportunities which might be available to Vodafone in F1. There was no letter of engagement. Mr Haines said it was agreed that Brown should be paid on the same basis as Tempus, effectively a time cost plus arrangement. Those at Tempus and Brown who played a significant part in events were Mr Joe Kieser (whose agency KSDP had recently been acquired by Tempus) the chief executive, and an account director, Charles Perring. Mr Kieser reported to Peter Dart, the president of Tempus. Mr Perring reported to Mr Kieser. Mr Dart had worked with Mr Haines before and they had become personal friends. Mr Kieser gave evidence at the instance of Vodafone. Mr Perring, whose witness statement was dated 12 June 2003, did so at the instance of Jordan. Brown also, through Mr Perring, involved outside solicitors (Townleys) to act on behalf of Vodafone. Those concerned were a partner, Stephen Townley, and an assistant solicitor, Jeremy Summers.
10. Jordan's 2001 title sponsor was Gallaher. Nigel Northridge was chief executive officer and Barry Jenner the UK managing director of Gallaher. The sponsorship was the subject of a substantial written contract plainly drafted by lawyers and signed by Mr Northridge and Mr Jordan dated 29 January 1997. The term of the contract expired on 31 December 1997 but with an option exercisable by Gallaher no later than 31 July 1997 to extend the term to 31 December 1999 and options in July 1999 and each subsequent July to extend the term for further successive periods of 1 year, subject to agreement on the fee payable. If a fee was not agreed, Jordan could not offer title sponsorship to another party on more favourable terms than those offered to Gallaher without first offering those terms to Gallaher. The Agreement contained detailed provisions for such matters as advertising and promotion, intellectual property rights, the livery to be used on the cars, drivers and team clothing, race tickets and hospitality and restrictions on the rights which could be granted by Jordan to secondary sponsors. It also contained both fixed fees and bonus provisions dependent on the level of success achieved by Jordan in F1 races.
11. The Agreement was duly extended so that for 2001 the fixed fee was £13m and the maximum bonuses which could be earned were £3m. It was also agreed in July 2000 that Gallaher's option to extend the Agreement for the 2002 season could be exercised at any time until 28 September 2000. In December 2000 the Agreement was further varied so that the fixed fee was £16m and no bonuses were payable, but if Jordan's performance was not such as would have earned a bonus under the earlier agreement up to £1.5m could be deducted from the fixed fee of £14m for 2002 should Gallaher exercise its option to renew the agreement for that year. Gallaher's option for 2002 was also varied so as to be exercisable at any time until 28 February 2001.
12. On 28 February 2001 Gallaher (Mr Jenner) wrote to Jordan (Mr Phillips). The letter states that at a meeting on 13 February (which, on the evidence was attended by both Mr Jordan and Mr Phillips) Mr Jenner had advised Jordan that Gallaher was "not in a position to continue as title sponsor in 2002/3" but, to preserve Gallaher's position, and in the interests of confidentiality, it was proposed that the right to exercise the option to extend the Agreement should be further extended to 31 March 2001. The letter proposed that Gallaher should become "the principal secondary sponsor for the 2002 and 2003 seasons" for fees of £10m and £11m respectively.
13. Jordan did not, despite Gallaher's request, sign and return this letter to confirm agreement to the extension of the option. Mr Phillips said in his fifth witness statement that whilst he was quite happy to extend Gallaher's option he was not happy with the terms for secondary sponsorship as he did not want to commit Jordan to numbers at the time. Mr Phillips said he spoke to Mr Jenner and told him as much but in effect had agreed orally to the extension. Had that been the case I would have expected Jordan or Gallaher at least to have confirmed it in writing and that the terms of Jordan's delayed response dated 20 March 2001 (paragraph 104), would have been different. In any event by 28 February 2001 both Gallaher and Jordan had made clear that Gallaher was not to continue as title sponsor.
14. Honda and Jordan (by Mr Jordan) entered into a formal Agreement dated 14 June 2000 for the supply by Honda to Jordan of engines for the F1 cars. Although the "contract period" was expressed to be 5 years starting with the 2001 season both parties were entitled to terminate the Agreement for the 2004 and 2005 years "without any cause and obligation to compensate" on giving notice to that effect by the end of December 2002. Further, whilst the supply of engines for 2001 and 2002 was agreed to be free of charge to Jordan, that was not the case for subsequent years. In effect as at early 2001 Jordan had free Honda engines for the 2001 and 2002 seasons and a contractual right to Honda engines only for those seasons and, provided a price could be agreed, 2003. Honda also supplied engines to the BAR F1 team in 2001 and 2002.
Deutsche Post (DP)
15. DP was a secondary sponsor of Jordan in 2001 under the terms of a formal Agreement dated 6 December 1999 signed by Mr Jordan. The Agreement continued until the end of the 2002 season, with options for Deutsche Post to extend it for 3 further years. The fee in 2001 was $17m and bonuses were payable up to a maximum of $2m for results. The Agreement scheduled drawings showing the approved DP logo and "display rights" on the cars and clothing. To quote the Amended Particulars of Claim, without accepting their accuracy, DP was "not entitled to determine the colouration of the Jordan car but has a known preference for the existing yellow colouration on which its logo appears in black". By an Agreement signed in February 2002 DP (in the name of DHL) became Jordan's title sponsor for 2002.
16. Jordan also had a secondary sponsorship Agreement with Lucent Technologies Inc for a three-year term ending with the 2001 season. The fee payable by Lucent for 2001 was $1.201m. Lucent and Vodafone were involved in a legal dispute in early 2001.
17. Infineon Technologies AG (a subsidiary of Siemens) and Mastercard were also secondary sponsors of Jordan in 2001 and 2002. Dr Volker Jung, a managing board director of Siemens and chairman of the supervisory board of Infineon, gave evidence at the instance of Vodafone.
18. In the event, Vodafone became principal non-title sponsors of Ferrari for the 2002 and subsequent F1 seasons. Phillip Morris (Marlboro) were Ferrari's title sponsors in 2001 and 2002. Jean Todt, Ferrari's team principal, gave evidence at the instance of Vodafone. The chief executive of Ferrari was Mr Montezemolo.
Other F1 Teams
19. In the course of the material events, apart from Jordan and Ferrari, other F1 teams became involved as potential subjects of sponsorship by Vodafone and it is convenient to refer briefly here to those which played some significant part in events. Benetton's title sponsor in 2001 and 2002 was "Mild 7" another tobacco company. The team principal was Flavio Briatore. Paul Jordan was from 2000 until early 2001 commercial director of Benetton. A witness statement by Paul Jordan was served by Jordan and accepted in evidence as such. Paul Jordan had been Jordan's sponsorship manager until 1999. Ted Brezina was Benetton's business development manager.
20. McLaren's title sponsor in 2001 and 2002 was "West", another tobacco brand. The managing director was and is Ekrem Sami who gave evidence at the instance of Vodafone.
The Primary Claim
21. The primary claim by Jordan is to be found in paragraph 28 of the Amended Particulars of Claim (APC) which reads:
On 22 March 2001 at about 6.20pm Mr Haines telephoned Jordan and spoke to Mr Jordan on a loudspeaker telephone in the presence of Mr Phillips. He informed Mr Jordan that Vodafone would sponsor Jordan for the three Grand Prix seasons in 2002 to 2004. In the course of the conversation and in response to Mr Jordan, Mr Haines said "Eddie, stop, stop, you've got the deal". Mr Jordan thanked Mr Haines for his confidence in Jordan. Mr Haines told Jordan to sort out any formalities with Mr Harris. Mr Haines had asked for a list of Jordan's bankers, shareholders and professional advisers as references but explained that this was a "formality".
22. It is Jordan's case that "the deal" to which Mr Haines was agreeing is to be found in and was established by:
i) A document provided by Mr Perring to Jordan on about 1 February 2001 which has come to be known as "the benefits wish list";
ii) A meeting on 6 February 2001 at Jordan's premises in Silverstone between Mr Jordan, Mr Phillips, Mr Perring and Mr Haines when it is said Mr Haines offered "a deal" then and there if Jordan would commit to a particular car design and said that "all matters of detail should be dealt with between Jordan and Brown";
iii) A meeting on 14 February at the Hilton Hotel at Heathrow between Mr Jordan, Mr Phillips, Mr Kieser and Mr Perring when it is said "agreement was reached in principle" that a total payment would be made by Vodafone of $150m over three years, additional bonuses "may be" payable for results, the team name would be Vodafone Jordan Honda, as to "the exclusive rights to be enjoyed in respect of telecommunications equipment" and the team title logo.
iv) To quote paragraph 25 of the APC:
The only outstanding matter yet to be fully agreed in principle at that stage was the colouration of the car. This was agreed in principle on 19 March 2001 when Mr Perring sent a design to Mr Phillips which was acceptable to Jordan and of which DP could not disapprove. At that stage all the necessary terms for a sponsorship agreement had been agreed in principle.
v) To quote paragraph 31 of the APC:
"31. By reason of the matters set out above a binding sponsorship agreement had been formed pursuant to which Vodafone was to sponsor Jordan for three years starting in the 2001 season:
31.1 paying $42,000,000 in 2002 (being $39,000,000 plus $3,000,000);
31.2 paying $53,000,000 in 2003 (being $50,000,000 plus $3,000,000);
31.3 paying $55,000,000 in 2003 (being $52,000,000 plus $3,000,000);
31.4 on the terms set out in the benefits wish list;
31.5 with a colouration for the car similar to the artwork submitted by Brown on 19 March 2001."
23. There is no dispute that on 25 May 2001 Ferrari and Vodafone announced their agreement for sponsorship for the three years 2002 to 2004. Jordan's claim is for the loss of $150m less "sums received by way of title sponsorship which would not have been received if Vodafone had abided by the terms of its agreement with Jordan". There are no particulars of what that loss might be nor was any evidence given about it in any witness statement. Had it been relevant to do so no doubt that could have been addressed later.
The alternative claim
24. The alternative claim is to be found in paragraph 40 of the APC. If there was no concluded contract formed on 22 March 2001 it is there alleged that:
"Mr Haines represented that a contract would definitely be entered into between Jordan and Vodafone shortly after 22 March 2001."
The words relied upon are the same as those relied upon in paragraph 28 of the APC.
25. Jordan is said to have relied upon this representation "in ceasing to negotiate any sponsorship (until 26 May 2001) with Gallaher for the 2002 season" with the alleged consequence that "Gallaher lost all interest in being title sponsor of Jordan and reduced the amount that it was prepared to pay" for the 2002 season "to a significantly reduced sum as a secondary sponsor in 2002". The claim is for the difference between £17m or £18m in 2002 plus 50% of that amount for the loss of the chance of the same sum being agreed for 2003 and the sums Gallaher in fact paid in those years (£7.1m and £6.5m) alternatively between £10m plus £11m and the sums in fact paid on the basis that had Gallaher been offered secondary sponsorship at an earlier stage it would have paid more for it in each of the years 2002 and 2003.
26. Vodafone's defence denies Mr Haines's authority to commit Vodafone to the alleged agreement and avers that: only the Vodafone Group Board had such authority; "a vast range of points of substance which would be incorporated into a final contract" would have required detailed negotiation; no "livery proposal" was ever agreed; and other F1 teams were always under consideration. On 22 March 2001 it is said that "at most Mr Haines conveyed the impression, which was in his reasonable opinion correct, that Jordan was the most likely partner."
27. It should be noted that in a response (dated 10 July 2002) to a request for further information Jordan made it expressly clear that it was not its case that Mr Haines had actual authority to bind Vodafone. The case was then (and until the trial began) only one of ostensible authority. Save for alleged conduct and representations by Mr Haines himself about his own authority (which, in law, cannot sustain such a case) the representations by Vodafone relied upon to support that case were by conduct in permitting Mr Haines "to approach [Jordan] with a view to concluding an agreement pursuant to which Vodafone would sponsor Jordan" and by "holding Mr Haines out as its Global Brand Director and permitting Mr Haines to negotiate" with Jordan in that capacity. In addition reliance was placed on an alleged representation made by Sir Christopher Gent to Dr Jung (Infineon) in March 2001 that Mr Haines "was the person who would select the Formula One team" to be sponsored by Vodafone. That representation is said to have been relayed by Dr Jung to Mr Jordan and Mr Phillips in Malaysia when they were there for the Malaysian Grand Prix which took place on 18 March.
28. On 23 May 2003 Jordan's solicitors wrote to Vodafone's solicitors enclosing proposed amendments to the further information supplied. The amendments were to seek to make a case of actual authority. That case ran to 19 sub-paragraphs. Essentially it came to an allegation that Mr Haines would not have claimed the authority to make agreements it is alleged he did claim nor made the statements it is alleged he did make about Jordan having the deal unless authority had in fact been bestowed upon him to do that and so actual authority to that effect was to be inferred.
29. Mr Boyle QC for Jordan sought permission to make this amendment on the first day of the trial. Mr Aldous QC opposed the grant of permission on the basis that the proposed amended case was demonstrably unsustainable and hopeless. I did not rule on it at the time on the basis that if Mr Aldous was right it would be established in the course of the trial and need not delay its progress. In the course of his closing submissions Mr Boyle entirely properly said he could not in the light of the evidence pursue the application. Jordan's "real case on authority" he submitted was the one advanced in the written opening submissions and reiterated in the closing submissions that Mr Haines did have authority to communicate to Jordan that Vodafone Group had taken the decision to sponsor Jordan even if he did not have the authority to make that decision himself.
30. It should be recorded that in early April 2003 a Consent Order was made requiring Jordan to make further disclosure of specific documents including documents in electronic form. Some of the documents which were produced as a result of that order proved to be of importance as will become apparent. Further, in the course of the trial, orders were made for the examination of Mr Harris' computer and computers in use by Jordan at the time. Those examinations also produced significant material to some of which I shall refer. The examination of Mr Harris' computer was a specialist examination of the hard disk because, in circumstances to which no criticism attaches, certain e-mails sent and received by Mr Harris were no longer otherwise accessible. The examination of Jordan's computers revealed documents which were material and readily accessible as they had not been deleted. The documents disclosed as a result of these examinations were the subject of supplementary written submissions by both parties. Very substantial written closing submissions had `already been exchanged and submitted to the court. Mr Jordan and Mr Phillips also made further witness statements (in each case the 5th statement) to address some of the Jordan disclosures and the submissions of Vodafone about them. Both were recalled to be cross-examined on those statements. Oral closing submissions were made following that evidence.
THE KEY WITNESSES
31. Since it is a vital question in a case involving conflicting and irreconcilable accounts of events decisive of the issues I have to decide, I will summarise here my views of the key witnesses.
32. Mr Haines was an impressive and, in my judgment, plainly truthful witness. His evidence was consistent with the documents and the commercial reality and commonsense of events. He had a lot on his plate at the time with little support before Mr Harris arrived. Mr Haines relied on Brown as indeed he and Vodafone were entitled to do. That reliance was, I think, in fact significantly misplaced. Both Mr Kieser and Mr Perring saw an opportunity for Brown to earn a substantial sum by way of a commission from Jordan (and later through other work) for a concluded sponsorship agreement and seem, particularly in Mr Perring's case, not to have appreciated the obvious conflict of interest and plain risk that they might be used by Jordan for Jordan's purposes in the events which ensued. That said, I do not doubt that Mr Perring with, as will appear, a limited perspective on events, did believe that Vodafone's objectives would best be met by sponsorship of Jordan.
33. Mr Harris was also an impressive and straightforward witness. Again his evidence was consistent with the documents and commercial sense.
34. I regret to say that I found both Mr Jordan and Mr Phillips to be wholly unsatisfactory witnesses. As will appear, their evidence was in many instances in stark conflict with and indeed belied by the documents, often documents of their own making. On occasions even Mr Jordan was unable to offer an explanation and was reduced to embarrassed silence by the exposure of blatant inaccuracies in what he was saying. The evidence they gave and the claim Jordan makes became more and more contrived and unsustainable. Mr Haines said, in relation to the telephone conversation on 22 March, when asked in cross-examination by Mr Boyle how Mr Jordan could have come to think a contract had then been concluded, that the only explanation he could give to himself was that "Mr Jordan had heard what he wanted to hear and not what was said".. That was a restrained and courteous comment. For my part I have no doubt at all that where the substance of Mr Haines and Mr Harris evidence differed from that of Mr Jordan, Mr Phillips and Mr Perring on any issue of real importance the evidence of Mr Haines and Mr Harris is to be preferred.
35. In order to explain why I have reached the clear conclusion that Jordan's case is unsustainable and the evidence of Mr Jordan and Mr Phillips to the contrary is to be rejected, I propose to set out the chronology of events in some detail. There are three significant periods in that chronology. First, the period preceding the alleged oral agreement on 22 March 2001. The probabilities of Mr Haines making a binding agreement on that date for Vodafone to sponsor Jordan must be seen in that context. Second, the events of 22 March itself and the days immediately following it when there was an exchange of correspondence referable to the telephone conversation. Third, the events which then ensued up to and following the time when the agreement for sponsorship between Vodafone and Ferrari was concluded and publicly announced. As will be seen, Jordan's conduct in this period in particular was wholly inconsistent with a belief that a binding agreement had been concluded with Vodafone on 22 March and the attempts of Mr Jordan and Mr Phillips to explain it in cross-examination did neither of them any credit.
EVENTS PRIOR TO 22 MARCH 2001
McLaren and Ferrari
36. Vodafone had been considering possible sponsorship in F1 in late 2000. There had been a proposal for secondary sponsorship of McLaren for 2001, and Mr Haines met with McLaren (Mr Sami) and Ferrari on 15 and 17 January. At that time McLaren were, however, only offering driver sponsorship and a small exposure on the car for 2002 which Mr Haines doubted would achieve the global impact Vodafone was seeking. The suggestion of sponsorship of McLaren for 2001 was not pursued. The meeting with Ferrari was also attended by Mr Colao. Ferrari could not offer title sponsorship but was prepared to offer what it called one of three major partnerships with Vodafone having equal or better rights than Shell whilst Phillip Morris remained as title sponsors.
37. Mr Haines sought the help of Brown KSDP. Mr Haines first met Mr Perring on 19 January. He had been told by Mr Dart that Mr Perring had F1 experience which was not in fact the case. He says, and I accept, that he told Mr Perring he and Vodafone were on "a learning journey" or "window-shopping" to look at options and get the facts about F1. It was not urgent. The 2002 F1 races did not start until March of that year. Mr Haines said (and the documents support him) that his criteria were maximum media exposure for the Vodafone brand, joint commercial ventures with a team to obtain "pay-back" from the sponsorship, and the need to ensure "buy-in" from the operating companies which would not only be seeing the loss of their own brands (such as D2) but would also be asked to pay for the cost of globalisation. Mr Haines readily accepted that at the time he thought the route to maximum media exposure was title sponsorship and that he had a personal belief that association with a tobacco company would be a weakness. Those views were known to Mr Perring.
38. Brown held what Mr Perring called a brainstorming meeting on 21 January. No one from Vodafone was present. Following the meeting a document was prepared "Project Fast .... The Starting Grid". This identified the "ideal world" as in effect title sponsorship including "ownership of red".
39. On 23 January 2001 Mr Perring sent Mr Haines his "thoughts" on how to approach meetings with Ferrari and McLaren which had been arranged for the next two days. The "thoughts" took the form of a document entitled "Project Fast – Critical Path". It described Mr Haines' role for Vodafone as "entitled to sanction the investment" which, as both Mr Geitner and Mr Haines said and the evidence establishes beyond doubt, was not accurate if it meant entitled to authorise a decision as distinct from make a recommendation to the decision-making authority. Mr Haines, however, did not question the description in the document at the time. Mr Townley's role was to include "delivery of the 'partnership agreement' and due diligence". Mr Perring's role included identifying opportunities for Vodafone and it was suggested Brown should be "positioned as part of the Vodafone team rather than external specialists".
40. News of Vodafone's activities was quick to reach Jordan. Mr Perring knew a Mr Paul Marshall who worked for a company providing hospitality at events such as grand prix. Mr Marshall was in contact with Mr Phillips and Mr Shorthouse. Mr Perring said in F1 people seemed to know what he was doing before he did.
41. It is apparent from an e-mail sent by Mr Phillips to Mr Shorthouse on 26 January that Mr Marshall had agreed to arrange a meeting between Jordan and Vodafone and indeed that Mr Phillips had been told that Vodafone had a "budget of £50m per year for three years starting 2002 and they have taken the decision to do F1". Neither piece of information was accurate, but substituting Mr Haines for Vodafone, US dollars for sterling enthusiasm for F1 but no decision, and omitting the word "budget" they would have been close to the truth. The e-mail also shows the tactical plan Mr Phillips had in mind. Mr Phillips had told Mr Marshall "in the interests of getting this moving" that 13 February, when he was due to meet with Gallaher, was "the deadline". In fact Gallaher's option for 2002 was not due to expire until 28 February.
Ferrari Meeting: 25 January 2001
42. The meeting with Ferrari (Mr Todt) went sufficiently well for Brown to conclude that it looked as if a "deal" was "going to happen". Mr Perring was present at the meeting. His notes show that matters were discussed in some detail. Ferrari repeated that it could not offer Vodafone team sponsorship "at present", because Phillip Morris had first right of refusal until the end of the 2002 season, but it was willing to offer an equal or better level of secondary sponsorship to Shell. At the meeting it was agreed to meet again on 9 February.
Jordan's opening proposal
43. Mr Perring reported to Mr Haines by an e-mail sent on Monday 29 January following the meetings with McLaren and Ferrari and discussions he had with Mr Haines on Friday 26 January. He enclosed what he called a "rights package" which he said he believed was achievable from both McLaren and Ferrari. This, with a few adjustments, became "the benefits wish list" on which Jordan relies as part of the contract it asserts. The e-mail also referred to a call Mr Perring had received from Mr Jordan "this morning" to the effect that Mr Jordan would welcome a meeting "as the title rights to the Jordan team are available from 2002. However he is in ongoing discussions with B&H which need to be finalised by February 14th if they continue".. The e-mail stated that Jordan was offering title sponsorship, "car livery in Vodafone colours/brand", "a deal structured around incentives and team performance" and an "entry level for 2002" at about $30 to 50m but, Mr Perring added, he believed the title rights could be secured for approximately $25m in 2002 rising to 30m in 2003 and 35m in 2004, a total of $90m.
44. Mr Perring sent a further e-mail to Mr Haines on 30 January. Mr Jordan had rung again and offered some dates for a meeting should Mr Haines be free. The e-mail also included a copy of the latest "rights package" or "benefits wish list".
Vodafone Board Meeting 30 January
45. The board of Vodafone Group met on 30 January. The report by Sir Christopher Gent noted the decision not to proceed with secondary sponsorship of McLaren in 2001 and stated "the issue of future involvement in motor racing remains open but dependent upon the nature of the proposal and the willingness of local operations to commit part of their promotional budget to such a group wide initiative".
The Benefits Wish List
46. On 1 February Mr Perring sent the benefits wish list by fax to Mr Jordan, Mr Todt and Mr Sami. The faxed letters accompanying the wish list were in different terms. The letter to Mr Jordan referred to a meeting arranged between him and Brown "tomorrow"; stated that "the Vodafone meeting in Dusseldorf was extremely positive and 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 mid next week" (a statement which Mr Kieser, who did not see the fax, did not consider to be accurate); enquired whether Mr Jordan could meet Mr Haines at Brown's offices on Tuesday 6 February; and (with my emphases) continued:
"Tomorrow I will get you up to speed with Vodafone's ambitions and we'll have the chance to discuss the benefits programme in more detail. What I'd like to come away with is a feel for what we know we can deliver and what may be problematical. By way of a little more background information, Vodafone's key criteria for 2002 are as follows:
1. Team sponsorship and maximum awareness of the Vodafone brand on the car
2. Category exclusivity (Technology and Telecommunications).
3. Maximising the hospitality and meeting opportunities at GPs.
4. Developing Partnerships and Joint Ventures with the Team and Team Partners to generate additional revenue streams."
47. Mr Haines was not aware that Mr Perring (and Mr Kieser) intended to meet Mr Jordan before he did. They did meet at Monte's restaurant in London on 2 February. Mr Haines also said that the reference to "team sponsor" was true for Jordan but, as he already knew, was not true for Ferrari or McLaren. That is clearly borne out by the different terms of the faxes to those teams which recognised team sponsorship was not available but asked if and when it might be. The rights wish list itself also set out the alternative forms of sponsorship, described team sponsorship as the "preferred option", referred to an initial 3 year term with a 3 year renewal option, and contained an extensive list of other "rights" expressed as bullet points.
Monte's Restaurant: 2 February
48. It was Mr Jordan's evidence that at their meeting at Monte's restaurant he was told by Mr Kieser and Mr Perring that Vodafone's key criteria were title sponsorship giving maximum awareness of the Vodafone brand and no involvement with tobacco. He says he was also told that Mr Haines would decide on which team Vodafone would sponsor. He agreed that Jordan would prepare a presentation for the meeting on 6 February.
The 6 February Jordan Meeting
49. In the event Mr Haines accompanied by Mr Dart, Mr Kieser, Mr Perring and Mr Marsall met Mr Jordan and Mr Phillips on 6 February at Jordan's premises in Silverstone. The meeting included a presentation by Mr Phillips and dinner. It started after 8pm and lasted some 2 hours. It was, as Mr Phillips said, a convivial evening. Mr Haines described it as "a jovial banter-like discussion".. At some point in the presentation an exchange of glances between Mr Jordan and Mr Haines led to Mr Jordan stopping the presentation and more general conversation ensuing. This was the first occasion Mr Haines had met Mr Jordan. He liked him. Although there is some uncertainty as to how far the presentation had progressed before it was stopped, a hard copy survives. It included as "Partnership benefits" "title sponsorship" for a term of 3 years "with options to be discussed", product exclusivity "to be determined", and the percentage of colouration of the cars "to be discussed".. Various car liveries were included which were combinations of yellow and red and black and yellow. "The Cost" was shown to be "$179 million (includes agency fee)" apportioned over the 3 years (54m, 58m and 67m) plus race bonuses capped at $5m a year and a championship bonus to be discussed.
50. Jordan places some considerable reliance on this meeting. In particular both Mr Phillips and Mr Jordan (supported by Mr Perring) say that on at least two occasions Mr Haines issued a challenge to Jordan that if Jordan would there and then accept a particular livery and a total of $150m "the deal was theirs".. Mr Phillips is said to have reacted to the challenge by saying he needed to check Jordan's other commitments on livery and would let Vodafone know in 24 hours what they were. Mr Jordan and Mr Phillips say Mr Haines said that Vodafone had decided on F1 sponsorship, he had authority to choose the team to be sponsored and to negotiate contractual terms and Ferrari had been rejected because title sponsorship was not available, it had a strong continuing association with tobacco and the Ferrari brand would overshadow the Vodafone brand.
51. Mr Haines accepts that he issued a challenge (to his and Mr Kieser's recollections referring to $140m not $150m) as he put it to try to get some "realism" on livery and money into the discussions. He had previously been told that the car could be all red (Vodafone's colour) but at the meeting it had seemed that was not the case. He had been told the price was $90m, now it was double. He said no one could sensibly have believed in the context of a first exploratory meeting of this kind that such a challenge could be seen as a contractual offer. Mr Kieser said Mr Haines and Mr Jordan were sparring. I am sure Mr Haines is right about this. It is commonsense. Mr Phillips nonetheless sought to suggest that this was an offer which if then accepted would itself have given rise to a binding legal commitment. I would characterise that evidence as fanciful.
52. Mr Haines denied that he said Vodafone had decided on F1 sponsorship or that he had authority to choose the team. Again I accept that. Neither would have been true and I see no reason why Mr Haines should lie about them. On the other hand I am sure that (rightly) Jordan was given the impression that Mr Haines' recommendation would be a major factor in Vodafone's decision and that the perceived problems with the Ferrari proposal were mentioned. Mr Haines (supported by Mr Kieser) also said, and I accept, that he made it clear that so far as Gallaher was concerned if Jordan had to go ahead and sign with Gallaher then Jordan should do so.
53. Brown prepared a "Contact Report" of the meeting. Mr Perring agreed it was accurate. It included (with my emphases) the statements that:
"A 3 year initial contract with option to renew for 2 or 3 years was discussed.
EJ looking for a financial commitment in the region of $150m net over three years ... EJ to confirm in writing exact figures ... by weekend.
Honda have a 3 year commitment to supply ... engines running 2001-2003.
Deutsche Post. Contractual commitment to black typeface on yellow background colour and prominent positioning. Ian Phillips to confirm flexibility of the contract in respect to Vodafone spend and positional requirements by 09.02"
54. Ferrari (Mr Todt) responded to Mr Perring's fax sent on 1 February by a fax dated 7 February. Mr Todt confirmed that Ferrari "would be glad to grant you a package that would be more substantial than that of Shell" and "could envisage" the possibility of Vodafone replacing Phillip Morris at the expiry of the current agreement. The fax said some of the wish list could not be granted and it should be addressed in detail at the meeting arranged for 9 February.
Mr Perring's fax: 8 February
55. On Thursday 8 February Mr Perring sent a fax to Mr Haines (which Mr Haines sent on to Mr Harris) to bring him "up to speed" on all Mr Perring's discussions and to set out a timescale for the next 14 days. Mr Perring recorded that he was due to meet Mr Todt (Ferrari) the next day and Mr Sami (McLaren) on 15 February and that in each case title sponsorship was unavailable. He also referred to Toyota and Benetton and then to Jordan. Mr Perring recorded that he had asked Mr Phillips to clarify Jordan's existing sponsor obligations. Mr Perring sought "a mandate to progress the Jordan discussions a stage further, based on our conversation in the car on the way back from Silverstone." He added "the mandate is by no means an authority to commit Vodafone to any agreement but merely your sanction for us to proceed with the due diligence necessary to establish the most accurate position". The suggested basis for the negotiations was a 3 year term and 2 year renewal option, "fees" totalling $150m over the 3 year term (net figures which "do not include any commission") plus bonuses. Mr Perring said Brown would produce various livery designs for the likely livery obtainable from Jordan. Finally Mr Perring said he would have "team comparisons" ready for Mr Haines' meeting with Mr Gent "where hopefully there will be a clear Team opportunity which suits Vodafone's strategic ambitions". Mr Haines did not reply to this fax. Mr Haines was due to meet Sir Christopher Gent to discuss global branding on 19 February.
56. The reference to the "conversation in the car" was to the return journey from the Jordan meeting. In the car Mr Haines was enthusiastic about Jordan and keen for Brown to get the best proposal they could from Jordan.
Jordan's obligations to DP
57. As agreed at the 6 February meeting Mr Phillips faxed Mr Perring on 8 February a document "outlining Jordan's commitments for 2002". They included, with reference to DP, "Car: engine covers, chassis side, front wing endplates, black on yellow". No longer the red car said previously to be available.
Ferrari: 9 February
58. Mr Haines, Mr Kieser and Mr Perring duly met Mr Todt on 9 February. After the meeting a document was drawn up to record what had been discussed and was available from Ferrari. It is a very substantial document. Team sponsorship was shown to be "unavailable at present"; the status of principal sponsorship was "available". Most of the other items on the list were "agreed" or available save for "right to develop a composite identity", and the detail of branding availability on team clothing and the like was addressed. Mr Todt's "summary" included the words:
"A significant package, elevating Vodafone to principle (sic) sponsor position above Shell."
Mr Todt said, and I accept, that Ferrari was enthusiastic about Vodafone's approach. This document bears him out. Mr Haines also thought the meeting a success.
59. Mr Harris responded to Mr Haines about the benefits wish list on 12 February raising basic questions about Vodafone's strategy and what it was seeking to achieve by F1 sponsorship. He also expressed the opinion that Jordan's bonus criteria were inappropriate. On 14 February Mr Harris passed on the concerns about Vodafone's strategy to Mr Perring. Mr Haines said he was pleased that Mr Harris was asking the right questions.
The 10 February Jordan/Brown meeting
60. On Monday 12 February Mr Jordan wrote to Mr Perring and Mr Kieser. They had met at Mr Jordan's London flat on Saturday 10 February. The letter was about figures. It included the following:
"You will note that our original proposal was US$ 163million with a 10% commission to your agency, giving a total of $179. Having fully evaluated the potential loss of several existing sponsors ... I have been able to trim the net figure to Jordan by a small amount. This total is US$ 157.5 million to include all the benefits detailed in our proposal. I repeat that this is a bottom line net figure to Jordan, no agency commission is included."
The letter concluded by referring to "Key meetings with our existing title sponsors in the near future" and the need for "an early indication of your position".
61. Mr Kieser also wrote to Mr Jordan on 12 February following the Saturday meeting. The letters probably crossed as Mr Kieser's letter refers to the fact that the Saturday meeting had not agreed upon a sponsorship figure and Mr Jordan was to produce one. Mr Kieser copied his letter to Mr Haines who accepted that he had received it. The letter sought to confirm "the salient points" of the Saturday meeting. It is an important letter. The emphases are mine. Mr Kieser wrote:
"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 sponsorships, 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 (sic), Stephen 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
The current visual conditions of brand exposure for the Jordan team sponsorship was tabled, detailing the agreed livery and team applications for Deutsche Post, Honda, Infineon, Bridgestone, Legg Mason Investors, Mastercard, Brother, Imation and Danzas/DHL. It was confirmed that even though Deutsche Post currently requires their identity to be applied black on yellow, that a joint presentation would suffice to obtain their agreement for application of white reversed out of black, or black on base white. We were comforted to learn that in the event of Deutsche Post not agreeing, Jordan will pursue the potential sponsorship with Nestlé, with whom you have had preliminary negotiations. The other co-sponsors, Bridgestone and Mastercard, would be retained as is, as well as Honda.
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. The meeting discussed the potential 3 year sponsorship contract and we wish to confirm that the cost of the sponsorship would be gross including the agreed and acknowledged 10% agent commission. The meeting could not conclude a realistic sponsorship figure and team Jordan would rework the 3 year budget to respond no later than Monday 12th February, in writing. Jordan would present the optional cost of termination and substitution of the Lucent Technology sponsorship for the current year, net of commission.
BROWN KSDP confirmed that the various team design proposals were currently being prepared to be presented to both client and team Jordan by Thursday afternoon. The meeting was adjourned.
We look forward to receiving your proposal."
62. It is clear from other documents that Mr Kieser misunderstood the nature of Mr Haines' meeting with Mr Gent on 19 February. The letter does however plainly refer to the Vodafone process including "Board Approval" albeit Mr Boyle pointed out that it said the "decision" would be finalised before the approval. No "Heads of Agreement" were ever drafted "in principle" or at all. The problems of the colouration of the car were plainly stated.
Gallaher and Jordan
63. It was on 13 February that Gallaher and Jordan met and agreed that Gallaher would not continue as title sponsor in 2002 but would become a secondary sponsor (see paragraph 12).
Jordan's 15 February e-mail and 14 February meeting with Brown
64. There was a further meeting between Mr Jordan, Mr Phillips, Mr Kieser and Mr Perring at the Hilton Hotel at Heathrow on the 14th February. It is referred to in an e-mail from Mr Phillips to Mr Perring sent on the morning of 15 February. The e-mail is one of the documents on which Jordan relies for the alleged contract. The e-mail (with my emphases) included the following:
Under the terms of the contract Vodafone will be the primary presenting sponsor. The team logo will be similar in proportion to the attached drawing; Vodafone will be permitted to use other brand names to which it has the rights ... in any of the branding areas granted to it under the contract provided that ....
Fees net to team.
Contracted fee: 2002 US $39m, 2003 $50m, 2004 $52m.
NB. the 2002 fee is subject to the car being predominantly black and yellow in respect of Jordan's existing contractual obligations.
In the event that Jordan and Vodafone conclude Heads of Agreement or full contract ... Jordan will immediately initiate discussions with Lucent ....
Vodafone will pay to Jordan a performance bonus each year based on its race performance on the following scale-
World Championship (constructors)
1st place $5m
2nd place $3m
3rd place $2m
In each Grand Prix
1st place $5m
2nd place $500,000
3rd place $250,000
plus $100,000 per world championship point scored.
US $3m in each championship year providing the team classified eighth or higher in the Championship."
65. Thus Jordan's proposal required a predominantly black and yellow car for 2002 (albeit with a lower fee) and performance bonuses and did not include any option to extend the three-year term.
66. Mr Phillips said that at the meeting Mr Kieser had made it clear that $150m could not be exceeded and any performance bonus would require separate discussion. The terms of Jordan's proposal are, however, plainly set out in his e-mail and included bonuses. There is not (and on the evidence could not be) any suggestion that Vodafone ever agreed to predominant black and yellow colouration for any year.
67. On 16th February Mr Kieser wrote to Mr Haines. They had met Mr McNally that morning. Mr McNally was a director of Allsports and was responsible for F1 track signage. The letter records that Brown would also pursue discussions with Benetton about title sponsorship and that Mr Perring had arranged to meet Benetton that afternoon. It records Mr Kieser's agreement with Mr Haines' "strategy of 'going underground' for a week or so," and refers to a meeting Mr McNally wished "to facilitate" which was in fact to be a meeting between Mr Haines and Philip Morris in Lausanne. Mr Kieser wanted to be invited to the meeting and to "pursue negotiations with the Ferrari team on your behalf". In the event he was not invited. Despite Mr Boyle's submission that it was plainly the arrival of Benetton on the scene which explained it, Mr Haines said, and I accept his evidence, that his reason for "going underground" was to get time to catch his breath and prepare for the meeting with Sir Christopher Gent which covered the whole global rebranding project. He was on his own at the time but knew new colleagues would be joining shortly. He also said that in their conversation Mr McNally had made him think that title sponsorship would not necessarily deliver maximum brand awareness.
Mr Perring and The Revised Proposals
68. Also at this time, and on Monday 19 February, a Mr Tazzioli of Ferrari's sponsorship department (at the request of Mr Todt) was trying but failing to get in touch with Mr Perring urgently to explain some drawings attached to e-mails which he said Mr Perring would need "for the Vodafone presentation tomorrow" and which Mr Tazzioli said Mr Perring would see made "the visibility of Vodafone" "very dominant". Mr Tazzioli told Mr Perring that he had therefore spoken directly to Mr Haines to give him the same information. It is perfectly clear from Mr Tazzioli's e-mails that Ferrari were keen that Vodafone should have their proposals. Mr Perring's attempts to explain his apparent lack of interest in what was being said were not easy to follow and did him little credit.
69. On Tuesday 20 February Mr Perring did forward to Mr Haines Jordan's "revised offer" which, in agreement with Mr Boyle, I think must be a reference to Mr Phillips' e-mail sent on 15 February. He also forwarded "revised offers" from Ferrari and McLaren. Mr Perring agreed with Jordan to keep Mr Haines informed of Jordan's renewal deadlines with Gallaher. Mr Jordan had told Mr Perring that they needed to be addressed "one way or the other, by the end of the month." In fact Mr Jordan knew by no later than 13 February that Gallaher was not going to be the team sponsor of Jordan in 2002 (paragraph 12).
Vodafone Internal Meeting 21 February
70. It is apparent from Mr Phillips' notebook that Mr Perring kept him informed about the timing of the presentation to Sir Christopher Gent which was moved from 19 to 21 February. He also told Mr Phillips that Benetton had emerged as a late contender. Mr Phillips acknowledged, as his note of this conversation makes clear, that he knew Sir Christopher was going to be closely involved in any decision or recommendation to the Board.
71. Mr Haines made the presentation to Sir Christopher Gent and Mr Geitner in Dusseldorf on 21 February. The written presentation is available. 5 teams were referred to but one of them (Toyota) it is agreed was never a serious contender. The others were Benetton, Ferrari, Jordan and McLaren. Each had a "cost" figure. Jordan's cost was shown as $150m including the $3m a season "appearance" bonus. The "next steps" noted in the presentation were to conclude with a "sponsorship decision" on 5th April. Sir Christopher was keen on a number of options including Jordan and Ferrari. No decisions were taken apart from the process and timetable.
72. Mr Haines, Mr Harris, Mr Perring and Mr Kieser met following the presentation to Sir Christopher Gent. This was the occasion on which Mr Harris was first introduced to Mr Kieser and Mr Perring. Mr Kieser made some notes of the meeting. They record that decisions would be made and announced by mid-April. Mr Perring prepared his own typed notes (written on 24 February) of the meeting. They include the fact that Mr Harris would be the day to day contact on the project but Mr Haines would continue to talk to Mr Todt, Mr Jordan and Mr Briatore. The notes also recorded:
"The final decision will be made mid-April. In the meantime PH and CP (Mr Harris and Mr Perring) would prepare a document for Mid-March which addressed the question of 'what Vodafone wants to get out of the project' both in terms of awareness and joint venture opportunities. DH (Mr Haines) advised that Ferrari, Jordan and Benetton were the most favoured teams."
"Next Actions" included a request by Mr Haines that "all information be compiled by the end of March for mid-April decision".
73. If Mr Perring had thought on 23 January (paragraph 39) that Mr Haines was entitled to sanction the investment, as he acknowledged in cross-examination he must now have known otherwise and he also knew that the final decision would not be made before mid-April. Such was Mr Perring's relationship with Jordan I agree with Mr Aldous that it is not credible that this timetable was not also known to Jordan. Indeed there was no reason not to inform Jordan of it and every reason to do so. There is also other evidence to show that Jordan was indeed aware of it.
Philip Morris and Benetton
74. On 23 February Mr Haines and Mr Harris met Mr Hogan (European Marketing Director of Phillip Morris) in Lausanne. Mr Haines described their discussion as "positive". Mr Haines also met Mr Briatore for the first time on 23 February when they discussed the possibility of Vodafone sponsoring Benetton and agreed to meet again. They did meet again, with Mr Harris, on 8 March.
75. According to Mr Phillips, on 1 March in Melbourne, Mr Perring told him that Vodafone were now only looking at Jordan and Benetton. That was wrong.
Vodafone Executive Committee
76. On 1 March the Vodafone Group Executive Committee met. The minutes record that "discussions were being held with both Ferrari and Jordan for the Formula One season for 2002. A further report on progress would be made to the next meeting". The next meeting was scheduled for 5 April.
77. Mr Perring was working on designs for a Jordan car with Vodafone title sponsorship. On 7th March he sent some designs to Mr Phillips which were described as "purely conceptual".. One of the designs (denoted A2) had the minimum of yellow and plainly would not have met the contractual obligations of Jordan to DP as described by Mr Phillips on 8 February (paragraph 57).
78. Further designs were sent forward to Mr Phillips later on the same day "to give you a feel for what is possible". Mr Phillips' response was that "somewhere in there is the combination which will satisfy everybody. The important thing is that we can convince David that he will get the dominant branding; we can work around our existing people when we have achieved that".
79. Mr Perring arranged to meet Jordan on Thursday 8 March. On that day he sent yet further designs to Mr Phillips saying "the yellow/red version (C2) was one that David (Haines) found interesting ... needs a lot of work but has some potential." "C2" can perhaps best be described as rather more red than yellow but no black.
Preparation for the Brand Council
80. There was to be a first meeting of the new Brand Council of Vodafone on 15 March in Dusseldorf. Mr Haines sought the views of the operating companies in advance of the meeting by an e-mail sent on 7 March. The e-mail stated there were three options for Vodafone: focus on a front row team such as Ferrari or McLaren; negotiate with a less high profile team "such as Jordan or Benetton... but where we may be able to achieve more brand exposure on the car" and focus on trackside advertising alone. Plainly title sponsorship was not the only option in Mr Haines' mind. Mr Haines had two responses before the meeting, from Italy and Greece. Both favoured Ferrari.
9 March Meeting
81. Mr Haines and Mr Harris met Mr Jordan and Mark Gallagher for breakfast in Dusseldorf to introduce Mr Harris. Mr Haines' evidence, which I accept, is that he told Mr Jordan that a recommendation relating to F1 sponsorship would be made in early April. It was proposed that Mr Gallagher and Mr Harris should have discussions on joint product development. Mr Jordan and Mr Gallagher were also shown a Ferrari car in Vodafone mock-up.
The 13 March Vodafone Group Board Meeting
82. On 13 March there was a Vodafone Group board meeting. Sir Christopher Gent reported that "during the next months all the operating companies will be invited to participate in the decision on whether to go with a high profile branding sponsorship in motor racing which will either feature participation in the Ferrari team or brand leading sponsorship of Jordan".
Benetton again: 13 March
83. Mr Haines and Mr Harris met Mr Flavio Briatore of Benetton on 13 March at Benetton's premises at Silverstone. They were impressed. Mr Briatore also arranged for them to meet Mr Ecclestone on 26 March.
The Draft Contract
84. On 14 March Mr Phillips sent Mr Perring "a draft contract". He said "there are a number of notes and blanks in it but it should give you an idea of where we are coming from". Mr Phillips said that Mr Perring had requested a draft. The draft contained 21 clauses and 5 proposed schedules and 6 proposed appendices. It was drafted by Jordan's solicitors. Most of the Schedules and Appendices were completely blank apart from titles. It is apparent even from a glance at the draft that, for example, the colour of the livery had not been agreed and would be the subject of detailed provisions and depictions; intellectual property rights would be the subject of detailed provisions some of which had not been drafted at all; provisions for sponsorship fees and bonuses were left blank; and "renewal option" was "to be discussed".
85. At some date, probably in early March, certainly before 14 March, both Mr Kieser and Mr Perring accept that Mr Kieser warned Mr Perring that Vodafone believed he had become too close to Jordan and was not giving objective advice to Vodafone. That indeed was the view Mr Haines had formed and expressed to Mr Dart and Mr Kieser.
86. Notwithstanding the warning there is a remarkable e-mail from Mr Perring addressed to Mr Jordan and Mr Phillips at 17.01 on 14 March. The e-mail starts by saying "... we're nearly there. As you have gathered there is a bit of indecision creeping in and we need to contain/manage it".. The basis for this was the meeting with Benetton on 13 March from which it is said Mr Haines and Mr Harris came away thinking Benetton had the edge. The e-mail continues (with my emphases):
"Quite frankly, I don't think the Benetton proposition will hold up........ the car is crap and will be for a few years from what I can gather and they don't offer the 'ownership' that Jordan does......... However, Flav is talking the talk and they are buying it and I don't have enough F1 experience for them to rely on my word as gospel. I also have to be careful about how much I character assassinate him in case they think I've been bought!!!
I think the decision making process could become very subjective and every little aspect could count......can you therefore have a think about the following.
David is meeting Chris Gent next week to discuss the two options ...... principally car branding in which you have a massive advantage.
Ultimately we could do with having Gents support and it may be time to wheel Peter Sutherland in at the appropriate time if Chris has the casting vote.
5. Performance related fees – have a think about this, but they are taking an interested view on it – of course Flav doesn't care if he has to give anything back because he has Renault support, but there needs to be an element which says if you don't finish in the top 3 of the constructors in 2002, you give some money back......similarly , put in a bonus structure for finishing top 3 and above and podiums and wins etc.....all based around $150m over 3 years....
7. Honda – could be key but tricky to involve at the moment..... I'd love to gauge their interest in Vodafone becoming Team sponsor next season, it could get them really excited and that can be passed to David...... if he knows there is a Honda to counterbalance Renault, then he's going to feel a lot more comfortable
8. Eddie - the key to David.......need to build on the momentum from last Friday without appearing to sell yourself too hard.....you know Flav's game and I imagine he's like a dog with a bone...could play into your hands but maybe on return from Malaysia and armed with great results you should have another meet....probably be the last one before any decision is made and we know how David seems to be on-side with whoever he has seen last. Don't bypass Harris either, he's pretty influential and needs to feel he's being courted as well.
Just for info......I'm having lunch with Paul Jordan tomorrow, hoping to get an inside steer on Benetton and I think David and Peter are meeting Bernie around the 26th – don't know if he'll be asked his opinion, but Flav has given the impression he has the best working relationship with him of all the team bosses.
Have a great race...... I'll keep you updated from my end........i needn't say it, but keep this confidential or they'll be convinced my blood runs green!
Thanx also for the draft contract – I'll read through it and forward to Peter – on first look it demonstrates the level of commitment you're prepared to make which is very positive.
87. Whilst it may be superfluous to comment on the nature of such a communication there is within it some important information:
i) The need to have Sir Christopher's support in a vote recognises the level of decision-making at Vodafone which in any event I think to be a matter of commonsense;
ii) It would not have escaped Jordan's notice that Mr Haines and Mr Harris were to meet Mr Ecclestone ("Bernie") on 26 March who might 'promote' Benetton;
iii) The need to build on the perceived "momentum" was stressed.
88. Mr Jordan said he had never seen this e-mail before he gave evidence. On a matter of this importance to Jordan and in the light of what occurred subsequently (paragraphs 94 and 95) I regret to say I find that incredible. In any event I am sure Mr Phillips would have told Mr Jordan what Mr Perring had said.
89. One consequence of Vodafone's views on Mr Perring's partiality was that he was, as he agreed when giving evidence, "out of the loop" for a number of things that occurred at Vodafone during and after March 2001 in particular with Ferrari, McLaren and Benetton. The inference that he unknowingly presented a misleading picture to Jordan as a result and that Jordan believed (wrongly) that they had an inside track is compelling.
90. Indeed also on 14 March Mr Perring sent an e-mail to Mr Harris saying that he had spoken to Ferrari when they had called him that day and "I have the impression they still think they are in with a shout... can you advise what the status is and whether you or David are writing to them advising of your decision." This e-mail is one of those which only became available upon examination of the hard disk of Mr Harris'computer. It was of course sent by Mr Perring to whom Jordan plainly had access. Mr Perring made no reference to it in his evidence.
91. Mr Boyle submitted that this e-mail was clear evidence that Vodafone had decided by 14 March not to pursue sponsorship of Ferrari and that was because title sponsorship was a key criterion and Ferrari had a tobacco company as title sponsor. That submission, as will be seen, is simply wrong as a matter of obvious fact. Mr Perring may have thought it was the case but even he had found out otherwise before 22 March: paragraph 109.
The Brand Council on 15 March
92. The Global Brand Council did meet for the first time on 15 March. Representatives of Omnitel, D2 and Vodafone UK were present. They were the three largest and most important operating companies in the Vodafone Group. Mr Harris prepared a presentation for the meeting. The timetable for a decision once again showed "final proposals" by the end of March and a final position by mid-April. The presentation showed Benetton, Ferrari, Jordan and McLaren all in contention.
93. No decisions were taken at the meeting. Mr Geitner said there was "a strong set of people amongst my colleagues who were in favour of Ferrari". Mr Haines said the representatives of the German and Italian operating companies favoured Ferrari. So did the UK representative. The German representative was particularly attracted by the fact that Michael Schumacher was the No 1 Ferrari driver. Both the Italian and UK representatives were also positive about the Jordan title proposal with total domination of the car's livery. Mr Haines and Mr Harris said in their own minds Jordan was slightly ahead at the time.
Jordan's 15 March letters
94. On 15 March Mr Jordan wrote to Dr Jung (Infineon) and Mr Sutherland. I do not think that was a coincidence following Mr Perring's e-mail of the previous day. The letter to Dr Jung informed him "on a confidential basis" "that we are very close to a major sponsorship deal with Vodafone". It recorded Mr Jordan's understanding that Jordan was in direct competition only with Benetton and that "a decision is due in ten days time". It also asks Dr Jung "perhaps cheekily" if he would "make a recommendation on behalf of Jordan to David Haines and Chris Gent".
95. The letter to Mr Sutherland stated that Mr Jordan understood Vodafone were "on the precipice of a decision between Jordan and Benetton; we expect to hear within the next ten days". It sought "any good reference to Chris Gent regarding Jordan...." Plainly Mr Jordan was aware of the importance of Sir Christopher Gent's opinion in any Vodafone Group decision.
96. The "understanding" that only Benetton was a competitor was plainly erroneous. Another e-mail from Mr Perring to Mr Harris recovered from the hard disks of Mr Harris' computer was sent on 15 March. It was intended to sabotage any proposal for title sponsorship of Benetton by suggesting Benetton's contractual arrangements precluded it giving Vodafone the lead name in the team and raising other concerns. It is, however, quite clear on the documents that Benetton was offering title sponsorship with a lead name and that in Vodafone's perspective that remained a live option both before and after 22 March.
Mr Jordan and Dr Jung
97. Mr Jordan said that following his letter to him, Dr Jung had telephoned on 18 March and told Mr Jordan that he had spoken to Sir Christopher who had confirmed that the choice of F1 team was "up to David Haines".. This is the conversation relied upon by Jordan in support of the "authority" of Mr Haines. Dr Jung's evidence was that he had spoken to Sir Christopher as requested and been told that Vodafone's F1 proposal was being prepared by a particular individual (he could not remember the name but assumed it was Mr Haines) and that once it was completed the Vodafone Board would then decide who to sponsor. He said that in any event it was not his understanding that the individual would bind Vodafone in any F1 deal and he "certainly did not subsequently say anything of the sort to Eddie Jordan". Dr Jung was a patently honest and truthful witness and I reject Mr Jordan's evidence.
The 19 March Livery
98. On 19 March Mr Perring sent Mr Phillips yet another design for the car. He expressed the hope that "it complies with other sponsor requirements and is beginning to look like a Jordan again". It is this livery which Jordan relies upon as the one which formed part of the "deal" on 22 March. It was a mix of substantially yellow and red. It drew the wholly unsurprising response from Mr Phillips the next day that he thought it was "probably too much like a Jordan!!" adding that it obviously suited Jordan perfectly well and he would still be prepared to develop design A2 "which may give David more of his stated dominant branding".. In his evidence, Mr Phillips nonetheless sought to suggest that as the design came from Brown he believed it came with Vodafone's approval. His own e-mail belies that. Mr Haines said, and the documents support him, that Jordan yellow was a contentious point throughout -which was never resolved.
99. The highest Mr Boyle put the matter of livery in his written closing submissions was that:
"By 19/3/01 it is submitted that it was clearly established that a livery acceptable to both parties had been arrived at. Obviously, the absolute final form of the livery would be a result of continued development. What was important was that livery was perfectly capable of agreement in a form which satisfied the requirements of Jordan and Vodafone. It followed from that that Jordan's proposal for title sponsorship now included a number of different designs which were acceptable to Vodafone so that the last core element of a Formula 1 contract was in place."
100. That submission considerably overstates the fact. It was not put to any Vodafone witness for comment. It in any event acknowledges both that livery was a "core element" of any agreement and that it was not agreed.
Mr Harris' Presentations
101. Mr Harris said, and I accept, that whilst in Atlanta (where he lived at the time) on Tuesday and Wednesday 20 and 21 March he prepared various drafts of a presentation building up to the meeting with Sir Christopher Gent now to be held on 21 March. Mr Geitner said he had never seen the drafts. Mr Harris said he did not in the event use parts of them. Again I am sure they are right about this as the final form of the presentation is in the papers. Mr Boyle placed some considerable reliance on tables included in the drafts which contained a points scoring system (in fact devised and provided by Mr Perring) for various attributes and the extent to which they were available from the four teams (Jordan, McLaren, Benetton and Ferrari) addressed. The tables prepared by Mr Harris resulted in Jordan scoring best and thus being "first choice", unless McLaren could provide title sponsorship. Mr Harris said he had prepared these tables but not used them in any presentation because he had decided that some of the attributes were much more important to Vodafone than others. Again, I unhesitatingly accept this evidence. Mr Harris indeed later prepared his own scoring table in his notebook (paragraph 146). Both Mr Harris and Mr Haines said that by this time they were not taking Mr Perring too seriously as he was obviously promoting Jordan. The terms of an e-mail dated 20 March from Mr Perring to Mr Harris and Mr Haines containing his assessment more than sufficiently bears out their views. It is also clear from the e-mail that Mr Perring knew no decision was to be made that week as he expressed a wish to debate the pros and cons with Mr Haines and Mr Harris "next week". Once again Mr Harris' drafts (like the final presentation) set out the process and chronology of Vodafone's decision-making starting with "approval of plan by Chris Gent & Board – March 26/April 12".
McLaren and title sponsorship
102. The reference to McLaren and title sponsorship was a reference to a very recent and very confidential proposal made by McLaren. Mr Harris (as his diary shows, and he and Mr Sami said in evidence) met Mr Sami on 14 and 20 March to discuss a McLaren title sponsorship proposal. It was very confidential because of McLaren's existing contractual commitments. The proposal led to an e-mail from Mr Harris to Mr Haines sent on 20 March which referred to a priced proposal for a 4 year deal. Mr Sami is said to have being willing to go to McLaren's board provided Mr Haines and Mr Harris agreed to propose McLaren as their recommended option to the Vodafone Board. Mr Sami is also recorded as insisting that the proposal should not be shared with Mr Perring or other external parties. Mr Harris, however, had told Mr Sami he would be given an answer "by noon" but he had stressed that Vodafone needed "to know for certain that" McLaren could "make this happen before we go to our Board".. Mr Harris said that the noon deadline was moved and it was arranged to meet again later. Mr Harris and Mr Sami both said, and I accept, that despite the recorded risk of an impasse as to who might first commit themselves, this was potentially an exciting proposal ("big on big") and they were looking at ways of trying to find solutions for some days. Indeed on 26 March at the Metropolitan Hotel in London Mr Sami made a presentation to Mr Haines and Mr Harris of possible Vodafone branding on the McLaren car. Mr Haines and Mr Harris said that it was only on 28 March that the proposal came to a halt, when Mr Sami came to Dusseldorf with another (in effect secondary) sponsorship proposal because it had been realised that title sponsorship could not be achieved.
103. It was part of Jordan's case that the McLaren title sponsorship proposal had been rejected by the time Mr Haines spoke to Mr Jordan and Mr Phillips on 22 March. Plainly it was rightly recognised that, if it had not, the likelihood of Mr Haines then making a binding agreement with Jordan was greatly reduced. The evidence, including the documents and the evidence of Mr Sami, overwhelmingly establishes that the proposal was still alive on 22 March and for some days thereafter and known to Mr Haines to be so. The consequence is as Jordan recognised. The basis for much of Jordan's cross-examination on this issue was a document which was dated to 22 March entitled "Vodafone/McLaren – Partnership Summary" which referred to Vodafone becoming "title partner (effective 2007)".. In fact that was a ruse to ensure the secrecy required for the proposal by McLaren. What it in fact does is further to demonstrate that the proposal was the subject of considerable continuing work on 22 March itself.
Gallaher 20 March
104. It was on 20 March that Mr Phillips wrote to Mr Jenner of Gallaher about their sponsorship agreement as I mentioned in paragraph 13 of this judgment. The letter refers to a conversation between Mr Northridge and Mr Jordan the previous day and was intended to clarify "our mutual criteria for extending our agreement".. In fact it is a classic stalling letter in effect saying that Jordan did want to extend the relationship along the lines discussed (plainly as a secondary sponsor) but needed first to explore the opportunities available to find a title sponsor.
105. On 21 and 22 March Mr Perring was engaged in preparation of a summary of the Benetton proposal. The "Team Name" was shown as "Vodafone Renault".. It is therefore apparent that the Benetton title sponsorship proposal was also being worked on on 22 March itself. Indeed as late as 17.13 on that day Mr Briatore's assistant was sending Mr Perring amendments he had made to the proposal.
106. It was, however, also a significant plank in Jordan's case, for the same reason as McLaren, that by the time of the 22 March telephone call between Mr Haines and Mr Jordan and Mr Phillips the Benetton proposal had also been rejected and Jordan was the only acceptable option available to Vodafone as Vodafone was committed to a title sponsorship and so Ferrari was also not acceptable.
107. The foundation of Jordan's contention about Benetton was a witness statement of Mr Paul Jordan (paragraph 19 above). In that statement he said that "on about 22 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. I immediately passed this information on to Ian Phillips at Jordan".. This statement was further expanded in a second witness statement dated 14 June 2003 in which Paul Jordan said he had spoken again with Mr Brezina "who remembers being told that Benetton would not be sponsored by Vodafone.. He does not recall who told him but that it was from a Benetton employee". Mr Paul Jordan also says he made a note of Mr Brezina's call to him which is written on the back of a note dated Thursday 22 March and before a draft prepared on the following Monday. There is indeed a note which reads "Vodafone Ted-B'TON No Deal – Gone to Jordan".. There is also a note in Mr Phillips notebook said to be of his conversation with Mr Paul Jordan which reads "Ted Brezina Charlie Perring leaked to Ted". That is curious if Mr Paul Jordan had been told Mr Brezina got his information from a Benetton employee. It is also curious that Mr Brezina should be told on 22 March by anyone that the sponsorship had gone to Jordan before Mr Haines had even spoken to Mr Jordan. Even Mr Perring did not believe any decision was made on 22 March.
108. It is not easy to comment on such second-hand evidence when it is flatly contradicted by the documents. There can sensibly be no dispute that Benetton remained a live possibility for sponsorship by Vodafone both at and after 22 March. Mr Perring himself was still working on it, although he did say that he was told by Mr Haines on 22 March that Benetton had been dropped. What I do think is likely and indeed is readily accepted by both Mr Haines and Mr Harris is that at this time they saw Jordan as a better prospect than Benetton and, though with less certainty, as a better prospect than Ferrari. But it is perfectly plain that no decision had been taken to reject Benetton and I reject Mr Perring's evidence that he was told otherwise by Mr Haines. It is however, I think, highly probable that encouraged by Mr Perring and their own efforts Mr Jordan and Mr Phillips may well have believed that Jordan was very much in pole position if not alone on the grid and that with a little bit more effort they could "get the deal".. Mr Perring acknowledged in his evidence that he was not aware of the level of discussions that Benetton were having separately with Vodafone but thought from his perspective that Benetton had been discounted.
Ferrari at 22 March
109. It is also clear from a further e-mail sent by Mr Perring to Mr Haines at 6.24pm on 22 March that Mr Perring had spoken to one of Ferrari's legal advisers about Ferrari sending a proposal and financial information to Mr Haines and that Mr Perring believed that Mr Haines and Mr Todt were in touch with each other on the subject.
Jordan at 22 March
110. Earlier on 22 March (at 11.06) Mr Phillips had sent Mr Perring an e-mail which converted the US$ figures in his 15 February "note" to sterling (including all the bonuses). Despite Mr Phillips' evidence that the bonuses had been rejected and his stated belief that they were in any event to come out of "another budget" it is apparent that insofar as there was any proposal from Jordan on 22 March the bonuses in the 15 February e-mail were and remained part of it.
111. There is a note in Mr Phillips notebook of a conversation he had with Mr Perring on 22 March which reads "used it to our advantage Red v. Orange us convert 15/2 figures to £".
112. It can therefore be taken that this note was written before the e-mail referred to in paragraph 110. A number of the e-mails recovered from Mr Harris' computer show that on 21 and 22 March Mr Perring was telling Mr Harris that Orange (one of Vodafone's major competitors) was unhappy with its sponsorship of the Arrows F1 team, was looking at other teams and had met with Jordan on 21 March. These e-mails also make it absolutely clear that Vodafone was still pursuing proposals from Benetton and that Mr Perring knew as much. Their target indeed was to drive Vodafone from Benetton to Jordan.
113. Anyone reading these e-mails, let alone someone of Mr Harris' experience, would at once realise that they were a naïve and crude attempt by Mr Perring to demonstrate to Vodafone that if it did not at once commit to sponsor Jordan then a major competitor might very well do so. The e-mail of 22 March was entitled "Red vs Orange" and so echoed Mr Phillips' note to which I have referred in paragraph 111 of the same date. The thrust of Mr Perring's thesis was that Orange would be happy for Vodafone to sponsor Benetton (in effect because Arrows would always beat Benetton) but would withdraw from F1 completely if Vodafone sponsored Jordan because Jordan would then always beat Arrows. Mr Perring also stressed that Orange were aware of the "limited window of opportunity" for it to agree to sponsor Jordan ("next Friday") because of Jordan's need "to re-commit to Benson & Hedges".
114. Mr Boyle submitted that it must have been apparent to Mr Harris and, through him, Mr Haines from this information that "Vodafone needed to make a decision at once on whether to commit to a deal with Jordan or risk losing Jordan to Orange in circumstances where the work done by Brown ... the previous day showed that Jordan was the first choice".. Hence, it was submitted, it was entirely understandable that Mr Haines would have made a binding agreement with Jordan on the telephone later that day and both he and Mr Harris must have deliberately chosen not to refer to Orange in their evidence because it would be bound to have been a significant factor in their thinking at the time.
115. I reject this thesis entirely. It simply cannot stand with the documents and commonsense. Further it is, I think, much more remarkable that neither Mr Perring nor Mr Phillips recalled the "Orange threat" when they made their witness statements and gave evidence unless, perhaps, as is undoubtedly the case (for reasons which will become apparent) Orange was not a subject which it was in the interests of Jordan to raise. The evidence of both Mr Jordan and Mr Phillips was that at this stage Jordan's discussions with Orange were limited to a musical arrangement with Mr Jordan personally, albeit Mr Jordan accepted he and Mr Denny of Orange had "touched on Formula 1" in their discussions. Mr Jordan thought Mr Perring must have got his information about Orange from Mr Marshall who had introduced Mr Jordan to Mr Denny. In his fifth witness statement Mr Phillips also expressed the belief that Mr Marshall was the source of Mr Perring's information about Orange. He said he was not. But Mr Phillips accepted that Mr Perring had telephoned him on 22 March and he had then made the note about "Red v Orange", but he said he did not ask Mr Perring to inform Vodafone whilst recognising it was obviously advantageous to Jordan Mr Perring should do so.
116. It is entirely credible that Mr Haines and Mr Harris would treat an e-mail such as this as further proof of Mr Perring's lack of objectivity and indeed naivety and ignore it. It is not credible that any company such as Orange would commit to a major sponsorship with Jordan in a matter of days let alone when they were already title sponsors of another team. Nor is it credible that Mr Haines and Mr Harris would believe that they would. Both were adamant and I am sure truthful in saying that they always made it clear that if Jordan needed to act it should do so without regard to Vodafone. They were not so naïve as to think that Vodafone needed Jordan more than Jordan needed Vodafone. Mr Perring and Jordan were, of course, also unaware that both Ferrari and McLaren were still well in the race as well as Benetton. The fact that neither Mr Haines nor Mr Harris mentioned Orange is, I think, strongly supportive of their views of Mr Perring and the likelihood that they simply ignored what he said.
AT 22 MARCH SUMMARY
117. At 22 March and before the telephone conversation between Mr Haines and Mr Jordan:
i) Everyone concerned at Vodafone (including Mr Kieser and Mr Perring) knew that Vodafone's decision on F1 sponsorship was due to be taken in mid-April. They also knew (as would in any event, in my judgment, be obvious) that the decision was to be taken by the board of directors and not by Mr Haines. I also think it probable that Jordan was aware of both matters not just as commonsense but also because Mr Perring would have been certain to tell them. Certainly it is documented that Jordan was not only told of the important role Sir Christopher Gent had in the decision but acted on it before 22 March.
ii) There were four teams under active consideration: Ferrari, Benetton, McLaren and Jordan. Jordan may have believed, encouraged by Mr Perring and Mr Paul Jordan, that Benetton was not a realistic contender. Jordan and Brown knew nothing about the McLaren title sponsorship possibility. Jordan, again encouraged by Mr Perring, may also have thought that Ferrari could not provide what Vodafone was seeking. Mr Haines' thinking on 22 March was, as he put it, "Jordan probably had their nose ahead" and was "the most likely partner" but no more than that. The Brand Council had not met since 15 March when Ferrari had been favoured.
iii) The only "proposal" from Jordan which existed was for a 3 year agreement at a total cost (including "appearance" bonuses) of $150m with further "performance bonuses" to be paid, all expressed in sterling, with a yellow and black car in the first year, with no options to renew, and with none of the detailed joint venture and intellectual property matters in a form which could even begin to be the subject of a binding agreement.
iv) In that context it is little short of inconceivable that Mr Haines, whatever pressure Mr Jordan might put on him, could have decided that day to commit to any contract with Jordan shutting out the other teams. To do so would have been to ignore Vodafone's corporate procedures and his own brief and to bind Vodafone to terms of material uncertainty and indeed which in the case of bonuses and colouration were known not to be acceptable. Of course the matter has to be looked at objectively and not by way of Mr Haines' motives or intentions. But that does not mean that it has to be looked at without regard to the factual context and some sense of reality.
THE 22 MARCH CONVERSATION
118. Mr Phillips' account is to be found (first) in paragraphs 105 to 113 of his first witness statement. He says Mr Perring spoke to him (after he had been told by Mr Paul Jordan that Vodafone had agreed to sponsor Jordan and not Benetton) and told him that Benetton had been dropped and to tell Mr (Eddie) Jordan to expect a call later in the day from Mr Haines "with some good news". He and Mr Jordan therefore expected to be told by Mr Haines that Jordan had the contract. The statement continues:
"107. At about 6.20pm David Haines called Eddie Jordan. We were sitting in my office waiting for the call. The call lasted approximately 10/15 minutes, it was on the loudspeaker and I heard what was said. Eddie Jordan started by extolling Jordan but he was cut short by David Haines who said,
"Eddie, stop, stop, you've got the deal".
I have read the defence regarding this conversation. David Haines certainly did not make the comments attributed to him. David Haines clearly told Eddie Jordan that he had the deal. By saying this it left no room for misunderstanding that the sponsorship contract had been awarded to Jordan.
108. We were thrilled to hear this and said it was great news and Eddie Jordan thanked David Haines for his confidence in Jordan. We expected the agreement would ultimately be replaced by a detailed written sponsorship contract along the lines of the draft already prepared and given to Charles Perring.
109. David Haines asked us to send a draft contract to Peter Harris saying "you can sort out the formalities with Peter". For reasons I have explained we had no doubt that David Haines had Vodafone's authority to conclude the agreement. We agreed with David Haines to keep the deal confidential for the time being for two reasons. First we wished to break the news to Gallaher in our own time and second we both wished to publicise the deal at the Monaco Grand Prix. As far as Gallaher were concerned, Eddie Jordan spent some time 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. David Haines acknowledged this was the correct approach and he would expect to be dealt with in the same way.
110. After concluding the agreement and discussing Gallaher, Eddie Jordan spent about five minutes discussing Vodafone's forthcoming meeting with Bernie Ecclestone. Eddie Jordan explained how he thought David Haines should deal with Bernie Ecclestone and that it would be helpful to be able to tell him that Vodafone were now Jordan's title sponsor. However it was accepted by Eddie Jordan and David Haines that the agreement would have to be kept confidential for the time being."
119. Mr Jordan's account in paragraph 31 of his first witness statement was to the same effect:
"31. I have read Ian Phillips' account of the telephone conversation with David Haines. This accords with my recollection. There is absolutely no doubt that David Haines told me we had the deal. There were no conditions attached to this statement. We were of course extremely pleased at this news. I telephoned Charles Perring to tell him and thank him for his help and spoke to Dominic Shorthouse. I told Ian Phillips that we needed to write to Vodafone to confirm David Haines' decision. We drafted the letter the following day."
Mr Phillips Note
120. Nothing more of substance was said about the conversation in Mr Jordan's second witness statement (dated 14 February 2003) nor in Mr Phillips' second statement of the same date or third dated 7 April 2003. In Mr Phillips' fourth witness statement dated 9 June he referred to going through his notebooks to identify "relevant notes" (albeit some of those notes had been referred to in his earlier statements). In paragraphs 4 to 7 of this statement Mr Phillips added the following:
"4. C8/1788-1790 are notes made by me and Eddie Jordan during the telephone conversation with David Haines on 22.03.2001 referred to at IP 107. I should like to amplify that conversation in relation to the manuscript notes. Eddie Jordan and I were sitting in my office opposite each other across my desk awaiting the call which Charles Perring told us to expect. While we were awaiting the call, I received a call from one of our drivers, Jarno Trulli. I opened my notebook at page 70 (C8/1790). The left hand page and the right hand page were both blank. I made a note of his name and telephone number on the left hand page (C8/1788). The remainder of the writing on that page is Eddie Jordan's who used one of my pens. Shortly after my call with Jarno Trulli, Eddie Jordan had a telephone conversation with Dominic Denny at Orange talking about a meeting he had had with his boss Denise Lewis. They spoke about the meeting in their London office at George Street in relation to a music and Formula 1 programme, a key issue being noted as Jordan. Eddie Jordan made the note as he talked.
5. Shortly after this we received the call from David Haines when he spoke the words "you've got the deal". Eddie Jordan had the notebook in front of him and had my pen. When David Haines said "you've got the deal", Eddie Jordan wrote the words "David Haines-do have".. I picked up another pen with a finer nib and pulled the notebook closer to me and wrote the words in quotation marks "you've got the deal". As a former journalist I am used to writing key notes of importance particularly quotes.
6. As Eddie Jordan had been writing on the opposite page and we were writing on fresh pages the carbon paper remained underneath the previous page. After writing the quotation Eddie and David started talking about the exit strategies with Gallaher and I took hold of the book and placed the carbon under page 70. As soon as Eddie and David started talking about the formalities of the deal they had made I made the further notes.
After the telephone conversation I drafted the memo to Dot using my broad nibbed fountain pen which Eddie Jordan had been using. After we left the office in our separate cars. I drove home to Piddington."
121. The importance of this evidence was (understandably) perceived to be such that in opening the case Mr Boyle put it right at the forefront of his submissions, producing the original notebook for inspection and emphasising Mr Phillips' stated experience as a trained journalist in "writing key notes of importance particularly quotes". Mr Jordan's third witness statement did not address the note. The note itself (at C8/1790) contains (above the draft memo to Dot) "Lawyers- David Haines -auditors, Bank, Warburg Pincus Credit Suisse/J Fuily – Peter Harris". Those words are also on the carbon. The words which are not on the carbon are "You've got the deal" and "contract, etc to Peter Harris".
122. Mr Perring's evidence in his witness statement was that by 22 March he knew Benetton had been rejected and "therefore made the assumption that Jordan would be selected because as far as I was aware now it was the only team in the running".. He said he had telephoned Mr Haines to say the teams should be told what the position was. He says Mr Haines told him that Benetton had been dropped and that he would be speaking to Eddie Jordan. Mr Perring said (as could hardly be gainsaid on the documents) that he "did not expect a deal to be done there and then" and (in the course of his oral evidence) that when told by Mr Jordan on 22 March that Jordan had the deal, whilst he was not surprised by the decision, he was by its timing. Importantly Mr Perring said he did not contact either Mr Haines or Mr Harris about Mr Jordan's call informing him about the deal.
123. In his first witness statement (18 December 2002) Mr Haines said:
"187. On the 22 March I attended the CEBIT trade fair in Hanover, Germany with my two colleagues Andy Moore (Consumer Insights Director at Vodafone) and Jost Schulte (Global Brand Manager at Vodafone). We drove the 3.5 hours from Dusseldorf to Hanover, it's about 300 kilometers.
188. Charlie Perring had called me at some point during that day on my mobile asking me to call Eddie. He wanted me to reassure Eddie that Jordan was still a contender for the Vodafone sponsorship.
189. I spent the return journey from Hanover on the telephone. We left Hanover around 4pm German time. A couple of hours after we set out on our way back, I got round to calling Eddie. I had made at least 17 calls before actually calling Eddie (including a fifteen minute conversation with Ekrem Sami). I attach a copy of my car phone itemised bill for 22nd March at DH 31. I was using both my car phone and my mobile.
190. It was dark, raining and there was heavy traffic. It must have been after 7 pm German time. I was in the back of the car with Andy Moore, whilst Jost Schulte sat in front of me. I was using my mobile phone, which kept breaking up and cutting the conversation off as we were going through hilly countryside.
191. In order to understand the context of the telephone conversation with Eddie, it is important to appreciate that firmly planted in my mind at the time of the conversation was the following:
a) Neither I, nor anyone from Vodafone had ever had a contractual discussion with any representative of Jordan and there were already very significant outstanding issues from the early meetings we had had ....
b) The telephone conversation with Eddie was just one of many. I had become used to Eddie badgering me – he called or asked to be called frequently ....
c) We were in the midst of the informal approval procedure with the Brand Steering Committee/Brand Council of the recommendations we were going to make to the EOIC. We had proposals from Ferrari, McLaren, Jordan and Renault Benetton. Certain members of the Brand Steering Committee had expressed a strong preference for Ferrari, but there were perceived problems with Ferrari, and the other teams (especially Jordan) were offering what appeared to be better branding packages. The matter was still up in the air and needed more discussion.
d) Decisions on which team to go with would not be taken until 4th and 5th April at the EOIC, GORC and Executive Committee meetings – as we had agreed with Sir Christopher Gent in February.
e) Peter and I were off to see Bernie Ecclestone in a couple of days to talk to him about Vodafone's involvement in F1.
192. When I actually spoke to Eddie, he seemed agitated, more pushy than normal and he repeatedly asked me where we were with the Jordan proposal.
193. As I did not know which way the decision would go with the EOIC, GORC and Executive Committee on the 4th and 5th April, I was keen to keep a number of options alive, including Jordan. I do recall using the phrase "We are getting very close" a number of times to Eddie. This to indicate that Vodafone were getting very close as the decision as to which team to pursue negotiations with was to be made on 4th and 5th April, but no decision had been made yet.
194. Eddie's reaction to this was to try and verbally push harder, he was really trying to pressure me. Whilst I understood why he would have been keen, I did not understand his heightened level of impatience at this particular time. I remember thinking that Eddie was not going to push me into a corner as he had tried to do (unsuccessfully) on 6th February with Gallaher.
195. In response to this verbal pressure I reiterated the same point using different language each time. I said, "the Jordan proposal is very interesting", and "Jordan are a very serious contender for the deal". I also recall at one point in response to his pressure saying things are looking good for a deal with Jordan.
196. I do not believe I said, "you have got the deal". I would not have given the impression in the telephone call that the deal was Jordan's, because it was not.
197. I did ask Eddie to forward me a draft contract so we could compare the standard conditions with the Renault Benetton contract that we had already requested (but never received).
198. Eddie offered to supply a list of his references. I was surprised at this as I knew who he was and I had not asked for or been offered references for any other team. The purpose of these references was unclear to me. I did not ask for clarification as I wanted to end the conversation and Eddie seemed to be winding up the telephone conversation. I think he felt he had got as much out of me as he was going to get.
199. I do not recall Eddie thanking me for our confidence. If he did, this would not be out of context as Jordan was in the running, one of four possible teams the Brand Steering Committee would consider as a recommendation to the EOIC, GORC, and Executive Committee.
200. From the entirety of the conversation it was crystal clear to me as it would have been to any observer that we had not just concluded an agreement to sponsor Jordan. It was simply the end of another telephone conversation. There was no excitement or any comments from Eddie that would have indicated he had concluded a huge deal. If anything, the conversation was somewhat brusque.
201. In fact, when the conversation ended Jost Schulte turned around and asked me when we expected to have a decision on Formula 1. I was still annoyed by Eddie's tone and manner and remember giving Jost quite a short and direct answer. I recall telling him in German "we are not that far, don't expect an immediate decision".
202. I did not discuss the conversation with Andy at all who was scribbling notes across from me."
Mr Moore and Mr Schulte
124. Both Mr Moore and Mr Schulte also gave evidence. Despite the fact that neither had been asked for their recollection until many months later both were patently truthful and careful in giving their evidence and also patently did recall the conversation. Both readily accepted that they were working on other things in the car and trying not to give the impression of eavesdropping on Mr Haines' conversations. Both found F1 interesting and heard references to "Eddie" and deduced that Mr Haines was talking to Eddie Jordan. Mr Schulte remembered Mr Haines using expressions like "it looks good" and "it is very promising". Neither remembered him using words to the effect of "you've got the deal" or anything similar. Mr Moore remembered Mr Haines using the words "we are getting very close". Mr Schulte said that whilst he could not exclude the possibility that Mr Haines did use the words "you've got the deal" they would not have fitted into what he did hear of the conversation or the brief reference to it between himself and Mr Haines after it had finished.
THE OTHER EVIDENCE
125. Before commenting on this evidence about the conversation on 22 March I will summarise such other significant evidence as there is about it.
Mr Jordan and Mr Harris
126. At 15.44 hours UK time on the following day (23 March) a letter was faxed from Mr Jordan to Mr Harris. Mr Harris was in Atlanta. Atlanta time is 5 hours behind UK time. The letter referred to an earlier discussion. That was a reference to a telephone call earlier that day in which Mr Jordan had told Mr Harris (to his surprise) that Mr Haines had agreed that Vodafone would sponsor Jordan or as Mr Harris put it in his witness statement "had got the go ahead for a deal". Mr Harris was non-committal and at once telephoned Mr Haines who was "shocked and horrified" and asked Mr Harris to write to Mr Jordan to clear up any misunderstanding.
Jordan's letter of 23 March
127. The letter signed by Mr Jordan, and with my emphases, read as follows:
"As you know I spoke to David yesterday evening and he confided in me of his decision.
The list of references David asked me to forward to you is attached.
You have already met my people who will work with you on the contractual and implementation issues, Ian Phillips and Mark Gallagher.
Ian is ready to take the draft contract through to conclusion; if you prefer we could have a Heads of Agreement ready next week.
Mark will co-ordinate the added-value technology programme and will contact you separately on this matter.
In anticipation of your meeting with Bernie Ecclestone next week, I did point out to David that a forthright approach usually pays best dividends in the end. I also suggested that there may be some advantage in delaying negotiations on future business until your identity as a title sponsor is known as the team will be able to personally assist you in achieving a better result."
128. Mr Harris agreed that it was likely that he e-mailed this letter on to Mr Haines when he received it. The reference to "the draft contract" was to the one referred to in paragraph 84 which Mr Perring had sent on to Mr Harris. Despite attempts to explain it away, the letter acknowledges in effect that whatever Mr Haines' "decision" matters had not even reached and would be required to reach at least Heads of Agreement. The reference to "Mark" was to Mark Gallagher and the "added value programme" was to be the subject of one of the schedules to the draft contract which was blank. The reference to Mr Ecclestone must I think be read as in effect saying better to see him only once you have signed up with Jordan. Indeed, and again despite his attempts to explain it, Mr Phillips' note of his conversation with Mr Jordan on the morning of 23 March makes that clear as do the earlier drafts of the letter he prepared and which are also to be found in his notebook. The earlier drafts are also revealing in other respects. The opening paragraph of an earlier draft read "As you know I spoke to David yesterday evening and I was extremely pleased to hear that we will have a relationship going forward".. I agree with Mr Aldous that even the letter as sent suggests an attempt to achieve a binding agreement as soon as possible rather than an assertion that such an agreement is already in place. The explanation offered for this was that the agreement was so confidential that it could not be revealed even to the typist. I think, in agreement with Mr Aldous' submission, that is absurd. The letter does assert a decision by Mr Haines and seeks to have a binding agreement concluded. To write that an agreement had already been made would add nothing and not adding it does nothing to keep the essential matter confidential.
Mr Phillips Note
129. Perhaps the most notable, indeed dramatic, exchanges in the trial came, however, when Mr Phillips was cross-examined by Mr Aldous about the contemporary note of the conversation on which Jordan placed so much emphasis. The transcript, understandably, does not fully catch the event. In short it became apparent that the all important words "You've got the deal" might not have been written contemporaneously rather than added at some unstated later time. The facts are stark. Mr Phillips made no reference to the note in any witness statement until 9 June, a week before the trial started, and nine days before he gave evidence. The account given there and repeated in the witness box was provided in minute detail bolstered by his journalistic experience in noting contemporaneously things of importance. But it was clear and accepted by Mr Phillips that other (and other important) passages in his notebook had in fact been added later to what were otherwise contemporaneous notes. That was demonstrated because they had not come through on the carbon. The elaborate explanation of why that was not so in the case of these four words was demonstrated conclusively to be false when Mr Phillips was asked to repeat what he said had happened at the time with the carbon in the witness box. It was demonstrated that the note could not have been made as he had stated. His final comment on what was a patently embarrassing experience for him was "You can reflect at any time and go back and add things; why not?" That has to be compared with his 9 June witness statement. The experienced journalist, as I find, failed to make a contemporaneous note about what was presented as the most important four words spoken in the conversation and indeed words which were said to be of enormous excitement and importance to Jordan itself at the time they were supposedly spoken.
Mr Harris' letter of 26 March
130. As agreed in their telephone conversation on 23 March, Mr Harris drafted a letter to be sent to Jordan. The letter is dated 26 March (a Monday) but was sent by fax on the morning of Tuesday 27 March. Mr Harris was having a heavy weekend. He flew from Atlanta to the UK arriving on Monday morning. The letter read as follows:
Thank you for your recent letter dated March 22, 2001.
I have shared your letter with David and we feel it is important to stress that we are still completing our final assessment against which Formula 1 team to potentially sponsor.
As you are well aware we are committed to making this decision in the very near future which is why we wish to work with your team on finalising the terms of a potential title sponsorship deal. However until final terms have been received from each team and until our Board approves such a decision we cannot fully commit to a partnership with the Jordan team or any other team at this time.
I will follow up with Ian and Mark on next steps but just thought it important to explain our current position with regard to a final decision.
We look forward to seeing you soon and wish you the best of luck in Brazil."
131. This letter has been subjected to minute analysis by Mr Boyle. He asks rhetorically why does it not deny what Mr Jordan was saying, why did neither Mr Haines nor Mr Harris immediately telephone Mr Jordan to put him right, why does it refer to a "final decision" as if acknowledging that Mr Haines had taken a decision. None of these points impress me at all. The position was not confrontational however it may now be seen. The letter was I think a polite way of disabusing Jordan of any misunderstanding and expressed belief in a context where it might well be that the decision would yet go in Jordan's favour. It also flagged, as Mr Jordan was said to be and I am sure he was "well aware", that the decision was due to be taken and taken by the board in the very near future. Mr Haines said he did not want to be badgered by Mr Jordan again and writing was, he thought, "the right thing to do".
Mr Phillips' e-mail of 28 March
132. On the morning of 28 March Mr Phillips sent a short e-mail to Mr Harris in response to his letter. It read (so far as material):
"Your letter to Eddie was received yesterday and understood. This is just to say that Eddie and I will be going to Brazil ... and that if you need to discuss any details of the proposal we are able to come to Dusseldorf at your convenience."
133. This response was only disclosed by Jordan following the court's order in April 2003 and was no longer available on Mr Harris' computer. The explanation for it offered by both Mr Jordan and Mr Phillips in evidence was that they had been assured that, in effect, Mr Harris's letter did not mean what it said and for so long as Jordan was to be awarded the sponsorship it was better not to take an aggressive stance by asserting that it had already been awarded the contract. Yet the response does not even refer to any telephone conversations let alone any understanding derived from them.
The "covering ass" note
134. There is another note by Mr Phillips which was made shortly after Jordan had received Mr Harris' fax and so probably on 27 March itself. The note is of a telephone call from Mr Perring. The top copy of the note (so far as material) reads "covering ass letter. No problem. David took decision last week – phone call. Peter Harris .... Complete deal + bonuses got to tie everything down...."
135. The words I have underlined were, as Mr Phillips accepted, added later. They are not on the carbon unlike the rest of the note. They look different. They are, again, one might have thought, the most important words spoken (if they were spoken) yet other matters were recorded at the time. Moreover, on Mr Perring's evidence (which I accept) that he did not think any decision had been made by 22 March and had not spoken to anyone at Vodafone about the 22 March conversation the added words cannot be attributable to him. I regret to say that once again I think Mr Phillips was untruthful in the evidence he gave about this. Read without the added words and on the basis that Mr Perring was expressing a personal opinion the note is hardly consistent with Jordan's case.
136. Mr Phillips' notebook also contains notes of a conversation with Mr Harris said to have taken place on 27 March following the conversation between Mr Phillips and Mr Perring. This note also contains material which it is accepted was added later. Mr Harris had no recollection of any conversation with Mr Phillips on that day. He was having an even busier day. He met Mr Briatore in the morning in London, flew to Paris to meet Mr Todt and then back to Dusseldorf in the evening. So far as material, and again with the words added later underlined, the note reads:
"Chris Gent meeting Wednesday. Not delaying. Lot of money, lot of people internally who have to be convinced. J has a lot of support. Looks good for you. Letter was if you've got to move you must"
137. This note both in its original and additional form is substantially consistent with Vodafone's evidence and case. It is not consistent with the 26 March letter meaning anything other than what it said. It also fits with the response to that letter which Mr Phillips sent. It is notable that neither in this note nor his e-mail of 28 March does Mr Phillips record surprise nor assert that Jordan already had a deal. The reference to "if you've got to move you must" is a reference to Gallaher. As I have already mentioned (paragraph 116) Mr Haines and Mr Harris both said that whenever Jordan raised in conversation the need for an early decision by Vodafone because of Jordan's need to meet a deadline with Gallaher (or otherwise) their reaction was that Mr Jordan should not let the Vodafone prospect stand in the way of doing whatever they had to do. Mr Phillips' evidence was to the precisely opposite effect: he said he was told on this occasion that if he had to tell Gallaher that it could no longer sponsor Jordan because Vodafone had agreed to do so then he should do just that.. I have no doubt at all that Mr Haines and Mr Harris evidence is to be preferred. The note itself supports them. So does the letter. What happened (and did not happen) with Gallaher thereafter puts the matter beyond doubt.
138. Mr Jordan also said he spoke to Mr Haines on 27 March about Mr Harris' letter. Mr Jordan said he was "perplexed and very annoyed" about the letter but decided "confrontation was not the answer." He says Mr Haines told him that Mr Harris had been concerned about the 22 March conversation and that he thought Mr Haines had "jumped the gun." Mr Jordan's first witness statement (paragraphs 32 and 33) continues:
"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 it was his programme and his responsibility. He said he would discuss the matter at a board meeting the following Tuesday and that he did not want any paperwork showing that a decision had been made. I was reassured by this conversation."
139. Mr Haines recalled having a conversation with Mr Jordan after 22 March but said that he would have said nothing to undermine the substance of Mr Harris' letter which he had asked Mr Harris to write nor to claim that any decision was his to make. Again, I unhesitatingly accept what Mr Haines says. He and Mr Harris were in the process of preparing their recommendations at the time, starting with a Brand Steering Committee meeting to be held on 29 March.
140. There is a handwritten note made on 28 March by Jane Graves (a secretary to Mr Jordan) which reads "Vodafone – decision tomorrow by the Board. David Haines – Global Director, confidentially told EJ and IP –JGP are the one – not rubber stamp by board. Letter advising jumped the gun".. The same note refers to Mr Jordan having had a meeting with Denise Lewis, a senior executive of Orange. These notes were taken at a Jordan Executive Meeting attended by Mr Jordan and others and (part time) Mr Phillips. The typed-up notes made no reference to Orange but for "action" by Mr Jordan recorded "Vodafone team choice decision to be made 29/03 by Vodafone –JGP have been confidentially told this just needs to be rubber stamped by the Vodafone Board meeting on Weds 4th April". The contrast with the handwritten note and Mr Phillips' note of his conversation with Mr Harris remains without satisfactory explanation. Nor does the meeting appear to have been characterised by such confidentiality that Mr Haines' "decision" could not be mentioned.
141. It was also a significant part of Jordan's submissions that there was an explanation for Mr Haines' change of mind shortly after 22 March away from Jordan. First, there was a telephone conversation on 23 March in which Mr Todt called Mr Haines and was told that Mr Harris would be formally joining the Vodafone team in April and it was agreed that Mr Harris and Mr Todt should meet on 27 March in Paris. Second, the meeting with Mr Ecclestone (arranged by Mr Briatore) duly took place on 26 March in London when he gave a strong recommendation that Vodafone should sponsor Benetton and mentioned that Ferrari would not be a bad option either. These activities, it was suggested, affected Mr Haines' eagerness for Jordan and so when Mr Haines and Mr Harris met in Dusseldorf on 28 March to prepare for the 29 March meeting of the Brand Steering Committee they decided to recommend the "small on big" option with Ferrari rather than a "big on small" option with Jordan. Whilst such a thesis may merit the description "inventive" it does not stand up to even modest examination. Both Benetton and Ferrari were in any event serious contenders. But even if it were true and even if it helped to explain the 26 March letter, the fact is that letter was sent and received and acknowledged and Jordan's case that Mr Haines and Mr Harris in subsequent telephone conversations then said in effect that the letter did not mean what it said becomes even more improbable.
CONCLUSION ON THE 22 MARCH TELEPHONE CONVERSATION
142. I have no doubt that Mr Haines' account is to be preferred to that of Mr Jordan and Mr Phillips. No sensible objective observer could reasonably have thought that any binding commitment was made by anything which was said or that Mr Haines had made any decision let alone that Vodafone had. I am sure Mr Jordan was pushing hard. I do not doubt he thought he was on a winner. He may even have indulged in wishful thinking. But not even the rudiments of a "deal" in the sense Jordan seeks to use the word had been established at the time. Nothing had even reached the stage of what could be described as Heads of Agreement and even Mr Jordan's letter recognised both that fact and the need at least to have agreed such a document. But I also think and find that Mr Haines did not even use the words "You've got the deal" at least in the context or sense on which Jordan relies. Had he done so Mr Phillips would indeed I think have noted them at the time rather than or in addition to the somewhat bland information he did record and the subsequent correspondence and references to the conversation would not have taken the form they did.
143. What happened after 22 March is itself also wholly inconsistent with any binding commitment and indeed with any belief on the part of Jordan that such a commitment had been made.
Brown's status report
144. Dated 23 March Tempus (Brown) prepared a document which was a "status report" on the Vodafone global brand exercise. Mr Perring, Mr Dart and Mr Kieser were addressees, as were Mr Haines and Mr Harris. It was recorded that negotiations were progressing with four teams with a recommendation scheduled for April 5. The text included the statement "Tempus Partners have been in discussion with Ferrari, McLaren, Jordan, Renault (ie Benetton) and Toyota to determine the best package of rights for Vodafone, and have subsequently narrowed their focus to three teams, namely Ferrari, Jordan and Renault".. Brown was of course unaware of the McLaren title sponsorship proposal. The suggestion that Benetton had been rejected on 22 March is unsustainable. Indeed on 28 March sample Benetton/Vodafone liveries were still being produced in draft presentations and Mr Perring was sending Mr Harris a copy of this Tempus document. The thrust of the document was, it is true, wholly slanted in favour of Jordan.
Orange and Jordan
145. On 28 March Denise Lewis of Orange wrote to Mr Jordan, following a telephone conversation held that day and a meeting, to thank him for his interest in Orange "and for the opportunity of discussing how we might work together in the future".. The letter stated that nothing could be achieved because "Orange does not break a contractual bond". That was a reference to Orange's sponsorship contract with the Arrows F1 team which, provided Arrows scored a single championship point, would continue into the 2002 season. The letter added "I would love to keep talking, but understand that you must now move forward with other parties". If Mr Jordan seriously believed he had a contract with Vodafone he could and would not have had any discussions with Orange. In fact the discussions continued and intensified after this letter. Mr Jordan and Mr Phillips' explanation that they could not terminate the discussions without Orange deducing that a deal had been done with Vodafone and they had agreed to keep that confidential defies reality and, as will be seen, is unsustainable in the light of the documents. Mr Phillips' evidence that everything that happened with Orange was in any event a waste of time and effort because no agreement could ever have resulted from it also did him no credit.
Mr Harris' presentation
146. Mr Harris' presentation for the internal meetings at Vodafone was finalised with Mr Haines on 28 March. It put forward the two options "small on big" and "big on small". Small on big was between Ferrari and McLaren. Big on small was between Jordan and Benetton. Mr Harris' notebook shows that at about this time he had prepared his own "score sheet" against just four criteria (Mr Perring had many more) which were media exposure, TV race coverage, Vodafone presence and "market buy-in" (a reference to the operating companies). On that score sheet Ferrari came first, McLaren second, Benetton third and Jordan fourth. Ferrari was the recommended team with Jordan and Benetton named as alternatives. "Next steps" included "an approval of plan by Chris Gent & Board April 4/April 12".
Brand Steering Committee
147. The Brand Steering Committee met on 29 March. It was an all day meeting on the branding project as a whole of which only about 20 minutes at the end of the day concerned F1. The objective was to agree on the final presentation and recommendations to be made to the EOIC, GORC and Executive Committees for their meetings on 4 and 5 April. Mr Haines said and I accept that the Brand Committee decided to recommend the "small on big" option with Ferrari overwhelmingly preferred to McLaren. That was also the conclusion Mr Harris and Mr Haines had advanced in the presentation.
The Mastercard letter
148. Albeit unaware of the precise details of Vodafone's internal processes, Jordan was aware of and alive to the importance of internal meetings at Vodafone on 4th April and Mr Jordan set about mustering support where he could. The terms in which he did so are revealing.
149. Mark Gallagher drafted and agreed with Mr Jordan a letter to be sent by Mastercard to Mr Haines. Mr Gallagher (and Mr Jordan's) objective was plainly that the letter should be sent prior to Mr Haines' meeting with Sir Christopher Gent on 4 April. The draft letter begins: "I understand from Eddie Jordan that there is a possibility of Vodafone working with Jordan in Formula One. We would welcome the opportunity to work with you...." In my judgment these words were wholly accurate. They are not, of course, consistent with an existing contractual commitment by Vodafone with Jordan. Mr Jordan's attempt to explain them was close to unintelligible. Mastercard sent the letter without alteration to the first sentence. It was Jordan's pleaded case, in paragraph 21 of the Reply, verified by Mr Phillips, and dated 9 May 2002, that this letter had been suggested by Mr Phillips to Mastercard at the time of the Malaysian Grand Prix and that its terms "reflect matters between Jordan and Vodafone as they stood on 18 March 2001 and not as at 3 April 2001".. That was untrue. E-mails disclosed following the Court's Order in April 2003 show the letter was drafted by Mark Gallagher over the weekend of 30 March/1 April and agreed by him with Mr Jordan at that time.
EOIC and GORC
150. Vodafone's EOIC (paragraph 8) met on 4 April. The minutes record that "the team's recommendation was for either Ferrari or McLaren" and it was agreed to present the matter for decision by the Executive Committee. The McLaren proposal before the EOIC was for secondary sponsorship. The GORC met later in the day (with many of the same members as the EOIC) and the EOIC's recommendation was noted without comment. Mr Haines left for a holiday immediately after this meeting, returning to work on 16 April.
Mr Jordan's Knowledge
151. Mr Kieser's evidence was that probably on 4 or 5 April he was telephoned by Mr Jordan who sounded very concerned and said that he had information that Vodafone had decided in a meeting that day that Ferrari was first and Jordan second. Mr Kieser was in Stuttgart on business and had no idea what had been decided and asked Mr Jordan how he knew. Mr Jordan replied "I know everything, I already know".. Mr Kieser says he called Mr Haines who was flabbergasted but confirmed that the EOIC would recommend Ferrari to the Executive Committee. Mr Haines evidence is to the same effect. It also has the strong ring of truth.
Executive Committee Decision
152. The Executive Committee met on 5 April. The presentation was made by Mr Geitner and Mr Harris. The Minutes of the Committee's decision read:
"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."
Jordan at 5 April
153. It is apparent from some notes made by Mr Phillips that, probably on 5 April, at Mr Kieser's request, made in his conversation with Mr Jordan, Mr Phillips prepared a "Ferrari versus Jordan" document to promote Jordan in that contest. He had been told by Mr Perring that Mr Harris was due to visit Ferrari at Imola the next week and that Vodafone wished to explore what Ferrari had to offer. The document points out (rightly) that Ferrari could not offer title sponsorship, (less accurately) that Ferrari could not offer dominant branding because of the presence of Marlboro and Shell and (rightly) that Ferrari could not offer "perceived ownership" and their title sponsor was the world's biggest tobacco brand. There is also a reference to "the joint-venture technology side" which Jordan was led to believe was important and had a team ready to discuss but "nobody has taken up our offer to explore this in detail".
154. The document puts forward a strong argument for Jordan. But it is not consistent with a "deal done" and demonstrates plainly that Jordan knew at this time where the main competition was to be found. Indeed both Mr Phillips' notes and the typed version make reference to the alleged challenge "to commit ... for $150m there and then and we had a deal" which is plainly a reference to the 6 February meeting. Yet neither refer to any conversation let alone an actual "deal" on 22 March. That is remarkable if Mr Phillips and Mr Jordan's recollection of that conversation was accurate and can hardly be explained by a wish not to be confrontational. Mr Jordan sought to explain the document on the basis that Mr Kieser (unlike Mr Perring) could not be told of the agreement with Vodafone made on 22 March. Mr Aldous described that evidence as "crass". I agree.
155. Mr Phillips sent an e-mail to Mr Harris at 12.57 on 5 April referring to the presentation to Vodafone's board on April 4. This was also disclosed only pursuant to the Court's Order in April 2003. Mr Phillips asked: "Anticipating that Jordan's proposal may have been a part of your presentation and without being too presumptuous, could I ask you to let me know what the position is going forward?" Mr Phillips referred to pressure from Gallaher to renew "plus our other partners like Honda, Mastercard, Siemens and Deutsche Post who have provided evidence of their willingness to co-operate with Vodafone and are as anxious as we are to work with a non-tobacco company".. There was no written response to this, but also on 5 April Mr Phillips has a note of speaking to Mr Harris. His note reads "Cannot tell you very much in the frame solid position decision within 2 weeks".
156. Mr Boyle was very critical of this. He said Vodafone was just stringing Jordan along when a decision to sponsor Ferrari had been taken that day rather than coming clean and saying they had gone back on "the deal" and were now moving ahead with Ferrari. Mr Harris could not remember any conversation with Mr Phillips on 5 April. Indeed he thought it unlikely there had been one as he went straight from the presentation in Newbury to the airport to fly to Atlanta. Nor did he expect the negotiations with Ferrari to be concluded in two weeks. Even assuming a conversation took place of the nature recorded I do not accept the criticism. There was no guarantee that an agreement could be successfully negotiated with Ferrari, Mr Harris was due to meet Ferrari at Imola, and Jordan was indeed seen as a real option in the event agreement could not be reached with Ferrari. As will also be seen, Jordan was not in any way prejudiced by not being told more. Of course, Mr Phillips' e-mail and note are not consistent with any concluded agreement.
157. On 5 April Gallaher (Mr Jenner but copied by him to Mr Northridge) wrote to Mr Phillips referring to a meeting they had had on 1 April. Mr Jenner thanked Mr Phillips for explaining Jordan's current thinking and plans regarding sponsorship for 2002/3 "in light of our decision to seek a lower level of sponsorship during next year and beyond". Mr Jenner was "encouraged" that Jordan wished to continue the relationship along the lines previously discussed and recorded agreement "to meet to formalise matters and agree next steps on or before 30 April".. This letter was first disclosed by Jordan on 5 June 2003, as was Mr Phillips' reply which read: "we will of course keep you fully informed of developments which I hope will materialise over the Imola weekend leaving us clear to finalise our discussions by the end of the month".
158. Mr Phillips' explanation of these letters, even with the admission that he was telling "porky pies" in saying Jordan wished to continue the relationship, was remarkable. He said it was only appropriate for Mr Jordan to break the news to Mr Northridge face to face that because Vodafone had agreed a fortnight earlier to sponsor Jordan Gallaher would no longer be able to sponsor Jordan at all because of Vodafone's perceived (by Jordan) aversion to any association with tobacco. As an explanation for this elaborate dance this is close to absurd. Nor was it true.
9 April Jordan management meeting
159. On 9 April Jordan held a management meeting which was attended by Mr Phillips. The Minutes of the meeting were not disclosed but were discovered on 14 July 2003 held on Jordan's computers. The Minutes record:
"Vodafone – JGP are still awaiting a response we know the decision will be between JGP and Ferrari.
B&H have been stalled until the end of the month. Nigel Northridge will be at Imola. IP to discuss with EJ."
160. That, I have no doubt, was the truth. Mr Phillips said he was anxious not to reveal to others who were present at the meeting that a deal had actually been done with Vodafone and in any event he was confident that Jordan would win any contest with Ferrari.. The reference to Gallaher, he repeated, was because of the need to treat Galaher correctly by Mr Jordan talking to Mr Northridge. I simply cannot read the document in the context in the way Mr Phillips sought to explain it. Gallaher had indeed been stalled by Jordan until the end of the month, that is to say until after Imola.
Jordan's Strategic Review Update
161. Jordan disclosed after the first day of trial an internal document which was prepared on 12 April entitled "Strategic Review Update". The document includes (with my emphases) the following passage:
"Following our discussions in Malaysia and Wada-san's (Honda) helpful letter of support discussions are progressing with Vodafone for a three year $150m title sponsorship beginning 2002. We understand that Vodafone's options have narrowed to Jordan and Ferrari and that a decision will be made at the end of April. We have kept Benson & Hedges (ie Gallaher) abreast of the position and in any case have asked them to relinquish the title for 2002 as it is realistically beyond their budget .... If we are successful with the Vodafone proposal operational costs for the next three years are covered ...."
162. A draft of this document is in Mr Phillips' notebook. It also belies two matters which are fundamental to Jordan's case and evidence:
i) That any agreement for Vodafone to sponsor Jordan had already been made and that Jordan believed it had;
ii) That Jordan had any interest in Gallaher as a title sponsor and proposed to tell Gallaher at Imola that their sponsorship was no longer wanted in any form.
163. Mr Phillips again attempted to explain the first of these (as with the discussions with Orange) on the basis that the agreement with Vodafone was so confidential that it could not be referred to. Mr Jordan said that he did not know why the Update was prepared, did not know who wrote it and he had never seen it: "I can promise you I have never written or seen this document before". Amongst the documents found on Jordan's computers was an e-mail sent on 13 April which referred to a letter from Mr Jordan to Mr Fukui of Honda which enclosed the Update. Mr Jordan said, nonetheless, that even if (and no copy could be found) a letter had been signed by him enclosing the Update he thought it highly unlikely he would have done more than sign it. The Update was not the sort of document he would read.
The San Marino Grand Prix (Imola)
164. The San Marino Grand Prix was held at Imola over the weekend of 13 to 15 April. Remarkably, both Mr Jordan and Mr Phillips say that it was at Imola that Gallaher (Mr Northridge) was told by them that Vodafone had agreed to sponsor Jordan in place of Gallaher and that Gallaher could not even be a secondary sponsor because Vodafone did not want an association with a tobacco company. Indeed that is Jordan's pleaded case and the basis of the claim for loss in the alternative claim. Mr Jordan said Mr Northridge "took it well and said he was pleased for Jordan" but Mr Jordan himself found it "a difficult conversation".. Mr Phillips said he met Mr Northridge later and confirmed the same to him. In the light of the minutes of the 9 April management meeting and the Strategic Review Update and Jordan's knowledge of Vodafone's interest in Ferrari these statements make no sense at all. Jordan knew, as the Strategic Review Update shows, that no decision would be made by Vodafone before the end of April and knew the decision lay between Jordan and Ferrari. Indeed Mr Phillips made a note of a telephone conversation with Mr Perring held between 15 and 20 April recording "not as forlorn as we thought, merely confirmed what V want from Ferrari. Undeliverable v. high price".. It would have been both untrue and commercially stupid to tell Gallaher in mid-April that Vodafone had agreed to sponsor Jordan and so Gallaher's sponsorship was no longer required at all. Neither Mr Jordan nor Mr Phillips are in my judgment commercially stupid. It is also a matter of legitimate comment by Vodafone that no witness from Gallaher was called to give evidence. The truth is, as I have said, to be found in the 9 April minutes. Gallaher was being stalled by Jordan and was not told of any agreement by Vodafone either at Imola or at all. The 17 April minutes of Jordan's management meeting record "no change" from 9 April. Moreover it was not just the continuing prospect of an agreement with Vodafone if Vodafone could not reach agreement with Ferrari which made it in Jordan's interests to stall Gallaher. Orange was very much in Jordan's sights at this time also and Orange and Gallaher were not even thought by Jordan to be incompatible as sponsors.
165. The documents plainly demonstrate that at this time and after Imola Jordan was pursuing title sponsorship proposals with Orange. Both Mr Phillips and Mr Jordan were involved. Mr Denny, the head of global corporate articulation at Orange (junior to Denise Lewis) acted for Orange. It is some measure of both Mr Phillips and Mr Jordan's conduct that Jordan's late disclosure included a fax letter from Mr Jordan signed by him to Mr Denny dated 20 April which included (with my emphases) the following:
"I felt that our meeting yesterday was very positive and clearly confirmed to me that there is a great and exciting synergy between Orange and Jordan.
Obviously I respect the Board's decision with regard to their current contractual obligations however I believe that there are some options to consider which could lead to a long term future between our two companies.
Orange to purchase the rights now to a full title sponsorship package for 2003, 2004 and 2005.
By doing this Orange would eliminate Vodafone's opportunity of title sponsorship with a leading team (Ferrari, Jordan, McLaren and Williams would no longer be available).
Orange to purchase an entry level branding package for 2002 at a favourable rate, sharing with Jordan's existing partners.. We envisage the title could be part of this initial programme.
This option causes no conflict with Arrows but does however through Jordan secure Orange's future with a motor manufacturer backed team. This also gives a great opportunity for long-term planning of the campaign and allows our faithful long-term supporter to exit with dignity and conveys a very positive PR message. It also offers an opportunity for joint collaboration with existing sponsors such as MasterCard, Honda, Deutsche Post and Siemens/Infineon.
We have already discussed costs which would be in the region of £12 million.
Finally, and possibly most importantly, I do believe we have a unique opportunity to blend the elements of your two major promotions, Formula 1 and Music, into a vibrantly powerful partnership with which to dominate the media.
Thank you again for your time yesterday and I look [forward] to talking to you Monday. "
166. Mr Phillips could offer no explanation for this document consistent with Jordan's case. Mr Jordan at first said it was never sent or delivered to Mr Denny "because I did not ever intend Mr Denny to have it". He based that on Mr Denny saying he had not received it. But an e-mail found on Jordan's computers showed that not only was it sent but it was amended to seek to correct a slight typo which appears on the copy signed by Mr Jordan. Mr Jordan accepted therefore that it was sent. It leaves little doubt as to who was pursuing whom, and at a time when on Jordan's case it had and believed it had an agreement with Vodafone. The reference to Vodafone in the letter can hardly stand with any suggestion of confidentiality. Moreover the "faithful long-term supporter" had not yet, it would appear, exited with dignity. That must be a reference to Gallaher. Indeed documents prepared by Jordan show that for 2002 it was envisaged that Gallaher would remain as a secondary sponsor if Orange became title sponsor.
167. The exchanges between Jordan and Orange at this time included the preparation by Mr Phillips of schedules showing what parts of the car and clothing could be available to Orange and Gallaher and ideas for a secret agreement to shut out Vodafone and keep Arrows in ignorance. At the time Arrows had yet to score a championship point. There were also negotiations for DP to become title sponsors of Jordan in late April and early May and Mr Perring was keeping Mr Phillips up to date with what he knew of Vodafone's negotiations with Ferrari. A document (disclosed on 11 July 2003) dated 2 May 2001 further demonstrates that contrary to Mr Jordan's evidence it was Jordan which was making the running with Orange and continuing to use the argument that if Orange agreed "now" to purchase the rights to title sponsorship of Jordan for 2003-5 it would alleviate "any problems with existing Orange contracts and effectively prevent Vodafone from acquiring title rights with any of the top 5 teams". The reference to "existing Orange contracts" was a reference to Orange's sponsorship of Arrows. In fact even when Arrows did score a championship point on 13 May, Jordan continued to seek an agreement with Orange. As Mr Aldous submitted, Mr Phillips' attempts to explain the Orange documentation became increasingly absurd. Mr Jordan first claimed not to have pursued any negotiation or discussion of title sponsorship with Orange at all. Faced with the late disclosure he maintained that there were never any substantive negotiations but "preliminary and exploratory discussion did take place" which was never likely to lead anywhere. It is readily apparent from the documents that this evidence was untrue.
The Pelham Hotel
168. On 23 April there was a meeting at the Pelham Hotel in London between Mr Jordan, Mr Haines, Mr Harris, Mr Kieser and Mr Dart. Yet again, there is a conflict of evidence about what was said.
169. Mr Jordan's first witness statement (paragraph 37) said:
"I briefly met David Haines, Peter Harris, Joe Kieser and Peter Dart at the Pelham Hotel in London. I think they were there for a function and I had been asked to meet David Haines. I told David Haines that I had heard a rumour that Ferrari might be being considered by Vodafone notwithstanding our agreement. His response to me was:
"they cannot deliver what we need, just have faith – you are the only ones."
170. Mr Haines said the meeting was arranged at Mr Kieser's suggestion after Mr Haines' return from holiday on 16 April because Mr Jordan had been calling Mr Kieser regularly to see what was happening. The date of 23 April was agreed because it was a day when Mr Haines was due to be in London anyway. When they met Mr Haines said Mr Jordan was "agitated" and they had told him "what apparently he already knew, that the Vodafone sponsorship was Ferrari's to lose, but that Jordan was still an option if Vodafone could not deliver the Ferrari sponsorship deal".
171. Mr Haines' account is fully supported by both Mr Harris and Mr Kieser. All three say that at no time (despite the fact, as each also says, that he became very angry and rude) did Mr Jordan claim that there was any agreement with Jordan let alone that Vodafone or Mr Haines were breaking any agreement. Nor did Mr Jordan say that he had terminated negotiations with Gallaher because of any deal with Vodafone. Mr Jordan's evidence was that Mr Haines had spoken to him when they were on their way out of the hotel on their own together and he had not spoken in front of everyone else "because it was confidential" and "he had no idea who Mr Haines had told".
172. I am sure that Mr Haines, Mr Harris and Mr Kieser were telling the truth about this meeting. The notion that on 23 April Mr Haines could have been giving further assurances to Jordan is totally out of context and fantasy. I am also sure Mr Jordan was very angry and rude which is a curious reaction if such an assurance was to be sought let alone if one had been given.
The Ferrari Letter of Intent
173. On 10 May Vodafone's Executive Committee considered the current state of the negotiations with Ferrari and resolved to pursue them subject to one matter, which if it could not be resolved, was to bring the negotiations to an end, in which event "a deal" would be sought with Jordan. The next day Mr Geitner and Mr Montezemolo of Ferrari signed a letter of intent which was expressly "subject to contract".. It incorporated a substantial document setting out the rights and benefits to be granted to Vodafone.
The Ferrari contract
174. By 15 May Mr Jordan was writing to Mr Sutherland that he thought it "inevitable" that Vodafone would go with Ferrari. By 22 May Vodafone's board minutes recorded the expectation that it would sign a sponsorship agreement with Ferrari on 25 May prior to the Monaco Grand Prix. Even at this date, however, the Ferrari agreement had not finally been resolved. By 25 May it was and the agreement was publicly announced.
Mr Jordan's boat at Monaco
175. Before the announcement was made Mr Haines and Mr Harris saw Mr Jordan and Mr Phillips on Mr Jordan's boat in Monaco harbour. There is a further dispute about what was said on this occasion. Mr Jordan and Mr Phillips say (putting it shortly) that Mr Haines and Mr Harris were contrite and Mr Harris at least acknowledged Jordan had earlier been told they had a deal. Mr Haines and Mr Harris say it was Mr Jordan who was blaming himself for "opening his big mouth" too wide and too early. There is a measure of agreement both that Mr Jordan expressed concern because he had told other sponsors that he had a deal with Vodafone and so had some explaining to do and that Mr Haines agreed to help him with his sponsors in any way he could. It follows from my earlier findings that I think Mr Haines and Mr Harris account is much to be preferred.
176. On 30 May Mr Phillips wrote to Mr Jenner "further to your letter of 28 February and our subsequent discussions" to confirm that Jordan was happy to enter into a contract with Gallaher for 2002 whereby Gallaher "will be the principal secondary sponsor in consideration of a sponsorship fee of £10 million. I would anticipate that Jordan ... and Gallaher will enter into a new contract based on the proposals discussed by you and I on 13 February 2001".. The letter suggested preparation of Heads of Agreement followed as soon as practicable by a full contract. Mr Jenner sent a reply by e-mail on 1 June agreeing to proceed on the basis Mr Phillips had outlined. There is no information (apart from a short handwritten note of Mr Phillips) before the court which describes "the proposals" in February for which Gallaher would pay £10 million. They would of course have been different to those for title sponsorship. Had Jordan told Gallaher at Imola some 6 weeks earlier that Gallaher was not to continue as a sponsor at all because Vodafone was to become title sponsor I do not think this letter could sensibly have been written in the terms it was. It is consistent with Jordan stalling Gallaher. Further had there been any prospect of Gallaher resuming as title sponsors it could have been expected that this letter would have raised it.
The 1 June Letter
177. On 1 June Mr Jordan dictated a letter to Mr Haines. Mr Phillips had drafted it. It reads (with my emphases):
"I appreciate that you and Peter took the time to speak to Ian and myself before your announcement in Monte Carlo, even if the F1 grapevine had told us some weeks before of your intentions...
As I told you in Monaco your final decision has left Jordan in an unenviable position.
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 6.20pm confirmed this when you categorically stated 'you've got the deal' My letter to Peter of 23 of March, on your instruction, reflected this.
Naturally I informed my partners who had taken the trouble to contact you, Honda and MasterCard, and Dr Jung Chairman of Siemens/Infineon, who had spoken to Chris Gent, of what I believed to be your decision.
There was also further embarrassment and potential long term damage to our relationship with Deutsche Post when Professor Schukies was shown an all-red 'Jordan' on a visit to Thomas Geitner at your offices in Dusseldorf.
As offered by you in Monaco, I would very much appreciate an open letter from you to me explaining your position fully which I can use to try to redress the unfortunate position in which I and my company now find ourselves with our partners."
178. This is the first occasion on which the words "you've got the deal" had been referred to in any open document. The letter itself makes clear that Jordan had known for "some weeks" that it had lost out. Most remarkably, in the context of this claim, whilst the letter asserts that various of Jordan's sponsors had been told that Jordan was to be sponsored by Vodafone (despite the supposed confidentiality) and refers to embarrassment with DP, the one sponsor which is not referred to is Gallaher which is said to have been so upset that when approached cap in hand by Jordan later only a reduced sponsorship amount was available. Moreover Dr Jung said, and I accept, that he had "absolutely no recollection of anyone telling me that Vodafone or Mr Haines had decided to sponsor Jordan". Mr Jordan himself accepted that it was not true that Mastercard had been informed.
179. Mr Haines' reply to this letter was a model of restraint and sought to fulfil his offer of help with Jordan's sponsors. It also included the following paragraph:
"I do not know what you are suggesting ... by focussing on one telephone conversation almost 3 months ago, out of the 30 or more points of contact between our organisations. I cannot recall the precise terms of the telephone conversation to which you refer. I am absolutely certain, however, that I would not have said categorically "You have got the deal". I would probably have conveyed the impression, which was true at the time, that you were the most likely partner."
180. As I find, Mr Haines was writing accurately and truthfully in this response.
181. On 13th June Jordan's solicitors wrote a letter before action asserting, as does the claim, that a binding contract was concluded on 22 March.
182. Jordan's original particulars of claim (dated 28 March 2002) alleged, in relation to the alternative claim, that Jordan acted in reliance on Mr Haines' statement on 22 March 2001 "in ceasing to negotiate any sponsorship (until 26 May 2001) with Gallaher for the 2002 season and informing Gallaher of the position with Vodafone". "As a result" it was alleged "Gallaher lost all interest in being a title sponsor of Jordan and reduced the amount that it was prepared to pay from a maximum of £19 million for the 2002 season to a significantly reduced sum as a secondary sponsor in 2002".. It was also specifically alleged that but for the want of negotiations "Gallaher would have been prepared to pay sponsorship of up to £19 million for title sponsorship in the 2002 season prior to a date on or around 31 March 2001".
183. In almost every respect this claim has been exposed as false. Indeed it is hard to avoid the conclusion, despite the statement of truth signed by Mr Jordan, and his third witness statement in support of the claim, that it was known to Jordan to be false. Weeks before there was even a suggestion of a deal with Vodafone Jordan and Gallaher had agreed that Gallaher would not continue as title sponsors. There was no chance of a deal for title sponsorship at £19m or any other price before 31 March 2001 or otherwise. There were discussions with Gallaher after 22 March and before 26 May. As I find, it was Jordan not Gallaher which stalled the negotiations and Jordan did not tell Gallaher that they had a deal with Vodafone.
184. Jordan's claim was amended on 17 June 2003 but the passages to which I have referred were only amended to change £19m to £17m and to add the allegation that
"Further, had Jordan approached Gallaher shortly after 5 April 2001, Jordan would have been able to negotiate title sponsorship for 2002 at or about that figure. Further, Jordan lost the chance of renewing title sponsorship with Gallaher at or about that figure for 2003. Alternatively, if Gallaher had not been prepared to make a contract for title sponsorship, it would have been prepared to make a contract for secondary sponsorship in the sum of £10,000,000 for 2002 and £11,000,000 for 2003. In fact, by the time Jordan came to negotiate with Gallaher it was only able to secure secondary sponsorship for 2002 in the sum of £7,000,000. For the 2003 season Jordan was only able to secure secondary sponsorship from Gallaher in the sum of £6,500,000."
185. The references to title sponsorship are equally fanciful. On the face of some of the documents Jordan did negotiate a fee of £10m for secondary sponsorship by Gallaher in 2002. In disclosure made on 11 July 2003 Jordan disclosed a document entitled "Sponsors 2002. Status report". It comes from a file dated 11 June 2001. As regards Gallaher it records:
"Agreement reached, subject to contract, for £10m in 2002. No title and reduced branding, Heads of Agreement being prepared."
186. Found on Jordan's computers, minutes of executive meetings of Jordan dated 12 and 19 June 2001 at which both Mr Jordan and Mr Phillips were present record:
"B&H deal has been signed for $10m, they understand they will not be the title sponsors."
187. In his 5th witness statement Mr Phillips' said these references to an agreement at £10m were mistaken. A contract had been prepared in that sum but he was told the board of Gallaher had expressed "unease" about Jordan's "proposals." Eventually agreement had been reached (signed only on 17 April 2002) in the sum of £5.6m, amended by a letter agreement dated 20 May 2002 by increasing the payment by a further £1.5m. Agreements to that effect were properly disclosed. The further payment was for additional sponsor places on the car illustrated by appendices to the letter agreement. What remains undocumented (apart from the short note of Mr Phillips) is the degree, if any, to which what Gallaher thought it was to get for £10m was in fact what it got for £7.1m. Plainly, as Mr Phillips said, the amount which Gallaher would pay for secondary sponsorship would depend on the amount of exposure it got. Gallaher would also have been entitled to a "pay-back-fee" under the 2001 contract because of Jordan's poor results. There is a letter from Gallaher (Mr Jenner) to Mr Phillips dated 23 July 2001 which was only disclosed during the trial but which demonstrates Gallaher's concerns at the time, all of which are about value for money and none of which have any relevance to Jordan's relationship with Vodafone. Mr Phillips indeed said the 2002 agreement was "a whole different package" based on the £5.6m Gallaher wanted to pay and "completely different" from the one they had been discussing in February. In the event Jordan entered into a title sponsorship agreement for 2002 with DP and secondary sponsorship agreements with Damovo and Virgin as well as Gallaher.
188. On the evidence before the court I find it impossible to conclude that Jordan has even established that it suffered any loss let alone the loss claimed by reason of any delay in concluding an agreement with Gallaher or any weakness in its negotiating position which can be attributed to the conduct of Vodafone on which it relies but which in any event I have rejected.
CONCLUSION ON EVENTS AFTER 22 MARCH
189. Both Jordan's conduct and the documents are wholly inconsistent with the existence of the contract or belief in a contract which Jordan asserts. They are also inconsistent with the loss it claims. Jordan continued to seek title sponsorship elsewhere, including with a major competitor of Vodafone. As I find, Jordan deliberately did not inform Gallaher that it had made a contract with Vodafone because it did not want to lose Gallaher as a secondary sponsor should it lose the contest with Ferrari for sponsorship by Vodafone or agree title sponsorship by Orange. Jordan knew very well, as was the case, that any decision by Vodafone was one to be taken by the board not Mr Haines and it knew that no such decision had been taken in Jordan's favour and was in no sense a rubber stamp. Jordan was not misled by Vodafone in any way.
190. It will be apparent from my analysis and assessment of the evidence that I reject on the facts Jordan's case that in the course of the 22 March telephone conversation Mr Haines said anything that could reasonably or indeed was taken by Jordan to be a binding commitment on Vodafone to sponsor Jordan. There are other issues also on which in my judgment Jordan's case is equally unsustainable.
191. At 22 March no one could have deduced what were the terms of any contract which Mr Haines was supposedly making. It was the understanding of both Vodafone and Jordan that any agreement would have to be in writing. Not even Heads of Agreement (which might or might not have been drafted so as to be legally binding) had been established. At this stage there was nothing which could sensibly even have been said to be "subject to contract".. There was no agreement on livery, no agreement on bonuses, no agreement on intellectual property matters or joint ventures and no agreement on a renewal option which, it is agreed, was a provision it was in the interests of the sponsor to secure in order to safeguard and benefit from the investment the sponsor was making in the team. Mr Boyle submitted that the "deal" was for those few matters which had been agreed and those which had not could be ignored or had been rejected. That submission disguises an impermissible form of cherry-picking when on any view of the facts a comprehensive agreement and certainly agreement on the key factors to which I have referred was both expected and required.
192. Further, and again for the reasons apparent from my analysis and assessment of the evidence, I am entirely satisfied that not only did Mr Haines not have actual authority to bind Vodafone to the agreement Jordan alleges but Jordan's case on ostensible authority is also hopeless. The only matter relied upon which might support such a case is the alleged conversation with Dr Jung on which I have commented in paragraph 97. As I find, the conversation does not support Jordan's case.
193. The submission that even if (as I have found) Mr Haines had no authority to make the alleged agreement he did have authority to communicate to Jordan the decision of those at Vodafone who did have authority to decide to sponsor Jordan was founded on the decision of the Court of Appeal in First Energy (UK) Limited v Hungarian International Bank  2 Lloyds Rep 194. I see no need to address the parameters of that decision as the submission fails on the facts. Even on Jordan's case (which I reject) as set out in the letter of 23 March and the oral evidence of Mr Jordan and Mr Phillips Mr Haines' words were not communicating anyone else's decision (see paragraph 127) let alone a decision of the board of Vodafone. If Jordan had thought that was so they were plainly told otherwise in Mr Harris' letter of 26 March and equally plainly were aware that the board had not made but would be making a decision thereafter.
194. For all these reasons Jordan's primary case fails. The alternative case also fails at the first hurdle. I find no representation was made on 22 March of the kind on which Jordan relies. Indeed Mr Haines and Mr Harris always made clear that if Jordan had to move with Gallaher it should do so regardless of Vodafone. The 26 March letter made the position clear. Moreover Jordan did not rely upon any representation as alleged. Gallaher, it had been established before 22 March, was not "in any event" going to be Jordan's title sponsor. Gallaher was never told that Vodafone had agreed to sponsor Jordan and that therefore Gallaher could not do so even as a secondary sponsor. Nor am I satisfied on the evidence that Jordan has proved any loss as a result of the final terms of the agreements it did negotiate with Gallaher for 2002 and 2003. For all these reasons Jordan's alternative claim also fails.
195. It follows that the entire claim by Jordan will be dismissed and I will hear the parties on any ancillary matters on a date to be fixed following the handing down of this judgment.