Mr McNally
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
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.
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
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.
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.
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".
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
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
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.
Livery A2
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).
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".
Livery C2
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
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
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
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
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
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".
Mr Perring
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.
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.
2....
3....
4....
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....
6....
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.
Charlie"
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.
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.
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.
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.
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
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.
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
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".
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.
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
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
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.
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."
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
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".