SUBSEQUENT EVENTS
Brown's status report
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
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
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
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
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.
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
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
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
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
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".
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.
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".
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.
Gallaher re-visited
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
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."
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
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 ...."
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)
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.
Orange
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.
Option 1:
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).
Option 2:
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."
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.
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
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.
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."
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
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
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
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.
Gallaher
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
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."
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.
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."
As I find, Mr Haines was writing accurately and truthfully in this response.
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.
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".
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.
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."
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."
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."
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
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.
OVERALL CONCLUSIONS
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.
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.
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.
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 [1993] 2 Lloyds Rep
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.
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 judgement.