Force India (now Racing Point) may not have quite got pole position defending its case against AMP, but limiting a claim for circa 11.1 million euros to an (ever so slightly) lesser sum of £150,000 certainly calls for a champagne celebration.
AMP Advisory & Management Partners AG, a sports marketing agency, sued Force India Formula One Team, claiming that it was entitled to 15% commission for assisting Force India in signing a sponsorship deal with BWT AG.
Mr Ramos of AMP, a friend of Dr Vijay Mallya, (now former) director and Team Principal of Force India, claimed that whilst having lunch with Dr Mallya at his home, he informed him of a potential sponsorship deal which led to a binding oral contract between the parties. Dr Mallya denied this, giving evidence that he would not be “agreeing commission deals on a purely speculative basis, on a no names basis, without knowing the sponsor, [or] the credibility of the sponsor”. The Court agreed with Dr Mallya and found no oral agreement. The Judge relied on the lack of information regarding the deal and that at no point following this lunch did Mr Ramos refer to the claimed oral agreement in correspondence. Mrs Justice Moulder also acknowledged that whilst the social context of the conversation is not a barrier to finding an oral contract, it will tend to show there was no intention to create legal relations; indeed here, the Judge noted that Dr Mallya had no pre-warning that business was to be discussed at this lunch.
AMP also argued that Force India was bound by a Mandate Agreement sent to Mr Curnow, commercial director of Force India, by Mr Ramos for signature. That agreement was never signed. AMP argued whatsapp conversations containing positive comments such as ‘happy to pay’ and ‘all agreed’ and the urgency of securing the deal, meant the parties had waived the requirement for signature. The Court did not agree. The Mandate Agreement stated it would “take effect on signature” and Moulder found that, coupled with Mr Ramos’s repeated chasers for signature, the parties had clearly not agreed a waiver. Additionally, both experts agreed, “they were not aware of any cases in which commissions had been paid in the absence of a signed agency agreement”.
The somewhat saving grace for AMP was that it partially succeeded in its alternative claim that Force India had been unjustly enriched by failing to duly pay AMP for its services and therefore was entitled to quantum meruit. Whilst they were not found to have been responsible for the introduction to BWT (this was a result of the actions of the CEO of Mercedes), AMP was found to have made “a contribution to getting the deal done in terms of acting as an intermediary”. That contribution was however limited and did not warrant the 15% commission claimed; the Judge valued it at £150,000.
The Court reiterated that “the best approach for a judge to adopt in the trial of a commercial case is to place little if any reliance on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts”, serving as reminder that relying on oral agreements is inevitably very risky. Albeit that this case turned on its specific facts and the commercial realities of how business is executed in the world of Formula One, its principles apply more widely and it is a useful reminder... Get agreements in writing and signed before crossing the finish line, or the checkered flag of a binding contract may not be waved.
I reject the submission for the claimant that given the wholly exceptional need for speed, the parties had decided to press ahead under an agreement on the terms of the Mandate Agreement without the need for signatures.