Neutral Citation Number: [2010] EWHC 2373 (QB) Case No: TLQ/08/0846 IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION Royal Courts of Justice Strand, London, WC2A 2LL Date: 24 September 2010 Before : THE HONOURABLE MR JUSTICE STADLEN - - - - - - - - - - - - - - - - - - - - - Between : (1) GIEDO VAN DER GARDE BV Claimants (2) GIEDO GISBERTUS GERRIT VAN DER GARDE - and - FORCE INDIA FORMULA ONE TEAM Defendant LIMITED (FORMERLY SPYKER F1 TEAM LIMITED (ENGLAND)) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr Anthony de Garr Robinson QC and Toby Starr (instructed by Starr and Partners LLP ) for the Claimants Mr John Davies QC and Mr Francis Tregear QC (instructed by Fladgate Fielder LLP ) for the Defendant Hearing dates: 11, 12, 13, 14, 20, 21 November 2008, 29, 30 April 2009, 29 June 2009, 10 July 2009, 6 October 2009, 16, 17, 18, 26 November 2009, 1 February 2010 and 30 July 2010 - - - - - - - - - - - - - - - - - - - - - Approved Judgment Judgment Approved by the court for handing down. Giedo Van der Garde v Force India Formula One Team Ltd The Honourable Mr Justice Stadlen: 1. Giedo Van der Garde is a young Dutch racing driver with aspirations to become a Formula One driver. He is the second Claimant. The first Claimant is a Dutch company established by Mr Van der Garde to manage his race driving interests. Mr Van der Garde is a director of the first Claimant, as is Marcel Boekhoorn. Mr Boekhoorn, who is the father of Mr Van der Garde’s long term girlfriend Denise Boekhoorn, is a rich Dutch businessman who has given very substantial financial support to Mr Van der Garde and the first Claimant with a view to advancing his career as a racing driver and in particular to becoming a Formula One driver. 2. The Defendant is an English company which owns and operates the Force India Formula One Team, one of the teams which compete in the FIA Formula One World Championship, the leading motor racing series in the world. Before 5 October 2007 the company was called Spyker F1 Team Limited and was owned by Spyker Cars NV, a Dutch public company which manufactures sports cars and specialises in very high end Ferrari-type cars. Prior to the sale of the company by Spyker Cars NV on 5 October 2007 to a consortium owned by Michael Mol, a wealthy Dutch businessman, and Vijay Millaya, an Indian entrepreneur with a keen interest in Formula One racing, the Chief Executive Officer of the Defendant was Victor Muller, a Dutch businessman, and the team principal of the Spyker F1 Team was Dr Colin Kolles. I will refer to the Defendant Company as Spyker. 3. On 28 February 2007 the Claimants and Spyker entered into two written agreements, a Service Agreement and a Fee Agreement. The Service Agreement related to the 2007 Grand Prix season. Among other things the Claimants allege that it required Spyker to permit Mr Van der Garde to drive a Formula One racing car in testing and/or practising and/or racing for a minimum of 6,000 kilometres (km). In consideration of Spyker entering and performing the Service Agreement, the Fee Agreement required the Claimants to pay Spyker $3million. That sum was paid to Spyker on 13 February 2007. In this action the Claimants allege breaches by Spyker of both agreements. The most significant breach alleged is that Spyker failed to permit Mr Van der Garde to drive a Formula One racing car in testing and/or practising and/or racing for a minimum of 6,000 km. Initially it was alleged that Spyker permitted such use of a Formula One car for no more than 1800 km. By the end of the trial however it was accepted that Mr Van der Garde was permitted to use a car for 2004 km. 4. The relief sought by the Claimants was the subject of amendments and extensive written and oral submissions. Recognising the difficulty of proving the financial benefits which would have flowed if his career had been enhanced by driving the full 6,000 km, the Claimants advanced a number of alternative claims. The principal claim was for the return of just short of $2 million or two thirds of the consideration paid pursuant to the Fee Agreement under the doctrine of failure of consideration. 5. Spyker’s principal pleaded defence was that its rights and obligations under the Service Agreement and the Fee Agreement were transferred to another company called Centurium Capital Limited on 13 November 2007 so that there was no cause of action against it. This defence, which was maintained at trial and was the subject of hotly contested evidence, was ultimately abandoned by Spyker towards the end of the closing oral submissions on liability of Mr Davies QC who at that stage appeared on High Court Unapproved Judgment: Giedo Van der Garde v Force India Formula One Team No permission is granted to copy or use in court its behalf. (Tragically Mr Davies died very shortly before an adjourned quantum hearing at which the Claimants’ amended claims for relief were due to be argued. He was in due course replaced by Mr Tregear QC who, after a further adjournment to enable him to prepare, advanced Spyker’s submissions on quantum). 6. Further or alternatively Spyker denied the alleged breach of the Service Agreement. The precise basis on which the denial rested is not easy to articulate. It was expressed in different ways in the Defence and Amended Defence and in Spyker’s opening and closing written submissions and Mr Davies’ closing oral submissions. In broad and general terms Spyker’s main contention appeared to be to the effect that the 6,000 km which it agreed to make available to Mr Van der Garde included Friday morning test sessions at Grand Prix race meetings and that if, as happened, Mr Van der Garde failed to obtain a Super Licence without which he could not drive in Friday morning test sessions, the 6,000 km which it was required to provide fell to be reduced by the amount of kilometres which would have been available had he been eligible to drive in Friday morning test sessions. 7. Linked to this contention was the further contention that on a true construction of Clause 2 of the Service Agreement Mr Van der Garde was under an obligation to use his best endeavours to obtain a Licence from the Federation Internationale de l’Automobile (“FIA”) to enable him to take part in the Grand Prix Friday morning test sessions and thereby be in a position to test for the 6,000 km referred to in the Service Agreement and that he did not use his best endeavours to obtain a Super Licence as a result of which he was unable to take part in the Friday morning sessions at which it was alleged that he would have tested for up to a further 3,400 km. In particular it was alleged that he refused to follow Spyker’s advice to participate in the GP2 series of races in which he could win a race and thereby obtain an FIA Super Licence. In addition Spyker alleged that the 6,000 km which it was required to provide fell to be reduced (a) by 1500 km which it was alleged he would have driven at the Paul Ricard Circuit in May 2007 but for his refusal to take part and (b) by a further 200 km which it is alleged he would have driven during a test at Silverstone in June 2007 had he not crashed. 8. The Claimants’ principal response to what, after the abandonment of the assignment defence became Spyker’s main defence, was that on the proper construction of the Service Agreement and/or as an implied term Spyker was obliged to offer the full 6,000 km of driving to Mr Van der Garde, that that obligation was not conditional upon Mr Van der Garde being eligible to drive in Friday morning Grands Prix and that even if Mr Van der Garde was in breach of an obligation to use his best endeavours to obtain a Super Licence, which was denied, that did not affect Spyker’s obligation to provide 6,000 km of testing. Nor did his refusal to take part in the Paul Ricard test or his crash at Silverstone. The Service and Fee Agreements dated 28 February 2007 9. The Service Agreement contained the following among other provisions: “2. Participation in Test, Indemnification Draft 30 September 2010 12:50 Page 3 High Court Unapproved Judgment: Giedo Van der Garde v Force India Formula One Team No permission is granted to copy or use in court Subject to the terms and conditions of this agreement and the FIA provisions and regulations and the Driver and Company complying with their obligations hereunder SPYKER hereby nominates and permits the Driver to drive the car in Tests. Tests means the testing and/or practising and/or racing with the Car of (i) a minimum of 6,000 km and (ii) subject to the Driver holding a valid FIA Super Licence, during the Grand Prix Friday morning test sessions. Dates of the Tests to be decided by SPYKER. Such Tests to include FIA monitoring for the FIA Super Licence application. Spyker will use its best endeavours and will assist the Driver to establish eligibility for an FIA Super Licence. Subject to the Driver holding a valid FIA Super Licence the Driver will drive at all of the Grand Prix Friday morning test sessions. The Driver is appointed and will act as, subject to the Driver holding a valid FIA Super Licence, SPYKER’s first reserve race driver for participation in races if required, unless the Driver does not perform satisfactorily in SPYKER’s view with regard to the Driver’s obligations set out in clause 3 and his performance as a test driver.