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The High Court has upheld the rejection of a claim for recovery of €4.25m in sponsorship payments against the liquidator of the Force India F1 Team.

In March 2017, the Force India F1 Team entered into a five-year sponsorship agreement with the Austrian water technology group BWT, as part of which Force India adopted a bright pink livery for its car.  By May 2018, the team was in financial difficulties and BWT insisted that the team execute a Deed of Variation deeming certain sponsorship payments to be “advance payments” and requiring those payments to be refunded to BWT in various circumstances including the insolvency of the team.  On 28 May 2018, however, BWT exercised a “termination for convenience” right under the original sponsorship agreement, the provisions of which stipulated that no pro rata refunds of sponsorship payments would be required in the event that the right were exercised.  Force India later went into administration and then liquidation, with its assets being sold to Racing Point (now Aston Martin).  By a proof of debt in the liquidation, BWT contended that the deemed “advance payments” in respect of the 2018 races which Force India had not completed when the original agreement was terminated by BWT had to be refunded to it by Force India.  By a Judgment dated 18 May 2021, upholding an earlier Judgment dated 23 November 2020, the High Court (Mr Justice Miles) dismissed BWT’s argument, holding that nothing in the May 2018 Deed of Variation affected the operation of the “clear and unambiguous words” of the original agreement entitling Force India to retain the monies in the event of a termination for convenience by BWT (see [22]-[52]).

James Segan QC acted as sole counsel for the Respondents, instructed by Eversheds Sutherland (International) LLP.  The decision is available here.

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