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FIA prime the lawyers, legal fight begins
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FIA prime the lawyers, legal fight begins
Posted By:   |  19 Jun 2009   |  3:29 pm GMT  |  98 comments

The row between the FIA and FOTA entered a new phase this afternoon as the FIA put out a statement saying that they were preparing legal action,

“The FIA’s lawyers have now examined the FOTA threat to begin a breakaway series. The actions of FOTA as a whole, and Ferrari in particular, amount to serious violations of law including wilful interference with contractual relations, direct breaches of Ferrari’s legal obligations and a grave violation of competition law. The FIA will be issuing legal proceedings without delay.

“Preparations for the 2010 FIA Formula One World Championship continue but publication of the final 2010 entry list will be put on hold while the FIA asserts its legal rights. ”

The FIA is meeting fire with fire. Part of the reason for the delay is that some of the potential new teams have withdrawn, leaving a potential entry list looking thin.

The legal threat is serious, but it does allow a period of reflection and dialogue, if a way can be found to restart the talks. The next major stage is Wednesday’s FIA world council meeting. I still think that the FOTA strategy is to try to effect change, but Mosley seems to be very sure of his ground and his support.

Ferrari are singled out in the FIA statement and their contract with the FIA remains the single most important aspect of this.

They responded this evening by saying that they have already launched an arbitration process at a civil court in Lausanne, this was done on Monday. This will establish the validity of the contract.

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1

I would be very suprised if a breakaway championship can be put in place for 2010 as the teams only have 8 or 9 months to do all the deals.

2

The TV companies will not support FOM.

The ECC will help FOTA setup the breakaway and smackdown any nonsense from the FIA and FOM.

The same will happen with the market regulatory authorities in Japan and North America.

You can bet your bottom EURO that the EU would not allow FIA or FOM to sue any of these auto carmakers for any kind of damages in this current political environment. Sarkozy’s got Renault’s back. Berlusconi’s got Ferrari’s back. Merkel’s got BMW and Mercedes and the UK government will do the same for McLaren, Brawn et al.

The ACEA is behind FOTA. The entire automotive industry are behind FOTA.

The sponsors are behind FOTA. The drivers are behind FOTA.

The fans are behind FOTA.

FIA and FOM hold no cards. The teams have finally realised this. About time. They are wobbling, time to finish of these odious organisations once and for all.

It is an inevitable that people shall rise up against tyranny of all forms.

3
Adonis Megoulis

Well, lets try a breakdown of the FIA legal arguments:
1. “The actions of FOTA as a whole, and Ferrari in particular, amount to wilful interference with contractual relations”, i.e. they accuse FOTA as a legal entity (union) and Ferrari also as a legal entity (company) that they presumably tried to talk Red Bull (for the rest of FOTA teams are not legally binded by any sort of contract with either FIA or FOM) out of their contract with a third party (meaning FOM or FIA). When you press ahead with a legal argument you have to prove what you claim. How the hell FIA are going to prove this, is beyond my comprehension, since within FOTA teams decide unanimously, therefore… nobody has the initiative. In order to prove the argument, FIA need internal sources and data from within the FOTA meetings (not very likely but also not impossible, given Bernie’s well established political tactics). If they claim that the interference was simply induced by the departure of Ferrari, which forced Red Bull to breach their own contract, there is no hope for FIA whatsoever.
2. “Ferrari are in direct breach of their contractual obligations”: It all depends on the 2005 contract term, by which Ferrari was granted a veto right over changes of regulations. If the term is found to be substantial (and in my opinion, it is), then also FIA are in breach of their bilateral contractual obligations, since they proceeded with the budget cup without asking Ferrari. Therefore, Ferrari can declare the agreement void.
3. “FOTA and Ferrari are in grave violation of competition law”: I’m not familiar with UK competition law, but I know european competition law quite well. According to it concerted practices amongst independent parties are prohibited. It is interesting that FIA deems FOTA (a simple union) to be in itself a forum of concerted practices by the teams against its championship. However, I don’t think that the argument is very serious and apart from that, it may backfire: In my opinion, it is FIA together with Ferrari, that tried back in 2005 to monopolize the market in which third parties are involved (via the notorious veto agreement) and this could lead EU competition authority to impose huge fines on both FIA and Ferrari.
As a fan, I am with FOTA. Max and Bernie have done miracles in the past but they are past their time and the spirit of F1. I prefer european races over subsidised vacant asian ones. I prefer technical freedom over pretexts that aim only towards control of the sport. I prefer cheaper tickets and less sterilised paddocks. Max has created a political empire and the Bambino Trust has made enough money. Time to move on…

4

thought max wanted new teams in F1 – from what he’s said over the last few weeks months and years, he couldn’t give a stuff about the manufacturers, and would be happy if they left – now he’s sueing them for doing what he wanted!

anyway, max and the FIA sueing others for contravening competition laws!? haha. didn’t the EU commisioner a few years back say that upon investigating the FIA and formula 1 that the backroom deals that went on between max and bernie were the worst cases of anti-competition violation that he’d ever witnessed in his life?

5

Questions, only questions …

Was Mosley appointed or elected President of FIA?

Isn’t there some sort of committee or council? Are these pronouncements a unanimous decision? Or, is it all ‘Yes, Max! Whatever you say, Max’?

I got the impression last night that Moseley and Bernie Ecclestone don’t exactly see eye to eye. Could one of them be on the way out?

Eddie Jordan for President!!

6

Rightly or wrongly, legal action is all very well but if virtually the entire F1 field is lined up agains the governing body I don’t see any positive outcome (regardless of the legal outcome); forcing teams to race is unrealistic. The legal threats are surely a large element of bluff and brinksmanship in the high stakes poker game this farce has become.

7

The general feeling I get from various websites is that the majority of fans want a breakaway series. We want to see the top drivers in the top teams racing at historic, packed out circuits. And not tinpot teams racing at another half empty generic Tilke track.

How about another one of your polls James?

8

Moseley “seems sure” … LOL, please James…..

If F1 sues FOTA, it will probably come under EU anticompetitive business legislation, so, no you will not Max.

If the FIA/F1 force teams to honour contracts, they can simply “Do an Indy” … do you remember the last time Max tried to bully unhappy teams to run – we have a precedent – they pulled in after one lap !

If Max really just wants to ruin Bernie and F1 is just the mechanism, this would be a good way to go. FOTA will run the real Championship and the bullied Teams can turn up in name at the Farce1 show, do one lap, find some “Mechanical Problems” and all pull in… how long will that last with the TV Execs ? Sponsors ?

What is that smell ?

Well and truly Cooked Goose my friends.

9

At this point I realy feel sorry for Peter Windsor, he has worked for almost 4 years to be a team owner and basically Max Mosley shatter his dreams.

Very sad, very sad.

10

There still won’t be a breakaway series run by the teams.

Even if they can get the money together and the logistics and the level of TV coverage that’s going to be required to satisfy sponsors (and that’s highly dubious I’d have thought) the cracks in the FOTA facade of unity will chasm-sized the moment of them interprets a rule in a different way to the rest.

Can you imagine a FOTA-run series grappling with the double-diffuser issue without half the grid threatening to split away again?

11

My Message Part 4

If what I imagine happens (Mosley and Ecclestone’s yielding), it will open up another hell given that a championship managed by its own members is very hard to police and clearly tensions will run high. Now it is working, because they found an opponent against whom to regroup.
But tomorrow they will be facing each other and within them there is an ogre disguised in a horse.

So if the teams take control of a new championship or the current one, the need to carefully establish the foundations unless they will end up where they started. And the best solution is to have an independent authority to control everything.

At the end, the best solution is to keep the current Formula 1 starting by sending MOSLEY into another galaxy, giving the teams their say on the regulations, and giving them more money step by step.

The problem is when so powerful people take decisions, they do it with 50% BRAINS 50% EGO. These times in Formula 1, BRAINS are a rarity and their value is higher than diamonds in stock markets. The same phenomenon is observed in the CITY.

Thanks for reading,
Jamil K.

P.S: excuse my English. You must have guessed it wasn’t written by Shakespeare. Well, I can’t say, I have never read something form Shakespeare. English is my 3rd language.

12

My Message Part 1

To start, I will emphasize that I want MOSLEY out and I think it is very very likely. I’ll argue :

MOSLEY said first Formula1 doesn’t need FERRARI and said that another championship with uncapped budget doesn’t scare him and if the constructors want another championship with their own rules the FIA would be happy to embrace the championship…..

Today, with the constructors announcing their breakaway series, not only MOSLEY didn’t put the definitive list of the entrants to next year’s championship, but he is challenging the teams in courts… That shows that MOSLEY was bluffing and the teams weren’t or at least if they are, they put MOSLEY in a situation where he couldn’t hide his bluff.
Moreover, MOSLEY has only 5 teams right now bound to next year + (FERRARI, REDBULL and TORO ROSSO) if he wins in courts which makes it 8 teams at maximum.

13
Craig from Canada

When Max said “I say, if you want to make the rules, then go and organise your own championship. Formula 1 is ours, we make the rules. We’ve started 60 years ago and we will continue like that.” wasn’t he (as the president of the FIA) giving the teams permission to create their own series? This would eliminate any legal basis for now suing the FOTA because they have done just that.

14

How about a poll for Breakaway series vs 40mEURO-capped F1?

I vote Breakaway.

15

FIA have again lost my respect.

16

James,

Could it be possible that this is what Bernie wanted all along.
With all the fighting between the FIA and FOTA,

Could Bernie be setting up Max and possibly joining the FOTA series. Because of the debts CVC has, the investors would want to be part of the series with Ferrari, Renault, McLaren, BMW, Red Bull. Not the series with Williams, Force India. Because will all due respect to Frank Williams, his team doesnt really have the commercial appeal that the FOTA teams can provide.

On the other, If Bernie stays with the FIA, wouldn’t that mean the Teams (FOTA) would be in a better situation financially. The initial outlay might be a bit expensive, and they need to set up some kind of governance to get TV rights but, the series would be running without the massive debts hanging over the its commercial rights holder. Therefore the tracks who couldn’t afford the such as Imola, Montreal, Hockenheim, Suzuka. (The Tracks that we all love to watch racing at) Have a better chance to be able to participate. Due to the fact they are not getting held to ransom by Bernie to pay off his debts. And the team would also get more of a percentage. Instead of 50-50 with Bernie. Which is a joke that administration side of a series should be make half the money. It should be with the teams. As they are spending all the money to put a show on. So in theory it could be very beneficial for them. Also would mean we go back to Silverstone.

I also think if Max was so hell bent on saving money. KERS even if it was not mandatory. Should have been scrapped. The team spent mega bucks to just test the system. Then implement that. Seems like a waste. The only reason it seems to work in other series is there aero packages are no where near as good as F1. So less turbulence behind the cars. Easier to follow in the first place.

17

There are other ways by which FOTA can start their own series without breaking their contractual obligations with the FIA. F1 racing is a professional sport with professional teams and therefore the teams are separate corporate entities in itself completely independent from their parent company. Thus, Marlboro Scuderia Ferrari has a different personality to Ferrari itself, so is Sauber BMW from BMW, Redbull Racing from Redbull and so on and so forth.

So, if the FOTA manufacturers each make brand new teams with incorporators who are not part of the incorporators of the original teams then these “new teams” are not bound by contract to anyone.

Moreover, it is the manufacturer’s teams that are bound by the FIA contract and not the manufacturers themselves. This is the reason why honda was able to withdraw from F1 despite being contractually bound to join in this season as it was the team contractually obligated to the FIA and not Honda motor company itself.

The FIA can sue all they want but thye won’t be able to legally prevent a new racing series.

18

Well we were all worried that the Brawns running away with the championship would make this a very boring year in F1….Think again!

19

It baffles me that anybody is surprised by the lawsuits. Yes he did tell them to start their own series, that does not release certain teams from contracts the FIA believe they have.

It is really easy for FOTA to say they will start a new series. To do it is something completely different. 8 teams have split. You would imagine at least 2 of the teams who applied (like prodrive) would be happy to go along as well. At least three of the teams will be sued. That could get extremely nasty. I think it could easily ruin Red Bull Racing (and TR). And in worst case scenario could also destroy Ferrari (e.g. they loose the case and are forced to reimburse the FIA for the damage caused, which could be billions). Ok that is an extreme case I admit, but just saying. I would be surprised if the lawyers could not find something to charge all of the other teams with something as well. Now imagine these court cases drag out for months. It will be very difficult for FOTA to launch a new series while court cases are going on. Most likely they would run out of time, at which point certain teams like Mclaren and Brawn are really in trouble.

Ok, if the court cases don’t take too long and go in favour of FOTA. The new series still needs to be organised. The cars are not a problem, as they can run with the current specs. Tracks also no problem. There are enough around. The two big problems, in my opinion, are TV and money. I don’t know what kind of contract the TV stations have with Bernie, but if they are tight and the stations can’t switch, FOTA is in trouble. In some countries there is a main national channel and some side channels, who might not be able to pay for the rights. In other countries, including the UK, it can see the rights going to pay tv channels, like Sky. Plus these contracts need time to setup. If FOTA does not get some good tv deals up very fast, it again could all fall apart. Without tv, there go the fans (only a minority actually goes to races) and also the sponsors.

So less money from tv, less money from race tracks, less money from sponsors (some will jump), less money from fans (some fans will be lost and I can’t see this increasing the number of fans for a few years at least), less money from merchandise (f1 is a pretty strong brand). Yes they will get a bigger share from the profit, but profits will be drastically smaller and setup costs for the first few years also need to be taken into consideration.

So the manufacturers will have to put some money in. Which is difficult to imagine at the moment. One or two could easily decide, actually they will save the money for a few years. Yes they all say they are committed, but that can be changed in one board meeting.

Finally all of it relies on FOTA sticking together, putting their own individual needs/desires to the side and working together in an extremely efficient way. This from the group who has to take a certain amount of blame for this whole theatre. Max has been pushing them for years to drop costs. Individual selfishness has often stopped his attempts. Anybody remember the voluntary testing ban from a few years, which Ferrari happily ignored.

I can’t see FOTA successfully launching a new series. But I can imagine them trying and none of us have anything interesting to watch next year.

Shame on the lot of you to let it get to this point and playing games. That most definitely includes you too Max and Bernie.

PS: Sorry James for the long rant, but I think some fans just don’t think about the consequences.

20

James

Just reading the press release, im assuming the FIA think the Manufactrures teams are in breach of the competition law, with the supposed 50million dollars agreement they have between them, in addition to Ferrari and redbull/torro rosso not entering into the championship and FOTA potentially geting involved with potential contracts assocaited with f1 regarding sponsors etc etc. (as per FOTA statement)

I find it a stretch that the FIA have a case other then to delay. The FIA, cannot prevent another series starting, neither could bernie as this would be in breach of a competition law. The FIA cannot even prevent the existing teams competing in another series, subject to whats in the existing contract. Brawn could leave and move to any series at the end of the year he chooses to.

Not only this if Bernie has contract with the FOTA team names within it, this is a problem for Bernie and CVC not the teams. Bernie and CVC provided a gurantee these teams would be competing, not the teams. Now they have had FIA fail in there bid, so we have a legal battle.

I believe if Ferrari win or lose, they will leave regardless. If they win i think FOTA will start a new series and put f1 to bed. Bernie can have all the law suits he wants against FOTA, the reality he cannot prevent. Finanically it will be difficult for f1 to survive, FOTA will hold all the aces.

21

Unless there is a compromise, then, F1 is done; that would require a lateral advancement for Max (off a cliff). FOTA has to have changes in overall GP structuring, but to give the Teams absolute control will also not work in the long term. F1 governance needs a Board of Governors that would represent the teams/constructors, but also the drivers association, competition regulators, and well as the commercial partners. Changes to the competition or commercial format would require proposals from various groups to be reviewed by the entire board (likely modified) and then voted upon. The sweeping changes of the last several years have not slowed the cars, just injected the need for vast expenditures for complex design; all this while the Powers-That-Be try to change F1 into a Spec Series and continue to take the cream straight off the top. The Canadian GP chopped, no US race in sight, the richest car market ignored; Good Job – Max & Bernie!

22

I’ve been really hoping that it wouldn’t come down to this as I didn’t want to see a sport I love ruined.

However, now it actually has I am far more convinced by the FOTA proposal and am actually quite excited by the prospect of genuine change.

Max has really backed himself into a corner and has effectively made his position untenable. It is impossible now to see the FOTA teams come back into the fold with him still involved.

Very strange behaviour from an international organisation such as the FIA the like of which totally reinforces FOTA’s arguments regardng governance.

23

The Friday press conference with several team principals was very interesting. All three FOTA representatives gave intelligent well-thought answers to all questions regarding how we have come to this and what the future could hold. Surprisingly Ross Brawn was the most openly critical of the FIA.

There arguments make a strong contrast to the ‘posturing’ of the FIA, whose statements all this week come across as vindictive rants.

Long live FOTA!

24
Darren Fellows

So what is getting at me is how would the FIA actually “Make” Ferrari race next year?

Surely Ferrari can bring a couple cars to the GP’s that wont pass scrutineering and thus stopping them racing ….

25

Have not Max Mosely said that F1 can do without Ferrari, The FOTA teams are welcome to go away and form their own series, the 40 million budget cap is desperately needed and prefferebly F1 should be a spec series to make it even cheaper.
Well now he can have it all, exactly as he wants! So way on earth is he making a fuz?

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