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Honda website

MAY 23, 2002

The Phoenix Case

THE case between Phoenix Finance Ltd. and the FIA, FOM and FOA was heard in the High Court in London at the start of last week by the Rt Hon Sir Andrew Morritt, the Vice Chancellor, who is in effect the chief judge of the High Court's Chancery Division.

The case created a number of issues which centered on whether Phoenix had the right to be granted injunctions so that it could compete in the remaining 12 Grands Prix and whether or not the company should be covered by arbitration, as laid out in Clause 17.3 of the Concorde Agreement.

The court considered the issues relating to Phoenix's claims, noting that on February 16 Phoenix made an offer to buy assets of Prost Grand Prix for $2.2m. That offer stated that Charles Nickerson, the chief executive of Phoenix, had an arrangement with Tom Walkinshaw for the TWR Group to supply the necessary engines and transmission. There followed detailed negotiation between Phoenix, the liquidator of Prost GP and the FIA over whether or not the team would have any Concorde Agreement rights. The conclusion was that the non-participation in the Australian GP was the result of Prost's insolvency and so the rights under the Concorde Agreement would no longer exist.

Phoenix did not appear in Australia but two noses cones were submitted to the scrutineers. These were rejected.

The TWR company did not receive the Prost chassis until the Monday and Tuesday after the Australian GP and they were then fitted with engines and gearboxes and sent to Malaysia but the cars were never presented for scrutineering in Malaysia. After that Phoenix commenced its legal actions against the FIA, FOM and FOA.

The judge concluded that none of the Phoenix claims had any validity and ruled against any appeal against the decision.

"Phoenix has not shown a serious issue to be tried entitling it to the final relief it seeks against any of the defendants," he concluded.

Justice Morritt also ruled that Phoenix Finance Ltd. should pay all costs. These are expected to be in the region of $1.2m.

The judgement will end any possibility of there being a 12th team in F1.

The future of Phoenix Finance Ltd. is (at best) uncertain.