Jordan says Vodafone reneged on £100m deal

Five words spoken in a private telephone conversation between two men might, at first, appear to be of little significance. That is, unless the words were "You have got the deal" and the exchange was between the flamboyant owner of a motor racing team and a senior executive of one of the world's biggest telecommunications companies.

Yesterday, that brief sentence lay at the centre of a complex £150m lawsuit in which Eddie Jordan, head of the Jordan Formula 1 team, accused Vodafone of reneging on a sponsorship agreement.

Mr Jordan's lawyers claimed David Haines, global branding director of the telecommunications firm, agreed to a £100m, three-year sponsorship contract in which Jordan would display the Vodafone brand on its cars. Vodafone was later enticed away by Ferrari. According to Jordan Grand Prix Ltd, Vodafone is liable for breach of contract.

However, Vodafone denied it had committed itself to the team, insisting the damages claim by Jordan was "wholly without merit".

The High Court battle, expected to last three weeks, began as Alan Boyle QC urged Mr Justice Langley to hold that the words - spoken between Mr Jordan and Mr Haines on 22 March 2001 - were binding. To bolster his case, Mr Boyle handed the judge a "critically important" notebook, in which he said Mr Jordan's commercial director, Ian Philips, a former journalist, had recorded the precise words in quotation marks while listening to the conversation. Both men will be called to give evidence.

The Commercial Court in London heard Mr Boyle contend that "You've got the deal" referred to an existing offer which both sides knew had been tabled by Jordan and negotiated at earlier meetings.

Although that offer was not in itself a binding contract, it was "a deal which was available to be done" and the clear and unqualified "words of commitment" spoken on the phone sealed it.

"There was clear assent on both sides to the existence of a deal," Mr Boyle said.

There was no suggestion that a written contract signed by both sides had to exist before a deal was done, although some such document would eventually have been necessary, he added.

Had Mr Haines wanted to avoid making an immediate binding commitment, he would not have used the words.

The judge heard that Vodafone - which also sponsors the English cricket team and Manchester United - in seeking a sponsorship deal, had narrowed the field to a "starting grid of five" potential teams: Ferrari, McLaren, Jordan, Benetton and Toyota. It eventually signed with Ferrari - currently leading in the Formula 1 constructor's championship, while the Jordan team is running in fifth place.

The mobile phone firm, in its defence, insisted no agreement had been reached with Jordan, no terms were finalised and no binding contract existed between them. It contended that, at the date of the alleged phone call, Mr Jordan was aware that many essential terms of any potential agreement remained unresolved and that Vodafone had yet to discuss sponsorship proposals with F1's governing bodies.

In a letter to Vodafone, written after the date of the alleged deal, Mr Jordan recognised that any sponsorship agreement would have to be in writing, the company argued. It was, Vodafone's lawyers said, "unheard of" in F1 circles for any major sponsorship contract to be concluded verbally.

Vodafone also said David Haines did not have authority to conclude such a big deal.

The case continues.