The Grammy award-winning singer and songwriter Seal will have to pay his former manager commission on his earnings from his first two albums following a ruling in the High Court today.
The performer, whose real name is Henry Olusegun Adeola Samuel, had contested the case brought by John Wadlow over allegedly unpaid commission.
Mr Justice Gray, sitting in London, gave judgment in favour of Mr Wadlow today and announced: "I direct that an account be taken of the commission to which Mr Wadlow is entitled in accordance with this judgment."
During a recent hearing the judge heard that Mr Wadlow's "primary claim" was that he was "entitled to unpaid commission on Seal's earnings from his first two albums", in accordance with an agreement dated March 31 1995.
The judge was only asked to deal with the question of liability during the trial, not to assess the sum owed.
Seal, 43, who announced yesterday that he is expecting a second child with model wife Heidi Klum, denied liability. He was not present in court for the decision.
Mr Justice Gray ordered the singer to pay an interim payment of £500,000 by July 21.
During the recent hearing, Mr Wadlow's QC, Ian Mill, told the judge that Seal met Mr Wadlow in 1987 when Mr Wadlow was a partner in a recording studio business known as Beethoven Street Studios.
He said: "At this point Seal was an undiscovered singer and songwriter and had not attracted any interest from record companies or publishers."
Their relationship continued until the March 1995 "management and publishing settlement agreement", he said, by which time Seal had achieved international "superstar" status.
He released his first album in May 1991 and his second in May 1994 - both reached number one in the UK album chart.
The court heard that Seal's case was that on the true construction of the 1995 settlement agreement, and a September 1990 management agreement, his former manager was not entitled to commission on his earnings from his first two albums, both entitled Seal.
Mr Mill said Seal further claimed that if Mr Wadlow was entitled as a matter of construction to commission, that entitlement "amounts to an unreasonable restraint of trade and it is accordingly unenforceable against him".
He said it was also argued on Seal's behalf that he was entitled to avoid both the 1995 and 1990 agreements "on the grounds of undue influence".
Mr Mill said Mr Wadlow denied the allegation of undue influence - the suggestion that the singer was under his influence and would do anything he asked.
"There is nothing to suggest that he acted improperly or unconscionably," he told the judge.
Seal "suggests he regarded John Wadlow as 'a surrogate father and guardian'," said the QC, but his former manager pointed out that the singer had always been an "independent, intelligent and streetwise person".
Giving evidence, Seal told the judge that he regarded Mr Wadlow as a "father figure" and "someone I trusted, liked very much and respected".
The judge said today: "The protagonists both gave evidence.
"I found Seal, who gave evidence first, an impressive witness. I am in no doubt that his account of events was an honest attempt on his part to recollect events, most of which took place long ago.
"He has had little formal education but he is clearly an intelligent man.
"His answers in cross-examination were thoughtful, modest and fluently expressed. It appeared to me that, at least in the early years of his career as an artist, he had little interest in its financial aspects and preferred to concentrate on his music.
"He has now come to feel strongly - and, I believe, genuinely - that Mr Wadlow, someone whom he once regarded as his mentor and, as he put it, a father figure, has betrayed him, in particular by 'emotionally coercing' him into the settlement agreement."
Following argument in court after the judge announced his decision, it emerged that Seal could face a commission payout of around £1 million.
The judge ordered the performer to make an interim payment of £175,000 towards Mr Wadlow's costs, which are estimated to be more than £500,000. He will also have to pay his own legal bill.
The judge said: "I found Mr Wadlow to be a reliable witness.
"His recollection of events, whilst far from perfect, was for understandable reasons better than that of Seal.
"I suspect that his involvement in the music business came about as a result of his love of music rather than a desire to make money.
"There is no doubt that in the early days he did a great deal to help Seal to build a career."
Mr Justice Gray added: "Once Seal's career took off, he felt himself entitled to share in that success. He was not at the time of the management agreement to know that Seal would become a true superstar.
"It is important in cases of this kind to beware of hindsight. By the time of the settlement agreement, Seal's success was assured."
He ruled that Mr Wadlow's entitlement to commission arose under the 1995 settlement agreement.
The purpose of that agreement was to implement Seal's wish to bring to an end his longstanding relationship with Mr Wadlow, said the judge, and to be managed in future by Bob Cavallo.
"Mr Wadlow was agreeing to the termination of what might otherwise have been substantial future earnings as Seal's manager.
"In my judgment the settlement agreement replaced the management agreement and the effect of it is that Mr Wadlow has a continuing entitlement to commission in respect of the first and second albums."
He also rejected the contention that "either of the impugned agreements is unenforceable on restraint of trade grounds".
Mr Justice Gray ruled that in relation to the 1990 management agreement Mr Wadlow had "misused his influence over Seal", adding: "The management agreement was in my judgment procured by undue influence."
But the March 1995 agreement was "plainly not procured by undue influence".
He concluded: "Whilst I readily accept that over the previous four-and-a-half years Seal and Mr Wadlow had had a close relationship as artist and manager, it is plain on the evidence that by February 1995, and probably earlier, that relationship had effectively come to an end.
"Seal had come to realise what he considered to be Mr Wadlow's limitations and shortcomings as a manager."Reuse content