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Williams Grand Prix v. Rokit Marketing and Rok Marketing

Williams Grand Prix Engineering Limited v. (1) Rokit Marketing Inc. and (2) Rok Marketing LLC, LCIA Case No. 204960
Nature of the proceedings:
International
Type of case:
Commercial Arbitration
Economic sectors:
Professional, scientific and technical activities
Advertising and market research
Arts, entertainment and recreation
Sports activities and amusement and recreation activities
Date of introduction:
20 Nov 2020
Status of the case:
Concluded
Claimant’s country of origin:
United Kingdom
Respondent's country of origin:
United States
Institution:
LCIA (London Court of International Arbitration)
Rules of arbitration:
Seat of arbitration:
London

Documents of the case

profile picture Klaus Reichert Sole arbitrator
Picture of partner

This document was contributed under the IBA x Jus Mundi Exclusive Partnership for Commercial Arbitration.

Contributor(s):

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    Jus Mundi

Lawyers, other representatives, expert(s), tribunal’s secretary

Partial Final Award

1. INTRODUCTION

1,1.
This Partial Final Award resolves, finally, the Claimant’s prayers for relief, save for costs (the latter claim is held over for later resolution by final award). For the reasons set out below, the Claimant is successful as against the Respondents.
1,2.
At the outset the Sole Arbitrator recalls the Partial Final Award rendered herein on 7 May 2021 ("the First Partial Final Award") which held as follows:

3.1 For the reasons set out above, the Respondents are hereby ORDERED to pay, forthwith as an immediate debt, the amount of GBP 20,000.00 to the Claimant along with interest at the rate of four per cent (4%) per annum over the base rate of the Bank of England from 16 April 2021 to the date that payment is made. This Partial Final Award for the payment of GBP 20,000.00 and interest is recoverable by the Claimant jointly and severally from the Respondents.

3.2 The Sole Arbitrator retains jurisdiction over all other extant prayers for relief herein for later disposition.

1,3.
The First Partial Final Award recorded the particulars of the Parties (and their legal representatives), the relevant procedural steps taken in this arbitration to the date thereof, the text of the relevant arbitration clauses in the First and Second Agreements (the defined terms of the First Partial Final Award are adopted herein), and, in particular, the fact that the Respondents’ counterclaims were deemed to have been withdrawn as of 16 April 2021. The Sole Arbitrator does not, therefore, need to repeat these matters for the purposes of this Partial Final Award and they are simply noted.
1,4.
Following the First Partial Final Award:

(a) By Procedural Order No. 3 of 7 May 2021, the Sole Arbitrator denied the Claimant’s application for security.

(b) On 12 May 2021, the Claimant filed further evidence.

(c) On 18 May 2021, the Claimant made procedural proposals for the hearing.

(d) On 20 May 2021, the Respondents stated that they had no comments on the Claimant’s proposals for the hearing. They further stated that they did not expect that they would be represented at the hearing but awaited instructions.

(e) On 27 May 2021, the Claimant filed its Skeleton for the hearing.

(f) On 27 May 2021, the Respondents confirmed, through Nicholas Faieta (of their Group Legal Team) that he had received instructions and confirmed that he would be representing the Respondents at the hearing.

(g) The hearing took place, by virtual means, on 28 May 2021, with oral submissions from Celia Rooney, Barrister, for the Claimant, and Nicholas Faieta for the Respondents.

(h) Following the hearing the Sole Arbitrator wrote (that same day) to the Parties (in relevant part):

I invite the Parties to set out in writing their positions, by reference to legal authority and the existing record, on jurisdiction as regards both the Oral Agreement and the Claimant’s claim for debranding costs. In particular, the positions should be directed to, first, the Claimant’s primary case that there was a variation, and then to the Claimant’s fall-back position that these were ancillary or supplemental. As noted during the hearing, I am particularly interested in the consequence of the "whole agreement" or "merger" clause.

(i) On 7 June 2021, the Claimant filed submissions, as per the invitation of the Sole Arbitrator on 28 May 2021. The Respondents did not file any such submissions.

1,5.
Next by way of introduction, the Sole Arbitrator records the contractual background to this arbitration. Disputes have arisen between the Parties from the following contractual arrangements:

(a) an agreement headed "Formula One Sponsorship Agreement" dated 26 January 2019 and stated to have been made between the Claimant and the First Respondent ("First Agreement"); and

(b) an agreement headed "Formula One Sponsorship Agreement" dated 22 October 2019 and stated to have been made between the Claimant and the Second Respondent ("Second Agreement").

1,6.
As to jurisdiction, clauses 14.2 of both the First and Second Agreements which provide, in identical terms, as follows:

"14.2 Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which LCIA Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be London. The language to be used in the arbitral proceedings shall be English"

2. PRAYERS FOR RELIEF

2,1.
The Sole Arbitrator now records the Claimant’s prayers for relief as sought in the Statement of Case:

Relief sought under the First Agreement

14.2 Under the First Agreement and the Oral Agreement and against Respondent 1, the Claimant is entitled to and claims:

(a) A declaration that the First Instalment and Second Instalment under the First Agreement are due and owing from Respondent 1 to the Claimant;

(b) Additionally, a declaration that the monies invoiced under the Fanatics and Show Car Invoices are due and owing from Respondent 1 to the Claimant;

(c) Additionally, an award that Respondent 1 immediately pays to the Claimant a sum equal to the First Instalment and Second Instalment under the First Agreement, and the Fanatics and Show Car Invoices;

(d) Additionally, an award of damages in a sum equal to the Third Instalment under the First Agreement;

(e) Additionally, an award that Respondent 1 pays the Additional Payment in accordance with the Oral Agreement;

(f) Additionally, an award compensating the Claimant for all other loss and damage suffered by the Claimant, which was occasioned by Respondent 1's breaches of the First Agreement, in the sum of £126,837 or such other amount as determined by the Tribunal;

(g) Additionally, an award that Respondent 1 pays such interest as is owing at the date of the award, pursuant to clause 3.2 of the First Agreement;

(h) Additionally, a declaration that Respondents jointly and severally pay the costs of this arbitration (to be assessed, if not agreed), including all expenses that the Claimant has incurred or shall incur in respect of the fees and expenses of the arbitrators, the LCIA Court, legal counsel, experts and consultants as well as its own internal costs, any other expenses incurred in connection with this arbitration or any other costs order as the arbitral tribunal decides, and an award requiring them to do so within 14 days of any judgment in these arbitral proceedings; and

(i) Any other such award, order or further relief as the Tribunal may deem appropriate.

Relief sought under the Second Agreement

14.3 Under the Second Agreement and against Respondent 2, the Claimant is entitled to and claims:

(a) A declaration that the First Instalment and Second Instalment under the Second Agreement are due and owing from Respondent 2 to the Claimant;

(b) Additionally, an award that Respondent 2 immediately pays to the Claimant a sum equal to the First Instalment and Second Instalment under the Second Agreement;

(c) Additionally, an Award of damages in a sum equal to the Third Instalment under the Second Agreement;

(d) Additionally, an award that Respondent 2 pays such interest as is owing at the date of the award, pursuant to clause 3.2 of the Second Agreement;

(e) Additionally, a declaration that the Respondents jointly and severally pay the costs of this arbitration (to be assessed, if not agreed), including all expenses that the Claimant has incurred or shall incur in respect of the fees and expenses of the arbitrators, the LCIA Court, legal counsel, experts and consultants as well as its own internal costs, any other expenses incurred in connection with this arbitration or any other costs order as the arbitral tribunal decides, and an award requiring them to do so within 14 days of any judgment in these arbitral proceedings; and

(f) Any other such award, order or further relief to the Claimant as the Tribunal may deem appropriate.

2,2.
The Respondents’ Prayers for Relief are as follows, as set out in the Responses to the Requests for Arbitration (each in identical language):

8.2 Respondent respectfully requests the Arbitral Tribunal to:

i. dismiss Claimant's claims;

ii. declare that Claimant has violated its obligations under the [First][Second] Agreement;

iii. order Claimant to compensate Respondent for the damages and losses suffered as a result of Claimant's conduct in an amount to be quantified by Respondent;

iv. order Claimant to pay all arbitration costs;

v. order Claimant to pay the interest rate of 4% per annum over the base rate of HSBC Bank plc on all of the amounts as of the date these amounts were due, until the date of their effective payment; and

vi. order any further and/or additional relief as the Tribunal may deem appropriate.

8.3 Respondent reserves its right to amend, supplement and further develop its arguments and make additional claims.

2,3.
The Sole Arbitrator recalls Procedural Order No. 2 (as referenced at para. 1.15 of the First Partial Final Award) which deemed the Respondents’ Counterclaims as being withdrawn. Thus, that means that prayers for relief nos. ii, iii and v of the Respondents’ claims were withdrawn as of that time. Essentially, this arbitration is solely concerned with the Claimant’s claims and the Respondents’ defences thereto. The Sole Arbitrator specifically notes that the Respondents’ two Responses as filed with the LCIA (which are their only substantive filings in this arbitration) unambiguously delineate between matters pertaining to their defences (namely, section 6 of each document) and matters pertaining to their (now withdrawn) counterclaims (namely, section 7 of each document).

3. ANALYSIS

3.1.
The analysis of the Claimant’s claims and the Respondents’ defences thereto will now be undertaken in the manner foreshadowed by the Sole Arbitrator in his email to the Parties on 26 May 2021 (in relevant part):

I recall of the dicta of Lord Mustill (then Mustill J. in the High Court) in Finelvet AG v. Vinava Shipping Co Ltd (The Chrysalis) [1983] 1 Lloyds Rep 503, when deciding an appeal under the then English arbitration law from an award of RA MacCrindle QC (as a passing note, Bob MacCrindle was described as "the pre-eminent advocate at the English Bar during the 1960s and 1970s" from his obituary in The Guardian in 2005):

" ....dividing the arbitrator’s process of reasoning into three stages:

(1) The arbitrator ascertains the facts. This process includes the making of findings on any facts which are in dispute.

(2) The arbitrator ascertains the law. This process comprises not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached.

(3) In the light of the facts and the law so ascertained, the arbitrator reaches his decision."

3.2.
Lord Mustill’s first question: what are the facts?
3.3.
The immediate answer to this question is "very little". Most, if not all of the underlying facts are undisputed. Rather, the nature of this arbitration appears to the Sole Arbitrator to be a dispute, in large measure, as to the legal consequences of the facts.
3.4.
The Claimant is a long established Formula 1 racing team. The Respondents are companies ostensibly within the Rokit Group, a media and venture capital organisation. The term Rokit Group is, to the Sole Arbitrator’s understanding, not a reference to a specific legal entity, but rather a general one covering a large number of similarly named companies.
3.5.
Both the First and Second Agreements were sponsorship arrangements whereby the Respondents’ logo would feature on, for example, the Claimant’s racing car.
3.6.
The First Agreement commenced on 26 January 2019 and was due to expire on 31 December 2023. The Second Agreement commenced on 1 January 2020 and was due to expire on 31 December 2023. While the ascertainment and interpretation of contractual provisions is, strictly speaking, a matter for legal analysis, the Sole Arbitrator records the pertinent provisions of the First and Second Agreements now to put the matters of fact into readable context.
3.7.
Clause 3.1 of each of the First and Second Agreements indicates that each of the Respondents agreed to pay "The Fee and any relevant added value tax or other similar tax payable thereon at the times and in the manner specified in Schedule 1", in consideration of the marketing and promotional services specified in Schedule 2 thereof. Schedule 1 of both the First and Second Agreements specified the fees payable to the Claimant.
3.8.
Schedule 1 of the First Agreement defined "The Fee", namely:

"The Sponsor shall pay to Williams a fee of thirteen million five hundred thousand Pounds Sterling (£13,500,000) in each year of this Agreement. The Fee shall be payable as follows: (i) five million Pounds Sterling (£5,000,000) payable on or before 1 January in each year (save for 2019 where such sum shall be payable within ten (10) Business Days of the Commencement Date); (ii) five million pounds Sterling (£5,000,000) payable on or before 1 March in each year; (iii) three million five hundred thousand Pounds Sterling (£3,500,000) payable on or before 1 June in each year.

3.9.
Schedule 1 of the Second Agreement defined "The Fee", namely:

"The Sponsor shall pay to Williams a fee of eleven million Pounds Sterling (£11,000,000) in each year of this Agreement. The Fee shall be payable as follows: (i) four million Pounds Sterling (£4,000,000) payable on or before 1 January in each year; (ii) four million Pounds Sterling (£4,000,000) payable on or before 1 March in each year; (iii) three million Pounds Sterling (£3,000,000) payable on or before 1 June in each year. "

3.10.
Clause 3.2 of both the First and Second Agreements state:

"In the event that the Sponsor fails to make payment of any monies due to Williams pursuant to this Agreement Williams shall be entitled to interest on such unpaid monies calculated at a rate of four per cent (4%) per annum over the base rate of HSBC plc from the date or dates when such monies first became due and payable until such time as they shall be paid".

3.11.
Clause 6.1 of both the First and Second Agreements state:

"Notwithstanding the provision of clause 2, this Agreement may be terminated immediately upon notice (unless otherwise stated) as follows: (a) by either party if the other commits any material or persistent breach of any of its obligations under the Agreement and, in the case of any breach capable of remedy, fails to remedy such breach to the reasonable satisfaction of the other in accordance with a notice in writing, which shall specify: (i) the nature of the alleged breach, (ii) the steps required to remedy such breach, and (iii) the time (not being less than twenty one (21) days) within which remedial action must be taken. In the case of any material breach reasonably considered incapable of remedy, termination may be effected summarily by the service of notice to the effect of the party in breach by the other... ".

3.12.
Next, Clause 6.2 of both the First and Second Agreement states:

"Termination of this Agreement properly effected by Williams shall not serve to relieve the Sponsor of any obligation to make payment hereunder provided that: (a) Williams shall, following any such termination, use all reasonable commercial endeavours to procure a Replacement Sponsor as soon as reasonably practicable; (b) the Sponsor acknowledges and agrees that the identity of the Replacement Sponsor together with the terms and conditions of any such sponsorship agreement between Williams and any Replacement Sponsor are matters for the sole discretion of Williams (acting reasonably and in good faith); ... ".

3.13.
Clause 6.4 of both the First and Second Agreements states:

"Any termination, however effected, shall be without prejudice to any other remedy available to the parties.".

3.14.
Finally, by way of recitation of contractual provisions, Clause 7.1 of both the First and Second Agreements states:

"Subject to clause 7.24, neither party to this Agreement shall be liable for loss of profit, loss of business or revenue or for any indirect or consequential loss."

3.15.
Certain payments were made for a number of the instalments (for the 2019 Formula 1 season) pursuant to the First Agreement (the Respondents were not the paying entities, but rather some other Rokit company based in Culver City).
3.16.
During the early part of the 2019 Formula 1 season, Jonathan Kendrick (of the Respondents) wrote to Claire Williams (of the Claimant) and (apparently after oral discussions or, as the Claimant puts it, an "Oral Agreement" was struck) offered to make a 'bonus’ payment of USD 1,000,000.00 in exchange for the Claimant providing services over and above those covered by the First Agreement. Mr Kendrick’s email of 27 February 2019 says, in part:

"So I am so blown away with what your doing for rokit and me (already you have helped us get Amazon Germany)... I also confirm I am giving a lm dollar bonus payable at the end of the year for the team "

3.17.
On 4 November 2019, the Claimant issued an invoice for the aforementioned GBP 1,000,000.00 to the Ffirst Respondent. The invoice was sent to Mr Kendrick on 29 November 2019. Mr Kendrick replied by email on 29 November 2019 as follows:

"Ok got it

Will organize for you"

3.18.
On 6 March 2020, Mr Kendrick emailed the Claimant saying the following:

Dan will be sending the swift confirmation today to you BUT it may have payment date of Monday or Tuesday as thats what the banks are telling me

Anyway pls can you confirm the exact amount and can we send it in dollars(do you have a dollar account) as that’s even easier for me as if I ask them to excchnage it I just don’t want any excuses for a delay

3.19.
Following on from Mr Kendrick’s email, the Claimant sent the following summary to the Respondents:

Please find attached the outstanding invoices previously shared.

These represent:

1. [390] In relation to the verbal agreement you had in place with Claire over the $ 1m "bonus" for 2019

2. [404] The first payment (£5m) in relation to the ROKiT title partnership deal for 2020

3. [405] The first payment (£4m) in relation to the ROKiT drinks partnership for 2020

4. [458] The second payment (£5m) in relation to the ROKiT title partnership deal for 2020

5. [459] The second payment (£4m) in relation to the ROKiT drinks partnership for 2020

The total is therefore £18m and the additional $ 1m for the bonus you had previously offered.

If you would like to pay in USS you can pay in to the account below and use the prevailing US$/GB£ exchange rate which is $1.30 per £1.00.

This would result in a USS payment of $24.4m (being £18m *1.30 - $23.4m), and adding the $lm bonus.

... ... ...

If you could confirm the swift as and when you have it that would be great.

@ Dan - please let me know if you require any further details in order to process the payment.

3.20.
The last email of that day came from the Respondents (a Daniel Lewis) to the Claimant attaching a document which bears all the indicia of an instruction to a bank to wire USD 24,400,000.00 to the latter’s nominated bank account. This is exactly the amount in USD indicated by the Claimant for payment of all invoices (including the USD 1,000,000.00 on foot of the "Oral Agreement"). This document is replicated now by way screenshot:
3.21.
The identity of the Respondents ’ bank is not identified in this document, though there does appear to be a US ABA Router number on the top left hand comer. As a matter of fact, however, this document did not result in money arriving with the Claimant. This is a most curious state of affairs as it appears, on its face, to be a bona fide instruction by a customer to its bank to effect a transfer. There is no ostensible reason why that bank would not carry out such an instruction save that either sufficient funds were not present in the relevant account to make the transfer, or that the transfer was somehow countermanded. Ultimately either scenario makes no difference to the Claimant as the promise of money, apparently backed up by a tendered bank transfer instruction, came to naught.
3.22.
Things went finally awry when none of these payments, mostly for the 2020 Formula 1 season, actually arrived. The detail of these amounts is now examined.
3.23.
The First Instalment for 2020 under the First Agreement amounted to GBP 5,000,000.00 was due on or before 1 January 2020. An invoice (WGPE-I-000404) was raised on 12 November 2019, and sent to Mr Kendrick on 29 November 2019. It was never paid.
3.24.
The Second Instalment for 2020 under the First Agreement amounted to GBP 5,000,000.00 was due on or before 1 March 2020. An invoice (WGPE-I-000458) was raised on 30 January 2020 and sent to Mr Kendrick on 31 January 2020. It was never paid.
3.25.
The First Instalment for 2020 under the Second Agreement amounted to GBP 4,000,000.00 was due on or before 1 January 2020. An invoice (WGPE-I-000405) was raised on 12 November 2019 and sent to Mr Kendrick on 29 November 2019. It was never paid.
3.26.
The Second Instalment for 2020 under the Second Agreement amounted to GBP 4,000,000.00 was due on or before 1 March 2020. An invoice (WGPE-I-000459) was raised on 30 January 2020 and sent to Mr Kendrick on 31 January 2020. It was never paid.
3.27.
The invoice for the bonus payment of USD 1,000,000.00 noted above was also never paid.
3.28.
On 7 April 2020, the Claimant wrote to the Respondents affording them the opportunity to cure and pay the invoices. The Respondents did not make those payments. This is contrasted with the position a month before when the Respondents were clearly informing the Claimant that they were taking active steps to make payment.
3.29.
On 28 May 2020, the Claimant wrote to the Respondents terminating the First and Second Agreements. The date of termination was, as a matter of fact, a few days before the last and final instalments for 2020 were due to be triggered for payment under both the First and Second Agreements (GBP 3,500,000.00 and GBP 3,000,000.00 respectively, on 1 June 2020).
3.30.
Separately in connection with the efforts to find a replacement sponsor, the Claimant presented a witness statement Tim Hunt, its Chief Marketing Officer. The Respondents did not call him for cross-examination. The fact that the Respondents did not call him for cross-examination is not, in and of itself, a reason to accept his testimony. It is a just a factor to be borne in mind. Having considered the matter, and also reviewed the redacted correspondence placed on the record showing that the Claimant pursued alternative sponsors once it became clear that the Respondents were not paying up, the Sole Arbitrator has decided to accept the contents of Mr Hunt’s witness statement.
3.31.
The Sole Arbitrator concludes this section on factual matters with an analysis of the predicate facts for a number of the Claimant’s monetary and damages claims of a lesser magnitude that those already discussed above.
3.32.
The Parties to the First Agreement agreed to share the costs of the original branding, which was provided by 'Fanatics’ - a third party clothing manufacturer - at the commencement of the First Agreement. There is no doubt, in that regard, when one reviews the emails between Amanda McReynolds (of the Claimant) and Fem Townend (of the Respondents) ranging between 7 June 2019 and 29 January 2020. An invoice for GBP 21,660.00 was raised on 23 January 2020 and sent to Ms Townend on that date. It has never been paid. The Sole Arbitrator considers that the amount of the invoice and its basis is factually established.
3.33.
The Claimant had also incurred costs with regards the transportation of show cars, which, pursuant to clauses (r) and (w) of Schedule 2 of both the First and Second Agreements, were payable by the Respondents. The associated invoices, which in total amount to GBP 30,834.00, remain unpaid. The Sole Arbitrator considers that the amount of the invoices and their basis is factually established.
3.34.
Finally, the Claimant incurred costs reversing and replacing its marketing and promotional materials and services, which carried the ROK1T livery. Those costs amounted to GBP 126,837.00. The Sole Arbitrator considers that this amount and its basis is factually established.
3.35.
Lord Mustill’s second question: what is the law?
3.36.
The Claimant (para. 38 of its Skeleton) describes the legal basis for its claims as follows (emphasis added for present convenience):

1) Claims in debt against ROKIT and ROK for £10,000,000 and £8,000,000. Those sums are due and owing in respect of the First and Second Instalments under both the First and Second Agreements.

2) A claim in debt against ROKIT, in the sum of £21,660, in respect of the de-branding and re-branding costs under the First Agreement.

3) A claim in debt against the ROKIT Entities, in the sum of £30,834, in respect of the Show Car Invoices (as particularised in Annex 1 of the Statement of Case).

4) Damages claims in the sum of £3,500,000 and £3,000,000 against ROKIT and ROK, respectively, in respect of the Third Instalment under each of the Sponsorship Agreements.

5) A claim in debt against ROKIT in the sum of £770,000, where that sum is due and owing under the Oral Agreement.

6) A claim in damages against the ROKIT Entities in the sum of £126,837 for the damages Williams has incurred in reversing and replacing its marketing and promotional services, in light of their breach

DEBT CLAIMS

3.37.
It requires little exposition of legal principles to articulate the basis for a debt claim in English law. The Claimant relies on Jervis v Harris [1995] EWCA Civ 9:

"The law of contract draws a clear distinction between a claim for payment of a debt and a claim for damages for breach of contract... a debt is a definite sum of money fixed by the agreement of the parties as payable by one party to the other in return for the performance of a specified obligation by the other party or the occurrence of some specified event of condition; whereas damages may be claimed from a party who has broken his primary contractual obligation in some other way than by failure to pay such a debt".

3.38.
The Sole Arbitrator has no difficulty in provisionally ascertaining that the debts claimed by the Claimant against the Respondents are definite sums of money, fixed by agreement, payable by the Respondents, and all duly invoiced. This emerges from the factual discussion in the preceding section of this Partial Final Award. This is as obvious as could be.
3.39.
However, before that provisional ascertainment becomes final, the Sole Arbitrator has given particularly careful consideration to the defences raised by the Respondents.
3.40.
First, the Respondents make complaint about missed testing days (two) in 2019. This is not substantiated by the Respondents, and is simply an allegation in one of the Responses. In any event, if this complaint was seriously maintained, then it is difficult to reconcile with the unambiguous exchange in March 2020 whereby the Respondents indicated that they were, in fact, paying all of the invoiced amounts.
3.41.
Secondly, the Respondents complain that from 1 January 2020 until termination they did not receive any of the contracted-for services. As with the foregoing point, it is both unsubstantiated and irreconcilable with the unambiguous promise of payment in March 2020 (as demonstrated, particularly, by the tendering by the Respondents of a bank transfer confirmation - such document, bizarrely, did not result in actual funds being transferred).
3.42.
The Sole Arbitrator considers that the Respondents’ two aforementioned lines of defence to have no basis, either in fact or in law.
3.43.
Of far greater interest is the issue, of a jurisdictional nature, raised by the Respondents concerning the Claimant’s claim under the "Oral Agreement" and the claim for branding costs. The Respondents say that there is no agreement to arbitrate in that regard and therefore, whatever about any underlying merit, the Sole Arbitrator has no jurisdiction. This point was the precise subject of the post-hearing written submissions.
3.44.
The Claimant, para. 15 of its post-hearing written submissions, confirms that its case is that, insofar as the "Oral Agreement" is concerned, it is a supplementary or ancillary contract to the First Agreement. For the avoidance of doubt, therefore, the Claimant is not making the case that the "Oral Agreement" was an amendment or change in some way to the First Agreement. Any such change to the First Agreement would, likely, need to overcome the whole agreement clause (Clause 21) contained therein. That legal debate is therefore not relevant to this arbitration.
3.45.
Paras. 17-18 of the Claimant’s post-hearing written submissions set out, precisely, its case for a supplementary or ancillary contract:

17. Accordingly, properly construed, the Oral Agreement does not modify or vary the First Agreement but supplements it with an additional (albeit, clearly related) agreement for the provision of further services in exchange for an additional payment. For that reason, as pleaded, the Oral Agreement is properly construed as an "independent agreement" (as referred to by the Supreme Court in MWB Business, per Lord Sumption at [14] / pg 129F) and not as one "modifying what would otherwise be the effect of the" First Agreement. Indeed, on reflection, common sense suggests that the Additional Payment for additional services is clearly supplemental and does not purport to modify existing terms. Accordingly, per Lord Sumption at [14], the 'no oral modification’ clause in clause 21.1 will not prevent the enforcement of the Oral Agreement.

18. While the Oral Agreement represents a separate, independent agreement from the First Agreement, it is clearly one which is related to the subject matter thereof. In that respect, as pleaded at paragraph 8.2 of the Statement of Case [6/59], the additional payment under the Oral Agreement was framed as a "bonus" payment (see the email of Mr Kendrick, dated 27 February 2019 [16/176-177]) - and not as an entirely freestanding obligation. Similarly, the services which Williams agreed to provide under the Oral Agreement were related, and similar, to the kind of services provided under the First Agreement. For that reason, they are described in the Statement of Case as being "over and above" those in the First Agreement (i.e. additional, but nonetheless related, to the existing obligations therein).

3.46.
The factual predicate for the "Oral Agreement" has already been discussed above in the preceding section of this Partial Final Award. Applying the legal argument and analysis, properly and fairly put by the Claimant’s Counsel, the Sole Arbitrator considers that the English law test has been satisfied. The Respondent’s argument that there was no consideration for the "Oral Agreement" (which the Sole Arbitrator appreciates to be the sole merits argument placed against the Claimant in that regard) has neither been articulated in any meaningful way, nor proven.
3.47.
Coming to the key point, namely, jurisdiction, the Claimant says (para. 13 of its post-hearing written submissions):

13. In multi-contract cases, however, the question is whether the contracts are "part of one package": AmTrust Europe, per Beatson LJ, at [49]. Specifically, Beatson LJ (at [47]) relied on a summary of the relevant principles from Sebastien Holdings, as follows: "(1)... [I]n construing a jurisdiction clause, a broad and purposive construction must be followed... (2)... [A]n agreement which [is] part of a series of agreements [should be construed] by taking into account the overall scheme of the arrangements and reading sentences and phrases in the context of that overall scheme... (3) It is generally to be assumed... that just as parties to a single agreement do not intend as rational businessmen that disputes under the same agreement be determined by different tribunals, parties to an arrangement between them set out in multiple related agreements do not generally intend a dispute to be litigated in two different tribunals... (4)... [W]here there are multiple related agreements, the task of the court in determining whether the dispute falls within the jurisdiction clauses of one or more related agreements depends on the intention of the Parties as revealed by the agreements as against these general principles. "

3.48.
The Sole Arbitrator has given the most careful consideration to the issue of jurisdiction and has, with considerable caution, decided that he has authority to determine the Claimant’s claim under the "Oral Agreement". The Sole Arbitrator is persuaded, based on the legal principles discussed by the Claimant and quoted just above, that the ancillary nature of the "Oral Agreement" to the First Agreement is of such a close connection that the arbitration clause contained in the latter encompasses (bearing in mind Lord Hoffmann’s classic, and now as established in English law as a cardinal principle, elaboration in Fiona Trust) the former.
3.49.
Quite apart from all of the foregoing, the Sole Arbitrator does consider that the Respondents’ position, as a whole, in this arbitration not only fails to persuade, it actively dissuades. Up to March 2020, the Respondents were unambiguously promising payment to the Claimant in full and without reservation. The Respondents even went to the extent of tendering an apparently authentic bank transfer confirmation, but no money actually materialised for whatever unknown reason which caused such transfer to fail. To now accept the Respondents’ position, generally, would require the Sole Arbitrator to suspend any meaningful forensic or evidential approach, and see the matter through a glass, darkly.
3.50.
Finally, as regards the debt claim, there is a similar jurisdiction point taken as to "re-branding" costs (GBP 21,160.00), however, the same analysis applies mutatis mutandis. The Sole Arbitrator has jurisdiction in that regard.
3.51.
In summary, insofar as the Claimant’s debt claims are concerned, these are all upheld in full, and insofar as there was any jurisdictional point taken by the Respondent, this is denied.

DAMAGES CLAIMS

3.52.
The Sole Arbitrator commences this section with the Claimant’s legal position (para. 34.3 of its Skeleton) which is to be read in conjunction with the quotation above at para. 3.37:

Where a further debt would have fallen due but for a breach of contract, the remedy will sound in damages. See, Chitty at 26-009 [130/1045]: "Under a contract for payment by instalments, no claim in respect of instalments due in the future may be brought as a claim for debt, but if the party due to pay the instalments has committed a breach of his obligations which entitles the other party to terminate the contract, then, subject to the general rule on damages, an award of damages may be made in respect of the prospective loss of the future instalments... "

3.53.
The Sole Arbitrator considers this statement of principle to be an entirely uncontroversial (and un-controvertible) articulation of English law.
3.54.
In application of the foregoing legal principle to the established facts (as discussed in the preceding section) there appears to be no discernible doubt as to the strength of the Claimant’s case for damages.
3.55.
First, there appears to be no dispute of any kind as to the right of the Claimant to the damages for GBP 126,837.00 that the Claimant has incurred in reversing and replacing its marketing and promotional services. This was post-termination, and arose naturally from the fact that the Claimant had to extract out the Respondents’ indicia from marketing and promotional services. This was necessitated by termination, and the fault or liability for that termination lies with the Respondents. That claim is established.
3.56.
Secondly, the main thrust of the Respondents’ defence to the "Third Instalment" claims for damages is that the Claimant failed to use all reasonable commercial endeavours in locating a replacement sponsor.
3.57.
The Sole Arbitrator is not persuaded by the Respondents’ position. As a matter of fact, the Claimant did seek out replacement sponsors (as per the witness statement of Mr Hunt) but to no avail. The Respondents have not proven this allegation in any way and it appears to be an assertion in pleadings only. However, the Respondents’ insurmountable difficulty is that the Claimant has a contractual right to choose a replacement sponsor in its "sole discretion" as per Clause 6.2 quoted above. That language, agreed to expressly by the Respondents, properly interpreted gives considerably leeway to the Claimant in the choice of replacement sponsor. Put more bluntly, the Claimant is not required to accept any sponsor, no matter how unsuitable, just to allow the Respondents diminish their liability in damages.
3.58.
The Sole Arbitrator is also unpersuaded by the Respondents’ argument that the Claimant’s claim in damages is precluded by the contractual bar on claims for lost profits. That, in essence, misreads and misunderstands the proper functioning of Clause 7.1 (quoted above). The Claimant is simply, by its claim in damages, seeking to put itself in the position it would have been had the contracts been performed according to their terms in 2020. The Claimant is not looking to the Respondents for any wider loss of profit or other sort of claim like that.
3.59.
Lord Mustill’s third question: the decision?
3.60.
Having considered all of the foregoing, the Sole Arbitrator upholds all of the Claimant’s claims, both in debt and in damages.
3.61.
As a necessary follow-on from the foregoing decision, the final matter to be determined is the Claimant’s claim for interest. This is granted. There is no doubt but that the Claimant is entitled to interest at the rate of four per cent (4%) per annum over the base rate of the Bank of England (per Clause 3.2 of both the First and Second Agreements). The Sole Arbitrator also notes that Article 24.7 of the LCIA Rules makes express provision for an award of interest. The Sole Arbitrator, having considered the position and the entire relevant circumstances of the case, sees no reason to deny the Claimant the interest amount it seeks on certain of the debts and damages. Accompanying its Skeleton is a calculation in the total amount of GBP 1,256,331.51 up to 28 May 2021 (the date of the hearing) on the three instalments for 2020 (the first two being part of the debt claims, and the third being part of the damages claim). The Claimant seeks, in its prayers for relief, interest as of the date of this Partial Final Award, but not beyond that point in time. While a certain amount of time has elapsed since 28 May 2021 to now, the Sole Arbitrator considers that the interest calculation up to the date of the hearing is that which has been established by the Claimant. No further interest is awarded. The precise allocation of awarded interest as between the First Agreement and Second Agreement claims are, respectively: (a) GBP 693,443.84 and (b) GBP 562,887.67.

4. GENERAL

4.1.
The Sole Arbitrator records that he has taken note of, and considered all submissions put before him for the purpose of this Partial Final Award. He has, in his assessment of the cases, positions and issues, referred in this Partial Final Award to those matters he has considered specific to the explanation of his reasoning; however, all submissions were taken account of, whether expressly referred to or not, in the formulation and articulation of the reasons and conclusions herein.

5. PARTIAL FINAL AWARD

5.1.
For the reasons set out above, the Sole Arbitrator holds, finds, grants and determines by way of Partial Final Award:

(a) A declaration that the First Instalment [GBP 5,000,000.00] and Second Instalment [GBP 5,000,000.00] under the First Agreement are due and owing from ROKIT MARKETING INC to WILLIAMS GRAND PRIX ENGINEERING LIMITED;

(b) A declaration that the monies invoiced under the Fanatics [GBP 21,660.00] and Show Car Invoices [GBP 30,834.00] are due and owing from ROKIT MARKETING INC to WILLIAMS GRAND PRIX ENGINEERING LIMITED;

(c) An award that ROKIT MARKETING INC immediately pays to WILLIAMS GRAND PRIX ENGINEERING LIMITED a sum equal to the First Instalment [GBP 5,000,000.00] and Second Instalment [GBP 5,000,000.00]under the First Agreement, and the Fanatics [GBP 21,660.00] and Show Car Invoices [GBP 30,834.00]:

(d) An award of damages to be paid by ROKIT MARKETING INC to WILLIAMS GRAND PRIX ENGINEERING LIMITED in a sum equal to the Third Instalment [GBP 3,500,000.00] under the First Agreement;

(e) An award that ROKIT MARKETING INC pays the Additional Payment [USD 1,000.000,00] in accordance with the Oral Agreement;

(f) An award compensating WILLIAMS GRAND PRIX ENGINEERING LIMITED for all other loss and damage suffered by it, which was occasioned by ROKIT MARKETING INC's breaches of the First Agreement, in the sum of GBP 126,837.00;

(g) An award that ROKIT MARKETING INC pays interest in the amount of GBP 693,443.84 pursuant to clause 3.2 of the First Agreement;

(h) A declaration that the First Instalment [GBP 4.000,000.00] and Second Instalment [GBP 4,000,000.00] under the Second Agreement are due and owing from ROK MARKETING LLC. to WILLIAMS GRAND PRIX ENGINEERING LIMITED;

(i) An award that ROK MARKETING LLC. immediately pays to WILLIAMS GRAND PRIX ENGINEERING LIMITED a sum equal to the First Instalment [GBP 4,000,000.00] and Second Instalment [GBP 4,000,000.00] under the Second Agreement;

(j) An award of damages to be paid by ROK MARKETING LLC. to WILLIAMS GRIND PRIX ENGINEERING LIMITED in a sum equal to the Third Instalment [GBP 3,000,000.00] under the Second Agreement; and

(k) An award that ROK MARKETING LLC. pays interest in the amount of GBP 562,887.67 pursuant to clause 3.2 of the Second Agreement.

5.2.
The Sole Arbitrator retains jurisdiction over all other extant prayers for relief herein for later disposition.
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