Why a former Williams sponsor was told to pay the team £26 million · RaceFans

Williams may have scored points rarely in 2022, but the team did enjoy a notable off-track success. Towards the end of last year the District Court of the Central District of California agreed the team’s former sponsor Rokit must pay them over £26.2 million.

The decision was the latest stage of a dispute between the two parties which came to light when Williams announced they had split in May 2020, following their first season in Rokit’s colours.

Rokit describes itself as a creator of innovative technology and premium products, with a range of smartphones, drinks, payment cards and e-bikes among the items it has sold. It is also heavily involved in motorsport sponsorship, having been the primary sponsor for Formula E, IndyCar and World Superbikes teams as well as having its logos appear on all cars in W Series and British Formula 4 and supporting individual drivers such as Nicolas Hamilton, the brother of Formula 1 champion Lewis Hamilton.

Documents published following the court’s decision shed light on what happened. Williams’ case revolved around three agreements between the two companies. The first covered team sponsorship and started in January 2019 and the second began on the first day of 2020 and applied to a partnership with the Rokit Group’s drink brand. Both were due to conclude at the end of 2023.

Williams 2019 F1 livery launch
Report: Williams shows off its new 2019 livery and title sponsor

In the first agreement, Rokit was to pay Williams £13.5 million each year. A payment of £5 million was to be paid on January 1st in each year of the contract, £5 million to be paid by March 1st in each year and £3.5 million by June 1st in each year.

The second agreement came to a sum of £11 million for each year, with sponsorship instalments of £4 million for January 1st and March 1st, and £3 million by June 1st.

A third ‘Oral Agreement’ totalling $1 million was also made in February 2019 – before Williams had even started a race in Rokit colours. The documents state that was put into writing by Jonathan Kendrick, chairman of the Rokit Group, who emailed Williams’s then-deputy team principal Claire Williams to “confirm I am giving a 1m dollar bonus payable at the end of the year for the team”. Williams sent an invoice for this shortly before the final race weekend of the year in November.

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A second email from Kendrick to the team about payment came three months later, after two of that year’s payment dates had passed, confirming the next bank transfer would be late and adding, the documents states: “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 exchange I just don’t want excuses for a delay”.

Nicholas Latifi, Williams, Circuit de Catalunya, 2020
Report: Williams to reveal new 2020 car livery after ending Rokit sponsorship deal

Williams sent five outstanding invoices in response: the $1m bonus, two of the £5 million instalments for the team sponsorship and two of the £4 million instalments for the drinks partnership.

“The total is therefore £18m and the additional $1m for the bonus you had previously offered,” read their reply. “If you would like to pay in US$ you can pay in to the account below and use the prevailing US$/GB£ exchange rate which is $1.30 per £1.00. This would result in a US$ payment of $24.4m (being £18m *1.30 = $23.4m), and adding the $1m bonus.”

This time a prompt response came from Rokit “however, this document did not result in money arriving with the Claimant [Williams],” noted the London Court of International Arbitration (LCIA) when this matter later reached it.

“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.”

The team wrote to the firm chasing payment of the five invoices in April 2020, “affording them the opportunity to cure and pay the invoices”. There was no progress, and on May 28th a follow-up message was sent by Williams saying it was terminating the first two agreements. A day later, the team announced that decision to the world.

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Three weeks on from that, Williams’ solicitors contacted Rokit, presenting a ‘Without Prejudice Save as to Costs’ of the payments owed. This offer provided Rokit with a tweaked number to pay to avoid the matter having to progress to legal proceedings.

Williams said they could settle with Rokit paying £13.5 million for the three instalments of one year of the first agreement, and £11 million for the second agreement, and said it would “refund any amounts that is secures by way of Replacement Sponsors in respect of the 2020 season”, and that they would not pursue the $1 million bonus or compensation for any legal costs.

But Rokit did not reply, and Williams enquired again with mention to that they had heard that the Rokit Group was now looking to sponsor Mercedes. In July, Rokit responded to Williams’ solicitors, saying: “…Your client is proposing that we pay £13.5m, for what? We look forward to receiving confirmation once you have commenced arbitral proceedings…”.

Williams therefore sought legal action to secure its sponsorship money, which commenced in 2021. The LCIA hearing took place on May 28th, and it was determined that Williams were entitled to their claims, with an additional £693,443.84 payable in interest at the rate of 4% over the base rate of the Bank of England. The claims not only covered the contractual cost of the two agreements, but also other costs that occurred due to the sponsorship deal with Rokit. They are broken down as below to the date of termination:

  • A claim of debt from Williams against Rokit, for the agreements £18 million
  • Damages from Williams against Rokit £6.5 million
  • A claim of debt of the ‘Oral Agreement’ £770,000
  • Damages for replacing Rokit as sponsor in light of their breach £126,837
  • Show car invoices £30,834
  • The branding and rebranding costs of the team with Rokit’s logo £21,660

Williams started the next stage of recovering the money by filing a costs submission to the US District Court for the Central District of California in August 2021 so the LCIA’s decision could be enforced. By November 2021 a further sum of over a quarter of a million dollars had been added to the sum owed to cover additional legal costs.

In September 2022, a notice of service of court was issued in California that “The Petition to Confirm Foreign Arbitral Award is now set for hearing on November 28, 2022” between the two companies. The hearing “confirmed all respects of the London court’s decision, meaning Rokit is to pay £26,220,094.25 and $1 million, along with costs occurred in this proceeding.”

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