Site logo

Uralkali case to be heard late next year


The legal case involving potential Force India purchaser Uralkali and the team's administrator, FRP Advisory LLP is to be heard late next year.

The Russian company began legal proceedings in September 2018, as it questioned the process by which the consortium led by Lawrence Stroll bought the Silverstone-based outfit, suggesting that the process "may not have been in the best interests of Force India creditors and stakeholders, and the sport in general".

In its action, Uralkali claimed that the Stroll consortium's winning bid was lower than its own, while describing the response from the administrators as "inadequate".

Its "extremely generous offer", included a cash consideration of between £101.5m and £122m, would have paid more than £40m to Force India's holding company.

"We had a strong business case for acquiring Force India and we believe our bid was the best one tabled," said Paul Ostling, an independent director of Uralkali. "We have serious concerns as to why the Administrators did not use the opportunity to maximise the amounts that could have been paid to creditors and shareholders."

The company's case appeared to be given strength by an FIA press release issued in the wake of the sale to Stroll's consortium which declared that "since the Force India Formula One Team Limited was placed into administration on 27 July, the FIA has worked in collaboration with the Joint Administrators (Geoff Rowley and Jason Baker of FRP Advisory LLP), Racing Point UK Limited and Formula One Management to ensure the expedient and compliant transition of the team's assets to the new entrant".

Which basically means, according to the FIA's own press release, that from the day Force India went into administration, the aim was for Racing Point to be the new F1 entrant.

Uralkali, of which F2 driver Nikita Mazepin's father, Dmitry, is a non-executive director, is seeking "substantial damages".

In December, The U.S. District Court for the Southern District of New York issued an order compelling Mr. John D. Idol, the CEO of Michael Kors, to provide documents in his possession relevant to Uralkali's claims in the U.K. against FRP Advisory LLP.

At a case management conference on Wednesday, a date for the case was agreed, with Uralkali subsequently issuing a statement:

On July 17, the High Court in London conducted a case management conference, which was an early procedural hearing, of the suit earlier launched by Uralkali against the Administrators. During this hearing the court considered case management issues and settled the timetable for further steps up to trial, which was scheduled to take place between October and December 2020. Prior to trial, the parties to the proceedings will be required to disclose certain correspondence and other documents relating to the Bidding Process, and will exchange witness evidence in April 2020.

Earlier in December 2018, two US district courts decided to compel members of the Racing Point consortium residing in US to provide documents and testimony, which may assist in support of Uralkali's claim in the High Court in London.

Uralkali's legal claim against the Administrators highlights significant areas of concern regarding the conduct of the Bidding Process, including:

Failure by the Administrators to determine the highest bid in the process - from Uralkali - as successful;

Misrepresentations and lack of transparency in the process run by the Administrators;

A flawed sales process which failed to achieve the maximization of sale proceeds for creditors, shareholders and other stakeholders.

When Force India went into administration on July 27, 2018 Uralkali was eager to try and protect the team's future and entered the sale process in good faith. Uralkali set out an extremely generous offer to acquire the company's business, assets and goodwill, which included a cash consideration of between £101.5 million and £122 million, depending on the specific structure of other bids. The offer proposed sufficient funding to satisfy the claims of all creditors in full (including assumed claims) and included an undertaking to provide significant working capital and a new investment program over a 5-year term to ensure the future success of Force India.

The Company estimates that, after repayment of all valid claims of creditors and administrator's costs (based on information from the Administrators) its proposal would have resulted in more than £40 million being available to Force India's shareholders (i.e., Orange India Holdings Sarl) and, consequently, further used as a source of repayment of any stakeholder claims.

During the course of the Bidding Process and discussions with the Administrator, Uralkali insisted on a transparent and fair process to ensure equal opportunities for each bidder. In particular, Uralkali proposed that the Bidding Process be conducted by way of the submission in sealed envelopes of best and final bids to be opened in the presence of appointed representatives of the interested bidders. However, this proposal was rejected by the Administrators.

Uralkali always emphasized its desire to bring transparency, proper corporate governance and financial stability to Force India. In this connection, Uralkali considers that the process conducted by the Administrator was not in the best interests of Force India's stakeholders.

Based on facts confirmed to us by the Administrators, the bid accepted by the Administrators was significantly inferior to Uralkali's bid. Uralkali's bid should therefore have been the winner.

Despite Uralkali's generous offer, which we believe was the best bid on the table, the Administrators chose to enter into an exclusivity arrangement with a lower bidder and subsequently refused to reengage with Uralkali or any other bidders. Due to Uralkali's concerns as to the Bidding Process, Uralkali had no option but to launch these proceedings and seek substantial damages. Uralkali intends to continue vigorous pursuit of its claims against the Administrator in the High Court in London."

"FRP Advisory remains adamant that it did nothing incorrect," FRP Advisory LLP told "We fulfilled our statutory duties as administrators throughout this process and ultimately achieved a very successful outcome for all stakeholders. We remain fully confident that this baseless legal action will be dismissed."


more news >



galleries >

  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images
  • latest F1/Formula 1 images


or Register for a Pitpass ID to have your say

Please note that all posts are reactively moderated and must adhere to the site's posting rules and etiquette.

Post your comment



1. Posted by Hobgoblin, 19/07/2019 12:55

"Uralkali, of which F2 driver Nikita Mazepin's father, Dmitry, is a non-executive director, is seeking "substantial damages".

Damages for what?
At the start of the process, they didn't have an F1 team.
At the end of the process they didn't have an F1 team.
Not sure what they have lost other than the costs of their bid - which they cannot claim as they would spend that regardless of the success or failure of their bid."

Rating: Positive (4)     Rate comment: Positive | NegativeReport this comment

Share this page


Copyright © Pitpass 2002 - 2022. All rights reserved.

about us  |  advertise  |  contact  |  privacy & security  |  rss  |  terms