RAM Media Ltd v Ministry of Culture of the Hellenic Republic (Secretariat General of Sport)

On 6 November 2006 there were due to take place in Athens the 2006 FIFPro World XI Player Awards (“the Awards”). The Defendant (“the Ministry” or “MOC”) was to host the Awards, and the Claimant (“RAM”) and Parallel Media Group PLC (“PMG”) were to organise and stage the Awards. The Ministry was also to procure a host broadcaster in Greece to produce a recording of the Awards for worldwide distribution in a format similar to the 2005 Awards, which had been staged in London. On 1^st November 2006 it was announced that the Awards had been cancelled. RAM and the Ministry blame each other for this disaster. RAM claims that there was a repudiation by the Ministry of the agreement between them, and for sums of money which it says are due to it as a result. That agreement between RAM and the Ministry was made in writing and dated 10^th May 2006 (“the Agreement”). The Ministry say that it was RAM who repudiated the agreement, and it counterclaims a declaration and damages. In practice the counterclaim is of little significance, since RAM is in Administration and the Ministry do not expect to recover any money that may be due to it.

FIFPro is the Fédération Internationale des Footballeurs Professionels. It is the worldwide representative organisation for all professional players. The membership is made up of national players' associations. It is based in the Netherlands. Its Secretary General is Mr Theo van Seggelen. On 1^st October 2004 FIFPro had appointed RAM to promote and organise a number of events, including the Awards, on terms set out in a detailed agreement (“the FIFPro Agreement”).

PMG was founded by Mr Ciclitira, and he has been its Chairman ever since. Mr Ciclitira had previously been one of the original shareholders of Europe’s first satellite television station which later became Sky TV, following its sale in 1983 to News International. Mr Ciclitira remained with that company as its Deputy Managing Director until he left to found PMG in 1986. PMG specialises in the promotion, management and marketing of international sports and entertainment events, in which it has substantial experience. PMG had been involved in seeking sponsors for the 2005 Awards. Those awards had been organised by another company, Celador. Celador’s agreement with RAM ended in 2005. In November 2005 RAM engaged PMG to sell the hosting rights and sponsorship for the Awards. Much later RAM entered into a contract by which it engaged PMG as the event manager for the Awards.

Meanwhile, in November 2005 Mr Ciclitira met Mr Orfanos to discuss a golf project. Mr Orfanos was the Deputy Minister of Culture with responsibilities for Sport. Having heard of the Awards from Mr Ciclitira at that meeting, on 4 January 2006 Mr Orfanos wrote to confirm the Ministry’s offer for Greece to be the host country for the Awards.

PMG Greece was a joint venture between PMG and Mr Mamantzis, Mr Taki Maskell and a third person, all of whom had been involved in the golf project. Mr Mamantzis had arranged the meeting between Mr Ciclitira and Mr Orfanos.

RAM is a subsidiary of RAM Investment Group PLC (“RIG”). RIG is an AIM listed company of which the share capital is held as to 17.61% by Mr Barry Edward Adams, and as to 26.5% each by Mr Nick Lebetkin and Mr Laurence Selman. RIG’s principal business is property investment and development, mainly in the leisure sector. RAM is a special purpose vehicle set up for the purpose of making agreements with FIFPro, and others, relating to the FIFPro 2005 awards, and other such events, including the Awards. RAM went into administration on 4 May 2007. Before joining RIG Mr Adams had been the chairman of Medi@ Invest PLC. Mr Manley is a chartered accountant and the company secretary of RIG. He worked as an independent consultant to a number of companies, including RIG, and as project manager for the financial aspects of RIG and its subsidiaries, including RAM.

In February 2006 the Ministry, RAM and PMG entered into a form of agreement for the hosting of the Awards in Athens. By a side letter it was agreed that this was subject to confirmation to be obtained from the Hellenic Republic Court of Audit. That confirmation was a requirement of Greek law. The agreement prepared in February was substantially in the form of the Agreement. But the Court of Audit required certain amendments to be made, and did not give its approval until 20 April 2006. The time taken in obtaining the confirmation of the Court of Audit meant that the dates for payment and other matters envisaged in February had to be revised when the agreement was eventually signed in May.

A press conference was held on 7 February 2006 in Athens to announce the decision for Athens to be the host venue for the 2006 Awards. Greece had recently hosted the Olympic Games, and the Greek team had won the European Championships in 2004. These successes were referred to.

There followed a number of meetings and other exchanges between the Ministry, RAM, PMG, PMG Greece, and FIFPro. Although there was as yet no binding agreement, plans for the Awards started to be made. Those who started to prepare plans included Mr Rory Renwick, Mr Derek Hanlon (who was to become the Executive Producer), Mr Simeon Pines (who was to become the Producer). Amongst the documents that Mr Pines prepared was what he called a “wish list” dated 30 March 2006 relating to technical specifications, the venue, staff and other matters. But by 10^th April 2006 Mr Ciclitira was becoming concerned at the delay, and wrote to Mr Orfanos expressing this.

The parties to the Agreement were RAM, PMG and the Ministry. There were recitals to the Agreement. These included references to the fact that FIFPro had granted rights relating to the Awards exclusively to RAM. The Agreement included the following provisions:

“I Hosting of 2006 FIFPro Awards

1.

RAM as the exclusive licensee of the commercial rights in and to the FIFPro Awards, hereby grants MoC the right to host the 2006 FIFPro Awards in Athens subject to and in accordance with, the provisions of this Agreement ….

3.

In consideration of being granted the right to host the 2006 FIFPro Awards pursuant to paragraph 1 above MoC undertakes to do as follows:-

(a)

to procure the use, free of charge, of a suitable venue in Athens (the “Venue”) for the purposes of hosting the 2006 FIFPro Awards. As soon as practicable after signature of this Agreement representatives of MoC and PMG (on behalf of RAM) will meet to establish the appropriate Venue taking into account the requirements of FIFPro, RAM and PMG and of the host broadcaster to be appointed in accordance with sub-paragraph c) below. MoC shall assist RAM (and PMG) in negotiating the agreement with the relevant Venue provider for the use of the Venue.

(b)

to guarantee to RAM, the payment of the sum of €4 million (four million Euros), by way of a hosting fee, in the following instalments and upon presentation of the appropriate invoices:-

- 30%, being €1,200.000 (one million two hundred thousand Euros), within 10 (ten) days of signature of this Agreement, upon presentation of an equal amount Bank guarantee;

- 30%, being €1,200.000 (one million two hundred thousand Euros), on Friday 30^th August 2006;

- 30% being €1,200.000 (one million two hundred thousand Euros), on Friday 15^th October 2006; and

- 10%, being €400,000 (four hundred thousand Euros) within ten (10) days of the end of the 2006 FIFPro Awards.

(c)

to procure a suitable host broadcaster in Greece to produce (at the cost of MoC or the relevant host broadcaster) an audio-visual recording of the 2006 FIFPro Awards (the “Recording”) of an internationally acceptable broadcast standard for the purposes of worldwide distribution, in a format similar in length and content to the recording of the 2005 event, which format has previously been approved by RAM. For the avoidance of doubt MoC acknowledges that all copyright and other intellectual property rights in the Recording (and in the 2006 FIFPro Awards) shall vest automatically upon their creation in RAM save only that the host broadcaster shall be granted the exclusive licence to transmit the Recording as well as recordings of December 2009. The terms of the production and broadcast agreement(s) to be entered into by the relevant parties and the host broadcaster shall be negotiated, in good faith, as soon as practicable after signature of this Agreement and, without limitation, shall require the host broadcaster to obtain and pay for all consents, clearances and licences as are needed to enable the Recording to be distributed internationally by RAM (with the assistance of PMG).

4a) Payment of the hosting fee referred to at paragraph 3b) above shall be made in full in Euros free and clear of any and all set-offs, deductions, withholdings or taxes levied by the local Greek tax authorities (including, without limitation, withholding taxes and value added tax).

II Additional Rights and Benefits for MoC

1(a) In addition to being granted the right to host the 2006 FIFPro Awards RAM hereby grants to MoC the following:-

(i)

the exclusive right to sell local sponsorship (including, for the avoidance of doubt, local broadcast sponsorship but excluding hotel and airline sponsorship which right shall remain with RAM) and hospitality for the event, in each case within Greece only, and to retain all revenue derived there from; and

(ii)

the right to branding at the 2006 FIFPro Awards which branding shall feature in the host broadcaster’s Recording of the event for broadcast in Greece only. MoC acknowledges however that such branding shall not appear on the main backdrop of the event nor in the Recording of the event for international distribution outside of Greece.

1(b) As soon as practicable after signature of this Agreement representatives of MoC and PMG (on behalf of RAM) will meet to agree, in good faith, the actual terms and conditions upon which MoC may exercise the Greek sponsorship and hospitality rights referred to at sub-paragraph a) above.

1(c) The Greek sponsorship rights referred to at sub-paragraphs a) and b) shall include sponsorship for the televised Greek Player of the Year Awards and the sponsorship rights in the other televised awards (notably all the FIFPro World XI; the FIFPro World Player of the Year Award; the FIFPro World Young Player of the Year Award and the FIFPro Legend Award) shall remain with RAM.

IV Obligations of RAM and PMG

1.

RAM (in co-operation with PMG) shall use its best endeavours to ensure that the 2006 FIFPro Awards are of the highest standard and that the event attracts high profile football players and other well-known celebrities and VIP guests from around the world. In this respect RAM shall use its best endeavours to secure the attendance of at least six (6) of the players who have been selected to win awards at the event.

2.

RAM shall take out insurance to cover adequately any loss or damages arising from the cancellation of the 2006 FIFPro Awards due to acts, events, omissions or accidents which are beyond the reasonable control of any of the parties hereto and, in the event that the 2006 FIFPro Awards are cancelled RAM shall repay to MoC within thirty (30) days of cancellations of the event all instalments paid by MoC pursuant to paragraph I 3b) above.

V Term and Termination

1.

This Agreement shall commence on the date of signature by the parties hereto and shall expire 30 (thirty) days after the conclusion of the 2006 FIFPro Awards 2006 subject always to earlier termination in accordance with paragraph 2 below (the “Term”).

2.

RAM or MoC shall have the right to terminate this Agreement by giving written notice to the other in event that:

(a)

That other party has committed a material breach of any of its obligation hereunder which cannot be remedied;

(b)

That other party has committed a material or repeated breach of any of its obligations hereunder and does not remedy such a breach (if the same is capable of remedy) within 30 days of being required, by written notice, to do so;

VI Assignment /Sub Licence

Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or sub-licensed by any of the parties hereto save that:-

(a)

PMG may assign or sub-license its rights and obligations hereunder to another company within the PMG group of companies (including, without limitation, to PMG Greece);

(b)

RAM may assign or sub-licence its right to receive the hosting fee referred to at paragraph 1 3b) above to PMG or to another company within the PMG group of companies (including, without limitation, to PMG Greece); and

(c)

RAM may appoint PMG Greece as its on-site event manager to organise and stage the 2006 FIFPro Awards in Athens.

(d)

The MoC can assemble an Organising Committee, based on the terms of law 2725/1999, as this applies, for the purposes of this Agreement. The Organising Committee will assume all rights and responsibilities of the MoC according to this Agreement. In this acase, the MoC shall remain guarantor to RAM,thus ensuring the fulfilment of the terms of this Agreement.

(e)

RAM may sign an agreement with a Bank and assign the financial terms of this Agreement, as they set out in paragraph I 3β.

VIII English Law

This Agreement shall be governed by and construed in accordance with English law and the parties hereby submit to the exclusive jurisdiction of the English Courts”.

At a meeting in Athens on 12^th September 2006 the Agreement was varied in writing in the form of two documents headed respectively “Appendix … Apportioned Breakdown of services to the … Awards Television Recording, (based on Television Show budget categories September 12^th 2006 attached)” and “Appendix 2 … Ministry … & RAM … Deliverables”. These two documents are in the form of Tables, each with two columns. In one column is a list of items to be procured by the Ministry: five in the case of the Appendix, and eleven in the case of Appendix 2. The second column lists items to be procured by RAM: sixteen in the case of the Appendix, and seventeen in the case of Appendix 2. The Ministry submit that these documents are simply itemising what the Agreement already provided. RAM submits that these documents provided for RAM to assume obligations which the Agreement placed upon the Ministry, at least in some instances. Nothing turns on that difference between the parties.

The Particulars of Claim were served with the Claim Form. There is pleaded the obligation on the part of the Ministry to pay the sum of €4 million under Cl I 3(b), including the instalment due on 15th October, and the failure to make that payment. It is then pleaded that after 15th October the Ministry made clear that it would not pay the €1.2m due on 15th October, that it would not release the Bank guarantee covering the earlier instalment of €1.2 million (see Cl I 3b), and that it would not pay the final instalment of €400,000, and that, rather than hosting the ceremony, it would be asserting that RAM was in breach of contract.

As to that assertion by the Ministry, the Particulars of Claim summarise RAM’s obligations, in particular the obligation under Cl IV 1 (to use its best endeavours to ensure that the Awards were of the highest standard etc), and it is asserted that RAM were not in breach. In the circumstances, it is pleaded, the Ministry was in repudiatory breach of the contract, which RAM accepted by letter dated 31 October 2006, thereby bringing the contract to an end.

In the Particulars of Claim there then follows a paragraph in which it is alleged that by reason of the Ministry’s repudiatory breach, RAM has suffered loss and damage. Particulars are given under six heads. Para (a) reads: “[RAM] has not been paid the sum of €2,800,000 which was due to receive in accordance with the Agreement (€1,200,000 of which is the subject of a Bank Guarantee).” Paras (c), (d), (e) and (f) allege loss of sponsorship income (identified at £75,000), damage to reputation, loss of profits from future ceremonies and legal expenses. In para (b) it is said that RAM “will give credit for any costs which, had the Ceremony gone ahead, it would have had to bear (“the Savings”)”. The Savings are identified as not less than €278,051.

Shortly before the trial, on 2 May 2008, the claims for loss of profits from future ceremonies, reputation, and legal expenses were abandoned. A document headed “Claimant’s Schedule of Loss” was served. The document has no formal status as a statement of case. In that document RAM claims “The outstanding balance of the Agreement (gross of Savings) at €2.8 million, together with lost sponsorship and other such losses totalling £103,319 and US$11,000”, and the costs of the Administration. The Savings to be deducted were put at €544,409.

In the Defence and Counterclaim in para 10 it is pleaded that by 12 September RAM was in breach of its obligations, and/or that it was in breach by 15th October. There is set out a non-exclusive list of 29 obligations, which it is said that RAM had failed to fulfil by one or both of these dates. The last two of these, by way of example, are “(bb) Using its best endeavours to secure the attendance of at least 6 Awards winners… (cc) Providing trophies for all Awards winners”.

There are then pleaded a number of contentions as to the true interpretation of the Agreement. The main contention under this head, made in para 15(c)(1), is that it was a condition precedent to the Ministry’s obligation to pay each instalment, that RAM should have performed those obligations which ought reasonably to have been carried out by it by the date when the Ministry’s payment obligation fell due. So, it is pleaded, (given the breaches alleged to have been committed by RAM) the Ministry was not bound to have made the payment on 15th October. It was also originally pleaded (and maintained until shortly before the trial), in para 15(c)(2), that there was a further condition precedent, namely that RAM should have incurred, or contractually committed itself to incur, costs in respect of the Awards in the amount of the instalment due to be paid by the Ministry.

Alternatively, it is pleaded in para 19 that the Agreement was varied orally during meetings in Athens on 27 October 2006. It was originally pleaded that the Agreement as varied provided that the total consideration payable by the Ministry was reduced to €2.2 million, and that, since it had already paid a total of €2.4 million, RAM was to repay €200,000. In consideration for this, the Ministry was to take over responsibility for certain contractual obligations of RAM which had been set out in a note listing 23 separate items (ranging from “Hair and makeup” to “Printing material”). By an amendment made without opposition at the trial, it is pleaded that the third term of the variation was that RAM was released from its obligation to provide a major international artist (the provision of a major artist is one of the obligations RAM undertook expressly in the Appendix agreed on 12 September 2006).

It is then pleaded that RAM was in repudiatory breach of the Agreement as varied on 27 October, and that the Ministry accepted this repudiatory breach by RAM, thereby bringing the Agreement to an end. There is a general denial that any part of the €2.8 million was due under the Agreement and (if the Ministry were in breach of contract) that RAM suffered any loss or damage as a result.

There is a Counterclaim for a declaration that the Ministry was entitled to call upon the performance guarantee for €1.2 million, and to restitution or repayment of all the €1.2 million that it had paid as the second instalment. This claim is founded on CL IV 2, alternatively on the basis of total failure of consideration, or the failure by RAM to fulfil the condition precedent. There is also a claim for expenditure incurred by the Ministry which it is said was wasted.

A further defence introduced by amendment without opposition was in para 18A of the Defence. By this the Ministry contend that if the non-payment on 15th October was a breach, then it was remediable, and the sole right of RAM was to serve a notice under Cl.V.2. This excluded any right to treat the breach as a repudiation.

By amendment the Ministry also withdrew its counterclaim to wasted expenditure which it had pleaded it had incurred to the Host Broadcaster, Star, and to the Venue.

It follows that the main issues in the case are: (1) was there an agreement made orally on or by 27 October by which the Agreement was varied (if there was, then RAM repudiated it and the Ministry accepted that repudiation)?; (2) if the Agreement was not varied on 27 October, did RAM’s alleged failures of performance provide the Ministry with a justification in law for not paying the sum of €1.2m due on 15th October? (3) if not, was the Ministry’s conduct a repudiatory breach of the Agreement (if it was, then RAM accepted that repudiation)?; (4) whether pursuant to Cl. IV.2 of the Agreement, RAM is in any event obliged to repay all the instalments, following the cancellation of the Awards?; (5) if not, to what remedy is RAM entitled?

In the course of the trial the Ministry gave notice of intention to apply to amend the Defence and Counterclaim. Two drafts were put forward, the second one on 9^th June 2008 (the third day of the hearing). A number of the proposed amendments were unopposed and I gave permission for them on 18^th June 2008. That was the first occasion on which I was invited to hear the application, since an earlier hearing would have inconvenienced the witnesses. By that time I had read all the witness statements then available, and most of the relevant contemporaneous documents. Two of the proposed amendments were opposed.

The first of the opposed amendments was a new para 19(a)(a). This pleads a third variation of the Agreement alleged to have been made orally in Athens on 19^th October ie third in addition to the variation admittedly made on 12 September and the one alleged by the Ministry to have been made on 27^th October. The alleged variation was in respect of three points: (i) that the bank guarantee should be amended to so that RAM’s obligation of “good execution” included an obligation to secure the attendance of 6 winners at the Awards (under the Agreement there was not an absolute obligation, but the obligation to use best endeavours); (ii) that the time by which the Ministry could call on the guarantee be extended to 9^th November (it was originally agreed to by 6^th November, the night of the Awards themselves); and (iii) that instead of the instalment of €1.2 million payable on 15^th October, the Ministry was to “release funds to RAM on presentation by RAM to the Ministry of details, such as contracts and invoices in relation to preparation for the Awards, together with evidence that those invoices had been paid”.

In support of para 19(a)(a) Mr Tozzi submitted that the witness statements served by both sides addressed the discussions that both sides agree took place on 19^th October, and that for the Ministry to plead that these discussions resulted in a variation of the Agreement did little more than bring the pleadings into line with the witness statements. No explanation was offered as to why the application was not mentioned before 9^th June.

Mr Mitchell submitted that that plea in para 19(a)(a) was entirely lacking in merit, but that of itself was not the ground on which he opposed it. He opposed it for two reasons. First, if the plea were permitted, then RAM would wish to amend the Reply to plead economic duress. Second, RAM had a possible claim that the Ministry repudiated the Agreement on a ground separate from the alleged refusal to pay the €1.2 million payable on 15^th October, namely that the Ministry was unable or unwilling to carry out its obligation to provide a Venue and Host Broadcaster in compliance with its obligations. In the light of the Defence and Counterclaim as it stood up to the start of the trial, RAM had decided not to amend the Particulars of Claim to advance this case, but if the Defence and Counterclaim were to be amended to include para 19(a)(a), then it would wish to do so.

I accept that there is always prejudice when a party is not allowed to put forward his real case, provided it is properly arguable. I do not decide that this plea is unarguable. Mr Mitchell did not ask me to. I assume (without deciding) that it is arguable. But on any view it is not a strong case. First, the Ministry might have been expected to put forward this case when the Defence was originally drafted, if it had considered there was any merit in it. A delay to a date some twenty months after the date of the alleged agreement calls for an explanation, which has not been put forward. In my judgment the application is too late. In addition, the suggested variation appears to be entirely one sided. Assuming there is arguably consideration (and none is identified) a Reply alleging economic duress is also arguable. In opening RAM’s case Mr Mitchell had referred to the discussions that took place on 19^th October, and to the proposals that the Ministry had then made. He had indicated that it was RAM’s case that its representatives participated in those discussions only because the Ministry were holding a gun to their heads (in the words of Mr Adams in his witness statement). Mr Mitchell has not identified any material on this point that he would have wished to deploy, and which is not now available. But I am concerned that there may not be in the witness statements and documents before the court all the material that would have been available to RAM to support a case of economic duress, if that case had been prepared in timely fashion. Moreover, the law in this area is not certain, and Mr Mitchell refers to differences in different common law jurisdictions. It is an issue that is capable of taking up significant amounts to time. I am concerned that points relating to an alleged agreement on 19^th October would disproportionately prolong the trial when the likelihood of the plea ultimately benefiting the Ministry is at best remote. The parties are not on an equal footing financially (RAM being in Administration) and I do not think it fair to impose the burden of dealing with this point upon RAM after the trial has commenced. Moreover, if I were to allow the Ministry to enlarge its case in this way I think it likely that it would be difficult for me to refuse permission to RAM to put forward the alternative case on repudiation by the Ministry, with consequences on the course of the trial which are not predictable.

I shall return later in this judgment to the second of the opposed amendments, since that relates to the remedy (if any) to which RAM may be entitled.

It soon became apparent that the preparations for the Awards were not going to progress as envisaged earlier in the year, or even as envisaged in the Agreement. Each party referred in contemporaneous correspondence and meetings, and (through their witnesses) in evidence to what they alleged were the failures and breaches of contract of the other party committed during the period up to mid October 2006. But neither party has made any claim that any alleged breach by the other party has given rise to any legal consequences with continuing effect for this trial. RAM had written on 7^th August 2006 alleging that the Ministry’s non-payment of the first instalment by that date was a breach of contract and invoking the mechanism under Cl V of the Agreement. And at the meeting in Athens on 12^th September Mr Stamou claimed that RAM had not met certain contractual requirements. The continuing effect of those episodes undermined each party’s confidence in the other’s willingness to perform its contractual obligations, but it is not suggested that it went further than that.

The second instalment of €1.2 million, due on 30^th August, was paid as to €300,000 on 19^th September and as to €900,000 a few days later. The cancellation insurance required by Cl IV.2 of the Agreement was obtained by RAM in the form of a cover note dated 4^th October 2006, with cover effective from 12^th September.

The first, and the crucial, event that has given rise to the issues which I have to decide is the non-payment by the Ministry on Friday 15th October of the third instalment in the sum of €1,200,000 due on that day, according to Cl. I.3(b). It was this fact which precipitated negotiations between the parties which ended in recrimination and the cancellation of the Awards two weeks later.

In order to understand what happened from mid October onwards it is necessary to refer briefly to what had, or had not, happened since the Press Conference in February, and in particular in the five months between 10^th May and 15^th October.

From the start FIFPro had misgivings about the choice of Athens as the venue. As early as 15th February 2006 RAM wrote through their solicitors confirming that RAM’s agreement with FIFPro was still in force, that there was no litigation between RAM and FIFPro, and that FIFPro did not have, or claim to have, a right to veto Athens as the chosen venue. The reasons for FIFPro’s misgivings were partly geographical. The winners of the Awards were always likely to include a significant number of players who would, in November 2006, be playing for clubs as far from Athens as the major clubs in Spain and England. These players would have to be transported to Athens and back, and their clubs might not welcome their absence at that time.

But there were other concerns underlying FIFPro’s misgivings. On 13 July 2006 , Mr Ad Dieben, the Managing Director of FIFPro wrote to RAM saying: “I … confirm that given the present situation in Greece, we feel that a FIFPro World XI Gala should not be held in Greece”. In addition to referring to the situation in Greece, he referred to points on which he was dissatisfied with RAM and added: “I can inform you that now there really is a lack of confidence in obtaining a good result … and in our future cooperation between us”.

Neither Mr van Seggelen, nor anyone else from FIFPro has been a witness in these proceedings, and the relationships between FIFPro and each of RAM and the Ministry were not directly relevant to any issue I had to decide. There is no doubt that FIFPro’s relationship with each of RAM and the Ministry did become strained during the period up to October 2006. I need not, and could not, make any findings of fact about the nature of these difficulties, or their causes, but the fact that the relationships were at times strained is relevant to understanding why the parties acted, or did not act, in the manner that they did.

There were differences between the form of agreement prepared in February and the Agreement. Two clauses of the Agreement which differ from the draft prepared in February are I.3(b) and VII(e). Cl I.3(b) of the Agreement required RAM to present to the Ministry a performance guarantee issued by a bank in a sum equal to the first instalment of €1,200,000. This was a burden to RAM. Apart from exposing RAM to the risk that the Ministry might call on the guarantee (which is a risk inherent in any performance bond or guarantee of this kind), this new provision required RAM to tie up resources to support the bank guarantee when those resources might otherwise have been available to it to use in its business. RAM had little by way of assets other than its rights under the Agreement, and it had no means of giving to a bank the security that any bank would require before issuing such a guarantee.

RAM fulfilled this condition by making an arrangement with the National Bank of Greece, by which it was required to deposit the first instalment of €1,200,000 as security for the bank. Cl VII(e) had been inserted to enable RAM to assign to a bank the right to receive the instalments due under the Agreement. If RAM had succeeded in doing that, then it would have substantially compensated for the cash flow disadvantage to RAM consequent upon it having to deposit the whole of the first instalment with the bank that gave the guarantee. In fact RAM was unable to find a bank willing to take the assignment contemplated by Cl VII(e). The upshot was that the first cash from the Agreement that was going to be available to RAM to use was to be the value of the second instalment due on 30 August.

RAM chose to enter into the Agreement on these terms. RAM did not suggest that this difference between the February draft and the Agreement provided it with any legal justification for withholding or delaying the performance of the obligations due from it. It does not accept that it did withhold or delay performance. But these events show, as a matter of history, that performance of the Agreement made in May was financially more onerous than RAM had expected in February.

These matters also show that RAM had a greater incentive to defer incurring expenditure than it might otherwise have had. Mr Adams explained the position in his witness statement as follows:

“Whilst the intervention of the Court of Audit was unwelcome … I considered that we could still live with the cash flow position. … The awards ceremony needs: (i) players – they could only be contacted during the last month (as had been the case in 2005) once the names of the winners / nominees were known, (ii) presenters / celebrities – there is a market containing a large number of appropriate people to fulfil these roles, and it is always possible to find suitable people at relatively short notice, and (iii) a music act – again there is a market. I therefore knew it would be possible to defer serious expenditure until after the [Ministry] paid the €1.2 million due on 30 August 2006, and still produce a show of the highest standard”.

On the Ministry’s side, the Agreement required that a number steps be taken as soon as practicable after signature of the Agreement. These related to the venue and to the host broadcaster to be found by the Ministry (Cl I.3(a) and (b)), and the further agreement with the Ministry on the exercise of its sponsorship and hospitality rights (Cl II.1(b)). Pantheon Arena was identified as the venue early on, but it was not booked (on the Ministry’s case) until 20 September 2006. In a letter to RAM of 3 October 2006 the Ministry informed RAM that they had finalised their agreement with a host broadcaster, although even then the name had not been officially announced. There were production and broadcast agreements (required by Cl 1.3(b)) to be entered into by the relevant parties with the host broadcaster.

The Agreement also specified that the Ministry was to make payments at the times specified in Cl I.3(b). The first two of the instalments were paid, but not on the dates specified in the Agreement.

As envisaged in Cl VII(c) and (d), RAM did appoint PMG Greece as its on-site event manager, and the Ministry set up an Organizing Committee (“the Committee”), but not before the end of July. In practice, various preparations were made for the Awards by individuals on behalf of RAM and PMG in anticipation of formal appointment, and, as mentioned above, in anticipation of the Agreement itself, starting in March 2006.

On 26 July 2006 the Committee was set up by a decree made under Greek law and published in the Government Gazette. It was stated to be constituted by seven people: Stavros Douvis, General Secretariat of Sport, President; Antonis Antoniades, Deputy President of the Pan-Hellenic Professional Football Players Association (“PSAP”), as Deputy President; Thomas Stamou, General Secretary for Support to Sports, as a Member; Kalliopi Nedelkou, Officer of the General Secretariat of Sports, as a Member; Konstantinos Kaminaris, Attorney at law, as a Member; Ioannis Tsolis, as a Member and Athanassios Vassiliadis, as a Member. The object of the Committee was stated to be to host and organise in Greece, on 6^th November 2006, the Awards, as well as to draft and to submit a Budget of the event pursuant to Greek law. Three other people were assigned as staff to the Committee.

Mr Douvis was (and is) a member of the Government, junior to Mr Orfanos. His appointment to the Committee at the end of July was his first involvement in the Awards. Mr Stamou was a senior civil servant. He had been involved in the preparation of the Agreement, and the submission to the Court of Audit earlier in the year. Apart from Mr Antoniadis, all the members of the Committee were working in the Ministry in the same building, and all of them had other responsibilities apart from the Committee. Mr Tsolis had expertise in financial matters.

The Committee held its first meeting on 3 August 2006. Mr Antoniadis did not attend that or any subsequent meeting. PSAP is the Greek organisation which is associated wiith FIFPro. The non-attendance of Mr Antoniadis caused concerns to the Committee, and these concerns are recorded in the Minutes of later meetings and in letters that the Committee sent to him, asking him to attend.

On 3 August 2006 the Committee considered a budget prepared by Mr Tsolis. This provided for a total expenditure by the Committee of €6,300,000. That is €2,300,000 over and above the €4,000,000 fee due under the Agreement. Much of this was attributed to the costs of the Committee itself and of administrative personnel. €60,000 was attributed to leasing the venue. There was nothing budgeted for the host broadcaster, perhaps on the understanding that it would bear its own costs. Income to meet this expenditure was attributed mainly to grants and subsidies, but €1,000,000 was attributed to commercial fees and other sources. The Committee had its own bank account which was funded by credits from the Ministry. As already noted, the Committee paid to RAM the first two instalments totalling €2,400,000. It also paid a figure of the order of €60,000 to defray its own operating expenses. But the Committee did not make any other significant payment, nor did it receive any income from selling local sponsorship or branding (as provided for in the Agreement Cl. II.1a).

The Committee held its second and third meetings on 4^th and 7^th August 2006. The Minutes record that they discussed a number of proposals and decided to recruit a specialist adviser. On 4^th August they issued an invitation to tender for the position of Host Broadcaster which was addressed in particular to six Greek broadcasters, ERT, ALPHA, MEGA, ANT1, STAR and ALTER. Amongst other information given with the invitation was requirement, originating from PMG, that the recording be in the High Definition format. The Committee also authorised the payment (against the required letter of guarantee) of the first instalment due under the Agreement of €1,200,000. The letter of guarantee had been received by the Ministry on 21 July 2006. On 7^th August RAM wrote claiming that the Ministry were in breach of the contract in failing to pay on time, and payment was made on 15th August.

By this time the relationship between the parties was already becoming strained. RAM had written to the Ministry expressing concern about the passage of time on 23th March, 10th April, 26th June and 21th July. On 8th August Mr Perring of PMG wrote expressing concern, in particular over there being no Host Broadcaster. On 9th August FIFPro wrote to the Ministry expressing similar concerns. Also on 9th August Mr Stamou wrote to RAM saying the Ministry could not reach agreement with the Host Broadcaster, the venue or anyone else so long as RAM had failed to obtain the required bank guarantee.

The fourth and fifth meetings of the Committee were held on 10^th and 14^th August. By 14th August the first instalment of €1,200,000 had been paid, but no reply had been received from a broadcaster. The Committee decided to appoint Omikron Group SA (“Omikron”) as adviser. The persons concerned at Omikron were Ms Martha Papapolyzou and Mr Giannakouros.

On 21^st August the Committee held their sixth meeting. It was decided to inform the potential broadcasters that the recording should be in the 16:9 digital format, with a view to limiting the costs of making the recording. On 24^th August 2006 ALPHA wrote expressing interest in being the Host Broadcaster, but this came to nothing. Ultimately Star was identified as the Host Broadcaster.

In order to determine whether there was a variation of the Agreement made on 27^th October it is necessary to consider the events between 1^st and 24^th October.

The discussions between the parties giving rise to the alleged variation arose against the background that, on 2^nd October 2006, FIFPro’s misgivings about holding the 2006 Awards in Athens were still unassuaged. This naturally caused very great concern to the Committee.

On 2^nd October Mr Adams wrote to the Ministry. That letter referred to “difficulties” (the word is in inverted commas in the letter) between FIFPro and the Ministry, saying that these “arise out of the recent short-lived suspension of Greece from FIFA as well as problems with the Greek FIFPro [that is, PSAP] and [the Ministry]”. Mr Adams wrote that FIFPro felt less confident that a full complement of the Award winners would attend the Awards in person. He wrote:

“Representing RAM we feel that some of the Awards winners will attend on November 6^th. However we are bound to report to you and respond to FIFPro’s concerns. We therefore agreed with FIFPro that it would be a sensible precaution to pre-record all World XI winners receiving their awards from a suitable presenter…”

On the same date Mr van Seggelen wrote to the Ministry himself. He referred to Mr Adams’ letter, and to the serious concerns FIFPro had expressed to RAM on 29 September “in reference to the cooperation between RAM and FIFPro …, especially to the upcoming gala in Athens”. He then added:

“In regard to the contract between those 2 parties, FIFPro has the obligation 1) to arrange the voting, which has been finalized by now and 2) to try to get the winners of the voting to attend the gala, with exception of the players who play in England. At this moment it looks like it will be quite impossible for several reasons to get the players to attend the gala.

We have the opinion that a gala without players is not a gala and therefore we would like to have a meeting in the very near future to cancel the gala in time. FIFPro … will find a way to bring this to the public without damaging the reputation of the Greek Government… FIFpro looked for a possible cooperation with the gala of the Greek Players UNION, the P.S.A.P. However, this seems not to be an option because of the complicated relationship between the P.S.A.P. and the Greek Government as well as their previous contractual obligations”.

Mr Adams’ letter upset the Ministry. On 3^rd October, Mr Douvis replied on behalf of the Committee. He expressed surprise at Mr Adams’ reference to problems which Mr Douvis said “were settled even before the final signing of the agreement between you and us … as your allusion to the ‘short lived suspension of Greece from FIFA’. This issue has been settled long ago and no further discussion on this matter is acceptable”. What Mr Douvis wrote was not entirely accurate. The short lived suspension had been in July, that is after the agreement had been made.

In his letter of 3^rd October Mr Douvis wrote expressing dissatisfaction with the lack of information from RAM on the progress of the work. He said that RAM was bound to carry out in accordance with the Annex agreed on 12^th September. He said that this delay diminished the possibility of the Ministry exploiting the rights which it had under the Agreement. That was a reference to obtaining sponsorship.

Mr Douvis then explained what I find was the Committee’s central concern:

“It is stressed that the … Committee considers not treated the agreement’s dispositions, according to which you are obliged to secure the presence of at least 6 out of the 11 players who are going to be awarded and you are expected to do so. To this disposition no alteration is acceptable. Therefore you must consider rejectable, without fail, your proposal for pre-recording all the winners receiving their awards”.

The obligation upon RAM was, according to the Agreement, “to use its best endeavours to secure the attendance of at least six (6) of the players who have been selected to win awards at the event”. This letter of 3^rd October marks the start of efforts on the part of the Ministry to make RAM convert that obligation into an absolute obligation, instead of a qualified obligation (to use best endeavours).

On 4^th October Mr Douvis wrote a reply to Mr van Seggelen’s letter of 2^nd October. Mr Douvis wrote that the Committee was surprised and “deeply concerned” at FIFPro’s suggestion that the ceremony be cancelled. Mr van Seggelen replied to Mr Douvis on 5^th October saying that FIFPro had informed RAM “that more than a substantial number of the eleven winners will not be able to attend the Gala”. He said it was for the Ministry and RAM to take any decision concerning the cancellation of the Gala.

Meanwhile on 4^th and 5^th October there were meetings in Athens attended by representatives of RAM and PMG at which they reported on the arrangements that had been made, and were to be made. By this time Star had been identified.

RAM did not agree with Mr van Seggelen’s assessment of the likelihood of the winners attending. As Mr Manley wrote in a contemporaneous e-mail to Mr Adams, he had told Ms Papapolyzou that Mr van Seggelen was a worrier, that he had expressed similar worries in relation to the 2005 Awards in London, that he was proved wrong then and would be proved wrong again. RAM was confident that at least six winners would turn up. RAM were not relying on FIFPro to ensure this. They were making their own arrangements with the players and clubs which they considered likely to be concerned.

On 5^th October there was a meeting of the Committee. The Minutes record the exchange of correspondence set out above, and the matters that had been discussed in the meetings of 4^th and 5^th October. One such matter was that Star confirmed that the presence of international celebrities was necessary to attract public interest in the event.

On 6^th October 2006 RAM wrote to the Committee in reply to the letter of 3 October. The letter quoted the terms of the Agreement containing RAM’s obligation as to the attendance of winners (namely to use its best endeavours). In the letter Mr Selman expressed that RAM was totally committed to making a success of the 2006 event and acknowledged its contractual obligations. The letter (including the terms of the Agreement) is quoted in the Minutes of a meeting of the Committee held on 6^th October. Mr Douvis replied to RAM on the same date, and included:

“Given your letter of Oct 6^th, … we assume that you have no intention of cancelling the gala ceremony … Therefore we are looking forward to making good progress in the scheduled meetings of next week…”

On 9^th October Mr Douvis wrote to Mr Antoniades. He reminded Mr Antoniades of his absences from the Committee’s meetings, and that “in parallel with the award for the 11 footballers of world class standard there will also be the decision for the best footballer of Greece”. He asked Mr Antoniades to attend the meeting of 11^th October, saying “I consider that your presence is necessary”.

A meeting was arranged for 12^th October in Athens, but Mr van Seggelen declined to attend (while later proposing a meeting in the Netherlands on 18^th October). In a letter of 10^th October he explained his reasons:

“… It is surprising to read in your letter of 7 October that you will not consider to cancel the gala, whereas you also previously confirmed that a gala without players is not a gala. The fact that you decided to carry on with the gala and deliberately take the big risk of having a gala without players, not being open to an alternative like we offered [that is a press conference in Greece without the presence of the players] made us decide that it will not be useful to travel to Athens this week”.

On 13^th October Mr van Seggelen wrote to Mr Adams and Mr Douvis. He said that on 16^th October he would inform them both in confidence by telephone of the names of the winners. He also said that FIFPro was “doing their utmost to get the players to attend the gala”, but repeated that “for several reasons it seems almost impossible”. The letter also included in the third paragraph the sentence: “I would like to confirm that RAM has to fulfil its obligations with regard to” FIFPro. Mr Douvis was naturally concerned by this, and wrote to RAM that if FIFPro’s unwillingness to secure the attendance of the players was a result of RAM not fulfilling its contract with FIFPro, the Committee required RAM to take action. This exchange of correspondence is summarised in the Minutes of the meeting of the Committee that was held on 13^th October.

On 16^th October Mr Manley sent to Mr Douvis by e-mail RAM’s invoice dated 15^th October for the third instalment, that is €1,200,000, payable that day. In the e-mail he wrote that RAM had a number of

“very large financial payments to make in the next three weeks… , including all the television payments (amounting to approximately 1m euros), payments for getting the players and their entourages to the event plus private jets …

In the meantime of course the third payment of 1.2m euros was due on 15th October and this is really important to keeping the event on plan”.

On 17^th October Mr Douvis wrote to RAM:

“… With this letter we are expressing our strong concern for your ability to fulfil your contractual obligations..

Today, we are less than 21 days from the event, and you have not supplied us with adequate confirmation and/or guarantee for your ability to deliver your sets of obligations.

This fact forces us to ask you, for the last time, immediate feedback to the following issues:

1.

LIST OF ATTENDEES-WINNERS

FIFPro’s position, as expressed through their letters of Oct. 2, 5, 10, 13, is that they consider it is almost impossible for the players to attend the gala. As in the contract among us, you are obliged to deliver 6 players to the gala to receive their awards, we are awaiting a firm guarantee that you will secure their attendance.

2.

LIST OF ATTENDEE-AWARD PRESENTERS

…

3.

ENTERTAINER ARTIST

…

4.

LIST OF BROADCASTERS TO AIR THE EVENT

…

Be aware that, up to now, your inability to provide specific and satisfactory answer to the a.m. matters, has compromised the local sponsorship program as well as the ticket sale to the event.

We will take our final decisions, based on your answers, tomorrow evening”.

The answer to the Committee’s first three questions was given in a letter from Mr Adams. He repeated that RAM’s obligation was to use its best endeavours to secure the attendance of at least six players, and said that it was not possible for RAM to guarantee their attendance. He added that the names had been released only the previous day, and that RAM were in touch with all the relevant clubs to secure the attendance of fourteen players and as many of the nominees as possible. He referred to the arrangements to be made for private air transportation for the winners and their immediate guests, and other arrangements that would involve a large number of people and consequent expenditure.

Mr Adams also confirmed the identities of the presenters and the artist. I shall refer to the artist as “the Artist”, because the choice of the lady in question became a matter of dispute, both between RAM and the Ministry, and, following her cancellation, between the Artist and RAM. It is unnecessary and it would be invidious to name her.

Mr Adams’ letter continued stating “the need for the necessary funding to be released without which none of the above can be committed” and went on:

“Your reference to a ‘final decision’ is alarming: RAM … is pressing ahead with organising this event and has already or is imminently committing itself to multi-million € contracts, on behalf of yourselves. As a small example we have a full team coming to Athens tomorrow night, we have a team of people working on the player procurement in 3 different markets and you will be pleased to know that the promotions for Athens and the Young Players Award vote start tomorrow on Sky TV.

In view of this alarming statement and your apparent anxieties I have altered my schedule and will accompany Iain Manley to Athens on Thursday to answer any additional questions that you might have”.

The reference to “multi-million € contracts” is an exaggeration. One of the ways by which RAM had been able to make such preparations as it had made without the use of the first €1.2 million instalment was by delaying entering into contracts. Nevertheless, it was true that large numbers of people were by then working on the project, and contracts not already made would very soon have to be made.

The answer to the Committee’s fourth question was given on 18^th October by PMG with a list of nineteen broadcasters, said to have a home reach of over 164 million viewers.

At 1030 am on 19^th October the Committee held a meeting recording the sending, the same day, of a letter from Mr Douvis to an organisation known as OPAP requesting sponsorship with a suggested figure of €1.5 million. The letter gives a very short description of the Awards (“awards will be player of the Year, Life time Achievement, 11 Players of the Year, Young Player of the Year and the prize for the best player in Greece”) and Mr Douvis states his belief “that this event will have a big audience both in Greece and across the world will it will be broadcast from 120 foreign channels”.

The meeting of 19^th October took place at the Ministry and was attended by Mr Douvis, together with his assistant, Mr Stamou, Ms Papapolyzou, Mr Adams, Mr Manley and members of RAM’s production team. Mr Hanlon and Mr Pines were present. Also present were members of the team who joined recently, Ms Mitchell, the Production Supervisor and Mr Mansfield, the Director.

There are two notes of the meeting which took place on 19^th October, made contemporaneously. One was made by the assistant to Mr Douvis, and the other by Mr Adams. Mr Douvis’s assistant appears to have a good command of English. The note is written mainly in Greek, with occasional words in English. The meeting was conducted in the English language, and there is a translation of the note into English. The note was kept on the Ministry files, but was not reviewed at the time by anyone present at the meeting. The note therefore has a number of weaknesses. Like many such notes, it is not always clear whose words the note records. It has been translated twice, from English into Greek, and then back into English. It is unclear how complete and accurate it is, and it is not always apparent to whom the words noted down should be attributed. The note was not available when the Ministry’s witnesses made their first witness statements, which are dated 20^th and 21^st February 2008. The note was exhibited to the second witness statement of Mr Douvis dated 10^th April 2008. In that witness statement he states that the note is consistent with his memory of the discussions (albeit that in his first witness statement he says that he did not attend the meeting for the whole time).

The note includes the following attributed to Mr Douvis, at the start of the text:

“We are unhappy. We are confronted with problems concerning sponsors! We have problems with Mr Seggelen who says that the players cannot come. Yesterday we had a meeting with a possible sponsor and they had asked us who are expected to come players and if they come, and we did not know the answer. We feel terribly insecure not knowing where we are heading to. If you cannot ensure that what we sent on 17^th October then we suggest even cancelling the event”

There then follow immediately words attributed to Mr Manley:

“As for the players all the clubs have players competing on the 5^th November. If they do not play well then they will not let them come and participate at the festivity. The trainers will make the decision on who will be coming”.

There then follow immediately words which, from the meaning, were plainly not spoken by Mr Manley. But there is no indication of who the speaker was, although, from the sense, it must have been someone on the Ministry side:

“Will players come? Otherwise we stop the preparations now!!!

1)

Theo will be writing another piece of the solution if they come (a new documentation) mentioning

- we need a guarantee. If the invitation to the players is not ensured we stop the whole process.

- How we are going to materialize sponsorship? We have nothing to sell”.

There then follows some text which in the Greek original starts at the top of the page. Above it, is the name “Martha” with arrows pointing down to the text. The words read:

“There is a remaining payment of 1,600,000 Euros that they will not get. Money they will receive on 6^th November. There will be an amendment to the contract stating that as stipulated in the contract if the players do not show up the price will be decreased. What are your proposals?!!!

No money will be given. ASAP we need a list of who is coming.

1)

We shall need a letter stating that a) at least six players will come, b) clarifying that in case on non coming of the players this constitutes a non execution of the contract as mentioned in the letter of guarantee of the National Bank. Following this the time of expiration of the letter of guarantee has to be prolonged from the 6^th November to the 9^th November 2006.

“That the … the amount of 1,200,000”

2)

We shall pay anything that will be coming as RAM Invoice in natural form which will comprise copies of invoices of RAM suppliers upon which was based the issuing of the invoices address to us and it will be immediately paid to the person who will carry it cover letter includes the minimum of six players”.

The second note of the meeting of 19^th October consists of one page written by Mr Adams. It is very sketchy, such as is not uncommon for a note taken by a person who is at the same time participating in a discussion. It is not easy to follow. Amongst other matters it records Mr Douvis saying that they could not sell sponsorship, and that if there were no players €4 million of government money would be wasted. There are references to a need to have guarantees for at least six players (these words have a line through them), and to an amendment to the bank’s letter of guarantee: “letter covering ‘good execution’ attendance of six players”. That part of the note covers the top half of the page. There then follows immediately the name of an English lawyer who was not at the meeting. Next to and after the lawyer’s name there are various figures, and notes referring to payment of invoices, and a box including the words “good execution 5 players best endeavours six or more”.

Also on 20^th October at 0810 am Mr Adams sent an e-mail to Ms Papapolyzou. He said RAM would be drafting a letter to the Ministry but “we have one request/amendment to make to what was agreed yesterday”. What he wanted was an irrevocable letter of release of the bank guarantee to be given to RAM on Monday 6^th November by the Ministry when it was confirmed that 5 or more winners are either in or en route to Athens. He said it was imperative RAM receive this letter before the show, so that “the €1.2m would … be released [by the National Bank] without any further arguments over what constitutes ‘good execution’”.

On 20^th October at 0857 am Mr Manley e-mailed to Ms Papapolyzou two invoices issued by RAM, one for €150,000 and the other for €170,841.60. They each bore a description: “Against the Third Instalment of the hosting fee … as per contract dated 10 May 2006, which was payable on 15th October 2006. This invoice relates directly to”, and then, in the case of the first, “to the attendance of the Artist”, and in the case of the second, to various other invoices which were attached. In the e-mail Mr Manley wrote: “This is the start now of the process on the next 1.2m. I am concerned that we must get going now…” The Ministry did not pay these sums.

On 20^th October at 1430 there was a meeting of the Committee. Mr Douvis referred to a letter of the same date from RAM. In the letter Mr Adams thanked the Committee for their hospitality the previous day. He wrote: “As per our discussions with Mr Douvis and Ms Papapolyzou, we would like to bring in a second group to support [the Artist]. He then gave a list of recommended artists, who have been referred to as girl bands. Nothing else is recorded in the Minute, whether about the meeting of 19^th October or anything else.

On 19^th, 20th and 25^th October Mr Manley sent three e-mails to Mr Adams (and to others, all of them on the RAM side). In one he wrote that “Based on the meeting we’ve had today we are now being paid the 1.2m euros on a drawdown basis against specific invoices.” In another he said “per the meeting yesterday if we pay this then the Greeks will transfer the money”. In the third he was reporting on his attempts to gather evidence as to what RAM had already spent on the event, and expressed the conclusion that RAM has spent very little on the project so far.

On 23^rd October FIFPro wrote to Mr Douvis. Mr van Seggelen said that he had to inform the Ministry that FIFPro had not yet received any positive response from the clubs about the attendance of players. He wrote:

“In other words, it does not look good for us. We seriously do not expect the situation to change during this week. Nevertheless, we will still do our utmost to convince the clubs and players to attend the gala. Contrary to the information that RAM gave you, we wanted to give you a realistic view in regard to the attendance of players. We can understand that you want to cancel the gala if there will be no players…”

Also on 23^rd October Mr Adams wrote to Mr Douvis and Mr Stamou. The first paragraph read as follows:

“Further to our meeting on Thursday 19^th October we can confirm that we shall be writing to the National Bank … in order to amend the bank guarantee letter. There will be two amendments. Firstly the definition of ‘good execution’ shall now mean the attendance of 5 of the winners at the awards only. Secondly, if 5 winners do not attend the awards then the [Ministry] has until 9^th November in order to instruct [the bank] to return any funds in escrow”.

In the second paragraph of the letter of 23^rd October Mr Adams asked for a letter of release along the lines mentioned in his e-mail to Ms Papapolyzou on 20^th October, although he set out more detail in the letter. One of the additional requirements is that the letter of release be sent to an independent lawyer, with instructions that he deliver the letter to the National Bank upon proof that 5 of the winners attended the Awards in person.

In the third and fourth paragraphs of his letter of 23^rd October Mr Adams wrote:

“We also conditionally accept a variation for the payment of the third instalment of €1,200,000 which was due for release on 15^th October. Technically the [Ministry] is now clearly in breach of contract. However we agreed on the 19^th October that this would be remedied if the [Ministry] now immediately release €150,000 of the third instalment and pay strictly within 2 days (or less) on presentation of valid invoices for further amounts which in sum shall not exceed the €1,200,000; to this end we issued an invoice to the [Ministry] on Friday 20^th October for €150,000. Therefore if this €150,000 is not paid by close of business the 24^th October and all subsequent requests for funds paid within 2 days then we shall revert back to the original contract of 10^th May and demand immediate payment of the third instalment less any payments made on account under this conditional variation of the contract.

We regard the urgent attention to this matter as being of the utmost importance and have therefore asked Iain Manley to be in Athens tomorrow to ensure that this €150,000 is paid without delay”.

There was a meeting of the Committee on 23^rd October at 1500. The Minutes summarise the letters from RAM and FIFPro dated 23 October, and the two invoices which RAM had sent for the Artist and for the other matters. There is no comment upon these recorded in the Minute.

On 24^th October Mr Douvis wrote to RAM in reply to Mr Adams letter of 23^rd October, referring to the “subjects which were discussed and agreed between us in the meeting of 19^th October 2006.” First he wrote that:

“It is with surprise that we realise complete distortion of what was agreed. We are completely unable to comprehend your behaviour and furthermore completely unable to handle henceforth the case of the Ceremony of the 2006 … Awards”.

Mr Douvis then sets out four points. First he complains that RAM has not already sent the letter to the National Bank. Second, he complains that what was agreed was that the bank, on RAM’s application, would send a letter to the Ministry by which the term “good execution” would be extended, so that it would include an additional obligation upon RAM to secure the attendance of six (not five) winners, and that the expiry date of the letter of guarantee from the bank would be extended from 6^th to 9^th November. Third, he complains that there had been no agreement on the proposed role for the independent lawyer. Fourth, Mr Douvis denies that the Ministry is in breach of contract. He complains that RAM’s omissions have led to the situation in which the Committee is unable to realise the benefits that were envisaged would to accrue to it under the Agreement in terms of sponsorship. He says this is because the Committee cannot give prospective sponsors the number of winning players who will attend, nor the participating artists, presenters and celebrities. He concludes:

“… we consider that not only technically but also it is a matter of substance it is you who are in … complete breach of contract, taking also into consideration the numerous affirmative letters of … [FIFPro] … (the last one was dated 23 October 2006, nine working days before the gala, that they cannot ensure presence of awarded players in the gala”.

There is a minor comment to be made in relation to the amendment to the bank guarantee letter. That letter was a first demand performance bond. The letter does include the words “good execution of [RAM’s] obligations arising from” the Agreement. But it contains no definition of “good execution”. No such definition is required, because the bank does not investigate whether there has been a breach of contract or not. The letter states that payment is to be made by the bank on the Ministry’s first written demand. I think Mr Adams and Mr Douvis were mistaken in so far as they each appear to have thought that the bank would agree without question that the guarantee letter could be amended to include a definition of “good execution”. If the definition of RAM’s obligations was to be amended (to convert the qualified obligation into an absolute obligation to secure the attendance of six, alternatively, five, winners), then that could be achieved by an amendment to the Agreement. The bank would have had no reason to query a request that the letter of guarantee be extended from 6^th to 9^th November, because the letter of guarantee does, of course, set out that it is valid only until 6^th November.

A number of witnesses gave evidence as to what occurred at the meeting on 19^th October. It is sufficient to refer to the following.

Mr Douvis confirmed in his witness statement, and I accept, that he had been deeply concerned by the letter to him from FIFPro on 2^nd October as to the prospects of the attendance of the winning players, and that he felt that RAM had not been straightforward in the way that they had reported the situation to the Ministry. This is an entirely understandable reaction. Whether or not RAM or FIFPro were correct in their assessment of the situation is not something that Mr Douvis, or the Committee, could have known at the time. It was inevitable that the Ministry would be deeply concerned and that confidence in RAM would be undermined by this letter, and later similar letters, from FIFPro. In addition to the letters, Mr Douvis gave evidence of telephone conversations he had with Mr van Seggelen during October which were similarly pessimistic. In fact, as he told me, Mr van Seggelen had expressed similarly pessimistic views as early as July.

Mr Douvis’s account of the meeting of 19^th October given in his first witness statement is consistent with his assistant’s notes. He said in that statement in terms that he wanted assurances that RAM could secure what the parties referred to as “the deliverables” (meaning their contractual obligations), and that if they could not do so he proposed cancelling the event. He said he was not prepared to accept what he referred to as Mr Manley’s “excuses” that coaches might prevent winning players from attending. He said that Mr Stamou proposed the amendments to the letter of guarantee, so that RAM’s obligations would include, as an additional term, that it secure the attendance of six winners, and that the validity of the letter be extended to 9^th November. Mr Douvis states that this was accepted by Mr Manley and Mr Adams. Mr Douvis also stated that Mr Stamou proposed that the Committee would release funds against paid invoices only.

In his second statement (made in response to the statements served by RAM) Mr Douvis said that RAM were unable to tell the Ministry what they were doing to make sure that the players would come. He added:

“Of course we were going to ask for guarantees. Anyone would do the same when faced with letters of the type which FIFPro were sending… I simply sought to hold RAM/PMG to their agreement by seeking assurances that RAM could deliver. I proposed cancelling the event in response to Mr Manley’s weak excuse that players may be prevented from coming if they played badly the day before… Mr Adams … says that we simply refused to release the €1.2 million. This is not true. We said, for example, we were prepared to release money if RAM could demonstrate they had paid out money on the Awards ceremony. We thought RAM were prepared to do this but they were not”.

Mr Stamou gave evidence of his experience at the Ministry over thirty five years, and his many and considerable responsibilities. These included oversight of important works for the 2004 Olympics. He explained that a reference to the Court of Audit is necessary for contracts with a value in excess of €1.5 million. Greek law has not been pleaded and I make no findings about it. But by way of background Mr Stamou said that by law the government is not permitted to make advance payments to contractors without guarantees, unless it can demonstrate that it has received the goods or services for which it is paying. The reason why in the Agreement a guarantee was required only in respect of the first instalment was because the Ministry had understood that after the first instalment had been paid, the Ministry would be able to demonstrate delivery of services, as RAM organised the event. This understanding turned out to be incorrect. As at 15^th October no such evidence existed to be made available by RAM. But there was no term of the contract, nor any representation or warranty, which expressly provided for a means by which the Ministry was to be able to comply with this requirement of Greek law, if such it was.

Mr Stamou also gave evidence about the form of the Minutes of the meetings of the Committee. He said they were prepared by secretaries, and their main function was to record the dates, times and those who attended the meeting, and the correspondence received and sent. He said the Minutes are incomplete and in some places inaccurate. For example, he said, there was no Minute recording the signing by Mr Douvis of the Appendices agreed on 12^th September with RAM.

Mr Stamou was as concerned as Mr Douvis by the letters from FIFPro and his own impression by 15^th October was that it would be impossible to get the winning players to attend in Athens. He was also concerned at the likelihood of attendance by presenters, celebrities and artists. He stated: “We were being asked to pay another €1.2 million, bringing the total to €3.6 million. I could not see what we were paying for”. In addition by 19^th October he was concerned because Ms Papapolyzou had told him of the difficulties in obtaining sponsorship.

Mr Stamou states that he did most of the talking at the meeting. He states that he agreed with Mr Manley that the appearance of the six winning players would only be part of the good execution requirement. He said that the Committee “could not agree with RAM that the attendance of the players was the only obligation that had to be satisfied and the guarantee would be released once the player arrived at the airport”. From this it appears that that is what RAM were contending for at the meeting.

Mr Stamou goes on to state that the Committee wanted to ensure that it saw and paid against invoices which RAM had already paid. He added that “Unfortunately, RAM appeared not to understand the requirement, because they proceeded to send through … invoices requesting payment” without evidence of payment by RAM. I shall return to the question whether RAM understood the requirement, but Mr Stamou does not say that RAM agreed to it.

Ms Papapolyzou’s recollection is consistent with the note taken by Mr Douvis’s assistant, except that she denies saying that there is a remaining €1,600,000 which RAM would not get. In cross-examination she suggested that this remark may have been made as an aside in Greek, but not to the representatives of RAM. This was no more than a suggestion. I accept that it would not have been Ms Papapolyzou’s role to say of her own initiative what she is recorded as saying. I have no doubt the note is correct in recording that words to that effect were said, and I find that they were said to the representatives of RAM. They were said by someone other than Ms Papapolyzou, and if they were also said by Ms Papapolyzou, it was by way of clarification to the representatives of RAM of what someone else on the Ministry side had said. Nothing therefore turns on whether Ms Papapolyzou actually said the words herself or not.

In cross-examination Ms Papapolyzou also said that there was a discussion (consistent with Mr Adams’ note) as to what would happen if RAM gave the guarantee that six players would attend, but that only five or four in fact attended. She said that discussion resulted in agreement that the bank’s letter of guarantee had to be amended to provide that “good execution” meant the attendance of six players. In cross-examination Mr Manley also said he recalled that there had been a discussion at the meeting about five winners attending.

Mr Adams states that Ms Papapolyzou started the meeting stating that unless the Ministry received comfort from RAM on the requirements in Mr Douvis’s letter of 17^th October, then the Ministry would cancel the event. This is what Mr Douvis and his assistant record Mr Douvis as saying at the start of the meeting. Mr Adams may be mistaken as to who said it. It is also possible (I make no findings as to this) that because Ms Papapolyzou’s command of English is so great, she might have explained to RAM’s representatives what Mr Douvis and Mr Stamou were saying. Mr Douvis and Mr Stamou have very good command of English, but what they said in evidence was not always as fluent or clear as what Ms Papapolyzou said.

Mr Adams said that no legal justification was advanced. It is not suggested by the Ministry that they did advance a legal justification at the meeting. Mr Adams states that the bargaining power of the two parties could not have been more unequal, and he felt that RAM was being bullied. He had in mind earlier remarks of Mr van Seggelen which he said had undermined his confidence in the Ministry. Mr Adams said that Mr Pines explained the efforts made by RAM to ensure the attendance of winning players (whose identities had been known for only three days) and to interview as many as possible of the fifty five players who had been nominated. He said that when the Ministry asked for guarantees that the winning players would attend, he explained that that was impossible. He refers to discussions about celebrities and the Artist, and to doubts about the suitability of the Artist which were raised by Mr Giannakouros. He states that the Ministry were effectively holding a gun to RAM’s heads in relation to player attendance, and that if RAM did not provide a guarantee, the Ministry would cancel the ceremony. The result of that would have been that RAM would become insolvent and that this would in turn result in it losing the rights to the FIFPro awards for future years.

Mr Adams states that the requirement of the Ministry was a guarantee that five players actually attended the ceremony, that is to say, that the ‘best endeavours’ obligation be converted into a guarantee. He understood that this related only to the €1.2 million that was the subject of the letter of guarantee by the National Bank. This understanding seems to me to imply the same misunderstanding of the autonomous nature of the letter of the bank guarantee as that shared by Mr Douvis and Mr Stamou. There is no doubt that a form of agreement could have been devised (although probably only by lawyers) by which the absolute obligation which the Ministry were seeking in relation to the winning players (six according the Ministry, five according to Mr Adams) could have been expressed to be linked to the €1.2 million the subject of the bank’s guarantee, and not give rise to a potentially larger cross-claim by the Ministry. But no one had at that stage (or at any stage) put forward a draft that would have that effect. The letter of guarantee from the bank was already and in any event limited to €1.2 million.

Nevertheless, Mr Adams states that the economic reality was that RAM had little choice but to accept the demand that it guarantee that, according to him, related to five, not six, players’ attendances. He said that Ms Papapolyzou confirmed the nature of the variation by saying “five players or more you are OK, but less than five players … (at which she made a movement of her hand across her throat)”. Of course, Mr Adams interpreted this, he states, as metaphorical. I do not think that Mr Adams invented this detail, and I find that Ms Papapolyzou probably did make such a gesture to clarify the position being adopted by Mr Douvis and Mr Stamou. Subject to the number (that is six, or five) that was the Ministry’s position, and Ms Papapolyzou’s gesture adds nothing of substance to the note of Mr Douvis’s assistant in this regard.

In cross-examination Mr Adams accepted his note of the meeting had not all been written at the meeting. But he rejected the suggestion from Mr Tozzi that it was in the course of drafting his letter of 23^rd October that he changed from six to five the number of players whose attendance RAM was to guarantee. Mr Adams said that during the meeting the Ministry asked for the number guaranteed, but that at the meeting the parties agreed on the figure five. Mr Adams also explained the figures in the bottom part of the page as recording a discussion (not leading to agreement) that there might be some proportionate release of funds held subject to the bank’s letter of guarantee, according to the number of players involved.

Mr Adams in his witness statement went on to state that the discussion moved to the late payment of the €1.2 million. He states that the Committee was not prepared to release the full €1.2 million. Mr Adams goes on to state that it was agreed, reluctantly on his part, that the Ministry would immediately release €150,000. He states that this was a float, with further payments up to €1.2 million within 2 days of the Ministry receiving third party invoices up to those sums. He states that this is what he confirmed on 23 October (para 90 above).

Mr Adams is mistaken as to the €150,000 being a float. That is not what his letter of 23^rd October says. And the letter refers to the two invoices already issued by that date, one being for €150,000. That was specifically in relation to the fee of the Artist. The €150,000 was the invoice for the Artist’s fee.

It follows that the differences between the parties as to what was agreed on 19^th October are mainly on the points: (1) whether the absolute obligation of RAM in relation to the attendance of players was to be (a) in relation to six players or five and (b) in addition to or in substitution for its other obligations under Cl. IV.1 of the Agreement; (2) whether the third instalment was to be released against invoices submitted by RAM to the Ministry, or only against invoices which RAM had already paid. In addition, the parties shared a common understanding (or perhaps, misunderstanding) as to what document had to be amended if the absolute obligation in relation to the players was to take effect so that, if it were breached, RAM’s liability was limited to the €1.2 million payable under the bank’s letter of guarantee. There is no dispute that the parties agreed that the bank’s letter of guarantee should be amended to extend its validity to 9^th November. Further, Mr Adams understood that the effect of the agreement on 19^th October was that on fulfilment of the absolute obligation as to the attendance of players the bank’s letter of guarantee was to be released, and that a mechanism had to be worked out as to the timing and means for ensuring this. Mr Adams understanding as to this is logically consistent with his understanding that the absolute obligation as to the attendance of players was to be in substitution for RAM’s obligations under Cl. IV.1 of the Agreement.

In my judgment all the witnesses who gave evidence before me were trying to assist the court to arrive at the truth. Their attempts to do this were hindered in part by the lack of clear contemporaneous records of the meeting, in this case the meeting of 19^th October. But it must also be said that on both sides loss of confidence in the other side had been developing up to the time of the meeting. This was partly in response to what FIFPro had been saying and writing, and partly in response to what the parties had respectively done, or not done, to perform the Agreement. By 19^th October the loss of confidence had became a strong mutual mistrust and even resentment. While all the witnesses kept these feelings under control, the witness who was most successful in retaining his objectivity was Mr Stamou. This is perhaps not surprising in such an experienced civil servant. The other witnesses were either business people or, in the case of Mr Douvis, a political appointee, and the failure to make a success of the 2006 Awards must have been a very great personal disappointment to all of them. I find that all of those who attended the meeting of 19^th October expected, after the meeting ended, that the 2006 Awards would not be cancelled, but would go ahead.

I also find that (subject to the issues of breach of contract and repudiation) they were all acting straightforwardly towards one another. By this I mean that in the letters written after the meeting, on 23^rd October by Mr Adams, and 24^th October by Mr Douvis, they wrote what they believed to be the truth. In his e-mail of 20^th October Mr Adams had identified a new point which he described as “one request/amendment to what was agreed yesterday”, which was developed in the third paragraph of his letter of 23^rd October. But the rest of the letter of 23^rd October was what he believed had been agreed. Similarly, when RAM presented unpaid invoices to the Ministry requesting payment, it was because that is what they thought had been agreed. No one at RAM was pretending that something had been agreed when he knew it had not been.

I make these findings of fact. First, there was never any agreement that the payments to be made after 19^th October were to be made only against invoices which RAM had already paid. I think it probable that Mr Stamou did make such a proposal. Mr Tozzi points to the e-mail of Mr Manley in which he refers to payment of one of the invoices (see para 86). He submits that that shows that payment of the invoices was mentioned at the meeting. Mr Manley’s e-mail shows that he had understood that that is what the Ministry had been seeking. But Mr Manley’s e-mail does not show that it was agreed.

Second, there was a genuine misunderstanding at the meeting as to whether the absolute obligation that RAM were agreeing to assume related to the attendance of six players or of five, and as to whether it was to be in addition to, or in substitution for, the wider best endeavours obligation in Cl IV.1 of the Agreement. The second of these findings on its own is sufficient to lead to the conclusion, as a matter of law, that there was no binding agreement between the parties. And the first of these findings on its own would mean that there was no agreement on the terms contended for by the Ministry.

I observe that unless the absolute obligation was in substitution for the wider best endeavours obligation in Cl IV.1 of the Agreement, it is hard to see any benefit to RAM in reaching this proposed agreement, or, in legal terms, any consideration for the proposed agreement. Without such consideration the agreement would not be binding in law. However, since I did not permit the amendment to plead an agreement made on 19^th October, nothing turns on this point.

The parties met again on 25^th, 26^th and 27^th October. On 25^th October there were present Mr Douvis, Mr Stamou, Ms Papapolyzou, and Mr Manley. Mr Manley had come to attempt to obtain payment of the invoices, in particular the €150,000. On 26^th and for most of 27^th October there were in addition two further representatives of the Ministry, and Mr Giannakouros, and Mr Ciclitira also attended.

There is a note handwritten in Greek of the meeting of 25^th October. Mr Douvis is recorded as saying that seven working days before the event the Ministry has invitations prepared, but it is too late. He asked for a proposal from RAM. Mr Douvis proposed changing the date, and various alternative dates are noted. Another translation of the same note read “even though we had prepared the invitations we cannot send them”. There is in the papers an example of an invitation dated 27^th October, and apparently ready to be sent out.

The note of the meeting of 26^th October records a similar statement about the invitations, and concerns raised by Mr Douvis as to the situation. The note also records words of re-assurance from Mr Ciclitira, explaining what work has been done, and in particular that there had been success in relation to the players’ attendance. Mr Douvis is then recorded as saying: “Because of the delay and the lack of organization of the presentations, we cannot sell the event. This is the biggest problem. We met in June … From then till now we hear from FIFPro that nobody is coming, therefore how possibly as a serious government can we accept all this? On the 23^rd of the present month the letter was saying no”. Mr Ciclitira is then recorded as saying that everyone will see the players who will come, and that he has come to the meeting in order to discuss decreasing the expenditure. He proposed a figure of €2.8 million.

There is no dispute that these notes give an accurate impression of the course the meetings took. In fact the discussions were long and difficult. At one point those on the RAM side left the Ministry to go back to London, without any form of agreement being reached. But they returned, and the discussion went on late into the evening. On the RAM side further time was spent in the night trying to work out what figures might be acceptable. And the meeting resumed on the morning of 27^th October. There is no dispute that an agreement in principle as to at least some matters was reached that morning, namely that the consideration would be reduced to €2.2 million, and that the Ministry would assume responsibility for some of the so-called deliverables of RAM, and that RAM was relieved of the obligation to secure the attendance of an artist. There is also no dispute that the parties expected formally to exchange letters.

The issues canvassed are: first, whether those three points were the only ones on which the parties had agreed and intended to agree, (so that an agreement was legally binding), or whether there were further points which remained for discussion before a final agreement could be reached; second, whether the terms set out in the handwritten note agreed on 27^th October were too vague and uncertain to constitute a binding agreement in law; third, whether the agreement reached would only become binding when reduced to writing and agreed in that form over the weekend and early the following week, and fourth, (if RAM fails on the preceding issues) whether Mr Manley and Mr Ciclitira had authority to bind RAM to an oral agreement on 27^th October. This fourth point is not pleaded.

The agreement (such as it was) on the deliverables to be transferred to the Ministry is set out in the next contemporaneous document. It is a two page note handwritten by Ms Papapolyzou late on 26^th October and headed “Deliverables to RAM/PMG”. It is a list of some twenty or more items which had been matters which RAM was responsible for providing under the Agreement (as varied in September 2006) but for which the Ministry was agreeing to assume responsibility. These are the items referred to in para 19 of the Defence which is summarised in para 18 above. The first item is typical of the format: “Hair and makeup 3 people”. One which Mr Mitchell submits is too vague is: “UN Costs - > Government”.

On 27^th October FIFPro wrote to RAM and to Mr Douvis a letter which, for the first time, gave a relatively optimistic report as to the prospects for the attendance of players. It recorded positive responses from Madrid and Barcelona on defenders, from Spain on strikers, from the World Best Player. Other responses, in relation to the goalkeeper, to midfielders in Italy and to players without a club are said to be unavailable or unclear. Negative responses are recorded in relation to players in England.

On 27^th October 2006 at 19:48 Mr Perring of PMG sent to Ms Papapolyzou an e-mail. An attachment was a document he had written headed “MoC FIFPro World XI Player Awards Deliverables” which he referred to as the list “discussed yesterday/this morning and reflecting your handwritten notes”. The document covers just over two pages in small typescript.

As already noted, there are invitations bearing the date 27^th October, apparently ready to be sent out.

On 27^th October at 16:00 the Committee met, with Mr Douvis and Mr Stamou present. Only two subjects are minuted as having been discussed, namely the letter of that date from FIFPro and the Committee’s decision to issue a Press Release giving details of the event and the players who will attend. The draft Press Release is signed by Mr Douvis and contains a page and a half of closely typed details, including the names and clubs of the 55 nominees.

On 27^th October at 20:15 Ms Papapolyzou replied to this e-mail, saying that she attached her preliminary comments but that she had still not discussed them with the Ministry. Her comments are added in the form of tracked changes to a Word document file.

Mr Tozzi also refers to an e-mail of 27^th October from the Artist’s agent which refers to the cancellation of the booking of the Artist. This e-mail is to Mr Pines, and he confirmed in cross-examination that she was cancelled that day. Mr Manley was not sure that she had been cancelled. Mr Tozzi makes the point that if there were no concluded agreement that RAM be relieved of the obligation to provide an artist, then it would have been wrong to cancel the Artist. Mr Mitchell on the other hand submits that the position is not clear, and that in any event cancellation of the Artist would be consistent with a view that there had been no agreement, but that there would be one the following week, alternatively, if there was not to be an agreement the following week, the event was unlikely to go ahead.

Mr Tozzi also refers to an exchange of e-mails between Mr Pines and another member of RAM’s team, Ms Mitchell, late on 26^th October in which Mr Pines responds to a query as to what is happening by saying “Stripped down by 2 million. No entertainment, cut to the bone”.

The evidence of the witnesses as to what was discussed or agreed on 25^th to 27^th October is limited. The witness statements focus largely on the issue of what was said (if anything) about the authority of Mr Ciclitira and Mr Manley. I shall deal with that point separately. It is a serious shortcoming in the preparation of the witness statements on both sides that they contain much material that is not related to issues which are pleaded, and is therefore irrelevant. This has caused confusion and waste of time. Another example of this is that the witness statements devoted much space to what was allegedly said during the contractual negotiations, although there is no pleaded case to which this could have been relevant. When I raised this point early in the case, counsel edited or, in the case of one proposed witness, entirely withdrew, the witness statements.

Mr Douvis and Mr Stamou refer in their first witness statements only to discussion of, and agreement being reached on, two of the alleged new terms, namely the reduced consideration of €2.2 million and the deliverables to be transferred to the Ministry. When commenting upon Mr Ciclitira’s e-mail of 28^th October (see below) in their first witness statements, Mr Douvis and Ms Papapolyzou state that there was no agreement to pay RAM by 30^th October. Mr Stamou makes a similar statement in relation to the letters from Harbottle & Lewis (“H&L”), RAM’s solicitors, referred to below. In his second witness statement Mr Stamou states that there was no agreement that the price was to be paid in full by 30^th October. None of these witnesses stated that the point had not been raised at all.

Mr Ciclitira in his first witness statement says that what he calls the agreement in principle included a term that the €2.2 million was to be paid in full by 30^th October. And it is Mr Ciclitira who first stated, in the same paragraph, that the requirement upon RAM to secure an artist was agreed to be dropped. The Ministry has accepted that there was agreement that the artist be dropped (although this is not mentioned in the witness statements of Mr Douvis or Mr Stamou). In her second witness statement, while commenting upon what Mr Ciclitira had stated, Ms Papapolyzou accepted that this had been agreed. Mr Ciclitira’s witness statement also confirms the accuracy of the notes cited above. In response to the suggestion that the event be postponed or cancelled, he had said that the players would be coming.

Saturday 28^th October was a national holiday in Greece. At 17:49 Mr Ciclitira sent Mr Douvis an e-mail which he received the following Monday. In it Mr Ciclitira thanked Mr Douvis for the spirit in which the meeting had been held in the previous days. He expressed his own enthusiasm for the event and described that of one of the famous players who had learnt he was to be a winner. He then wrote:

“I have not heard back from you, and have therefore assumed that we are moving forward on the terms that we discussed ie a reduced figure of Euro 2.2 million (to be paid and received in full by RAM by the close of business on the 30^th October 2006 at the latest) and your agreement to take over the costs initially outlined in handwriting and formally listed out by me and sent to Martha on Friday evening. I would like to feel that we can finalise all of the paperwork with Iain from RAM on Monday morning”.

Also on 28^th October Mr Pines sent an e-mail to Ms Papapolyzou informing her of the opportunity to have as guests of FIFPro at the 2006 Awards two of the most famous footballers of former years, Pele and Franz Beckenbauer. He mentions this is unconnected to the players or prize givers and is “simply an added bonus for you”. He then mentions the travel and accommodation costs that would be involved. Mr Tozzi submits that this is only consistent with the Ministry having taken on responsibility for the deliverables in the list prepared the previous day. I take this to be a reference to the airfares and accommodation referred to in that list.

On Monday 30^th October at 10:53 Athens time Mr Stamou created and, at 12:52 he modified, a Word document in Greek. It is the draft of a letter to be sent to RAM requesting RAM to send to the National Bank an instruction that the National Bank credit to the account of the Committee the sum of €1.2 million, the subject of the letter of guarantee by 2^nd November. The letter includes the words “as specified on Friday October 17^th [sic] 2006”, which must mean that this point had been mentioned in the discussions on 27^th October. The draft refers to the Agreement and goes on:

“Once the relevant account has been credited the … Committee will release payment of the remaining amount of Euro 1,000,000 in two instalments. More specifically, the amount of Euro 600,000 by 5/11/2006 and the remaining amount of Euro 400,000 as specified by the contract, for full payment of our obligations arising from the contract, on the basis of the specification of October 17^th 2006”.

There is a longer draft with a file name 26205104v1, but bearing no time marking. I infer that it was prepared on 30^th October by Mr Stamou, because the text of it is included in a later draft e-mailed at 19:15 that day by Ms Papapolyzou to Mr Stamou. In this untimed draft there is a payment clause, similar in substance to the draft prepared at 10:53. This draft is in the form of a letter to RAM and starts (as translated):

“… we confirm with the present document the agreement between ourselves which was concluded on 27 October 2006 …”

On 30^th October at 11:44 Mr Perring responded with an e-mail to Ms Papapolyzou’s comments on his draft sent to her on 27^th October. She responded at 11:57.

On 30^th October at 15:30 Athens time the Committee started a meeting. The Minute is unusually long at six pages, and refers to the subsequent correspondence that day as set out below. The Minute also refers to a letter to the Greek Tourist Board seeking sponsorship. Nothing else is recorded.

On 30^th October at 16:05 Athens time the Ministry received a fax sent at 14:05 London time by H&L. The letter refers to the Ministry’s letter of 17^th October and asserts that RAM has “beyond argument” fulfilled its obligations under the Agreement. The letter then goes on:

“We understand that you have now proposed to our client that you significantly reduce the amount that you agreed to pay to our client pursuant to the [Agreement] and that instead of releasing the bank guarantee in the sum of €1.2 million and making further payments to our client of €1.2 million and €400,000 … that instead you simply release a further €1 million to our client …. Our client’s position is that it would like to assist you if it can, but at present does not know whether or not this is possible. Our client owes obligations to FIFPro [PMG and others] … Our client is reasonably optimistic that this will be possible …

In the meantime, timing is critical, and if funds are not released to our client by close of business today, our client will be unable to fund the broadcast of the event or retain the aircraft required to transport the players to the event. In those circumstances are client will have no option but to hold you in breach of contract … [there follow proposals, including the release of the bank guarantee]

We must make it absolutely clear that if we do not have written confirmation from you by close of business today that the €1.2 million in escrow has been released unconditionally to our client and is available for our client to spend, then the event will have to be cancelled and our client will resort to litigation against you”.

Mr Douvis immediately wrote a letter marked with the number 71 to RAM about H&L’s letter. He said he received it “with great disappointment” and that it “is unacceptable after the deal we made with” Mr Manley and Mr Ciclitira. He said that at the meeting on 27^th October it had been agreed that the amount to be paid would be €2.2 million and that the obligations of the parties were set out in the handwritten note prepared by Ms Papapolyzou. He wrote that the H&L letter was “completely opposite to what we have agreed” and that it was RAM who was therefore in breach of contract.

There then followed at 15:45 London time the second of three telephone conversations between Mr Douvis and Mr Manley (the first had been in the morning, at a time that is not recorded). Mr Manley and Mr Adams were at that time attending a meeting at H&L with Mr Amlot (then a senior associate, but now a partner of H&L) with Mr Amlot’s supervising solicitor. They were joined for part of the time by Mr Lebetkin and Mr Selman. Mr Amlot made a note of the meeting, much of which was privileged. It was realised at a late stage that the note included a brief record of the telephone call with Mr Douvis, which was not privileged. The conversation in London was on a speaker phone. That part of Mr Amlot’s note was produced during the trial, after Mr Manley had given evidence.

Mr Manley had not mentioned these conversations in his witness statements and in cross-examination he said that by this time he thought that he had dropped out of the picture and subsequent matters were dealt with by others. Mr Amlot gave evidence about it, but naturally could add little to the note itself. Mr Adams did not mention the conversation in his witness statement. He was asked about it in cross-examination and said he had only a hazy recollection of the conversation. Mr Douvis referred in his first witness statement to a telephone conversation with Mr Adams that day, after he had sent his letter numbered 71 referred to in para 142. This is consistent with Mr Amlot’s note. Neither counsel asked Mr Douvis any questions about these conversations.

The first words recorded as spoken in the morning call are attributed to Mr Manley and read: “I wondered how close we are to getting €1m”. There then follow notes referring to a letter to the bank, and to cancellation, and to other matters, but it is impossible to reach a conclusion from the note itself as to which of Mr Manley or Mr Douvis was speaking. The second call was at 15:45 London time, after Mr Douvis had sent his letter. It is clear that Mr Douvis said that there was a very serious problem as a result of H&L’s letter. There are figures noted, including €2.2 million, €600,000 “now” and €400,000 “after event”, but it is not possible to tell from the note who spoke those words. For the third conversation at 18:10 (London time) it is noted “they going to cancel the event”, but it is not possible tell from the note who said that.

Although it is not possible to tell from the note who said what, the figures €600,000 “now” and €400,000 “after event” correspond to the draft letter that was being prepared internally by the Ministry that day, starting at 10:53 Athens time (08:53 London time): see paras 137 to 138 above. The payment of figures €600,000 “now” and €400,000 “after event” makes sense only on the footing that (as envisaged in the Ministry’s drafts) the National Bank was to have repaid €1.2 million.

Mr Tozzi submits that assistance can be drawn from the contemporaneous correspondence, in which it is H&L who use the language of cancellation. So he submits the word cancel was more likely to have been used by Mr Manley than by Mr Douvis. I agree that assistance can be derived from the contemporaneous documents. I infer and I find that the stance being adopted by Mr Douvis in these conversations was substantially similar to the contents of the drafts that were being prepared within the Ministry that day, and were ultimately sent as a letter in the early hours of 1^st November.

The proposal that the €1.2 million be repaid by the National Bank to the Ministry would have left RAM in the position of having actually received only €1.2 million until they subsequently received the €600,000 “now” and €400,000 “after event”. From RAM’s perspective the Ministry’s proposal exposed RAM to a risk that, once RAM had instructed the National Bank to pay the €1.2 million back to the Ministry, the Ministry might (for whatever reason) not be willing to pay one or both of the sums of €600,000 and €400,000. From the Ministry’s point of view that was not a risk. But confidence between the parties had by this time sunk very low, and RAM did see it as a risk. RAM wanted the National Bank to release the money directly to itself, or to a solicitor.

Between the second and the third telephone conversations, at 17:16 London time, RAM sent a letter to Mr Douvis referring to the call (“Mr Adams and Mr Douvis”) and confirming that provided RAM received confirmation that evening that the Ministry would release to RAM by 10am the next morning (London time) the sum of €1.2 million held by the National Bank, RAM would retract H&L’s letter. The letter ended “without [release of the funds] it will be impossible for the event to proceed”.

On 30^th October at 19:15th Athens time Ms Papapolyzou sent to the Ministry an e-mail to which was attached a further draft of a document setting out the matters noted in her handwritten note. In this draft there is included the clause relating to payment which appeared in the earlier untimed draft.

On 30^th October RAM’s production team held a meeting. Mr Tozzi refers to the fact that Mr Hanlon is recorded as saying that the event would be organised by the Ministry and its consultants, and there is no mention of the Artist.

On 31^st October at 07:22 Mr Ciclitira sent an e-mail to Mr Douvis. He referred to a conversation they had had “last night” and said he was extremely keen for the 2006 Awards to happen, as were the directors of RAM and, he said, Mr Douvis. He said the revised budget had risen from €2.2 million to €2.3 million, and gave an explanation for the figures. He proposed an addendum to the Agreement be entered into that day by 1300 London time making the following changes: (1) the consideration be reduced from €4 million to €2.3 million; (2) that the Ministry undertake the obligations set out in the list sent to Ms Papapolyzou on the evening of 27^th October; (3) that RAM be released from having to provide an international artist; (4) provision be made for payment in the manner set out. The proposal was that the Ministry agree to the payment to RAM of the €1.2 million held as security by the National Bank in instalments, namely €700,000 on signature of the addendum and at the same time, €400,000 in to an account with H&L, to be released by H&L at specified stages on 6^th November on proof of arrival of specified winners at Athens airport that day, or failing that, returned to the Ministry. A solicitor from H&L was to be at the airport with a camera to provide proof.

It appears that the Ministry’s drafting of a letter to be sent to RAM continued through 31^st October. There is a draft similar to that sent by Ms Papapolyzou to Mr Stamou the night before into which there was inserted a clause containing the absolute obligation on the part of RAM to secure the attendance of six award winning players in Athens, twelve award presenters (who are defined) and the show presenters whom RAM had already arranged for.

Also on 31^st October H&L wrote a (first) letter setting out a proposal very similar to that made by Mr Ciclitira in his e-mail. The letter stated that provided the Ministry complied with these varied terms RAM would waive its right to bring a claim for the full €4 million (less amounts actually received). By a second letter the same day H&L gave notice that the offer in the first letter would expire at 18:30 London time “at which point you will have left our client no choice but to accept your repudiatory breach … as a result of which the Agreement will be terminated”.

By a third letter of 31^st October at 20:05 (London time) H&L referred to the two earlier letters of that day, they accepted the repudiatory breaches which they said had by then occurred, and claimed to terminate the Agreement. H&L identified these as follows: (1) failure to make payment of the third instalment due on 15^th October according to Cl I.3.b); (2) unreasonably seeking to reduce the contract price with no legal justification and making it plain that they were only prepared to pay significantly reduced sums, and then only at a date that was unclear; (3) alleging the existence of an agreement said to have been made with Mr Manley and Mr Ciclitira as justification for a complete departure from the terms of the Agreement (H&L stated that RAM denied that any such agreement had been reached) (4) by the final paragraph of the Ministry’s letter of 30^th October, making it clear that the Ministry no longer intended to be bound by the Agreement.

There is a Minute of a meeting of the Committee which states that the meeting was at 20:30 Athens time. The Minute refers to Mr Ciclitira’s e-mail of that morning, to the three letters from H&L, and to a letter no 79 described as having been sent by the Committee.

The Committee did send a letter marked no 79, and it is dated 31^st October. But according to the fax header, it was not sent until 1^st November 01:27. This was a timing upon which Mr Tozzi placed considerable reliance, submitting that the letter should be read only as a response to the letters received from the Ministry on 31^st October, and not as a record of what the Ministry claimed had been agreed on 27^th October. This is important because if it is read as a record of what the Ministry claim was agreed on 27^th October, it contains terms that are not part of the Ministry’s pleaded case as to that agreement, and which the Ministry’s witnesses do not support as having been discussed or agreed on 27^th October.

The letter from the Ministry starts with the words:

“After numerous telephone conversations of yesterday and today (30^th and 31^st of October 2006) we expected from your side confirmation of the issues that were commonly agreed in the meeting concluded on the 27^th October … by which the [Agreement] was further detailed and specified, and which has come into effect as its is described below…”

The terms which are set out and which would amount to variations of the Agreement include (1), clause 3, relieving RAM of the obligation to provide an international entertainment programme; (2) clauses 5, by which the Ministry assume responsibility for a number of items originally the responsibility of RAM (this is based on the list handwritten by Ms Papapolyzou); (3) clause 6, by which RAM give an absolute guarantee as to the attendance of winning players and specified presenters (this is in the same form as the drafts prepared by Mr Stamou on 30^th October); (4) clause 7, by which the total consideration is reduced to €2.3 million, with provision as to its payment. The clause refers to the two payments of €1.2 million, of which the first is held by the National Bank, and so to RAM being due to receive in effect a further €1.1 million. The clause requires RAM to instruct the National Bank to extend the letter of guarantee to 10^th November. The clause provides that upon confirmation by the bank that this has been done, the Ministry and the Committee will instruct the bank to release to RAM €400,000, and that they will instruct the bank to release a further €400,000 on 7^th November “once it is verified that RAM and PMG have fulfilled all of their above mentioned deliverables and obligations”, and that they will instruct the bank to release the final €300,000 on 17^th November. Failing agreement to these terms by 11:00 on 1^st November, Mr Douvis wrote that the Ministry would terminate the Agreement and hold RAM liable for any amounts paid to RAM and damages.

The terms of the clause as sent on 1^st November are wider than what the Ministry had proposed on 19^th October, in that the absolute obligation is expressed to extend beyond at least six winning players. I have heard no evidence as to how this extension came to be inserted. The words include:

“RAM/PMG are contractually obligated to deliver to Athens at their own expense:

-

at least 6 of the award winning players

-

award presenters: 4 award presenters (3 places are booked for provision by MoC) as follows:

-

the ‘heros’ of the award receivers to give them their trophies,

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Other award presenters – celebrities from the football world,

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The show presenters (Ruud Gullit and Gabby Logan)…”

Mr Douvis in his witness statement refers to the letters from H&L, and to telephone conversations on 30^th October. He also mentions the letter that is dated 31^st October and sent by the Ministry early on 1^st November. But he makes no mention of the drafting that had been taking place at the Ministry throughout 30^th and 31^st October. Nor does he comment on the opening words of that letter, which state that it is what was agreed on 27^th October. In his second witness statement he comments: “We were saying that we had an agreement reached on 27^th October but RAM was not accepting that there was one”.

Mr Stamou’s first witness statement on this topic is little more informative than Mr Douvis’s. But he does address the point to this extent. He states (in relation to the letter sent early on 1^st November): “Although we believed we had an agreement on 27 October, some of those terms were improved to try to reach a deal with RAM. For example we were prepared to agree a figure of €2.3 million …” In his second witness statement Mr Stamou states that he expected that the handwritten note would be confirmed in letters, but that the Ministry did not require this documentation in order to have a valid agreement.

There is a striking difference between the Ministry’s case as pleaded, and the documents that the Ministry produced internally on 30^th and 31^st October, and ultimately sent in the form of the letter sent early on 1^st November. The pleaded case is that the agreement on 27^th October contained only two terms, namely the reduction in the consideration to €2.2 million and the transfer of deliverables. A third term, dropping the Artist, was added by amendment at the trial. But the drafts prepared on 30^th and 31^st October and the letter sent on 1^st November all include further terms, of which the two most important are the absolute obligation upon RAM to secure the attendance of at least six players (and others), clause 6, and the provisions by which RAM was to receive €1 million (later amended to €1.1 million) free of the letter of guarantee from the National Bank.

Mr Stamou made some observations on this in cross-examination. He said that his understanding at the end of the discussions on 27^th October was that RAM were obliged to actually deliver to Athens at least six of the winners. But he was unable to recall whether that had been discussed at the meetings on 26^th and 27^th October. He said “We have discussed and agreed upon these matters on the 19 October agreement”. This answer is largely consistent with the drafting on 30^th and 31^st October of the letter that was ultimately sent early on 1^st November. It explains why the Ministry felt able to include an absolute obligation on RAM to secure the attendance of at least six players. But it does not explain the pleading of the Ministry’s case in the original pleading. More importantly, the point is the subject of my finding that no such agreement was in fact reached on 19^th October (although the Ministry thought that it had been).

As to the provisions for payment, Mr Stamou said that this was not discussed on 26^th or 27^th October, but that it came up on 30^th October when he had read Mr Ciclitira’s e-mail of 28^th October. I am not convinced by this answer. As a matter of timing, it is true that the e-mail of Mr Ciclitira predated the first attempt at a draft of a payment clause at 10:57 on 30^th October. But there is no contemporaneous document linking the e-mail with that draft. And if Mr Ciclitira’s e-mail had been the first that the Ministry had heard of this point, I would have expected the Ministry not to start drafting their own version of the clause, but to protest, as they had done after the meeting of 19^th October. It seems more probable, and I find, that the parties always understood the need to agree the timing and means by which RAM were to receive the €1 million from the National Bank. But no agreement ever was reached, and the negotiations simply continued until they broke down.

By letter marked 83 and dated 1^st November 2006 the Ministry and the Committee wrote to RAM and PMG. The letter again starts with words asserting that their letter dated 31^st October, but faxed early on 1^st November, summarised the “mutual agreement of the meeting held on 27^th October…” This letter stated that the Ministry stopped immediately all actions towards the event and declared the Agreement terminated and the event cancelled. The same day by a letter marked 82 the Ministry wrote to the National Bank in Greek asserting that RAM had not performed the Agreement and demanding immediate payment of the €1.2 million which the National Bank had guaranteed. This demand was of course met. They issued a Press Release saying that there was a lack of guarantees that the winning players, presenters and guests would actually be present. The Ministry echoed the words of Mr van Seggelen had written on 2^nd October, that “a gala without the players is not a gala” (para 55 above).

Accordingly the question of the authority of Mr Manley to bind RAM does not arise. If it did arise I would hold that Mr Manley did have authority to bind RAM. He was the Company Secretary of RIG. He had described himself as such below his signature on the Agreement. It is immaterial that he signed on behalf of PMG rather than RAM. He was also held out as being the Finance Director of RAM. That was how he was described in the Cover Note for the Cancellation Insurance provided by RAM to the Ministry. He was also so described in a contact list circulated with the knowledge of the directors of RAM to the Ministry. I accept that he may have attempted orally at the meetings on 26^th and 27^th October to express to the Ministry that his authority was limited. But I accept the evidence of the representatives of the Ministry that they did not understand that.

Mr Mitchell raises a further point, namely that even if there was an agreement on 27^th October as pleaded in the amended Defence, then the deliverables as set out in the handwritten list were not set out with sufficient certainty to be capable of forming a binding contract. This point does not arise. But if it did I would reject it. It must be recalled that by the time this list was drawn up the individuals concerned on both sides had been working together on the project (albeit not without difficulty) for many weeks. In addition they were professionals in the field, in particular Ms Papapolyzou. Mr Giannakouros, and the members of RAM’s production team present at that meeting. Had the document been drawn up between strangers who were not already in a contractual relationship, Mr Mitchell’s point might have had some force. In the context of the Agreement that had been so substantially performed by 27^th October, it has none. It is true that the drawing up of the list was the subject of discussion and redrafting over 27^th to 30^th October. But the fact that the list was varied (if it was) in those subsequent drafts does not demonstrate that the handwritten list was too uncertain to be binding. In the event the professionals who were mainly concerned by the list did not disagree.

This question must now be answered on the footing (as I have found) that the Agreement remained binding until 31 October.

The only legal justification relied on by the Ministry is the contention that there was a condition precedent to the Ministry’s obligation to pay the €1.2 million due on 15^th October, namely that RAM should have performed certain obligations, and that RAM had not performed those obligations: see paras 16 and 17 above.

This contention has no merit. In its Reply RAM refer to it as an abuse of process. But no application appears to have been made for summary judgment under CPR Part 24.

Mr Tozzi supports his submission of law that there was a condition precedent with little more than the assertion that the staged payment structure under the Agreement was clearly intended to match payments to progress by RAM. For the Awards to be successful RAM needed to ensure that most of the basic matters had been organised by 15^th October. RAM needed, for example, to have booked the relevant entertainment, and arranged the attendance of suitable celebrities and high profile footballers. He submits that was necessary if the Ministry were to be able to exploit their rights to obtain sponsors and sell tickets.

Mr Mitchell submits that there is nothing significant in the third payment being 15^th October, so far as performance of RAM’s obligations was concerned. The names of the winners were not even identified or communicated by FIFPro to RAM until 16^th October, and there is nothing in the Agreement as to when that communication would occur. Moreover, the obligations to be performed by RAM, and the payments to be made to RAM by the Ministry, reflect only a part of the benefits and burdens of the Agreement to the two parties. The Ministry obtained under the Agreement not just the right to fulfilment of RAM’s obligations in relation to the Awards, but also the right to obtain money from third parties for sponsorship and the like. Similarly, RAM were entitled to obtain additional payments from third parties. There is no direct relationship between the instalments payable by the Ministry and the services to be provided to the Ministry by RAM. This was not just a contract for services to be rendered by RAM to the Ministry. Further, by Cl I 4a) the payments were to be made to RAM clear of any set offs or deductions. If the Ministry were dissatisfied with RAM’s performance they had the benefit of the first demand letter of guarantee from the National Bank. Moreover, in the original Agreement, and to a lesser extent in the Appendices agreed on 12^th September, the obligations of RAM were not set out with the certainty that would be required if they were to be conditions precedent.

I accept all of these submissions of Mr Mitchell.

It follows that the contention by the Ministry that by 15^th October RAM were in breach of contract can, if correct on the facts, have no legal consequences for this case. The Ministry’s case is not that RAM’s failure to fulfil its obligations was such that RAM was in repudiatory breach of the Agreement by 15^th October, and that the Ministry accepted such repudiation. The Ministry’s case on breach of contract by RAM is confined to the condition precedent point.

The legal basis for the contention that RAM were in breach of contract is also doubtful. A clause requiring a party to a contract to use best endeavours is generally found in contracts which require a party to perform an act which can only be performed with the consent of a third party who is not a party to the contract. So, in a contract for the export of goods, the seller may contract to obtain an export licence. He may undertake an absolute obligation to export the goods, with the result that he will be in breach of contract if he does not succeed in obtaining the necessary licence. Alternatively, he may undertake only to use his best endeavours to obtain the licence. Then, if he does not succeed, the question whether he is in breach of contract requires an enquiry as to whether he used his best endeavours to obtain the licence. If he did, he is not in breach of contract merely because he has not succeeded.

In the context of the present case, the issue of best endeavours might have arisen as follows. If the project had gone ahead, and if on 6^th November less than six winners had attended, then there would have had to be an enquiry as to whether RAM had used its best endeavours to secure their attendance, as required by Cl IV 1. Similarly, if the Court had found in favour of a claim by the Ministry that the Awards were not of the highest standard (as required by that clause) or that the players, celebrities and guests who did attend were not “high profile”, “well known” or “VIP” (as required by that clause) then there would have had to be a similar enquiry as to whether RAM had used their best endeavours. Since the Awards were not held, no such claim could be made by the Ministry. And the Ministry could not have contended, and did not contend, that as at 15^th October it was inevitable that less than six winners would attend, or that it was inevitable that the Awards would not be of the highest standard, or that those who did attend would not be of contractual standard. The Ministry were very worried that that might turn out to be the case, but they did not say that that would inevitably be the case. If that had been inevitable as at 15^th October, then the Ministry would have been entitled to terminate the Agreement on that ground at that date. They did not do so.

Mr Tozzi invokes the “best endeavours” obligation in an entirely different and novel way, for which he cites no authority. He submits that the best endeavours obligation entitled the Ministry in effect to monitor RAM’s performance during the period from 10^th May to 6^th November, and to claim a breach of contract had occurred if, at any stage, or in relation to any obligation, RAM were not at that time trying hard enough. So if RAM adopted the policy of deferring expenditure for cash flow reasons as explained by Mr Adams (see para 40 above) then, for example, in failing before October to book an artist, or prepare a running script, RAM were in breach of the obligation to use best endeavours. On this footing, if RAM did not attempt to fulfil its obligation to secure the attendance of well-known celebrities until the last week of October, but nevertheless in fact succeeded in securing their attendance on 6^th November, RAM would be in breach of contract for the period during which it was not trying, or trying hard enough, to perform its obligation. Mr Tozzi accepted that in that event there might then be no damage suffered. But meanwhile, according to Mr Tozzi, if the obligation were a condition precedent to the payment of an instalment, the Ministry would be relieved of the obligation to pay the instalment.

Mr Mitchell submits that these submissions for the Ministry are untenable and that evidence going to the issue of breach of contract by RAM was irrelevant.

I am inclined to agree with the submissions of Mr Mitchell. If I had to decide the point, which I do not, I would be minded to hold that the best endeavours clause does not bear the meaning contended for by Mr Tozzi.

It is regrettable that these submissions of law for the Ministry were ever advanced. They formed a very weak legal peg upon which to hang the relevance of a vast amount of evidence relating to RAM’s acts and omissions in preparation for the Awards. Very substantial work was expended on these points before the trial in the form of lists of points upon which RAM were said to have, or not to have, used its best endeavours. In a request for further information in February 2007 (settled by counsel not now appearing) RAM was asked to give detailed particulars of its case that it had used its best endeavours. The responses include one dated 27^th September running to 18 pages under 37 headings. Mr Tozzi’s written Opening Speech had attached to it an Appendix of 54 pages, and his Closing Speech an Appendix of 22 pages addressing the 37 headings. The first was largely, and the second entirely, devoted to setting out the alleged failings of RAM to take the steps that the Ministry contended it should have taken by various dates. Mr Mitchell’s Closing Speech had an Appendix running to 37 pages of closely typed submissions on each of the heads of complaint. It was plain from the start of the trial that the court would face formidable difficulty in addressing such points in a hearing estimated to last ten days. No adjournment was sought by either party, and I made clear that the court would not permit an indefinite extension of the time available for the hearing.

At the trial there in court were some 62 lever arch files of documents contemporaneous with the events in 2006, that is some 30,000 pages. Much the greater part of these consisted of documents generated by and exchanged between members of the production team assembled by RAM. Many documents contained similar text, such as e-mails to different addressees, and different drafts of documents. The Agreement, the documents essential to understanding the background, and the documents relating to whether there was a variation of the Agreement on 27^th October, had for the most part been assembled by those representing RAM into two core lever arch files, to which a modest number of additional documents were added during the hearing. Almost all the rest were apparently in court for the purpose of being relied on by the Ministry in support of its case that RAM had not fulfilled the alleged condition precedent.

I could not but admire the command that all counsel demonstrated that they had of the files. But I was dismayed as, for the purposes of cross-examination, Mr Tozzi drew from various of the 62 files one document after another to put to the witnesses. A junior solicitor was in court to hand up to me from the court’s set, which was in the well of the court, the document that Mr Tozzi was putting to the witness. On about the third day Mr Tozzi handed up a separate lever arch file for each witness he was about to cross-examine. There was some overlap between the witnesses. So in this way I eventually had about seven bundles of documents selected by Mr Tozzi. None of the bundles was in date order, or paginated continuously throughout. Further bundles were handed up to me, or referred to, during closing speeches. This is a state of affairs far removed from the requirements of Part 39 Practice Direction para 3 and The Queen’s Bench Guide para 7, and has meant that the trial, and the preparation of this judgment, have each been more laborious and time consuming than it should have been. The estimate for the case when it started was ten days. It took sixteen, although some of these were not full days. In an order dated 17^th August 2007 the estimate for the trial is given as five days. If the condition precedent point had not been advanced, I think it likely that five days would have sufficed.

I do not propose to make findings on the 37 heads under which the Ministry alleged that RAM had failed to fulfil the alleged condition precedent. There is no need for me to do so, in the light of my conclusions as to the law. I shall confine myself to the following remarks.

First I shall assume that the Awards had been held on 6^th November, and the Ministry had made a complaint that RAM’s obligations had not been fulfilled, in that less than six winners attended, and the celebrities and other matters were not the required high standard. I am not in position to make, and do not make, any finding as to whether such a complaint would have been held by the court to be well founded. But if it had been held to be well founded in relation to the number of winning players, then the Ministry would not have succeeded in its claim that RAM had failed to use its best endeavours with regard to the attendance of players. I can say that with confidence. RAM called Mr Fowler, who had given a very detailed witness statement dated 5^th February. In he recounted the arrangements he had made with a view to securing the attendance in Athens of winning players who played in Barcelona. He set out convincingly his reasons for being confident that five of these players would have attended. Mr Tozzi did not challenge this evidence, or submit that what Mr Fowler described did not amount to the use of best endeavours by RAM. This was a late concession by the Ministry. The Ministry had declined to make an admission to this effect when requested to do so by RAM’s solicitors on 7 May 2008. There was evidence given in a witness statement of Mr Lippi in relation to a further three players (from AC Milan and Real Madrid). He did not give oral evidence, but Mr Tozzi did not invite me reject his evidence.

As to RAM’s obligation to secure the attendance of celebrities and others, the position might have been different. The fact that RAM left to a late stage their attempts to secure the attendance of the required persons, other than winning players, may well have meant that, if they failed on the night, they would have been in breach of contract. This is not to be understood as a suggestion by me that they were likely to have failed. I express no view on that. One consequence of leaving these arrangements late may have been, not that RAM failed to secure the necessary attendances, but that they had to pay more to secure the attendances. If so, that would have been of no concern to the Ministry.

I was impressed by the witnesses called by RAM to prove that they had used their best endeavours. The team that RAM or PMG had assembled consisted of highly experienced professionals with the skills required for the occasion. As noted above, this team included Mr Mansfield, Mr Hanlon, Mr Pines, Ms Mitchell and Mr Hodges, all of whom gave evidence, and others who did not give evidence (of whom the most significant was Mr Perring). They all came to say that they believed that the Awards could and would have been put on to the highest standard. I accept that they believed this. With all their expertise and experience, those beliefs would have carried great weight with me in reaching any findings I might have made.

The Ministry also believed, at least until 25^th October, that the Awards would be of at least an acceptable standard. That is implicit in Mr Douvis’s invitation to sponsors on 19^th October (para 75 above), and in the fact that Ms Papapolyzou gave presentations to potential sponsors on 13^th, 16^th and 18^th October. The witnesses for the Ministry confirmed as much in their oral evidence. It is also implicit in the fact that up until that date the Ministry, while contemplating the possibility of cancellation, did not want to cancel. If they had obtained the variation to the Agreement that they were seeking on 19^th October as to the attendance of winning players, they would not have contemplated cancellation. The Ministry continued to work towards holding, and not cancelling the event. But after 27^th October what they were contemplating was something different from that provided for in the Agreement, and I draw no inferences from the fact that on and after 27^th October the Ministry continued to work towards holding the event.

The witnesses called by RAM had certain important reservations to their optimism as to the Awards. The reservations of these witnesses related mainly to the fact that there was no host broadcaster engaged before the end of September. And when Star was engaged in that capacity, the witnesses had doubts about Star’s suitability for the role. Greece is served by a number of broadcasters, the best known being ERT, which has a number of channels. There is great interest in football in Greece. But Star has been described as a relatively small lifestyle channel, which did not normally broadcast football, or football related programmes. RAM’s witnesses also remained unconvinced, up to the 1^st November, that Star was in a position to provide the necessary equipment, in particular an Outside Broadcast Truck. So concerned were RAM’s team about this, that they had made back up arrangements to bring such a truck from England at the last minute, if necessary, although that was not part of RAM’s contractual obligation.

On the other hand the witnesses for the Ministry, especially Ms Papapolyzou and Mr Giannakouros, were of the view that RAM had misconstrued the Agreement, and that there was no good reason why the late engagement of a host broadcaster should have delayed the preparations that RAM had to make. At the risk of oversimplifying the parties’ positions, RAM were saying that the host broadcaster would expect to participate in important decisions as to the form and content of the Awards (that is both the gala event itself held in Athens, and the recording of the event), whereas the Ministry’s position was that the host broadcaster had to do no more than make the audio-visual recording referred to in Cl I.3c) of the Agreement.

If I had had to decide whether or not RAM had used its best endeavours to ensure that the Awards were of the highest standard, then I would have had to resolve this dispute as to the significance of there being no host broadcaster engaged until the end of September. I express no concluded view about the nature of the co-operation required. But at least to some extent it is clear that RAM was entitled and required to co-operate with the Host Broadcaster from as soon as practicable after the Agreement. That is one reason why the Agreement at Cl I.3c) makes the provision that it does, and refers to “as soon as practicable after the signature of this Agreement”. And it is what is envisaged in Cl I 3a) (“As soon as practicable after signature of this Agreement representatives of MoC and PMG (on behalf of RAM) will meet to establish the appropriate Venue taking into account the requirements of FIFPro, RAM and PMG and of the host broadcaster”).

Finally, in this list of observations, I must refer to the Ministry’s contention that the late performance by RAM of its obligations made it difficult or impossible for the Ministry to secure the sponsorship that they had envisaged pursuant to Cl II 1a) of the Agreement.

RAM’s team was never going to be able to inform the Ministry earlier than they did inform them about the players who had been nominated or who were winners. It must always have been obvious to all concerned that the nominees and winners were going to come from a relatively small group of players, any of whom would be a major attraction to those who were enthusiasts for football, or liked attending galas of the kind here in question. The names could not have mattered, except that without the names there was a positive element of suspense which is a characteristic feature of all awards ceremonies put on for entertainment purposes. On the other hand, RAM could have engaged an artist much sooner than they did, and could also have secured the attendance of other persons of the kind referred to in Cl IV.1.

As I have mentioned, an issue arose between the Ministry and RAM as to whether the Artist was of a standing required if the Awards were to be of the highest standard. I am glad I do not have to resolve this issue. The Artist is undoubtedly a lady with a great reputation as a singer and entertainer. On the other hand, there are other singers and entertainers who may be said to be have a higher standing, or who may be said to have been more suitable for a football event. I express no view on this. If I had had to resolve this issue, I would have been minded to take into account that the Agreement was made on 10^th May, and so that there were at most just under six months in which the artist could be retained. There was some evidence before me that the world’s most sought after artists (some of whose names were mentioned between the parties at an early stage, and again at the trial) are unlikely to be available to perform at less than six months notice.

I accept that if the Ministry had had more information from RAM at an earlier stage (assuming that were possible without a host broadcaster), it would have made it easier in principle to attract sponsors. But I would not be minded to accept that the difficulties that the Ministry say they had over sponsorship are to be attributed solely or even mainly to this lack of information. It is plain that the plans the Committee envisaged making when they considered the budget for €6.3 million were not in fact carried out. No attempt to obtain sponsorship appears to have been made until about 13^th October. The few documents that I have seen do not give any indication why sponsors were not attracted. Ms Papapolyzou prepared a prospectus for sponsors in September, but she did not act (I assume she was not instructed to act) upon it until a month or more later. As to ticket sales, although the Ministry’s documents show that the invitations were ready to be sent out on 25^th October, they were not in fact sent out at all. I am unable to make any finding as to why they were not sent out before 25^th October, which is already a very late date to be sending out such invitations.

In cross-examination Mr Mitchell suggested a number of possible reasons, some related to the apparent lack of interest in the Awards by Mr Antoniades and the Greek footballers. He produced cuttings from Greek newspapers suggesting that there were disputes between Mr Orfanos and leading figures in the world of Greek football. Mr Stamou and Mr Douvis denied this. An English court would in any case hesitate to make findings as to political issues in another country, and in the present case I have very little information upon which any findings could be made. It appears that there must have been reasons why the Committee did not engage in the expenditure it had originally envisaged, but I am unable to say what those reasons were. As Ms Papapolyzou explained, obtaining substantial sponsorship involves investing substantial sums of money to do so.

Mr Tozzi submits that, if he fails on his case that there was a variation of the Agreement (as he has), RAM’s claim to have terminated the Agreement lawfully nevertheless fails for two further reasons: (1) RAM failed to serve a notice pursuant to Cl V 2b) and (2) RAM failed to make time for payment of the essence of the contract.

Mr Mitchell submits that Cl V 2b does not apply, and that there was no need for RAM to make time of the essence, because the Ministry did not simply withhold payment of the third instalment, but rather it displayed a clear intention not to be bound by the contract in a manner that was outside the scope of Cl V 2b). In any event, Mr Mitchell submits that RAM did make time of the essence of the contract.

There is no dispute as to the law. Chitty, Vol. 1 at para 22-048 (citing Lockland Builders Ltd v Rickwood (1996) 77 B.L.R. 42) summarises the law as follows:

“The fact that one party is contractually entitled to terminate the agreement in the event of a breach by the other party does not preclude that party from treating the agreement as discharged by reason of the other's repudiation or breach of condition, unless the agreement itself expressly or impliedly provides that it can only be terminated by exercise of the contractual right. Whether the procedure laid down for termination in the contract excludes, expressly or impliedly, the common law right to terminate further performance of the contract in respect of a breach which falls within the scope of the clause is a question of construction of the contract.”

For the law on what amounts to a repudiatory breach, Mr Mitchell cites Woodar v Wimpey [19080 1 WLR 277 Lord Keith said at 294:

“In deciding the issue of repudiation which arises in this appeal, the guiding principle is that enunciated by Lord Coleridge, C.J. in Freeth v. Burr, L.R. 9 C.P. 208, 213:

". . .in cases of this sort, where the question is whether the one party is set free by the action of the other, the real matter for consideration is whether the acts or conduct of the one do or do not amount to an intimation of an intention to abandon and altogether to refuse performance of the contract.".

The matter is to be considered objectively:

"The claim being for wrongful repudiation of the contract it was necessary that the plaintiff's language should amount to a declaration of intention not to carry out the contract, or that it should be such that the defendant was justified in inferring from it such intention. We must construe the language used by the light of the contract and the circumstances of the case in order to see whether there was in this case any such renunciation of the contract." (Johnstone v. Milling (1886) L.R. 16 Q.B.D. 460, 474, per Bowen L.J.).

The importance of looking at the whole circumstances of the case was emphasised by Lord Selborne L.C. in Mersey Steel and Iron Co. Ltd. v. Naylor, Benzon & Co., 9 App.Cas. 434, and by Singleton L.J. in James Shaffer Ltd. v. Findlay Durham & Brodie [1953] 1 W.L.R. 106, 116.

Lord Scarman said at 298:

“To be repudiatory, the breach, or threatened breach, must go to the root of the contract. If an anticipatory breach is relied on, the renunciation must be "an intimation of an intention to abandon and altogether to refuse performance of the contract "; or, put in other but equally clear words, "the true question is whether the acts and conduct of the party evince an intention no longer to be bound by the contract": Lord Coleridge C.J. in Freeth v. Burr, L.R. 9 C.P. 208, 213.”

Mr Mitchell submits that on and after 19^th October the Ministry made clear that, unless the Agreement was varied to impose upon RAM an absolute obligation to secure the attendance of players, then the Ministry intended to cancel the Awards. This would have involved the Ministry refusing further payment and calling upon the National Bank’s guarantee, as in fact happened on 1^st November. He relies upon the following:

Mr Mitchell also relies upon what he submits were the severe consequences that would result to RAM if it were not to be paid at least €1 million immediately, namely, as he submitted, insolvency. He relied upon a passage in the judgment in Decro-Wall v Marketing Ltd [1971] 1 WLR 361 at 369 where Lord Salmon said:

“So far as the plaintiffs were concerned it is clear from the facts stated earlier in this judgment that the only effect of the late payments was that the plaintiffs may have incurred liability to their bank for a comparatively insignificant sum by way of extra interest which in any event they could have recovered from the defendants. The case would have been quite different if the defendants' breaches had been such as reasonably to shatter the plaintiffs' confidence in the defendants' ability to pay for the goods with which the plaintiffs supplied them. I think that, in such circumstances, the consequences of the breach could properly have been regarded as most serious, indeed fundamental, and going to the root of the contract so that the plaintiffs would have been entitled to refuse to continue doing business with the defendants. As already indicated, however, Mr. Josef in his evidence plainly stated that the plaintiffs never doubted that if they went on supplying the defendants with goods, the defendants would meet the bills. They would, however, in all probability, meet them some days late, as they had done throughout the whole course of the dealings between the parties”.

That passage does not support the proposition that consequences such as insolvency of the innocent party are relevant to this issue. The consequences referred to are the effect on the innocent party’s confidence in the repudiating party’s ability to pay. An effect on the innocent party’s confidence in the repudiating party’s willingness to pay would also be relevant, and that did occur in the present case. But the Decro-Wall case takes this point no further than that.

Mr Mitchell also relies by analogy on a case from employment law, Cantor Fitzgerald International v Callaghan [1999] 2 All ER 411. In that case Judge LJ (as he then was) held that the amount in issue (£7,000) was not in the context of the overall package “very great”, although the sums at stake were “not trivial”. However, since the refusal to pay was deliberate and determined, motivated by a desire improperly to pressurise the employees into harder work the decision wholly undermined the contract of employment and constituted a repudiatory breach. (421b). The analogy between RAM and an employee is in my judgment inappropriate. The point being made in that case about an employee is that he or she is a natural person, not a corporation.

Mr Tozzi submits that the consequence of insolvency to RAM was not established, and was not within the contemplation of the Ministry. He submits that in any event it is irrelevant to the issue of whether the Ministry was in repudiatory breach.

In my judgment the Ministry’s position as communicated to RAM went beyond a mere failure to pay the instalment of €1.2 million due on 15^th October. It is true that the Ministry were not refusing to pay RAM under any circumstances. It was not in that sense an absolute refusal. But the Ministry were refusing to pay RAM in accordance with the Agreement. The Ministry made clear its intention throughout the period 19^th October to 31^st October that it would pay RAM only in accordance with a new contract varying the Agreement. The new contract had, according to the Ministry, added to the obligations of best endeavours in Cl IV 1 an absolute obligation upon RAM to secure the attendance of at least six winning players. From 24^th October the Ministry were also asserting, wrongly in my judgment, that RAM were in breach of contract. The Ministry was also asserting from 24^th October that RAM were in breach, first, of a new agreement made on 19^th October and, on 30^th October, of a new agreement made on 27^th October, and by clear implication that they would call on the bank’s letter of guarantee. The assertion, and the threat, were both wrong, as I have found.

This was an actual breach by the Ministry of its obligation to pay the third instalment due on 15^th October and an anticipatory breach of its obligation to pay the fourth instalment. The sum at issue in relation to these two instalment was €1.6 million out of a total consideration of €4 million. But it went further than that. The Ministry’s implied threat to call on the bank guarantee meant that the total at issue was €2.8 million. This would have left RAM with the certain sum of no more than €1.2 million which had been paid on 22^nd September 2006.

In my judgment, on this basis, the Ministry did repudiate the Agreement.

I do not accept that the Agreement expressly or impliedly provided that it could only be terminated in accordance with Cl V. In any event it is clear that a written notice by RAM requiring the Ministry to remedy its breach within 30 days would have been futile, and so, in my judgment, unnecessary. The Ministry had made as plain as could be that it did not consider itself to be in breach, and that, on the contrary, it was RAM that was in breach of the new agreements made on 19^th and 27^th October. They had made clear that if the Awards went ahead, but less than the required number of winning players and others attended, the Ministry would not pay in accordance with the Agreement. The Ministry would not be concerned to enquire whether or not RAM had used its best endeavours.

With hindsight it is clear that the Ministry’s refusal to pay the third instalment and its subsequent stance left RAM insolvent. But I make no finding that the Ministry knew this would be the case.

The witnesses for the Ministry were all aware that RAM had been insistent in its demands for payment of the instalment due on 15^th October, and that RAM said they needed the money. But the Ministry were sceptical about this. From the Ministry’s point of view, RAM had received €2.4 million. The Ministry knew that RAM had chosen to use the first €1.2 million as security for the bank’s letter of guarantee, but RAM could expect to have that money at its disposal immediately after 6^th November (only a few days ahead) if it performed its obligations under the Agreement, and/or under the new contract varying the Agreement. RAM had not produced to the Ministry any explanation of where the other €1.2 million had gone. Mr Douvis and Mr Stamou expressed surprise that RAM should have entered into the Agreement without funds, other than the consideration due under the Agreement, and without access to the financial support of its shareholders or other third parties. At the very least they said they had expected to RAM to exploit its sponsorship, merchandising and other rights reserved under Cl II 1d) of the Agreement. I accept the evidence of the Ministry’s witnesses as to what they knew and believed as to RAM’s financial position. They did not expect it to become insolvent.

It follows that I do not need to address Mr Tozzi’s point that RAM never made time of the essence of the contract. It is common ground that, in law, contractual stipulations as to time are not construed as essential unless they are expressly or implicitly “of the essence” or notice has been served making time of the essence. The law is summarised in Chitty on Contracts Vol 1, paras 21-011 to 21-019 and Mr Tozzi also referred to Dalkia Utilities Services Plc v Celltech International Ltd [2006] 1 Lloyd’s Law Rep 599 at para 131 where Christopher Clarke J said follows:

“In Re Olympia & York Canary Wharf Ltd (No 2) [1993] BCC 159 Morritt J, as he then was, considered the authorities relating to the making of time of the essence. From that analysis and other authority I derive the following propositions:

(a)

Equity, before the Judicature Acts, insisted that prima facie time for payment was not essential. But Equity's patience was exhaustible. It would allow the contract to be treated as repudiated if the party in default had been given the opportunity to mend his ways by the giving of a notice to comply within a reasonable time. Whilst this is described as making time of the essence in reality the notice is the means of bringing to an end equity's interference with the contract. Behzadi v Shaftesbury Hotels [1992] Ch 1;

(b)

Such a notice, which may be given in respect of any species of term, may not be served until the time for performance has expired; but it may be served as soon as that time arrives;

(c)

Such a notice must state clearly what the other party is required to do and the consequence if he fails i.e. that the contract may be terminated; Afovos Shipping v Pagnan [1982] 1 WLR 848, 854C [“A notice must be clear, definite and absolute and given at a time after the default has occurred”];

(d)

If the defaulting party fails to perform after service of such a notice, the failure is not automatically a repudiation of the contract, giving rise to a right to terminate. The breach must go to the root of the contract;

(e)

The notice operates as evidence of the date by which the promisee considers it reasonable to require the contract to be performed, failure to perform by which is evidence of an intention not to perform: see Lord Simon of Glaisdale in United Scientific Holdings Ltd v Burnley Borough Council [1978] A.C. 904, 946E–947A; Astea (UK) Ltd v Time Group Ltd [2003] EWHC 725, TCC, para 147.”

The point that Mr Tozzi makes is that the notices relied on by RAM, in particular the letters from H&L, refer to the release of the moneys held by the National Bank, and not to the payment of the third instalment.

The point is good as far as it goes. But it does not go far. The reason for the notices being in this form is, of course, that by the time the first of these letters was written on 30^th October the parties were in negotiation, and that is one of the points they were negotiating about. The Ministry had by that time also made clear that no money would be paid to RAM except either by release of those funds by the National Bank directly to RAM, alternatively, after the release by the bank of those funds to the Ministry. The Ministry had since 19^th October made clear that the third instalment would not be paid in accordance with the Agreement. For that reason, in my judgment the serving a notice making time for payment of the third instalment of the essence of the contract was unnecessary.

Mr Tozzi submits that Cl IV 2 contains 2 limbs: a requirement to take out cancellation insurance and a requirement on RAM to repay all instalments paid in the event that the Awards are cancelled. Whereas the first limb refers to cancellation “due to acts, events, omissions or accidents which are beyond the reasonable control of any of the parties”, the second limb does not. It can properly be assumed that this was intentional as: (1) had the requirement to repay been so limited the clause could easily have been drafted to say so; (2) the requirement to repay is not dependant on a recovery under the cancellation insurance and (3) the requirement is expressly imposed on RAM.

In my judgment the two limbs of the clause should both be construed as relating to cancellation due to matters beyond the reasonable control of the parties. The clause consists of one sentence only. It is not reasonable to read the word “cancel” in the second limb as relating to something different from what is referred to by the word “cancellation” in the first limb.

Moreover, the result contended for by the Ministry would be most unjust. On the footing that cancellation has occurred on account of the repudiatory breach of contract of the Ministry, the Ministry’s case is that RAM should be left to bear the costs that it did incur in carrying out its obligations over many weeks to ensure that the 2006 Awards were as required by Cl IV 1. RAM had gone a long way to performing its obligations by 1^st November, not least by its arrangements to secure the attendance of more than six winning players. There was no total failure of consideration in this case.

Before considering this it is first necessary to turn to the application to amend in relation to savings and experts.

The second of the two opposed amendments for which permission was sought by the Ministry was to para 24(c)(ii) so that the pleading would read:

“Para 11(b) is noted [that is the paragraph in which RAM offer credit for the Savings] and RAM is put to strict proof. In particular it is noted that it would appear that RAM has avoided all or most of the expenses alleged to be related to the 15th October 2006 instalment payment in respect of which as pleaded earlier invoices were presented (after the due date) in the amount of or about €290,480.34.[The Ministry] avers that if RAM had properly performed its obligations under the Agreement (including but not limited to its best endeavours obligations), the total costs which it would have had to bear in organising the … Awards would have exceeded €4m. In the premises, [the Ministry] avers that RAM’s Savings for which it must give credit (as defined in paragraph 13(c)) are sufficient to extinguish any liability which RAM might establish by reason of its claim under paragraph 13(b)).”

The second opposed amendment is linked to another application by the Ministry, namely for permission to adduce expert evidence as to what it would have cost RAM to perform its obligations under the Agreement. The Ministry propose to explore in evidence what that would have cost RAM, in order then to submit that the Savings (that is the difference between the expenses RAM had incurred by 31^st October and the expenses that they would have had to incur by 6^th November) were substantially greater than the Savings which RAM had identified and given credit for in its Particulars of Claim and Schedule of Loss. To understand the issues on this point it is first necessary to consider what remedy RAM claims. This has given rise to some argument.

The pleadings in this case on both sides were not settled by any of the counsel who now represent the parties. The question as to what remedy is being claimed arises in part because the pleader has drawn no distinction between the €400,000 (which was payable only after the alleged termination of the Agreement on 31^st October), and the three instalments of €1.2m (each of which had become payable or had been paid before that date). Further, the pleader refers only to damages and does not in terms state that the claim or any part of it is in debt. The fact that the word “debt” is not used is not itself determinative. CPR 16.2(5) empowers the court to grant any remedy to which the claimant is entitled even if that remedy is not specified in the claim form.

Mr Mitchell submits that RAM’s claim is in part in debt. He submits that the Particulars of Claim reflect the principle that the acceptance by RAM of a repudiatory breach on the part of the Ministry had no effect on obligations that had accrued before the date of acceptance. Exactly what part of the claim is in debt may be open to debate (depending, in particular, on the status of the first instalment after the Ministry had obtained repayment from the bank under the guarantee). But Mr Mitchell submits that €2.4 million is claimed in debt, alternatively at least €1.2 million. Mr Mitchell accepts that the claims for the €400,000 final instalment, and for other losses, such as for additional revenues, are claims in damages.

After some argument to the contrary, Mr Tozzi accepted that if the court decides that, on the facts pleaded, RAM is entitled to make a claim in debt, then the court may grant that remedy.

Both parties accept that in its Particulars of Claim RAM is not advancing a claim for the loss of the profit that it would have made if the Agreement had been performed by both parties. Mr Manley’s first witness statements includes passages (paras 208-213), relating to the abandoned loss of future profits claim. In these he states that the total costs to RAM associated with the Awards would have been €2,873,051.11 (which, if correct, would have left a profit of over €1 million after taking into account other income). But there is before the court no pleaded claim for the loss of such a profit.

Mr Tozzi submits that it is nevertheless necessary, or at least appropriate, for the court to find what the costs to RAM would have been. He points to the terms of the plea that RAM will give credit for the Savings. He submits that since the costs would have been much higher than RAM, or Mr Manley, admits, so there remained to be incurred between 31^st October and 6^th November much greater costs than RAM admits. So, he says, the Savings are much greater. In order properly to calculate the Savings which RAM has said it will allow as a credit against all its claims (both in debt and in damages) Mr Tozzi submits that the court has in effect to engage in the same exercise as it would have engaged in if it had been assessing what (if any) profits RAM lost as a result of the alleged repudiatory breach.

Mr Manley had already given evidence by the time I heard the application on 18^th June. Mr Tozzi did not object to the evidence of Mr Manley to the extent that it goes to the question what the costs to RAM would have been. He might have objected on the footing that Mr Manley has no expertise in events management, and his calculations were all derived from figures given to him by others. Of those others the main source was Mr Perring, who was managing the event. But neither side has called him as a witness and the information given by him in 2006 is not evidence, even where it is recorded in contemporaneous budgets. It is information given in documents which neither side has adduced in evidence. Mr Tozzi has deployed the documents in cross-examination, but that does not make them evidence. The witnesses were not asked about every item, and they did not always agree with Mr Perring’ figures. The reason, I infer, why Mr Tozzi did not object to this part of Mr Manley’s evidence is that it is the Ministry which wishes the court to assess what the costs would have been, and the Ministry is applying for permission to adduce expert evidence from its own witnesses.

The Ministry had made an application to Pitchford J for permission to call an event manager as an expert witness, and by Order dated 31^st October 2007 that application had been refused. When that application was made, the evidence was said to be relevant to liability only, namely to the question whether RAM fulfilled its obligations under Cl IV 1. The application had never been made in relation to damages or to the amount of the Savings.

The evidence that the Ministry apply for permission to adduce consists of two statements. The first is para 42 of the second witness statement of Mr Giannakouros, served as recently as 10 April 2008 (in response to the witness statement of Mr Manley). The second, is a statement in the form of a report by Ms Hotston Moore, who is an accountant.

It is not disputed by RAM that Mr Giannakouros has expertise in event management. But his two witness statements were served as evidence of fact. He was closely involved as a consultant to the Ministry. Permission is needed if he is to give expert evidence in addition to evidence of fact. Of course, his involvement as consultant to the Ministry means that, as an expert witness, he would lack independence. Mr Tozzi submits that that goes to weight, and not to the admissibility of his evidence.

The report of Ms Hotston Moore is entirely different. She disclaims any expertise in event management. In order to form a view as to what costs RAM would have incurred she states that she asked various people, who are in the business of providing services of the kind required by an event manager, what it would they would have charged to provide what the Ministry claims RAM ought to have provided. In other words, she engaged upon an evidence gathering exercise, and this part of her report therefore consists entirely of hearsay. Of course, experts often do give hearsay evidence of information within the scope of their expertise. So, a medical expert will often refer to and rely on publications relating to research in which he was not himself involved. Under the Civil Evidence Act 1995 hearsay evidence is as a general rule admissible. But the approach adopted in the report of Ms Hotston Moore is in my experience unprecedented. It is also unacceptable. If evidence from her sources is to be given to the court, the sources should be properly identified, as should the information and questions put to them, and they should give their evidence themselves in written statements.

I rejected the application of the Ministry to rely on the expert evidence of each of these two witnesses. In the case of Ms Hotston Moore I would in any event have rejected it. She lacks the relevant expertise herself, and so she is not an acceptable channel through which to put before the court the hearsay evidence of the individuals to whom she spoke.

Mr Mitchell refers to CPR Part 16.5(2)(b). This requires a defendant who intends to put forward a version of events different from the claimant’s version to state his own version. To the extent that the draft amendment to para 24(c)(ii) of the Defence puts forward a different version of events, it does so only by stating that the Savings for which credit must be given are sufficient to extinguish any liability which RAM may establish. It gives no breakdown of this, nor even a figure for what it says the Savings amount to. It derives this conclusion from the statement that the cost of the Awards would have exceeded €4m. RAM had advanced no pleaded case as to what the cost of the Awards would have been, and neither does the Ministry.

The Ministry have also served a document headed Defendant’s Counter Schedule of Loss. Neither party has referred to its Schedule of Loss in any pleading. In a written argument dated 13 June Mr Tozzi referred to the Ministry’s Counter Schedule in relation to the draft amendment. The Counter Schedule states that the Ministry relies in support of its case upon a Budget produced by RAM dated 26 October 2006. Mr Tozzi had asked Mr Manley a number of questions about that and other budgets, in the course of which he made clear that the Ministry did not accept that the figures in the budgets were correct. The Counter Schedule does not state what the Savings are which the Ministry claims should be deducted.

This confusing state of affairs has a history. It arises in part from the fact that until 1^st May 2008 RAM were advancing a claim for loss of profits from future ceremonies (para 11(e)). In that connection in June 2007 the parties had obtained orders for the exchange of expert reports. Time was extended by agreement, to 11^th April for RAM and 25^th April for the Ministry. On 1^st May RAM’s solicitors abandoned the future loss of profits claim, and told the Ministry’s solicitors that they would not be serving an expert’s report. The Ministry was by then out of time to serve its report. Mr Tozzi submits that much of the financial information from RAM came to the Ministry for the first time in the form of Mr Manley’s witness statement served on 22 February 2008, and in subsequent disclosure. The steps which the Ministry has taken subsequently are in response to the disclosure made by RAM.

That may be so. But if the Ministry had wished to raise a case that the cost to RAM of fulfilling its obligations under the Agreement would have been over €4m, and that from that it can be deduced that the Savings would have been some figure greater than conceded by RAM, the Ministry could have pleaded such a case from the start. The Ministry claim that RAM was not fulfilling its obligations. So the actual costs incurred by RAM are not sufficient to support the Ministry’s case. The Ministry chose not advance such a case until they saw Mr Manley’s witness statement and subsequent disclosure. By then it was too late.

The proposed amendment to para 24 of the Defence does not identify what the Ministry states the Savings are, or how they are calculated. The expert evidence proposed to be adduced in support of that case does not make good the deficiencies. It would not be just at this late stage to expand this trial so as to embark upon an assessment of what it would have cost RAM to fulfil its obligations. There is no injustice to the Ministry in refusing it permission to advance now a case which it chose not to advance at the proper time.

It is first necessary to state the law applicable when a contract is terminated by the acceptance by one party to it of the repudiation by the other party. The law is succinctly stated in Bank of Boston v. European Grain Ltd. [1989] 1 A.C. 1056, 1099 where Lord Brandon of Oakbrook cited the following statement of Dixon J. in McDonald v. Dennys Lascelles Ltd. (1933) 48 C.L.R. 457, 476-477:

"When a party to a simple contract, upon a breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected."

RAM’s right to payment of the third instalment due on 15^th October had been unconditionally acquired. There is no dispute that that claim is in debt.

RAM’s right to payment of the fourth instalment of €400,000 had not accrued. It follows that any claim in respect of that would sound in damages. However, an award of damages is made on the principle that the claimant is, as far as money can do it, to be placed in the same position as if the contract had been performed. It follows that savings made by a claimant because he is relieved from performing his side of the contract must be set off against his losses arising from the breach (after he has taken reasonable steps to minimise those losses). See Chitty on Contracts para 26-001. In the present case it is now accepted that RAM has made savings in excess of €400,000. In Mr Manley’s first witness statement dated 19^th February 2008, para 207 (which gives a detailed breakdown), and again in a document headed “Claimant’s Schedule of Loss”, and dated 2^nd May 2008, the figure for savings is put at €544,009. In his second witness statement made on 13^th June 2006 in response to Mr Giannakouros’s second witness statement, Mr Manley calculates the savings at €499,021. It follows that it makes no claim for damages in relation to the fourth instalment.

The first instalment was paid to RAM. It was deposited by RAM with the National Bank as security for the bank guarantee to the Ministry required by Cl I 3b). On 1^st November 2006 the Ministry called on that guarantee, and the Bank duly paid to the Ministry the €1.2 million demanded (as it was bound to do), and re-imbursed itself from the €1.2 million that RAM had deposited with it as security. On the findings I have made, RAM was not in breach of the Agreement, and so the Ministry had no right to make that demand upon the National Bank. The form of the Ministry’s demand, as translated from the Greek, refers to forfeiture. Mr Mitchell submits that this is what happened. It did not. The word is inapt, if it is not a mistranslation. The Ministry simply made a demand upon the bank guarantee.

The nature of the parties’ rights and obligations in this situation are not in dispute, in so far as they are set out Potter LJ in In the case of Cargill v Bangladesh Sugar [1998] 1 WLR 461 at 468-9):

“If questions of reasonableness are taken into account and if the usual characteristics and broad commercial purpose of performance bonds are borne in mind, it seems to me that the following matters are pertinent to the task of construction in the case. First, as Mr. Hossain accepted, such a bond is a guarantee of performance. That is not to say it is a guarantee in the sense that it has all the normal incidents of a contract of surety; it is of course a contract of primary liability so far as the bank that gives it is concerned. However, it has the feature that its purpose is to provide security to the buyer for the fulfilment by the seller of his contractual obligations: see Kerr J. in R. D. Harbottle (Mercantile) Ltd. v. National Westminster Bank Ltd. [1978] Q.B. 146, 149B. Second, its purpose is also that the buyer may have money in hand to meet any claim he has for damage as a result of the seller's breach. Third, it confers a considerable commercial advantage upon a buyer. Not only does the buyer have an unquestionably solvent source from which to claim compensation for a breach by the seller, at least to the extent of the bond, but payment can be obtained from the seller's bank on demand without proof of damage and without prejudice to any subsequent claim against the seller for a higher sum by way of damages. In these circumstances the obligation to account later to the seller, in respect of what turns out to be an overpayment, is a necessary corrective if a balance of commercial fairness is to be maintained between the parties”.

It follows that the Ministry are obliged to account to RAM for the whole of the €1.2 million. There is no inquiry to be made, since the Ministry make no claim that it has suffered damage as a result of any breach by RAM, given the findings of fact that I have made. It follows that the claim is not a claim for damages.

A claim in debt (such as for the third instalment) would not be subject to an obligation to give credit for savings made by a claimant because he is relieved from performing his side of the contract: White and Carter (Councils) Ltd v McGregor [1962] A.C. 413 and Chitty 26-009. In my judgment, the same must apply to a claim for an account of moneys wrongly claimed under a performance bond. It is in substance a claim in respect of a right which had already been unconditionally acquired before the acceptance of the repudiatory breach.

If these principles are applied, RAM would be entitled to judgment for €2.4 million on these claims. There would remain for consideration certain other claims made by RAM. Of the claims made in the Particulars of Claim, the only surviving one is for loss of sponsorship at £75,000, which is a claim for damages. That too would fall to be reduced by the savings, which on Mr Manley’s first calculation would more than cover this additional sum which (at the exchange rate used by RAM of £1 = €1.48) would amount to €111,000. On his revised calculation the Savings fall short of the damages claimed by about €12,000 (€511,000 less €499,021).

However, in RAM’s Schedule of Loss, it seeks to claim further losses in the sums of £25,000, £3,319 and US$11,000 for the loss of different rights. In addition it claims the costs of the administration of the insolvency. There is a witness statement from a solicitor, Mr Ballinger, which was adduced in evidence without him being required to attend for cross-examination. He states that the costs of the administration are at an agreed 10% of the realisations of RAM’s assets, and that RAM’s only asset is this claim against the Ministry.

Mr Tozzi notes that no amendment has been made to the Particulars of Claim to include the costs of the administration and the additional sums sought in the Schedule of Loss. No application for permission has been made to me. It follows that these claims are not properly before the court, and fail on that account. The claim for the costs of the administration would in any event fail on grounds of remoteness, for reasons set out in para 212 above. At the time the Agreement was made, the insolvency of RAM was not in the contemplation of the Ministry as a consequence of non-payment of the third instalment.

There is, nevertheless, an issue on the remedy to which RAM are entitled. Mr Tozzi submits that RAM has accepted that it must give credit for any saving as a result of the event not going ahead. He further submits that in order to calculate an accurate figure for savings it is necessary for each item of expenditure to be subjected to a two stage process: first, it is necessary to assess what it would have cost to put on the Gala event; next the Court has to ascertain the costs actually incurred (this includes sums spent and liabilities incurred). By deducting costs incurred from what it would have cost to put on the Gala event, one arrives at a figure for the savings. That submission is in accordance with law set out in Chitty on at para 26-100,

It is necessary in the light of this to examine what the concession is that was made by the pleader. Mr Mitchell has given consideration to this, and after some hesitation, he has made clear that he does not seek to amend the Particulars of Claim in so far is it includes a concession. He stands by the pleading.

The concession in the Particulars of Claim is in the following terms:

“(a)

The Claimant has not been paid the sum of €2,800,000 which it was due to receive in accordance with the Agreement (€1,200,000 of which is the subject of a Bank guarantee);

(b)

The Claimant will give credit for any costs which, had the Ceremony gone ahead, it would have had to bear but which it has not in the event had to bear (“the Savings”). The exact amount of the Savings is not yet known, since discussions with third parties are continuing, but to day the sum of £278,051 has been identified as being the minimum amount of the Savings”.

That form of pleading leaves something to be desired. It lumps together as part of the €2,800,000 the three claims which I have identified separately as respectively in debt, for an account and, damages. The damages claimed in the Particulars of Claim included, a number of heads of damage which have been abandoned, in addition to the €400,000 fourth instalment and the £75,000 for lost sponsorship. See para 14 above. It follows that on any view, at that stage, the admitted Savings fell well short of any claims that are properly to be categorised as claims for damages. The question arises in new circumstances as to what was being conceded. The new circumstances are that the other claims for damages have been abandoned, and that the admitted figure for Savings exceeds the pleaded claims which are properly to be categorised as damages.

Mr Tozzi submits that the concession is to be interpreted as meaning that RAM will give credit for Savings against the claims which are properly to be categorised as in debt, and for an account, respectively. Moreover, the Ministry’s case is that Mr Manley has not properly calculated the Savings, and that properly calculated they are €4,072,663, thereby extinguishing any sum that might otherwise be due to RAM.

Mr Mitchell has been hesitant in his response to Mr Tozzi’s submission that the concession is to be interpreted as reducing the claims in debt and for an account. Much turns on the point, and perhaps not only for the parties to this litigation.

As Mr Mitchell submits, if the concession is to be interpreted as reducing the claims in debt and for an account, then it did not need to be made. And if it has been made, the Ministry may be relieved of a judgment which would otherwise have been entered against it, either partly, or even wholly.

As to the extent of the concession, Mr Mitchell submits that it is costs which RAM has not incurred as a result of the Ministry’s repudiation. He submits that they are set out in Mr Manley’s second witness statement, and are costs which as a matter of fact RAM was intending to incur after 15th October. He says: “This concession is limited only to those sums which would necessarily have been spent and which were not spent as a result of the acceptance of the repudiation – it goes no wider than that”. Moreover, he refers to authorities which show that the innocent party need only act reasonably, and the court will not reduce the damages merely because the wrongdoer can show that other measures might have been taken to reduce the loss.

I accept that as an explanation of the figure which is conceded. But that submission does not assist me as to whether the concession extends to what is in law a claim in debt. Mr Mitchell has left that point to the court.

This issue must be considered in the light also of the Defence. In its original form (and in its current form, since I refused permission to amend this paragraph) it is pleaded that RAM is put to strict proof of the Savings, and that they should be at least €290,480.34. The plea that the Savings are sufficient to extinguish any liability was not pleaded. The plea that RAM are put to strict proof of the Savings does not reflect the law. The onus of proof is on the defendant.

It is clear that until the preparation of the draft amendment, and the expert evidence which I have declined to admit, the question whether the concession extended to the claims in debt did not arise, and had not occurred to the Ministry.

I find the concession ambiguous, and that the correct interpretation is that it is limited to claims that are in law claims for damages. It does not apply to debt. Accordingly, the admitted savings leave only a claim of about €12,000 in damages.

I must go on to consider Mr Tozzi’s submissions, since they relate to the €12,000, and, if I am wrong in my interpretation of the concession, to the whole of RAM’s claim.

Mr Tozzi’s submissions are very lengthy and detailed. They cover paras 143-233 on eighteen pages of his written Closing Submissions. The submissions contain an analysis of what Mr Manley said in para 207 of his first witness statement dated 19^th February 2008, and Mr Tozzi adds as an Appendix B figures which he submits Mr Manley should have used, derived from budgets and similar documents disclosed by RAM.

Mr Tozzi’s central criticism, as it seems to me, is that Mr Manley had taken his figures for savings from a budget (which he does not identify in his first statement) and set out what he says were budgeted sums that were not in fact spent. Mr Tozzi submits that Mr Manley ought to have taken as his starting point a budget that is dated 25^th October 2006, or other documents, which show that €4 million would have been spent, and so that the saving are greater.

This is a case that has not been pleaded. It does not require expert evidence adduced for the Ministry, but it does suffer from the fact that Mr Manley is an accountant. The purpose of his statements was to set out his calculations, and to say what was in fact spent, or incurred, in so far as that was within his knowledge. He has no expertise on what such a project would cost, or ought to have cost. He was dependent for the figures in his budgets upon others. In his second statement he states: “In this …. Statement I have, as requested by RAM’s solicitors, adopted the approach of basing all figures on the budget of 25^th October 2006, and have refrained from any judgment or estimate of my own”.

One of Mr Tozzi’s criticisms of Mr Manley’s evidence is as follows:

“… Mr Manley’s estimations are not based on any personal knowledge or experience of what it was likely to have cost to put on an event of this nature, as he himself noted: “At the moment lots of people at PMG are asking me to authorise expenditure on various items but without reference to a specific budget line. It’s all very well saying that this is now my responsibility but as I have never run an event before the numbers I am using were provided to me by Charlie Perring at PMG.””

Mr Tozzi complained many times that RAM had not called as a witness Mr Perring, who had experience of event management. Who is called as a witness is a matter for each party to chose.

The onus is on the Ministry to show that the savings were greater than the sum conceded. The attempt to do so almost entirely by cross-examining Mr Manley on the budgets containing figures provided to him by others must fail in principle. If the point had been pleaded fully, and in good time, there can be little doubt that it would have been supported by expert evidence, that there would have been meetings between experts, and that the issues would have been put before the court very differently. As it is, and subject to one other point, I cannot find that the Ministry would have established their case, if it had been properly before me on the pleadings.

There is one figure of €400,000 which raises a point of law, subject to it being pleaded. That is the fee that RAM agreed to pay to FIFPro under the agreement between them dated 1^st October 2004. Clause 7 provides that RAM will pay to FIFPro €400,000 for specified events, one being the 2006 Awards. The Ministry claim that that is a saving. A settlement agreement was reached between RAM and FIFPro in April 2007, and RAM have not had to pay it. The agreement of 1^st October 2004 does not provide what is to happen in the events that have occurred.

Mr Mitchell submits that this is too remote (or res inter alios acta, in the Latin phrase). But it is a payment that would have had to be made, and which has not had to be made, as a direct result of the repudiatory breach by the Ministry. In my judgment it would be a saving, if my interpretation of the concession is mistaken.

For the reasons set out above, RAM are entitled to judgment in the sum of €2.4 million.