Decisions at Force India

Force India’s Vijay Mallya says that he will name his 2012 drivers shortly. He previously said that he would name names in Abu Dhabi, but failed to deliver on that statement. The team is believed to have two drivers under contract for 2012 – Paul di Resta and Nico Hulkenberg – but Adrian Sutil did a terrific job in 2012, finishing ninth in the Drivers’ Championship, with 42 points, compared to di Resta’s 27. To let Sutil go thus makes very little sense, but at the same time if there are contracts in place for the other two drivers then the team would have to break the contract with one of them in order to keep Sutil. It should be remembered that the team has demonstrated limited respect for contracts in the past, having pushed out Tonio Liuzzi last year, despite a contract for 2011.

However, it is not as easy as that as if, for example, the team wished to drop Hulkenberg in order to keep Sutil, it would have to either respect the terms of his contract, or negotiate a settlement. Under the terms of the Concorde Agreement all contracts have a clause in which the parties involved agree to respect the decisions of the Contract Recognition Board (CRB). This is an independent body that exists in order to solve contractual disputes, without the need for court action. The CRB consists of a panel of four European lawyers, of different nationalities, who are appointed by the International Court of Arbitration of the International Chamber of Commerce. The administration is dealt with by a public notary in Geneva and all meetings take place in the Swiss city. At such a meeting the panel reads the terms of a disputed contract and then decides whether or not it is valid. Once the CRB has made a decision a team is committed to respect the decision, but this does not mean that the two parties cannot agree to a settlement and cancel the contract, if a suitable deal can be found over compensation. If a team makes it clear to a driver that it does not want to run him, then it is fairly pointless to try to force the issue and the negotiation is over how much money the team will pay in compensation. The CRB process is conducted in secret and so it is not really clear at the moment whether this is what has been holding up the decision.

Mallya has many other things on his mind at the moment, not least the fact that his Kingfisher Airlines is struggling to survive. This organisation provided the team with $9.5 million in sponsorship in 2010 (and presumably a similar amount in 2011). His empire provided another $15.5 million and the team still made a loss of $42 million. Mallya has announced that new co-owner Subrata Roy Sahara will invest $33 million in the team in 2012, but this is still not enough to meet bills in the region of $100 million or more. Thus, money may be a problem for the team as well, as Mallya’s ability to borrow money must have some kind of a limit. The airline is finding this out at the moment as his inability to find cash means that the company is having to pay cash for fuel. Many flights have been cancelled as a result and the company’s latest news is that it is shutting down cabin crew bases in Kolkata, Hyderabad and Chennai in order to cut costs. About a third of the planes are currently grounded and slots allotted to the airline have been cancelled because they are not being used. The signs are that the company is being scaled back in an effort to survive, while Mallya tries to find someone willing to invest. The Indian government does not want to see the airline collapse and has in recent hours announced that it will allow foreign carriers to buy up to 26 percent in private Indian airlines. The key question is whether anyone will come up with cash to keep Kingfisher flying, given the debts that it has to service, and the costs that it cannot meet.

In any case, a cash-strapped or smaller airline will have less money to spend on luxuries such as Formula 1.