There are reports today that Ferrari will not be able to use its veto against the proposed dual-engine regulation in 2017 (if indeed the proposal ever gets beyond the chattering stage), on the basis that the independently-supplied engine is not against Ferrari’s interest. This is a very dubious argument, not least because the writers are almost certainly unaware of the exact terminology in the highly-secret Concorde Implementation Agreement of 2013. The clause in question is called the Ferrari Protection Right and this grants Ferrari the right of veto “in respect of the introduction/modification of any technical or sporting regulations (except for safety requirements)”.
It is true that there are two conditions that must both be met in order for the veto to be used: “The exercise of the right of veto is not prejudicial to the traditional values of the Championship and/or the image of the FIA” and “Ferrari reasonably considers that the new regulations are likely to have a substantial impact on its legitimate interest”.
These are very woolly terms in a legal sense and while the FIA President Jean Todt may think he can argue them that way, Ferrari can easily argue the opposite. And how will this be settled? If the two parties do not agree then the only option is going to arbitration, a process that usually takes many months and is unlikely to be decided in time for a tender to be arranged and a decision made regarding a supplier – and giving the supplier the time to manufacture the engine. If the Formula 2 tender process is anything to go by, the decision could overrun by more than six months…
The real question is what do the terms “reasonably consider”, “substantial impact” and “legitimate interest” actually mean? These are phrases which are difficult to define, although generally “legitimate interest” is decided upon in a court of law if the right is one that is beneficial to society at large.
However, it seems fairly reasonable to argue that an equivalency formula is contrary to the interest of all the engine manufacturers involved in the sport because it will only be effective if the resulting engine is as competitive or better than the best existing units and, this being the case, it would be an unfair advantage. If it is not the case, there would be little logic in any team using the engines. Thus, a lawyer would argue that the method by which the equivalency is decided is a completely legitimate concern and something that could have a substantial impact on all the manufacturers.
In legal terms, Todt might be better off trying to invoke the first condition because on paper the proposal would appear to be prejudicial to the image of the FIA because it would be completely contrary to the FIA’s declared strategy and thus would weaken the federation’s image as being an effective governing body.
But, I guess that argument is not likely to happen…