The World Motor Sport Council ("WMSC") met on 13th September 2007 to consider a charge that Vodafone McLaren Mercedes ("McLaren") had breached Article 151(c) of the International Sporting Code.

1 Background

1.1 Scuderia Ferrari Marlboro ("Ferrari") has submitted that it received information on 24 June 2007 suggesting that unauthorised use may have been made of certain of its confidential information. Ferrari has submitted that it subsequently learned that certain of its confidential information had come into possession of Mr. Michael Coughlan ("Coughlan"), the then Chief Designer of McLaren.

1.2 On 3 July 2007, in the context of litigation in the High Court of England and Wales ("High Court Proceedings") between Ferrari and Coughlan, a search was undertaken at the private residence of Coughlan under the authority of that Court. According to the evidence before the WMSC, during that search, a dossier of some 780 pages of confidential information belonging to Ferrari was recovered.

1.3 In light of the results of the search, Ferrari wrote to the FIA late on 3 July 2007 inviting it to consider whether the FIA should launch an investigation into the matter.

1.4 After preliminary investigations, on 12 July 2007 the FIA wrote to McLaren requesting it to appear at an extraordinary meeting of the WMSC in Paris on 26 July 2007 ("the 26 July WMSC meeting"). McLaren was informed that, at the 26 July WMSC meeting, it would be asked to answer the charge that between March and July 2007, in breach of Article 151(c) of the International Sporting Code, it had unauthorised possession of documents and confidential information belonging to Ferrari. In particular, McLaren was charged with the unauthorised possession of one or more of the following technical documents that could be used for one or more of the following purposes: designing, engineering, building, checking, testing, developing and running a 2007 Ferrari Formula One car, including drawings, lay-out and digital mock-up schemes, technical documents and reports and procedures relating, amongst other things, to weight distribution, aerodynamics, component designs, suspension, gearbox, hydraulic, water, oil and fuel system designs, assembly and building technology designs.

1.5 In response to the charge, McLaren made extensive written submissions in advance of the 26 July WMSC meeting and made detailed oral argument at the meeting itself. McLaren did not dispute that Coughlan had come into possession of Ferrari confidential information but argued, inter alia:

(i) that the Ferrari confidential information in question had not been circulated within McLaren;

(ii) that McLaren had neither used nor benefited from the receipt by Coughlan of the Ferrari confidential information; and

(iii) that the actions of Coughlan in receiving and dealing with the Ferrari confidential information were those of a "rogue employee" for which McLaren should not be held responsible.

1.6 The WMSC considered the arguments and evidence presented by McLaren at the 26 July WMSC meeting and came to the conclusion that McLaren had been in possession of Ferrari confidential information and was therefore in breach of Article 151(c) of the International Sporting Code.

1.7 Although a number of unsatisfactory elements were noted during the deliberations, in assessing the gravity of the breach, the WMSC concluded that there was insufficient evidence that the information was used in such a way as to interfere with the running of the FIA Formula One World Championship ("the Championship").

1.8 However, conscious of, inter alia, the fact that several related procedures were ongoing (including, notably, the High Court Proceedings, a criminal investigation in Italy and various internal forensic investigations at McLaren and Ferrari), the WMSC explicitly reserved the right to revisit its conclusions if further information came to light, in particular information showing that Ferrari confidential information had been used by McLaren to the detriment of the Championship.

1.9 The following Decision was therefore reached:

"The WMSC is satisfied that Vodafone McLaren Mercedes was in possession of confidential Ferrari information and is therefore in breach of article 151c of the International Sporting Code. However, there is insufficient evidence that this information was used in such a way as to interfere improperly with the FIA Formula One World Championship. We therefore impose no penalty.

But if it is found in the future that the Ferrari information has been used to the detriment of the championship, we reserve the right to invite Vodafone McLaren Mercedes back in front of the WMSC where it will face the possibility of exclusion from not only the 2007 championship but also the 2008 championship.

The WMSC will also invite Mr Stepney and Mr Coughlan to show reason why they should not be banned from international motor sport for a lengthy period and the WMSC has delegated authority to deal with this matter to the legal department of the FIA."

2 Re-convening of WMSC