August 24, 2023 COURT OF FIRST INSTANCE - JUDGMENTS
Claim No. CFI 025/2021
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
CALVIN E JUNGQUIST
Claimant
and
(1) CORBIN CROSSROADS CONSULTING FZE
(2) MICHAEL H CORBIN
(3) NAVISTAR DEFENSE LLC
Defendants
JUDGMENT OF JUSTICE MICHAEL BLACK
Hearing : | 4 July 2023 – 7 July 2023 |
---|---|
Counsel : | Mr. Benjamin James Williams, instructed by King & Spalding for the Claimant Ms. Sophia Hurst, instructed by Reed Smith LLP for the First and Second Defendants Mr. Matthew Watson, instructed by Pinsent Masons LLP for the Third Defendant |
Judgment : | 24 August 2023 |
UPON the Claimant’s Part 7 Claim dated 18 February 2021, and amended on 9 November 2021 (the “Claim” or “Claims”)
AND UPON the First and Second Defendant’s Amended Defence dated 18 November 2021
AND UPON the Third Defendant’s Defence dated 13 January 2022
AND UPON hearing counsel for the Claimant, the First and Second Defendants, and the Third Defendant at the Trial held before me from 4 July 2023 to 7 July 2023
AND UPON reviewing the relevant documents in the case file
IT IS HEREBY ORDERED THAT:
1. The Claims against each of the Defendants are dismissed.
2. The parties shall file submissions on costs within 14 days of the receipt of this Judgment.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 24 August 2023
At: 12pm
SCHEDULE OF REASONS
Introduction
1. The Claimant (“Mr. Jungquist”) entered into a Consultancy Agreement dated 17 July 2017 (the “Consultancy Agreement”) with the First Defendant (“CCC”) governed by the law of England and Wales. The Second Defendant is the sole shareholder, director and employee of CCC. The Claimant claims that in breach of the terms of the Consultancy Agreement CCC has failed (or is liable) to pay him his share of certain sums received (or to be received) from the Third Defendant (“Navistar/NDLLC”).
2. The Claimant pleaded the following causes of action:
(1) As against CCC - breach of contract;
(2) As against CCC - a restitutionary claim for unjust enrichment;
(3) As against all three Defendants - damages for unlawful means conspiracy; and
(4) As against all three Defendants - damages for lawful means conspiracy.
3. In his written opening submissions, the Claimant appeared to raise an unpleaded case of breach of an implied duty of good faith by CCC but counsel for the Claimant stated in his oral submissions that he was not advancing a case that the Consultancy Agreement is a relational contract with implied obligations of good faith and fidelity that have been breached by CCC.
4. He also stated that the Claimant was not seeking to advance an unjust enrichment claim as a standalone claim as the basis of liability. It was included only if necessary to redress any issues on the damages claim in terms of proving loss and dealing with issues of duty to mitigate under a damages theory.
The Context of the Dispute
5. The context in which the Consultancy Agreement was made was the proposed supply of refurbished excess capacity armoured military vehicles and ancillary equipment by the United States Government (“USG”) to the Government of the United Arab Emirates (“UAEG”) under the Excess Defense Article (“EDA”) Programme. The vehicles in question were MaxxPro Mine Resistant Ambush Protected Vehicles (“MRAPs”) manufactured by Navistar.
6. The supply would be under a Foreign Military Sale (“FMS”1 ) and assigned an FMS Case Number. An FMS takes place at intergovernmental level and US defence contractors are only involved if the EDA equipment is to be refurbished. If defence contractors are involved, their contracts are with the USG. The contractors may also offer Field Support (possibly through local agents) – Maintenance, Repair and Overhaul (“MRO”) - but it is not clear to me (nor is it material) whether this would be under separate contractual arrangements.
7. The process begins with the foreign government submitting a Letter of Request (“LOR”) to the USG. If the USG is interested in meeting the requirements of the LOR, it will then enter into a negotiation with the foreign government over the terms of the potential acquisition, which, if successful, will culminate in a binding agreement between the USG and the foreign government, known as a Letter of Acceptance (“LOA”).
8. Many countries (including the UAE) impose “Offsets” on defence contractors as a condition of the transaction. The terms of offsets are complex, changeable and vary from country to country. In short, they may include: (i) co-production; (ii) credit assistance; (iii) investment; (iv) licensed production; (v) purchases; (vi) technology transfer; and/or (vii) training and are not limited to the defence sector. Transactions with offset elements usually obligate the defence contractor to develop a bespoke offset programme in cooperation with the foreign government’s representatives. The defence contractor negotiates its offset obligations directly with the relevant foreign government and it owes those obligations to the foreign government, not the USG.
9. The UAEG has its own specialist agency to deal with offsets called the Tawazun Economic Council (“Tawazun”). Tawazun negotiates “TEPAs” (“Tawazun Economic Program Agreements”) with defence contractors which may involve, as in the present case, the contractor posting a bond with Tawazun in order to guarantee the investment.
10. A list of the various acronyms and other abbreviations is annexed to this judgment.
Summary of the Issues
11. The Consultancy Agreement was made between Mr. Jungquist and CCC expressly in contemplation of an agreement between Navistar and CCC dated 28 March 2017 (the “2017 Navistar Agreement”) whereby Navistar would pay CCC a monthly retainer and Success Fee in consideration of services to be rendered to secure a successful conclusion of a contract for the refurbishment of MRAPs and the supply of ancillary items through an FMS with the UAEG (designated “UAE1”).
12. Under the Consultancy Agreement Mr. Jungquist and CCC were to share the monthly retainer and Success Fee equally. It was a term of the agreement that should the Navistar 2017 Agreement be extended or amended, then the Consultancy Agreement would apply to any extension, variation or amendment of the Navistar 2017 Agreement.
13. The Navistar 2017 Agreement was extended on 1 January 2019 and UAE1 came to final fulfilment in the Summer 2019. Navistar paid CCC the monthly retainer and Success Fee which CCC duly shared with Mr. Jungquist. The extended Navistar 2017 Agreement expired in December 2019.
14. There was however a second supply contemplated (designated “UAE2”). On 31 March 2020 CCC and Navistar entered into a further agreement (the “2020 Navistar Agreement”). It is Mr. Jungquist’s case that the 2020 Navistar Agreement is an extension or amendment of the 2020 Navistar Agreement within the meaning of the Consultancy Agreement and consequently, he is entitled to a share of the sums payable under the 2020 Navistar Agreement.
15. Mr. Jungquist claims that CCC is in breach of contract in failing to pay his share of sums received (or to be received) under the 2020 Navistar Agreement to him. The issues in relation to this head of Mr. Jungquist’s claim are purely questions of contractual interpretation – does the extension or amendment clause in the Consultancy Agreement apply to the 2020 Navistar Agreement because it was an extension or amendment of the 2020 Navistar Agreement? There is no dispute that CCC has been paid a monthly retainer under the 2020 Navistar Agreement and will be paid a Success Fee on finalisation of UAE2.
16. Mr. Jungquist also claims that the Defendants conspired to cut him out of his share of those sums. As noted above he alleges both unlawful and lawful means conspiracies. The necessary elements of those heads of claim are agreed between the parties.
17. In order to establish an unlawful means conspiracy, it is necessary to prove:
(1) A combination or agreement between a given defendant and one or more others;
(2) An intention (but not necessarily a predominant intention) to injure the claimant;
(3) Unlawful acts carried out pursuant to the combination or agreement as a means of injuring the claimant;
(4) Loss suffered by the claimant as a result.
18. In order to order to establish a lawful means conspiracy it is necessary to prove:
(1) A combination or agreement between a given defendant and one or more others;
(2) A predominant intention to injure the claimant;
(3) Acts carried out pursuant to the combination or agreement as a means of injuring the claimant;
(4) Loss suffered by the claimant as a result.
The Parties, the Witnesses and their Evidence in General
19. The Claimant, Mr. Jungquist, is a consultant specialising in the fields of defence and security. He is by education and early experience a Civil Engineer but over 40 years ago he moved to the Middle East, working in several industries including spending some time with the Abu Dhabi National Oil Company (“ADNOC”). For the last 26 years Mr. Jungquist has worked in the defence sector.
20. Mr. Jungquist’s career in the defence sector began in October 1997 with Hughes Aircraft Company (“Hughes”). He was recruited directly by Hughes and hired on an FMS contract to investigate and handle a single point of failure. The client in this FMS contract was the US military and the end user was the Royal Saudi Air Force. He was responsible for overseeing the maintenance of 23 Long Range Radar and Command and Control sites situated across the entire geographic spectrum of the Kingdom of Saudi Arabia (“KSA”). Once the investigation and rectification works were completed, he was promoted to the position of Central Maintenance Facility Manager for the whole of KSA in 1999. He continued to work for Hughes after it was bought out by Raytheon from General Motors in 1999. However, after the FMS case and the programme were cancelled by the USG in 2001, Raytheon sent him to Amman, Jordan in November of that year to assist with an FMF programme as the Country Program Manager.
21. The FMF programme in Amman involved the refurbishment and retrofitting of vehicles (primarily tanks). This programme had a significant training programme element, which was essentially an offset requirement for the purposes of FMF programmes but was commonly referred to as a “training program” because it was funded by the USG directly. Raytheon needed a country manager for the FMF programme; he held this position from November 2001 until November 2002. During his time in Jordan, he was responsible for the offset programme as well as all of the in-country contracts with the US military. That offset programme was successfully completed, albeit after he left to go to Kuwait.
22. He was recruited to go to Kuwait in February 2003 to head up a communications contract delivery. This was an unusual project: everything had to be delivered commercially, but under FMS guidelines and process accounting procedures. This was because it takes approximately 18 months to get an FMS case number, and this FMS case could not be finalised in that time due to Desert Storm II. He was specifically selected to spearhead the project, because (he said) he was one of the few true offset specialists in the region and the only one who knew how to deliver commercially under FMS guidelines and procedures. During that time, he became the Chairperson for the US Overseas Security Advisory Council (“OSAC”) in Kuwait in 2004 and held that position until he left Kuwait in 2009.
23. He became the In-country Resident Manager at ITT Aerospace/Communication Division, responsible for the delivery of the SINCGARS Radio Systems to the Kuwait Ministry of Defence Signal Corps. This delivery contract was attached to a specific offset programme. During his time in Kuwait, he worked closely with a Tony Wilson at Leidos to get the offset programme done.
24. After leaving Kuwait in March 2009, Mr. Jungquist worked at Kellogg Brown and Root on the Qatar Bahrain Causeway Program from April 2009 until July 2010. He spent August 2010 until February 2012 at Olive Group (International Security Solutions) and March 2012 to April 2014 at Mott MacDonald. In June 2014, he joined AECOM as the Vice President of Managements Services for their Middle East Defence Security Group. He was there until March 2016, at which point he became an independent consultant.
25. The Second Defendant was the US Ambassador to the UAE between September 2011 and December 2014. In the US, a former ambassador retains the title with the suffix 8 of 42 “(ret.)” (unlike, I think, the English practice). I shall therefore refer to the Second Defendant as “Ambassador Corbin”.
26. Ambassador Corbin joined the US Foreign Service in 1984. He had particular experience serving in the Arab World. Among other postings and roles, he was based at the US Embassy in Tunisia from 1985 to 1987; was based at the US Embassy in Kuwait from 1987 to 1989; served as Political-Military Affairs Officer at the US Embassy in Egypt from 1994 to 1997; served as Deputy Director of the Office of Arabian Peninsula Affairs in the Bureau of Near Eastern Affairs from 2001 to 2003; served as Minister Counsellor for Economic and Political Affairs at the US Embassy in Egypt from 2003 to 2006; served as Chargé d’Affaires at the US Embassy in Syria from 2006 to 2008; and served as Minister-Counsellor for Political-Military Affairs at the US Embassy in Iraq from 2008 to 2009. From 2009 to 2011 he served as the Deputy Assistant Secretary for Iraq Affairs at the State Department in Washington before taking up his post in the UAE.
27. After his term as Ambassador ended, he decided to establish full-time residency in the UAE. Since December 2014, he has been the sole shareholder, sole director and sole employee of CCC. CCC is a consultancy seeking to help international-focused institutions with projects, initiatives or concepts in the Middle East and beyond. It is a vehicle for Ambassador Corbin to provide advisory services on a strictly retainer basis to a few select entities.
28. I also heard evidence from two retired US Army officers on behalf of Navistar. Unlike what I again think is the English practice, apparently retired senior US military personnel do not use their former rank, at least when acting in a business context. I will therefore refer to both witnesses as “Mr.”.
29. The first was Michael Hawn (“Mr. Hawn”). Mr. Hawn is a West Point graduate who served in the US Army Rangers from May 1988 until August 2008 attaining the rank of Lieutenant Colonel. He joined Navistar shortly after retiring from the Army until January 2022 when he moved to another corporation.
30. The second was Michael Gray (“Mr. Gray”). Mr. Gray served in the US Army in various roles including as a US Army Acquisition Officer. He retired with the rank of Major. From October 2020 to January 2022, he was Managing Director, Capture & Strategy at Navistar. In January 2022, he was appointed as Senior Vice President for Business Development replacing Mr. Hawn.
31. Mr. Jungquist was bitter at what he perceived as having been cut out of a potentially lucrative deal by Ambassador Corbin and Navistar when he regarded himself as “the key individual [who] put that all together”. There was also much evidence directed to whether or not Mr. Jungquist was making an adequate contribution to Navistar’s success in supplying the MRAPs to the UAEG with which Mr. Jungquist took great issue. Mr. Hawn was particularly vocal on the subject. He seemed to relish giving evidence and played up to the image of the plain-speaking ex-special forces soldier, stating that he thought Ambassador Corbin was naïve in agreeing to share the fees paid by Navistar equally with Mr. Jungquist. On the other hand, even though the evidence he could give was limited, Mr. Gray gave the impression that when he was providing his testimony it was an unwelcome intrusion in his working day. Ambassador Corbin came across as thoughtful and measured in his evidence, but I do not underestimate his skills as a seasoned diplomat and ability to “read the room”.
32. Having said all that, I am satisfied that each of the persons giving evidence did not in any way consciously seek to mislead the Court but simply stated the position as he perceived it. As will be seen from the summary of the issues above, the oral evidence is irrelevant to the breach of contract claim. It will however be relevant to the determination of subjective intention necessary in the consideration of the conspiracy claims.
The Facts in Detail
33. It is likely that the UAEG submitted a LOR to the USG in about February 2014. The LOR was “sole-sourced” in that it expressly specified that the UAEG wished to have Navistar refurbish the MRAP Vehicles that it intended to acquire. The number of vehicles involved was in excess of 1,000.
34. Mr. Hawn’s primary responsibility was to secure UAE1. To that end, in or about March 2016 Mr. Hawn attended a so-called “definitisation meeting” in the UAE with John Grooms, Navistar’s President, their senior engineer and senior programme manager between representatives of the USG and UAE military. It was at that meeting Navistar became aware that as a condition of securing its involvement in UAE1 Navistar would be required to commit to UAEG’s offset programme.
35. Navistar had no prior experience of offset programmes. Mr. Hawn felt they needed help. As he put it in evidence, “at that point, we would have spoken to anyone that could spell "offset" quite honestly, because we were so ignorant on how deep we were 10 of 42 in it at that point that we were grasping at straws to educate ourselves just to understand the risk for the offset cost based on the pricing that we had already disclosed to our customer.”
36. Mr. Wilson (see paragraph 23 above) recommended that Mr. Grooms contact Mr. Jungquist as an offset expert, and in March 2016 Mr. Grooms did contact Mr. Jungquist. Mr. Jungquist was understandably excited about the opportunity and he may perhaps be forgiven, in his enthusiasm to impress Messrs Grooms and Hawn, for overstating the position in referring to Ambassador Corbin as “my guy in Abu Dhabi” in an email of 21 March 2016 and “my partner in the UAE” in another dated 25 March 2016.
37. In fact Mr. Jungquist had contacted Ambassador Corbin, whom he knew from previous interactions when Ambassador Corbin was acting as a consultant with The Cohen Group. Mr. Jungquist asked if Ambassador Corbin wanted to join a project he had been approached about. Ambassador Corbin was already aware of the project as it had started during his time as Ambassador to the UAE. He agreed with Mr. Jungquist to assist Navistar
38. In evidence Mr. Jungquist stated:
“A. Early on in our discussions when we set this thing up it was all that we were a partnership. That is why I told you I offered him 50% of a deal that he had no clue of, had no idea and only after he didn't get his deal worked out in Iran did he decide to come along and call me back and say, okay, I will be interested. So I can only tell you what the original agreement was, and yes, we did talk about us always working together. It was never an intention to work apart.”
39. There was some contentious evidence about the modalities of the due diligence process undertaken by Navistar and the descriptions attributed to Mr. Jungquist, but while Mr. Jungquist takes issue with those descriptions on the basis that they do not adequately reflect the fact, as he puts it, that he and Ambassador Corbin came as “a package deal” I do not find them of relevance. The true nature of the relationship between Mr. Jungquist and Ambassador Corbin is to be found in their agreements properly interpreted in the light of the admissible surrounding circumstances.
40. On 18 May 2016 Navistar entered into a Consulting Services Agreement with CCC (designated by Navistar as “Consulting Services Agreement I”). I can see that it was likely to be more convenient for Navistar to contract with CCC than with Mr. Jungquist and Ambassador Corbin as individuals, but I attribute no more significance to it than 11 of 42 that. Mr. Hawn seems to think the suggestion came from Mr. Jungquist and Ambassador Corbin. Mr. Jungquist says it was Navistar’s suggestion because of security clearance issues. Ambassador Corbin denies that clearances were an issue but confirms that it was Navistar’s preference to contract with a company. None of this is relevant – the contracts speak for themselves, and all concerned recognised that at this initial stage the services provided to Navistar would be undertaken by both Mr. Jungquist and Ambassador Corbin.
41. The material terms of Consulting Services Agreement I were as follows:
(1) Clause 1 - Navistar retained CCC to render the services set out at Exhibit I;
(2) Clause 2 - The initial Term of the agreement was two months from 18 May 2016 to 19 June 2016. “The Initial Term of the Agreement may be extended for additional terms of two (2) months (each an "Extended Term") provided that both Parties agree in writing to such extension no later than 30 days prior to the expiration of the Initial Term or any Extended Term”;
(3) Clause 3 - During the Initial Term Navistar would pay CCC USD 50,000;
(4) Clause 19B – “The Parties may terminate this Agreement without cause at any time by means of a mutual written consent signed by both Parties. In the absence of mutual consent. either Party may terminate this Agreement without cause unilaterally upon thirty (30) days written notice to the other”;
(5) Clause 22 – “This Agreement shall be construed in accordance with the laws of the State of Illinois”;
(6) Clause 23 – “This Agreement is and shall be deemed to be the complete and final expression of the agreement between the Parties as to its subject matter, and shall supersede any previous agreements or understandings between the Parties, whether written or oral, pertaining to its subject matter. Any amendment to or modification of this Agreement must be in writing and must be signed by both Parties”;
(7) Exhibit 1 –
“1. Research current acceptable UAE offset concept models.
2. Explore latest challenges and obstacles facing defense firms' pursuit of offset programs.
3. Identify viable local UAE companies and individuals that could serve as potential partners.
4. Meet with UAE Offset governing officials and groups to determine offset solutions that will yield the largest mix of multipliers for offset requirements.
5. Consult with wide range of local experts.
6. Determine best options for a viable NDLLC offset program.
7. Use US Embassy in Abu Dhabi as resource for overall FMS case and facilitate assistance for NDLLC.
8. Conduct regular (at least weekly) calls and/or meetings with NDLLC representatives and have access NDLLC Middle Eastern contacts.
9. Prepare a written report on proposed options for NDLLC's offset program, including the results of research and communication with contact in the UAE.
10. Provide NDLLC topical, current, accurate information on possible ways forward on an offset program, including but not limited to, potential partners and ways to maximize the multipliers established by the UAE Offset committee.
11. Provide a draft report for comment during the second month of the Initial Term with a final report incorporating client input provided by the end of the Initial Term.”
42. On the same day CCC and Mr. Jungquist entered into an agreement (the “2016 Consultancy Agreement”):
“For the purposes of this contractual agreement, the two parties named below, agree to supply support consultancy services in the delivery of an offset plan for the UAE FMS Case that Navistar Defense, LLC (NDLLC) is obligated to complete with the UAE MoD.
Corbin Crossroads Consulting, FZE (CCC) based in Dubai, UAE has a consultancy contract with NDLLC, to supply the services shown in Exhibit 1- Services (see attached), of the NDLLC contract (see attached). Calvin E. Jungquist (CEJ) based in Doha, Qatar will be an "Intermediary Technical Offset Delivery Expert", supplying services in support of the CCC delivery requirements that are outlined in Exhibit 1 mentioned above.
Whereby, it is agreed that CCC and CEJ will work together in the execution of the services outlined in Exhibit 1, on the NDLLC contract and they will share equally in the fees paid, as set forth in the NDLLC contract (Item 3 of contract) and any extensions of this contract, as agreed to by NDLLC and CCC.
CEJ agrees to abide by the Terms and Conditions contained in the NDLLC contract and abide by the CCC FCPA guidelines.”
43. This agreement was expressly tied to Consulting Services Agreement I and that agreement was limited in duration and directed towards the production of a report to Navistar with proposals as to how it could fulfil the offset programme.
44. On 7 July 2016 CCC produced the report. The report identified a number of potential offset partners, including Bin Hilal Enterprises (“BHE”) and Automotive Management Services Co. (“AMS”) as able to supply FSR (Field Service Representative) support.
45. Very shortly thereafter CCC and Navistar entered in a second agreement (“Consulting Services Agreement II”) dated 18 July 2016. The body of the agreement was in similar terms to the first agreement but:
(1) Clause 2 – “the Term” was 18 July 2016 through 31 October 2016;
(2) Clause 3 – the sum payable under the agreement was USD 100,000 plus addition compensation specified in Exhibit 1. In addition –
“If a contract for refurbishment of MRAPS with the UAE is not executed before October 31, 2016, CONSULTANT will continue to work for a fee of $25,000 per month (inclusive of expenses) for an agreed upon term to be negotiated by the parties. During any Extended Term, NAVISTAR will continue to make $25,000 monthly payments to CONSULTANT on terms to be negotiated by the Parties prior to the commencement of any Extended Term.”
(3) Clause 24 –
“This Agreement is contingent upon satisfactory completion of background research including reference verification of the Consultant.”
(4) Exhibit 1 –
“The Services to be performed by Corbin Crossroads Consulting, FZE ("CONSULTANT") under the foregoing Consulting Services Agreement include the following:
1. Raise the profile of ND on the ground in UAE with presence in UAE and access to key decision makers.
2. Engage partners who have interests in the program and encourage them to lobby the UAE Government to move forward on refurbishing EDA MaxxPro® MRAPs.
3. Using access to key program officials, raise awareness of the overall capability of Navistar Vehicles for UAE Soldiers and the value/knowledge Navistar brings to the UAE market.
4. Engage USG and US Embassy to encourage their support to help UAE support the MaxxPro® refurbishment program and to work for as smooth a FMS/contracting process on the USG side as possible.
5. Assist with TAA process to see successful NDLLC cooperation with UAE prior to the signing of the FMS contract and build awareness of the NDLLC capability to support a deployed force during combat operations.
6. Educate senior UAE leaders on Navistar’s corporate reputation for building quality vehicles and providing superior supply chain management.
7. Advise NDLLC on all relevant political, economic and other developments in UAE that could impact the EDA MaxxPro® refurbishment program.
8. Seek to detect, understand, and provide remedies for UAE issues during the contracting process.
9. Work with contacts within USG and UAE government to overcome the frustrations associated with the US Third Party Transfer Program.
10. Recommend strategic times for NDLLC personnel to visit UAE. Assist NDLLC personnel with coordinating visits to UAE and setting up meetings with key UAE Officials.
11. Participate in routine conference calls to update NDLLC Leadership on current status of this program.
12. Continue research and engagement regarding UAE Offset Program to better prepare NDLLC for offset obligations and to keep UAE Offset officials engaged with NDLLC.
B. KEY PERSONNEL
The Key Personnel identified for this Statement of Work are:
Michael H. Corbin, Amb. (Retired)
Calvin Jungquist
Each Key Personnel will be made available to support this activity, on a non-exclusive basis as necessary and appropriate to perform the work defined above.
C. ADDITIONAL COMPENSATION
Success Fee In the event NDLLC is awarded a contract for the refurbishment of MaxxPro ® vehicles and ancillary items purchased by the UAE through a Foreign Military Sale (“FMS”) with the United States Government (“USG”) under the Excess Defense Article (EDA) program (the “Contract”) and such Contract is signed by NDLLC during the Term or Extended Term of this Agreement (or within a period of 6 months immediately following the expiration or termination of the Agreement), NDLLC shall pay CONSULTANT a fee of .25% of the total Contract sales revenue actually received by NDLLC for refurbishment products and services for MaxxPro® vehicles purchased by and delivered to the UAE or USG (the “Success Fee”) …”
46. The LOA between the USG and UAEG for UAE1 was executed on 29 September 2016. Navistar began negotiating a sub-contract with the USG, which was itself a complex process, in part because it had to take account of Navistar’s obligations under the offset programme. The sub-contract was awarded in February 2017. The contract 15 of 42 included 1085 long wheelbase chassis, a mixture of used and new “MaxxPro Capsules2 ”, spare parts and training.
47. On 28 March 2017 Navistar and CCC entered into the 2017 Navistar Agreement ( “Consulting Services Agreement III”):
(1) Clause 2 –
“the Term” was from 1 January 2017 through 31 December 2018 and “the Term of the Agreement may be extended for additional terms of two (2) months (each an "Extended Term") provided that both Parties agree in writing to such extension no later than 30 days prior to the expiration of the Term or any Extended Term.”
(2) Clause 3 – CCC was to be paid a retainer of USD 25,000 per month during the Term or Extended Term plus additional compensation described in Exhibit 1;
(3) Clause 24 –
“This Agreement is and shall be deemed to be the complete and final expression of the agreement between the Parties as to its subject matter, and shall supersede any previous agreements or understandings between the Parties, whether written or or pertaining to its subject matter, including but not limited the CONSULTING SERVICES AGREEMENT between the Parties effective 18 May 2016 and the CONSULTING SERVICES AGREEMENT II between the Parties effective 18 July 2016 (together the "Prior Agreements"). Any amendment to or modification of this Agreement must be in writing and must be signed by both Parties…”
(4) Exhibit I – Services
“1. The Services to be performed by Corbin Crossroads Consulting, FZE ("CONSULTANT") under the foregoing Consulting Services Agreement include the following:
a) Work with UAE offset body "Tawazun" or ''Tawazun Economic Council" on all issues related to the offset requirement for the EDA MRAP program and guide NDLLC through this process to include the Tawazun Economic Program Agreement (TEPA) and the Tawazun Economic Council Supplemental Agreement (SA).
b) Concurrently CONSULTANT will assist NDLLC in arriving at an offset program or programs and projects (and any associated concept papers or business plans) that are approved by Tawazun. This process will involve determining UAE priorities, potential partners, feasibility and cost challenges and other issues.
c) Keep USLO3/Embassy officials engaged on all aspects of the MRAP delivery process throughout the Term and any Extended Term of the Agreement. CONSULTANT will continue to engage USG officials in the UAE to include the USLO, Commercial Service. Embassy Front Office and others as required to support NDLLC with all issues related to the MRAP EDA program.
d) Assist with any visits by NDLLC representatives to the UAE during the Term and any Extended Term of the Agreement. CONSULTANT will assist with scheduling, strategy, and planning for visits by NDLLC personnel to UAE.
e) Assist with due diligence for potential Offset Program partners.
f) Facilitate the UAE signature of the NDLLC/AMS Technical Assistance Agreement to enable support for certain NDLLC vehicles already present in the UAE.
g) Engage with all relevant UAE officials to facilitate the MRAP delivery program throughout the Term and any Extended Term of the Agreement.
h) Assist NDLLC in selecting the best offset partner(s).
i) Assist NDLLC with picking offset program(s) and projects to deliver and satisfy NDLLC's offset obligations in the UAE during the Term and any Extended Term of the Agreement.
j) Assist NDLLC Field Service Representatives with engagement in the UAE.
k) Assist NDLLC to position itself to provide spare parts to the UAE.
I) Provide Government interface with the delivery of Refurbished MRAP vehicles to UAE and work with AMS/NDLLC to promote successful handover of these vehicles.
m) CONSULTANT will work to ensure strong relationships with the UAE and constantly interface with all concerned parties in the UAE, with AMS and the U.S. Embassy
n) Such other reasonable services as are related to the foregoing as mutually agreed between the Parties.
2. KEY PERSONNEL
The Key Personnel identified for this statement of work are:
Michael H. Corbin, Amb. (Retired)
Calvin Jungquist
Key Personnel will be made available to support this activity, on a nonexclusive basis, as necessary and appropriate to perform the work defined above.
3. ADDITIONAL COMPENSATION
Success Fee. NDLLC has been awarded a contract for the refurbishment of MaxxPro ®vehicles and ancillary items purchased by the UAE through a Foreign Military Sale ("FMS") with the United States Government ("USG”) under the Excess Defense Article (EDA) program (the ''Contract") and NDLLC shall pay CONSULTANT a fee of 0.275% of the total Contract sales revenue for refurbishment 17 of 42 products and services for MaxxPro® vehicles purchased by and delivered to the UAE or USG (the "Success Fee")”
48. On 17 July 2017 CCC and Mr. Jungquist entered the Consultancy Agreement. It contained the following express terms:
(1) RECITALS:
“WHEREAS, CCC entered into a consulting services agreement with NAVISTAR DEFENSE LLC, … ("NDLLC"), on 4 April, 20174 (the "Navistar Agreement") which is attached as Schedule I to this Agreement.
WHEREAS, CCC is required to provide the services set out in Exhibit 1 of the Navistar Agreement (the "Services") to NDLLC for the period from 1 January 2017 through 31 December 2018 (or as may be extended in accordance with the terms of the Navistar Agreement).
WHEREAS, the sole shareholder of CCC, Mr. Michael H. Corbin Amb. (Retired) ("MHC"), and the Consultant5 are both identified in Exhibit I of the Navistar Agreement as CCC's key personnel for the purposes of performing the Services set out in the Navistar Agreement.
WHEREAS, CCC and the Consultant now wish to enter into this Agreement for the purposes of (i) setting out the terms and conditions of the Consultant's engagement by CCC, and (ii) setting out the respective rights and obligations of the Parties with respect to the performance of the Services that are required to be performed by CCC under the terms of the Navistar Agreement.”
(2) Clause 1(b) –
“Should the Navistar Agreement be extended or amended, then this Agreement shall also apply mutatis mutandis to any such extension, variation or amendment of the Navistar Agreement.”
(3) Clause 2(c) –
“The Parties shall perform their duties and responsibilities with respect to the Services to the best of their ability in a diligent, trustworthy, businesslike and efficient manner. Notwithstanding the aforementioned, each Party shall work on a non-exclusive basis so long as it devotes sufficient time and effort with respect to the provision of the Services. Further, either Party may be engaged or concerned in any other business, trade, profession or other activity during the Term which does not place it in a conflict of interest with NDLLC.”
(4) Clause 3 Consultant Undertaking –
“The Consultant undertakes (the "Undertaking") that he shall abide by the terms and conditions of the Navistar Agreement mutatis mutandis and that a material breach of the aforementioned agreement by the Consultant shall constitute a material breach of this Agreement.”
(5) Clause 10 Entire Agreement –
“This Agreement embodies the complete agreement and understanding among the Parties and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way.”
(6) Clause 11(a) –
“This Agreement shall be governed by, and construed in accordance with, the laws of England and Wales.”
49. Delivery of the MRAPs began in August 2017.
50. Discussion of a further supply of MRAPs ( “UAE2”) started around April 2018. On 6 June 2018 UAEG submitted a LOR in respect of the additional MRAP vehicles.
51. In October/November 2018 the USG selected Navistar to complete UAE2. About the same time on the recommendation of Mr. Jungquist Navistar hired Charles “Chuck” Williamson under the title “Business Plans and Strategy, Offset Programs” based in Abu Dhabi.
52. In December 2018, a private equity fund, Cerberus Capital Management, acquired a controlling interest in Navistar.
53. In January 2019 the 2017 Navistar Agreement was extended for an additional period of one year until 31 December 2019 and the extension was incorporated into and became part of the 2017 Navistar Agreement.
54. In February 2019 CNN disclosed that MRAPS supplied by the USG to the UAEG had fallen into the hands of militias linked to al Qaeda and Iran. On 20 March 2019 USG notified Navistar of a delay to UAE2.
55. In April 2019 Tawazun issued a new policy document and a new form of TEPA was issued in July 2019.
56. On 2 July 2019 Mr. Hawn wrote to Ambassador Corbin. Mr. Jungquist now points to this email as evidence that that Navistar and Ambassador Corbin were seeking to cut him out from an early stage by focussing on the following:
“I appreciate your kind words but you earned the success fee. It’s been a great relationship and we look forward to writing you more big checks in the future – those are good days for Nav Defense and for me personally.”
57. Mr. Hawn was replying to an email from Ambassador Corbin of the same day which was about “Navistar Payment Cycle Process Change” in which he said:
“Separately, I just need to confirm the success fee payment and get the final admin costs involved but will send you another email on that.
I know it is a bad time to do it but just want to close that account. And, I really appreciate everything you did to get us the success fee.
I just hope we can get the follow-on program moving soonest.”
I am not persuaded, when read in context, that Mr. Hawn’s email bears the significance attributed to it by Mr. Jungquist.
58. Deliveries under UAE1 were completed during the Summer of 2019 but Navistar was still obliged to comply with the offset programme albeit that Ambassador Corbin had negotiated a deferment. The TEPA involving BHE was signed on 18 July 2019. Mr. Jungquist and Ambassador Corbin shared a Success Fee of approximately USD 2.6 million.
59. It was around August to September 2019 that Mr. Jungquist says he began to suspect that he was being cut out of the 2017 Navistar Agreement but he could not prove it. He says that Mr. Williamson told him that he heard that Ambassador Corbin trying to push him out. Mr. Williamson did not have a good relationship with Ambassador Corbin; he preferred working with Mr. Jungquist, who was an old friend.
60. In October 2019 Ambassador Corbin was reporting to Mr. Jungquist that UAE2 might be in trouble again in Congress. Mr. Jungquist wrote to Ambassador Corbin on 20 October 2019:
“I write with reference to a) the Consultancy Agreement dated 17 July 2017 between your company, Corbin Crossroads Consulting FZE ("CCC"), and myself (the "Agreement") and b) the Consulting Services Agreement of 28 March 2017 between Navistar Defense LLC ("Navistar") and CCC (the "Navistar Agreement").
Under the Agreement, it was agreed that CCC would engage me as a consultant to CCC with a view that we would jointly provide to the consulting services set out at Exhibit 1 of the Navistar Agreement (the "Services"). In accordance with the terms of our Agreement, we have successfully cooperated and efficiently apportioned the workload, for the delivery of quality Services under our contract. I am pleased that our cooperation has yielded such positive results for Navistar.
As provided under the Agreement, the extension of the Navistar Agreement triggers mutatis mutandis the extension of the Agreement. Accordingly, the Agreement has been extended until 31 December 2019. I am hopeful that Navistar shall request a further extension of 20 of 42 the Navistar Agreement, so that we can continue to jointly provide the Services.
However, as a result of recent changes within the management team at Navistar/Cerberus, it would seem that a number of business dealings are being revisited, which may include the current consultancy arrangement we have with Navistar. In the event Navistar's new leadership seeks to make any adjustments to the terms our arrangement, I trust we will jointly engage with Navistar with a view to agree a mutually beneficial outcome for all parties.
I would like to thank you for your transparency on this point and I very much look forward to further developing our fruitful working relationship.”
This is a strangely formal letter. It is obvious that there had been at least some input from a lawyer. Its purpose is not apparent from its face. If Mr. Jungquist did suspect that he would be cut out of any extension of the 2017 Navistar Agreement Mr. Jungquist may have thought that this was a shot across Ambassador Corbin’s bows. On 12 November 2019 Mr. Jungquist wrote to Ambassador Corbin to explain the letter:
“As I mentioned yesterday in our call, I had engaged outside legal advise [sic], to review the Navistar contract and our CCC-CEJ agreement.
Now that the Navistar executive management team is changing, I am sending you this clarification letter to state that our CCC-CEJ arrangement is very solid and I believe that the Navistar Team will see the advantages in keeping this team together.”
The explanation does not cast any light on why the letter was sent to Ambassador Corbin rather than Navistar
61. In cross-examination Mr. Jungquist stolidly maintained that he did not think that Navistar would not renew the Consultancy Agreement. I found his answers puzzling given that in answers to questions by me he stated “This was getting at the end of the year and we still didn't have the extension in hand so I felt we needed to put this down in writing” notwithstanding that he had not felt moved to write in a similar vein in previous years. If that were the case he would have been writing to Navistar not Ambassador Corbin. It seems to me more likely that Mr. Jungquist was feeling that the contract was slipping away from him, recognising that Ambassador Corbin was undertaking the majority of the work, and he wanted to reassert his position so that he did not lose out on a share of the fees if UAE2 were concluded.
62. On 18 December 2019 Mr. Hawn sent an email to Ambassador Corbin:
“Just a quick note to inform you that our current agreement will expire on 31 December 2019. We do not plan to renew that agreement as we have done last year. I am happy to discuss at your convenience.”
The following day Ambassador Corbin forwarded the email to Mr. Jungquist with the words “Cal: Please see below. We had a good run.” Mr. Jungquist wrote to Mr. Williamson, “Chuck, looks like Navistar is going in another direction! Maybe has todo [sic] with Carpenter?” This was a reference to Kyle Carpenter, an ex-military attaché, whom Navistar hired to sell MRAPS and special forces vehicles to the KSA. At the time, Mr. Jungquist suspected that Mr. Carpenter was somehow involved with his exclusion from the project as he considered himself to be more knowledgeable in the Middle East than Mr. Carpenter and that Mr. Carpenter was jealous.
63. Ambassador Corbin spoke to Mr. Hawn by telephone. There was at that time considerable uncertainty. Mr. Hawn said that the previous offset work would not be part of any future scope because Navistar did not need offsets assistance from external consultants but there may be a role for Ambassador Corbin to provide advisory assistance although it was unclear whether the political issue would be resolved or not.
64. In his written evidence, Mr. Hawn recollects that Ambassador Corbin made it clear to him that he wished to end his business relationship with Mr. Jungquist because he felt that Mr. Jungquist was no longer adding any value and that it was thus not fair or appropriate for CCC to continue sharing with him the fees it was receiving from Navistar. He also recalls that Ambassador Corbin was reluctant to say this directly to Mr. Jungquist, and so he asked him if Navistar would allow Consulting Services Agreement III to expire and subsequently enter into an entirely new agreement with CCC that made it clear that Mr. Jungquist would no longer be involved in providing any services to Navistar. He said that Ambassador Corbin asked him for an email that would allow him to make a clean break with Mr. Jungquist. Mr. Hawn saw nothing wrong with this.
65. Mr. Hawn was somewhat more outspoken in his oral evidence:
“As I stated previously, Ambassador Corbin is great at what he does, but i[s] not necessarily the best businessman, if you will. So it didn't strike me as that odd that he was not wanting to confront Cal head on to end their business relationship. It seemed a little bit wimpy, if you will. But at the same time, I knew that I was paying a fee for services that 99%, 95% were being performed by Ambassador Corbin so I had zero problem with him ending his relationship with Calvin Jungquist, I had zero problem or -- I was in complete agreement that moving forward, especially at the stage we were in, that I would be completely relying on Ambassador Corbin for the work that we needed to get done to get on to contract, which, as you stated, has not yet taken place.”
66. Ambassador Corbin does not remember saying that he was ending his business relationship with Mr. Jungquist to Navistar in such terms, however, he does recall 22 of 42 saying to Mr. Hawn that since Navistar did not need offset help from external consultants, then CCC could enter into a new contract with Navistar without engaging Mr. Jungquist.
67. Mr. Hawn says that Navistar’s priority was to continue working with the Ambassador especially in light of the wider political issues they were facing in respect of UAE2. Moreover, he felt that Navistar no longer had any need for Mr. Jungquist’s services. He felt that Mr. Williamson offered what Mr. Jungquist lacked, namely presence in the UAE and the ability to meet the relevant personnel from Tawazun and handle the dayto-day work associated with the offset programme. He did not regard Mr. Jungquist as an expert in offsets, he did not recall Mr. Jungquist contributing anything of value from 2017 onwards and saw no role for him after Mr. Williamson was hired. As he graphically put it: “Calvin was bumbling along earning 50% of just -- just to be clear, so let's -- so Calvin, not doing much, was receiving $12,500 a month and half a million dollars in success fee. A pretty good gig for doing nothing” and thought that Ambassador Corbin was “a knucklehead for entering into an agreement that he would give away half of his money to somebody who was not doing all the work.”
68. In contrast, Mr. Jungquist felt that he still had much to do to assist Navistar with completion of the offset programmes notwithstanding the employment of Mr. Williamson. He and Ambassador Corbin exchanged WhatsApp messages on 19 December 2019:
“[19/12/2019, 11:39:42 AM] Jungquist Calvin: I am in London for a couple more hours, so let’s talk if you are available
[19/12/2019, 12:27:12 PM] Michael: Hello, I am running because I leave on vacation this weekend. Bottom line is there is no phase 2 in sight. I will see if there is anything I can do for them in the UAE next year. As you know I don’t want to do the Offset so pursue that route on your own if you want. Best and hope you have a good holiday.
[19/12/2019, 12:35:29 PM] Jungquist Calvin: Michael, you and I are tied at the hip with Navistar, so what ever we do, it is shared and we have the right to the follow on contract success fees also!”
69. Mr. Jungquist disputes that there was no phase 2 in sight at that time and that Ambassador Corbin was not interested in doing offset work. It seems to me that Ambassador Corbin was quite clear that the association with Mr. Jungquist was at an end and that they might investigate individual roles with Navistar. This was not apparently an attractive prospect for Mr. Jungquist and he took the view that even if Navistar exercised its option not to renew the Consultancy Agreement Ambassador Corbin was not free to enter into a similar type of contract and exclude him.
70. On 23 December 2019 Navistar was informed by the USG that potential follow-on MRAP programme may proceed if the UAE signs a clarification letter.
71. On 30 December 2019 Mr. Jungquist wrote to Mr. Hawn, Mr. Thomas (the President of Navistar) copied to Mr. Wright (CEO of Navistar), Ambassador Corbin and his lawyers.
“My business partner, Mr. Michael Corbin, has informed me that, on 18 December 2019, Navistar Defense decided not to renew the Consulting Services Agreement III (“Agreement”).
However, it has come to my attention that Navistar may be exploring options to work with our key personnel. More specifically, I have received communication that Navistar may be in discussions with Mr. Corbin and that Navistar may be engaging Mr. Corbin to perform certain services in 2020, some of which may be identical to those services in the Agreement. Up to this date, Mr. Corbin has not informed me of the specifics of any discussions that were or are being held between himself and Navistar, if any.
Regrettably, if Navistar Defense is to commence work with Mr. Corbin, directly or indirectly, such will likely result in a dispute between myself and Mr. Corbin, depending on the actual facts. In these circumstances, I would request that Navistar refrain from engaging with Mr. Corbin until you have discussed the nature of the relationship I have with Mr. Corbin in relation to Navistar. Please may I ask that you copy me to any and all correspondence with Mr. Corbin, at this point?
Note, I have now engaged the law firm of King & Spalding LLP (Managing Partner copied above), as I wish to ensure my legal rights are protected in relation to all parties.
I look forward to your cooperation in this matter.”
72. I consider this email to be ill-advised. If Mr. Jungquist thought there had been any possibility of a renewed agreement with Navistar that email would surely have rendered the prospect unlikely. Perhaps he felt that he had nothing to lose. It was also ill-advised in another way. It would obviously put Navistar and Ambassador Corbin on the defensive. Their correspondence was bound to become more circumspect. At its highest, it might prompt the impression of a conspiracy where none was intended. At the least, I must review that correspondence against the background of the clear threats contained in the email. Unsurprisingly Navistar did not reply. Mr. Hawn summed it up:
“I chose not to get involved in a revolving email exchange with Mr. Jungquist. I saw no point in it. Again, he wasn't working directly for me. He was working for Ambassador Corbin. And he clearly talks about the ... (Pause) his part in working with Mr. Corbin, not with Navistar. He is talking about engaging with a law firm in my mind was ridiculous. So I had no reason -- I have many other responsibilities, namely, trying to get this UAE II back on the rail. I had no -- no desire to continue any 24 of 42 conversation, relationship, dialogue with Calvin Jungquist. I didn't owe him that at all.”
73. Mr. Jungquist relies on a number of exchanges that he submits show that the differences between the 2017 and 2020 Navistar Agreements were merely “pretextual and artificial” to make it look like the 2020 Agreement was not an amendment, variation or extension of the 2017 Agreement:
(1) A WhatsApp exchange on 14 January 2020:
“[14/01/2020, 5:18:43 PM] Hawn Michael T: It also just wanna let you know that your follow on agreement is at the top of my to do list. I should have something for your review in the next couple days. It will look very similar to the first one, but will change the scope of work somewhat to reflect reality.”
(2) On 15 January 2020, an internal email from Mr. Hawn:
“Attached is a new agreement for Ambassador Corbin. The previous agreement ended on 31 Dec. The change to this agreement was the removal of his former business partner, Calvin Jungquist from the “Key Personnel” list. It’s now just Corbin. Other than that, I changed the formula for how we pay success fee. In the original agreement, we paid them a 40% lump sum after contract definitization and the remaining 60% over the remaining contract period of performance. In this version, we pay him the percentage of what we get paid, after we get paid with NET 30 terms.”
(3) On 16/17 January 2020 Mr. Hawn wrote to Ambassador Corbin:
“Latest from State, Clarke Cooper. They are waiting for the Emiratis to send the signed letter back before initiating the CN6
We would appreciate any and all efforts you can make to “encourage” the Emiratis to sign this letter. One of our goals is to sign our contract with the USG by 31 Oct 2020. This is a big challenge given:
1. Letter needs signed
2. Congressional Notification (70 day process – minimum)
3. LOA development (concurrent with CN)
4. LOA Signature
5. ND Proposal to USG
6. Contract Negotiations
7. Contract signature
All that said – we want to make every effort to get a signed contract by 31 Oct 2020. You will note in your new agreement that I’ve added an Incentive Bonus if we are able to sign our contract by 31 Oct 2020. There are many things you can do to help us achieve this goal that I’ve added to your scope: 1. Encourage letter Signature; 2. Encourage LOA signature as fast as possible; 3. Encourage Emiratis to request urgent contracting between USG/ND. You do so much to support our efforts – I’m sure there are other tasks you can think of that will help the effort. And I know you wouldn’t make less of an effort without the incentive.
I’m happy to discuss the letter or the Agreement at your convenience. I did not change anything from the previous agreement, except removing Cal as a Key Person and adding the Incentive Bonus language. Also, I did change the success fee payment formula we had in the first agreement. We’d prefer to pay as we are paid rather than the 40% lump/ 60% over 18 months formula.”
(4) A WhatsApp exchange on 20 January 2020:
“[20/01/2020, 7:17:34 PM] Hawn Michael T: Michael - did you get the chance to review the draft agreement I sent Thursday?
[20/01/2020, 8:05:49 PM] Michael: Yes, thanks very much for working on that so quickly! I have a few comments but I think it will work just fine. Right now I am totally focused on trying to track down the letter here and to get the response ASAP. I spent a long time with General Faris last night and he is trying to get it moving. I need to see someone higher up and I am working on that now. Will get back to you on the agreement soon but I have no issues with the numbers in the agreement and just want to make it as different from the previous agreements as possible and still want to wait a little bit to have a time separation. Will be in touch soon.” [emphasis added]
(5) A WhatsApp exchange on 6 February 2020:
“[06/02/2020, 6:17:46 PM] Michael: Yes I am sorry I had to wait until we did the new contract but that should be done in time for next week’s call. As I said I just needed a separation.”
(6) A WhatsApp exchange on 20 February 2020:
“[20/02/2020, 2:49:55 PM] Michael: I have been working on the agreement and I need to do some revisions to make it separate from the previous agreements. I need some help from my lawyers and I should have it by next week
[20/02/2020, 2:52:18 PM] Michael: My lawyers say I have to keep separate until we have the new agreement as Chuck will be sharing with Calvin that we are discussing UAE 2 as simply a continuation of the previous work. That is my problem but can we do a separate call as I don’t want to be on with him until next week when I think all will be settled.
[20/02/2020, 3:11:14 PM] Hawn Michael T: We can certainly do a separate call. Chuck should not be discussing anything with Cal but I do understand your concern.”
74. Mr. Hawn explained his last comment in evidence:
“I am not actually sure how to read that, other than Chuck is a Navistar Defense employee and certainly privy to our discussion to move -- not move forward with Mr. Jungquist. He is also a close friend of Jungquist and I actually had to counsel Williamson not to discuss any of this with Jungquist, because it was no longer Jungquist's business…. We did not have a relationship with Jungquist at that time. So if Chuck was sharing that an MRAP vehicle has six lug nuts in, that is still a foul. There is no reason for Chuck to be having any conversation with Jungquist conviction at this point, because we don't have a relationship with Jungquist.”
75. USG ended suspension of military sales to the UAE 3 February 2020.
76. Mr. Jungquist also relies on an email from Ambassador Corbin to Mr. Hawn dated 11 March 2020 in support of his conspiracy claims:
“As promised here are my changes with assistance from my lawyers for the new agreement. Hopefully you can see tracked changes on the version you sent. I think most of the changes are straightforward….
I think all the other changes are simply designed to distance me from previous contracts.”
77. Ambassador Corbin says he was anxious not to exacerbate the situation with Mr. Jungquist notwithstanding he believes that Mr. Jungquist would not be justified in commencing legal proceedings.
78. On 31 March 2020 Navistar and CCC entered into a further Consulting Services Agreement (the “2020 Navistar Agreement” / “Consulting Services Agreement IV”):
(1) Clause 2 –
“’the Term” was from 1 January 2020 through 31 December 2020 and “the Term of the Agreement’ may be extended for additional terms of twelve (12) months (each an "Extended Term") provided that both Parties agree in writing to such extension no later than 30 days prior to the expiration of the Term or any Extended Term.”
(2) Clause 3 –
“NDLLC will pay CONSULTANT Twenty Five Thousand Dollars ($25,000) per month on a monthly basis during the Term and Exte1nded Term of the Agreement. NDLLC will pay the Additional Compensation, the Success Fee and Bonus as described in Exhibit 1 and subject to the additional terms provided in Exhibit 1.”
(3) Clause 19B – the agreement was terminable without cause on 30 days’ notice;
(4) Clause 24 –
“This Agreement is and shall be deemed to be the complete and final expression of the agreement between the Parties as to its subject matter. This Agreement is a new Agreement effective from 1 January 2020 and it shall supersede and completely replace all previous agreements or understandings between the Parties (including all extensions and/or amendments to such previous agreements or understandings between the Parties) whether written or oral, 27 of 42 pertaining to its subject matter or otherwise, including but not limited to the following terminated agreements: (i) the CONSULTING SERVICES AGREEMENT between the Parties effective 18 May 2016 and any extensions or amendments thereto, (ii) the CONSULTING SERVICES AGREEMENT II between the Parties effective 18 July 2016 and any extensions or amendments thereto, and (iii) and the CONSUL TING SERVICES AGREEMENT between the Parties effective February 1, 2017 and any extensions or amendments thereto, (together the 'Terminated Agreements"). Any amendment to or modification of this Agreement must be in writing and must be signed by both Parties.”
(5) Exhibit I – Services
“1. The Services to be performed by Corbin Crossroads Consulting, FZE ("CONSULTANT") under the foregoing Consulting Services Agreement include the following:
a. Encourage Emirati signature of US Department of State Letter that clarifies the Terms and Conditions of Letter of Offer and Acceptance (LOA).
b. Encourage Emirati signature of Letter of Offer and Acceptance for Follow-On MaxxPro MRAP Reset FMS case (UAE II) in as short of time as possible.
c. Encourage Emirati request to the United States Government (USG) for expedited contracting process between the USG and Navistar Defense for the Follow-on MaxxPro MRAP Reset Program. (UAE II).
d. Make all efforts within the scope of this agreement that will help facilitate Navistar Defense signing a contract with the US Government for UAE II by 31 October 2020.
e. Develop and cultivate, in accordance with all applicable laws and regulations, relationships with UAE Armed Forces and UAE Government decision makers. Meet regularly with UAE decision makers to discuss ongoing ND programs and obtain information on upcoming UAE requirements that may be met by ND products. At appropriate times, coordinate meetings for senior ND officials with UAE decision makers
f. Develop and cultivate relationships, in accordance with all applicable laws and regulations with key members of the US Embassy Country Team to include (but not limited to) the US Ambassador, Senior Defense Official/Defense Attache, Office of Defense Partnership, and Commercial Section. Meet regularly to discuss ongoing ND programs and obtain any relevant information that could influence ND business. As necessary, coordinate meetings for senior ND officials with the US Ambassador and US Country Team.
g. Assist ND in contract negotiations for current and future programs
h. Facilitate timely signature of future contracts by appropriate Emirati officials - to include DCS7 Contracts and FMS Letters of Offer and Acceptance.
i Expand and build awareness of the ND name, brand, image and products in the UAE.
j. Identify and report to ND regarding all Opportunities for Product sales to UAE. Report all relevant tactical wheeled vehicle information pertaining to the UAE Armed Forces to ND.
k. Obtain RFl's, RFP's, and other relevant, publicly available information regarding Customer Opportunities and/or Contracts and communicate to ND
l. Advise ND on all relevant political, economic and other developments that could impact military vehicle program issues.
m. Work closely with NDLLC in-country Offset Manager to advise engagements with the UAE offset body "Tawazun" or "Tawazun Economic Council" on all issues related to the offset requirement for the EDA MRAP program.
n. Concurrently CONSULTANT will assist NDLLC with execution of offset program or programs and projects (and any associated concept papers or business plans) that are approved by Tawazun. This process will involve advising on UAE priorities, potential partners, feasibility and cost challenges and other issues.
o. Assist with any visits by NDLLC representatives to the UAE during the Term and any Extended Term of the Agreement. CONSULTANT will assist with scheduling, strategy, and planning for visits by NDLLC personnel to UAE.
p. Assist NDLLC Field Service Representatives with engagement in the UAE.
q. Assist NDLLC to position itself to provide spare parts to the UAE.
r. CONSULTANT will work to ensure strong relationships with the UAE and constantly interface with all concerned parties in the UAE, with AMS and Bin Hilal Enterprises.
s. Such other reasonable services as are related to the foregoing as mutually agreed between the Parties.
2. KEY PERSON
The Key Person identified for this statement of work is:
Michael H. Corbin, Amb. (Retired)
3. ADDITIONAL COMPENSATION
Success Fee. Navistar shall provide services (where such services will be separate to the scope of services currently provided under the current EDA MaxxPro RESET FMS Case (Case ID: AE-B-ZVA)) to the USG pursuant to the UAE Ill contract to be entered into between Navistar and the USG (the "Contract"). From the first receipt of USG funds under the Contract, NDLLC shall pay the CONSULTANT a fee of 0.275% of the total sales revenue payable to Navistar by the USG pursuant to the Contract (the "Success Fee"). The Success Fee shall be paid by NDLLC to the CONSULTANT on a monthly basis for the duration of the total period of performance of the Contract (the "Period of Performance"). NDLLC will pay each monthly payment on a NET 30 basis. If this Agreement is terminated for any reason other than for cause, the Success Fee payable to the CONSULTANT by NDLLC shall continue to be payable, to the CONSULTANT for the entire Period of Performance of the Contract and any renewal or extension thereof.
a. Incentive Compensation: NDLLC places a high importance in signing the Contract on or before 31 October 2020. NDLLC shall pay the CONSULTANT a bonus of $100,000 (Bonus) for 29 of 42 efforts taken to support this timing for Contract signature which shall be paid in full 1to the CONSULTANT on the Contract execution date, provided such execU1tion date is on or before 31 October 2020.”
79. Mr. Hawn sent a copy of the agreement to Mr. Thomas on 31 March 2020 stating:
“Kevin – attached is the new Corbin agreement. This has taken way longer than it should have. He wanted some separation of time between the previous agreement (with Cal) that ended 31 Dec and this one. Not sure why…its effective 1 Jan 2020.”
80. He saw the scope of work as different from the 2017 Agreement. He stated in evidence:
“The shift of responsibilities that Corbin shouldered between 2017 and 2020 were vastly, vastly different. I can characterise it as, okay, first of all, we have a private equity company that invested in Navistar Defense and is seeing its investment go down the tank and is not very happy about that. We see a Yemen war coming to a close and so the requirements for the vehicles were not as strong in the forefront of Emirati decision-makers as maybe they were for UAE I. The US Government has told us that even though this programme was approved by US Congress previously, they wanted to go back to Congress in order for it to be approved for sale. We had two senators, specifically Senator Menendez from the State of New Jersey that was absolutely against transferring any more armoured vehicles to the United Arab Emirates. So the political landscape, the business landscape, everything had changed more to a level of difficulty that could only be accomplished by someone as senior as Ambassador Corbin.”
81. On 6 June 2020, the US Congress approved the supply of 671 vehicles out of 977 contemplated under UAE2.
82. Apparently the LOA in relation to UAE2 was delivered to the UAEG on 11 or 12 October 2020 with an expiry date of 18 December 2020. In early December the UAEG requested additional Joint Visual Inspection (“JVI”) due to the time lapse. The LOA expired and the JVI took place in May/June 2021.
83. The 2020 Navistar Agreement was extended for a further 12 months on 18 June 2021 and again on 12 January 2022.
84. Counsel for Mr. Jungquist challenged Ambassador Corbin’s statement “I don’t want to do the Offset” in the WhatsApp exchange at the end of 2019 and suggested that in fact Ambassador Corbin did work on the UAE2 offset programme. Ambassador Corbin differentiated between “executing” the programme (i.e. using his political skills to allow the programme to take place) and “implementing” the programme (i.e. delivering the programme) which was Mr. Jungquist’s and subsequently Mr. Williamson’s role. He contrasted the two:
“Mr. Jungquist did not have the high-level contacts, he did not live in the UAE, he did not understand the politics of the UAE. Whatever he was doing with Mr. Williamson was providing generic advice and helping Mr. Williamson to do his work in whatever way. I was not privy to that. What I am talking about is what I know, which is that Mr. Jungquist did not have the same skills that I had to help execute an offset programme…. I-- there was a completely new situation. Cerberus didn't want to do offset. They didn't want to -- They had bought this company, Navistar, actually acquired a controlling stake, and they are a private equity company that didn't want to be involved in the offset matter at all, so there were many ways -- new ways that the offset issue could be addressed. But my role being living and working in the UAE as the former US ambassador gave me certain skills that I could apply to the new situation that applied in 2020.”
85. In July 2022 the USG and the UAEG enter into a Letter of Offer and Acceptance for the US to provide 106 MRAP vehicles to the UAE.
86. Navistar did not renew the extended 2020 Navistar Agreement and on 31 December 2022 it expired as Mr. Gray took the view that after the signing of the LOA in July 2022, the stages of the project where Ambassador Corbin could truly add value through his network and experience had passed, and he was not going to add additional value to the project going forward.
87. Mr. Gray confirms that no contract has yet been entered into between the USG and Navistar arising out of the LOA and no success fee is payable to CCC although it has received its monthly retainer of USD 25,000.
Analysis
88. The parties have helpfully agreed a list of disputed issues, the first 10 of which are as follows:
(i) The Navistar Agreement
(1) Did the 2017 Navistar Agreement expire on 31 December 2019 or is the 2020 Navistar Agreement an extension, amendment, or variation of the 2017 Navistar Agreement?
(2) Did Mr. Jungquist perform the majority of CCC’s obligations under the Navistar Agreement? Was his personal contribution to the provision of those services greater than Ambassador Corbin (ret.)’s contribution? If so, is that relevant?
(3) Did Navistar treat Mr. Jungquist as an employee of CCC for the purposes of submitting paperwork to the US Government? If so, is that relevant?
(4) What, if any, fees has CCC become entitled to, or will it become entitled to, under the 2020 Navistar Agreement?
(ii) The 2017 Consultancy Agreement
(5) Did the Consultancy Agreement expire on 31 December 2019 or was it extended so as to apply mutatis mutandis to the 2020 Navistar Agreement?
(6) Alternatively, did CCC validly terminate the Consultancy Agreement on 12 November 2020?
(7) Is there an implied right to terminate the Consultancy Agreement on reasonable notice?
(8) Was the purported termination in breach of Clause 9 of the Consultancy Agreement?
(9) Is Mr. Jungquist entitled to any fees earned or to be earned by CCC under the 2020 Navistar Agreement? If so, what compensation is Mr. Jungquist entitled to from CCC under the Consultancy Agreement?
(10) Was Navistar aware of the existence of the Consultancy Agreement?
89. I can dispose of Issues (2) and (3) immediately. I do not consider either relevant. Whether or not Navistar treated Mr. Jungquist as an employee of CCC for the purposes of submitting paperwork to the USG or whether Mr. Jungquist performed the majority of CCC’s obligations under the Navistar Agreement or whether his contribution was greater than Ambassador Corbin’s contribution do not assist in determining the meaning and effect of the 2017 Navistar Agreement.
90. The crucial issue is Issue (1) and is to be read with Issue (2): was the 2020 Navistar agreement an extension, amendment, or variation of the 2017 Navistar Agreement within the meaning of the Consultancy Agreement. If so, did the terms of the Consultancy Agreement apply mutatis mutandis to the 2020 Navistar Agreement? If so, was CCC in breach of the Consultancy Agreement in failing to account for 50% of any fees received and in anticipatory breach in disputing liability to account for any fees yet to be received?
91. Consideration of the issue involves the interpretation of the Consultancy Agreement which is governed by English law and the 2017 and 2020 Navistar Agreements which are governed by Illinois Law.
92. The general principles governing the interpretation of contracts under English law are settled and not in dispute between the parties. They are summarised in the Claimant’s Skeleton Argument - the meaning that the agreement conveys to a reasonable person, disregarding the subjective intentions of the parties, should be assessed in the light of:
(1) the natural and ordinary meaning of the language used in the clause;
(2) any other relevant provisions of the agreement;
(3) the overall purpose of the clause and the contract;
(4) the facts and circumstances known or assumed by the parties at the time that the document was executed (i.e., the factual matrix); and
(5) commercial common sense (that is to say that where the natural and ordinary meaning of the language used would produce an outcome that lacks commercial sense, an interpretation that yields to commercial common sense should instead be adopted).
(See: Re Sigma Finance Corp [2010] 1 All ER 571; Rainy Sky SA v Kookmin Bank [2011] UKSC 50: Arnold v Britton [2015] UKSC 36; Wood v Capita Insurance Services Ltd [2017] UKSC 24)
93. To assist me in determining whether the 2020 Navistar Agreement was a variation of the 2017 Agreement the Claimant also draws my attention to Aurium Real Estate London Ultra Prime Limited v Mishcon De Reya LLP [2022] EWHC 1253 (Ch) [48] which refers to Chitty on Contracts at 25-036:
“The effect of a subsequent agreement – whether it constitutes a variation or a rescission – will depend in large part upon the extent to which it alters the terms of the original contract… If the changes do not go “to the very root of the contract” it is more likely to be a variation. However, at the end of the day, the question whether there has been a rescission or a variation depends upon the intention of the parties as evidenced by the terms of the subsequent agreement and its surrounding circumstances. Thus, if it was their intention to replace the initial contract, the subsequent agreement may amount to a rescission even in the case where the subsequent agreement is not fundamentally inconsistent with the initial agreement.”
and held (following British and Beningtons Ltd v N.W. Cachar Tea Co Ltd [1923] AC 4) that whether or not a contract is varied, as opposed to rescinded, is to be determined by refence to the intention of the parties, as evidenced by the subsequent agreement and its surrounding circumstances and it is appropriate to ask whether the suggested variation goes “to the very root of the contract”.
94. That is the test under English law but here I am asked to consider two Illinois contracts and whether the second is an extension, amendment, or variation of the first albeit within the meaning of a provision in an English law contract. The Third Defendant submits that Illinois law takes a stricter approach to contractual interpretation than DIFC law.
95. As a matter of DIFC law I cannot ignore the express choice of law by the parties to the Navistar Agreements8 . The practice in the DIFC is that issues of foreign law are to be addressed as points of law by way of submission rather than proved by expert evidence as a question of fact9 . The Third Defendant has cited Illinois authority in support of its submission relating to the principles of contractual interpretation adopted in the State. Those submissions have not been challenged and consequently I adopt them as an uncontroversial statement of Illinois law.
96. The controlling authority10 is the Illinois Supreme Court’s decision in Air Safety Inc v Teachers Reality Corporation, where the Court held:11
Traditional contract interpretation principles in Illinois require that:
‘[a]n agreement, when reduced to writing, must be presumed to speak the intention of the parties who signed it. It speaks for itself, and the intention with which it was executed must be determined from the language used. It is not to be changed by extrinsic evidence.” Western Illinois Oil Co. v. Thompson, 26 Ill.2d 287, 291, 186 N.E.2d 285 (1962).’
This approach is sometimes referred to as the “four corners” rule. See, e.g., URS Corp. v. Ash, 101 Ill.App.3d 229, 234, 56 Ill.Dec. 749, 427 N.E.2d 1295 (1981).
In applying this rule, a court initially looks to the language of a contract alone. See
Rakowski v. Lucente, 104 Ill. 2d 317, 323, 84 Ill. Dec. 654, 472 N.E.2d 791 (1984) (stating that both the meaning of a written agreement and the intent of the parties is to be gathered from the face of the document without assistance from extrinsic evidence). If the language of the contract is facially unambiguous, then the contract is interpreted by the trial court as a matter of law without the use of parol evidence.”
97. The Third Defendant submits that as the Illinois Supreme Court explained, if a contract is “facially unambiguous” it must be construed simply on its language. Extrinsic evidence is not admissible when construing the contract. If the language is ambiguous on its face, extrinsic evidence can be admitted. In some circumstances, extrinsic evidence can be relied on to show an ambiguity that may not be facially apparent, but not if there is an “integration clause” (the US term for what is called an “entire agreement clause” under English and DIFC law)12. There is an integration clause in both the 2017 and 2020 Navistar Agreements.
98. These submissions are made in support of the proposition that the 2020 Navistar Agreement does not express itself to be an extension, amendment, or variation of the 2017 Agreement and so would not be regarded as such under Illinois law. That may well be case, but I have to determine whether that is dispositive of the question whether it is also so to be regarded under the Consultancy Agreement as a matter of English law.
99. In this connection the First and Second Defendants argue that where a document contains a legal term of art the court should give it its technical meaning in law, unless there is something in the context to displace the presumption that it was intended to carry its technical meaning. That proposition is derived from Lewison, The Interpretation of Contracts 7th ed., Ch. 5, Section 8, heading and §5.62, and was approved in ICICI Bank UK plc v Assam Oil Co Ltd [2019] EWHC 750 (Comm) at [41]. They submit there are three good reasons for this, as explained by Lord Simon in Falkiner v Commissioner of Stamp Duties (NSW) [1973] AC 565 at 577F-H:
“In the first place the existence of the rule will enable legal advisers to predict how a court will construe the words in various circumstances within the contemplation of the client and advisers; and, if the prima facie legal meaning does not represent the clients’ intention, to make that intention plain. Secondly, the rule leads to economy: the meaning need not be spelled out at length, but words can rather be used in the knowledge that they will prima facie carry the meaning put on them by the law. Thirdly, if as often happens, the actual forensic situation was probably not foreseen by settlor or testator, the court is relieved from a purely impressionistic interpretation, which might well vary from judge to judge; and the unsuccessful litigant will at least have the consolation of knowing that his case has been adjudged by an objective standard, which has been applied in the past to others in a similar situation to his, and which will be so applicable to others in the future.”
100. It has not been suggested that “extension, amendment, or variation” have any special meaning under Illinois law but the Claimant argues against an overly technical approach to interpretation of the words and that the Court should not be distracted by the labels CCC and Navistar have placed on the 2020 Navistar Agreement. He too relies on a passage in Lewison at §9.56:
“The nature of the relationship between the parties is to be determined by the substance of the obligations into which they have entered; and if their contract is described by a label inconsistent with that substance, or if the parties incorrectly state what they believe to be the effect in law of their contract, the label or the statement will be rejected.”
He refers to the statements of Jenkins LJ in Addiscombe Garden Estates Ltd v Crabbe [1958] 1 Q.B. 513, 528 to the effect that relationships are determined by the law, and not by the labels which the parties choose to put on them and of Smith LJ in Protectacoat Firthglow Ltd v Szilagyi [2009] I.C.R. 835, 848F that the Court must look at the substance not the label.
101. The point of course cuts both ways. The Claimant refers to his question of Mr. Hawn “You knew, didn’t you, Mr. Hawn, that the 2020 Navistar agreement was a de facto renewal of the 2017 agreement, didn’t you?” and his answer “Yes. Except that it excluded a non-performing teammate”. Whether or not the 2020 Agreement was “a de facto renewal” (whatever that is taken to mean, even assuming it is a synonym for “extension, amendment, or variation”) is a question of law, to be determined in accordance with accepted principles of objective contractual interpretation, not the label affixed to it by one of the parties. Equally the Claimant has made extensive reference in the list of transcript references that accompanied his oral closing submissions to his subjective understanding of the Consultancy Agreement (all of which I have reviewed), but it is common ground that the subjective intentions of parties are to be disregarded.
102. It seems to have been the common intention of Mr. Jungquist and Ambassador Corbin that the 2017 Navistar Agreement and the Consultancy Agreement were to “back-toback”. This was put by Mr. Jungquist’s counsel to Ambassador Corbin and he agreed13. In any event, objectively that is obvious – the Consultancy Agreement was made by reference to and annexed a copy of the 2017 Navistar Agreement. The Consultancy Agreement was professionally drafted by the well-known law firm, Curtis, MalletPrevost, Colt & Mosle LLP14. In Wood v Capita at 1180B, Lord Hodge JSC said, “Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals.” I consider that the Consultancy Agreement is such a contract.
103. Given the back-to-back nature of the two agreements and the care I would expect from a professional draughtsperson, I would expect the wording of what I might call the subordinate contract to reflect the wording of the dominant contract. In the present case the subordinate contract is the Consultancy Agreement – it is the later in time, it was intended to regulate how CCC and Mr. Jungquist would perform the services under the 2017 Navistar Agreement, the parties expressly incorporated the terms of the 2017 Navistar Agreement in the Consultancy Agreement and provided that a material breach of the 2017 Navistar Agreement would constitute a material breach of the Consultancy Agreement.
104. The crucial clause is 1(b) – “Should the Navistar Agreement be extended or amended, then this Agreement shall also apply mutatis mutandis to any such extension, variation or amendment of the Navistar Agreement.” In my judgment “extension, variation or amendment” must be interpreted by reference to the 2017 Navistar Agreement.
105. The relevant provisions of the 2017 Navistar Agreement are Clause 2 which allows for extensions of the Term of the Agreement for additional terms of 2 months agreed in writing by the parties and Clause 24 which provides that any amendment to or modification of the Agreement must be in writing and must be signed by both parties. I do not think anything turns on any differences between amendment, variation, or modification as each word simply denotes a change to the terms of the agreement.
106. It follows that an “extension, variation or amendment” within the meaning of the Consultancy Agreement must refer to a further written document signed by the parties altering the duration or other terms of the 2017 Navistar Agreement. I am reinforced in this interpretation by three matters. First, it is consistent with the principle that a legal term should give it its technical meaning in law, unless there is something in the context to displace the presumption that it was intended to carry its technical meaning. Secondly, it is consistent with the unchallenged position under Illinois law that a contract shall be interpreted literally in accordance with its unambiguous terms. Clauses 2 and 24 are clear and unambiguous and the Consultancy Agreement refers to and incorporates those terms. Thirdly, while subsequent conduct is not normally admissible as an aid to interpretation of a written contract, what CCC and Navistar did under the 2017 Navistar Agreement is relevant to how that agreement worked and the common intention of the parties to that contract rather than interpretation of the Consultancy Agreement. The 2017 Navistar Agreement was expressly extended by an agreement in writing.
107. In the alternative, the Claimant contends that in substance the 2020 Navistar Agreement is an extension of the 2017 Agreement. In his witness statement Mr. Jungquist suggests:
(1) Items n.-s. in Exhibit 1 of the 2020 Navistar Agreement are the same as and correspond to items b), d), j), k), m), and n) in 2017 Navistar Agreement respectively;
(2) Items a.-d. in Exhibit 1 of 2020 Navistar Agreement were added by Mr. Hawn on 17 January 2020 to make the 2020 Navistar Agreement look different from the 2017 Navistar Agreement. These items were hastily added long after the purported expiry of the 2017 Navistar Agreement – and were already all covered by item h;
(3) The other items in Exhibit 1 of the 2020 Navistar Agreement were ongoing requirements and already part and parcel of what Ambassador Corbin and he were doing for Navistar under the 2017 Navistar Agreement (which all fell within the scope of item n in the 2017 Navistar Agreement).
108. It is important in my view to consider the 2017 and 2020 Navistar Agreements against the background of the contemporaneous facts. When the 2017 Agreement was signed the LOA for UAE1 had been executed 6 months earlier and Navistar had just been awarded the sub-contract to refurbish the MRAPS. Navistar had to set up an offset programme and find a suitable partner. Under Exhibit 1:
(1) items (a), (b), (e), (h) and (i) relate to the offset obligations;
(2) Items (c), (l) and (m) relate generally to relations with the USG. Items (g) and (m) relate generally to relations with the UAEG;
(3) Item (d) relates generally to visits by Navistar personnel to the UAE;
(4) Items (f), (j) and (k) relate generally assisting Navistar to secure support contracts for existing vehicles and those yet to be delivered.
109. Deliveries under UAE1 started in August 2017 and discussions surrounding UAE2 started around April 2018. Mr. Williamson was hired in October/November 2018. In January 2019 the 2017 Navistar Agreement was extended for 12 months. In March 2019 UAE2 was put on hold. Deliveries under UAE1 were completed during the Summer of 2019 and the TEPA involving BHE was signed on 18 July 2019. In December 2019 there was a prospect that UAE2 might proceed. In January 2020 Mr. Hawn spoke of the challenge in signing a contract with USG given that UAEG had not signed the clarification of the LOA, the LOA had not been issued, the sale would require Congressional approval and Navistar would have to negotiate its contract with USG.
110. Against this background the Navistar 2020 Agreement was signed. Under Exhibit 1 to that agreement:
(1) Items (a), (b), (c) and (d) relate to UAE2 and (g), (m) and (n) to the associated offset programme including working with Mr. Williamson;
(2) Items (e) and (h) relate generally to relations with the UAEG, item (f) relates generally to relations with the US Embassy;
(3) Items (i), (j), (k), (l), (o) and (r) relate generally to business development; and
(4) Items (p) and (q) relate generally assisting Navistar to secure support contracts.
111. I do not agree with Mr. Jungquist’s analysis. It is correct that the scope of the activities in general is similar. It is bound to be - the only object of any activity of Navistar in the UAE is to sell military vehicles, spare parts and training. If that level of generality were enough similarity to constitute one agreement the extension of the other there would be no need for more than one agreement with a work scope that the Consultants are to assist Navistar in its business in the UAE. That was clearly not the mutual intention – the parties were more specific in defining the work scope under each successive agreement as matters developed. I find that the duties outlined at paragraphs 108(1) and 110(1) above are specific and relate respectively to UAE1 and UAE2. There is a certain overlap between the more general duties but not only is that to be expected, the detailed execution of those duties will depend on what is happening at the material time. By way of illustration, I accept that the situation in 2020 called for Ambassador 39 of 42 Corbin’s diplomatic skills, in facilitating the unblocking of UAE2, to a greater extent than he had been called upon in 2017/2018 to utilise (as he conceded in answer to a question from me) those same skills.
112. Thus, even if I am wrong in applying a too technical approach to the question of whether the 2020 Agreement was an extension of the 2017 Agreement, I am of the view that the substance of the agreements when considered against the timeline shows that they were different agreements, not one varied agreement. Put another way, I find that the changes in the 2020 Agreement go to the root of the contract and render it a different creature from the 2017 Agreement.
113. What follows from the foregoing is that the terms of the Consultancy Agreement did not apply mutatis mutandis to the 2020 Navistar Agreement. Accordingly, CCC was not in breach of the Consultancy Agreement in failing to account for 50% of any fees received nor is in anticipatory breach in disputing liability to account for any fees yet to be received.
114. That finding also disposes of the claim in respect of unlawful means conspiracy. If CCC was not in breach of the Consultancy Agreement there were no unlawful means.
115. That does leave the claim for lawful means conspiracy. Lawful means conspiracy is a tort unknown to DIFC law, DIFC law recognises only unlawful means conspiracy at Article 36 of the Law of Obligations. The parties are however agreed that I should approach the Claimant’s tortious claims in accordance with English law. It is common ground that in order to establish a lawful means conspiracy a claimant must prove loss or damage due to a combination or agreement with a predominant intention to injure the claimant ( Kuwait Oil Tanker Co SAK v Badr [2000] 2 All ER (Comm) 217, 311j). “Predominant intention” was explained by Viscount Simon LC in Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435, 445:
“Next, it is to be borne in mind that there may be cases where the combination has more than one "object" or "purpose." The combiners may feel that they are killing two birds with one stone, and, even though their main purpose may be to protect their own legitimate interests notwithstanding that this involves damage to the plaintiffs, they may also find a further inducement to do what they are doing by feeling that it serves the plaintiffs right. The analysis of human impulses soon leads us into the quagmire of mixed motives, and even if we avoid the word "motive," there may be more than a single "purpose" or "object." It is enough to say that if there is more than one purpose actuating a combination, liability must depend on ascertaining the predominant purpose. If that predominant purpose is to damage another person and damage results, that is tortious conspiracy. If the predominant purpose is the lawful protection or promotion of any 40 of 42 lawful interest of the combiners (no illegal means being employed), it is not a tortious conspiracy, even though it causes damage to another person.”
116. Whether they were right or wrong, I accept that both Ambassador Corbin and Mr. Hawn genuinely considered that Mr. Jungquist ceased to have a significant role to play in relation to UAE2. I have no doubt that it was welcome news to Ambassador Corbin that Navistar was willing to pay similar fees under the 2020 Agreement to those under the 2017 Agreement, but in my judgment the evidence does not support the conclusion that it was his predominant intention was to cut Mr. Jungquist out so that he could keep all the fees for himself. He stated in both his written and oral evidence that he expected his fees to be reduced and even offered to take a reduced fee. He was roundly challenged in cross-examination on the point. He said he raised it with Mr. Hawn. Mr. Hawn was not asked about the point.
117. It seems to me that Ambassador Corbin’s predominant intention was to keep working for Navistar if they would have him but without Mr. Jungquist, as he had told Mr. Jungquist in the WhatsApp exchange at the end 2019. If Navistar were willing to contract with him alone and continue paying fees of the same magnitude as before that was his good fortune. Ambassador Corbin was not prohibited from working with Navistar without Mr. Jungquist and Navistar was not bound to employ either or both of them as consultants. Indeed each of Navistar Agreements gave the consultants at most 30 days’ security as each was terminable for convenience on 30 days’ notice. When Mr. Gray felt that Ambassador Corbin was no longer of assistance Navistar did not renew the 2020 Agreement.
118. Ambassador Corbin was therefore pursuing his own legitimate interests. He may have felt that Mr. Jungquist was no longer pulling his weight but even that would not constitute a predominant purpose to damage Mr. Jungquist but rather, as Viscount Simon put it, he would be “killing two birds with one stone”. The allegation of a lawful means conspiracy accordingly fails.
Conclusion
119. The Claimant’s claims against each of the Defendants are dismissed. The parties are to file submissions on costs within 14 days of the receipt of this judgment.
APPENDIX
ADNOC | Abu Dhabi National Oil Company |
AMS | Automotive Management Services Co. |
BHE | Bin Hilal Enterprises |
CCC | Corbin CrossRoads Consulting FZE, First Defendant |
CEJ | Calvin E Jungquist, Claimant |
CFSR | Contractor Field Support Representative |
CN | Congressional Notification |
DCS | Defence Contractors |
EDA | Excess Defense Article |
EDT | Emirates Defense Technology |
FCPA | Foreign Corrupt Practices Act |
FMF | Foreign Military Funding |
FMS | Foreign Military Sale |
FSR | Field Service Representative |
JVI | Joint Vehicle Inspection |
KSA | Kingdom of Saudi Arabia |
LOA | Letter of Acceptance |
LOR | Letter of Request |
MGE | Middle East General Enterprises |
MRAP | Mine Resistant Ambush Protected vehicle |
MRO | Maintenance Repair Operations |
NDLLC | Navistar Defense LLC, Third Defendant |
OSAC | US Overseas Security Advisory Council |
TEPA | Tawazun Economic Program Agreement |
UAEG | United Arab Emirates Government |
USG | United States Government |