Proton and 1MRT come to amicable settlement on Lotus

KUALA LUMPUR: Six months after the UK High Court ruled that Group Lotus, a wholly owned subsidiary of Proton Holdings Bhd, is the only one with the right to use the name “Lotus”, Proton has issued a statement to say that the legal dispute has “ended amicably”.

In a filing with Bursa Malaysia, Proton said the parties had agreed to settlement terms earlier this month. It declined to reveal the terms, but said the “Lotus” brand has been reunited under the sole ownership of Group Lotus. This includes the rights to the “Lotus” and “Team Lotus” names in Formula 1 motor racing.

1Malaysia Racing Team (1MRT), which is owned by Tan Sri Tony Fernandes, will race in the 2012 Formula One season under the name “Caterham F1 team” and will use a “Caterham” chassis.

It added that the deal sees a working relationship established between both parties which will now work together on future projects in the automotive field.

According to an earlier filing, the dispute originated when Group Lotus issued a notice to terminate the licence it had issued to 1MRT in December 2009 to use the “Lotus Racing” name in the Formula One, following what it claimed were breaches of contract by the 1MRT group. The termination was supposed to have prevented 1MRT from using the “Lotus” name from then on, including in the 2011 racing season.

1MRT, however, declared it would go ahead and use the name in the 2011 Formula One season and initiated proceedings against Group Lotus in the UK courts. In October 2010, Group Lotus retaliated with its own lawsuit against 1MRT, Fernandes and companies associated with him, including Team Lotus Ventures Ltd, its parent company Tune Group Sdn Bhd, and 1Malaysia Racing Team (UK) Ltd.

An English judge ruled in May this year that Group Lotus is the only one allowed to use the name Lotus within Formula One, and to race in the historic black and gold livery. He further ruled that 1MRT was in breach of the licence agreement and awarded Group Lotus damages. The Team Lotus Ventures trademarks for the name Team Lotus were also revoked for “non-use”.

However, there was some ambiguity in the May ruling that concerned Proton at that time. The judge said Team Lotus had the right to continue to race in Formula One under the name Team Lotus, although the effect of the rest of the judgement was that only Group Lotus was allowed to use the name “Lotus” on its own.

Proton and Group Lotus were concerned that this aspect of the judgement would “cause confusion in the eyes of spectators and the wider public” and decided to appeal against it so that the right to use the Lotus brand in Formula One was clarified once and for all, Proton said in an earlier statement to Bursa Malaysia.

In a joint press statement released by Proton, Group Lotus, 1MRT and Fernandes yesterday to announce the “amicable settlement” Group Lotus CEO Dany Bahar said: “We understand that this has been a very difficult and confusing time for racing fans and the Lotus brand, so we are glad to have reached a clear resolution on this important matter and I would like to take this opportunity to thank our fans for their continued support. It means everything to us.”

Team Lotus Group CEO Riad Asmat said: We are proud of what we have achieved by bringing the Team Lotus name back to Formula 1 and although we are sad to say goodbye to Team Lotus we are excited about having our own future and being in control of our own destiny. Now we have no one to compare with. We make our own history and we will remain green and yellow.”