The end of Lotus F1? Proton terminates contract with the 1 Malaysia Racing Team

The return of the Lotus name to Formula 1 racing had many race fans applaud the return of a brand that was as closely related to the series than some of the biggest names around today. The 1 Malaysia Racing Team acquired the rights to use the name from Proton and last week team principal Tony Fernandes announced that his group had acquired to use the 'Team Lotus' brand after acquiring it from its supposed owner, David Hunt.

But the meteoric rise of the "best of the new teams" has come to a screeching halt after Proton announced that it is terminating its contract with Tony Fernandes and the 1 Malaysia Racing Team, and that the team is no longer allowed to use the Lotus name in anyway whatsoever including Lotus F1 and Team Lotus as the Malaysian car assembler rightfully owns the brands and all the rights to it. The termination of the contract takes effect in 2011.

This comes as a shame as the team that has been doing so well as a newcomer. Below is the official statement from Proton about the retraction of its contract with the 1 Malaysia Racing Team.

Kuala Lumpur, 27 September 2010 – There is and always has been only one Lotus, the Lotus started by Colin Chapman. From the beginning Lotus made road cars and raced racing cars. Until 1994, Group Lotus, the road car manufacturer and Team Lotus, which operated the Formula 1 team, were in common ownership with common directors. In 1994, Team Lotus failed and Lotus has not raced since. Since 1994, David Hunt has claimed to have acquired assets of Team Lotus, including its name, from the liquidator. He has never raced as Lotus. Mr. Hunt’s attempt to acquire the name Team Lotus was ineffective. Group Lotus is the owner of all rights in the "Lotus" automotive brand including those relating to Formula 1.

Last year, Tony Fernandes and 1 Malaysia Racing Team recognised this by taking a licence from Group Lotus to use the "Lotus" brand for the "Lotus Racing" team in the current Formula 1 season. With PROTON’s agreement, Group Lotus has now terminated its licence to 1 Malaysia Racing Team to use the "Lotus Racing" brand in the 2011 and future Formula 1 seasons as a result of the flagrant and persistent breaches of the licence by 1 Malaysia Racing Team, which were damaging to the "Lotus" brand.

Following that termination, neither 1 Malaysia Racing Team, nor any other company associated with Mr. Fernandes such as Tune Group Sdn Bhd or Team Lotus Ventures Limited, has the authority of Group Lotus to use any "Lotus" brand in the 2011 Formula 1 season. This includes the use of the brand "Team Lotus".

Group Lotus understands that Mr. Fernandes intends to rebrand the current "Lotus Racing" Formula 1 team to "Team Lotus" for the 2011 Formula 1 season. Mr. Fernandes indicates that Tune Group has acquired the rights to the name "Team Lotus" from a business formerly owned by David Hunt called Team Lotus Ventures Limited. Group Lotus believes these rights to have no proper legal foundation, a fact of which Mr. Fernandes was well aware when his company purchased them.

PROTON will support Group Lotus in taking all necessary steps to protect its rights in the "Lotus" name, including resisting any attempts by Mr. Fernandes or his companies, or any other unauthorised person, to use the "Lotus" name in the 2011 Formula 1 season.

Dato’ Sri Mohd. Nadzmi Mohd. Salleh, Chairman of PROTON Holdings Berhad and Group Lotus commented, "We believe the Lotus brand to be one of the most valuable brands in Formula 1 today. We are the owners of this brand, and will take all necessary steps to protect it. Tony Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission and will withdraw our sponsorship of the Lotus Racing team."

“To put it simply, Group Lotus is everything Lotus. The fact that 1 Malaysia Racing Team entered into an agreement with Group Lotus to use the brand means that both Mr. Fernandes and 1 Malaysia Racing Team recognises and acknowledges Group Lotus’ rights,” he added.