Exhibit 5.1
26 November 2003
Diageo Investment Corporation Your reference
6 Landmark Square
Stamford Our reference
Connecticut 06901-2704 SRBP/ORK
United States of America Direct line
020 7090 3452
Diageo Capital plc
Edinburgh Park
5 Lochside Way
Edinburgh EH12 9DT
United Kingdom
Diageo Finance B.V.
Molenwerf 10-12
1014 BG Amsterdam
The Netherlands
and
Diageo plc
8 Henrietta Place
London W1G 0NB
United Kingdom
Dear Sirs,
U.S.$7,000,000,000 SHELF FOR THE ISSUE OF GUARANTEED DEBT SECURITIES
("GUARANTEED DEBT SECURITIES") BY DIAGEO INVESTMENT CORPORATION,
DIAGEO CAPITAL PLC AND DIAGEO FINANCE B.V. (EACH AN "ISSUER" AND
TOGETHER THE "ISSUERS") GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM (IF ANY) AND INTEREST BY DIAGEO PLC (THE "GUARANTOR") AND
FOR THE ISSUE BY THE GUARANTOR OF DEBT SECURITIES ("DIAGEO DEBT SECURITIES"
AND, TOGETHER WITH GUARANTEED DEBT SECURITIES, "DEBT SECURITIES") AND OF
WARRANTS ("WARRANTS"), PURCHASE CONTRACTS ("PURCHASE CONTRACTS"),
UNITS ("UNITS"), PREFERENCE SHARES ("PREFERENCE SHARES") AND
ORDINARY SHARES (TOGETHER WITH PREFERENCE SHARES, "SHARES")
We have acted as English legal advisers to the Guarantor in connection
with the establishment of the above-mentioned shelf under which the Issuers may
from time to time issue Guaranteed Debt Securities on and subject to the terms
of the Diageo Capital Indenture (as defined below), the Diageo Investment
Indenture (as defined below) and the Diageo Finance Indenture (as defined below)
and under which the Guarantor may from time to time issue Diageo
Debt Securities on and subject to the terms of the Diageo Indenture (as defined
below), Warrants, Purchase Contracts, Units and Shares.
This opinion is delivered in connection with the registration
statement in respect of the Securities on Form F-3 of the Issuers and the
Guarantor to be filed with the United States Securities and Exchange Commission
(the "SEC") on or around 26 November, 2003 (the "Registration Statement"). We
have not been concerned with investigating or verifying the facts set out in the
Registration Statement.
For the purpose of this opinion, we have examined copies or drafts of
the following documents:
1. the indenture dated 3 August 1998 entered into between Diageo Capital
plc, the Guarantor and Citibank, N.A. (the "Diageo Capital Indenture")
including the form of guarantees to be given by the Guarantor (the
"Diageo Capital Guarantees");
2. the indenture dated 1 June 1999 entered into between Diageo Investment
Corporation, the Guarantor and Citibank, N.A. (the "Diageo Investment
Indenture") including the form of guarantees to be given by the
Guarantor (the "Diageo Investment Guarantees");
3. the indenture to be entered into between Diageo Finance B.V., the
Guarantor and Citibank N.A. (the "Diageo Finance Indenture") including
the form of guarantees to be given by the Guarantor (the "Diageo
Finance Guarantees" and together with the Diageo Capital Guarantees
and the Diageo Investment Guarantees, (the "Guarantees"));
4. the indenture to be entered into between the Guarantor and Citibank
N.A. (the "Diageo Indenture" and, together with the Diageo Capital
Indenture, the Diageo Investment Indenture and the Diageo Finance
Indenture, the "Indentures") including the form of Diageo Debt
Securities;
5. copy of an extract from the minutes of a meeting of the board of
directors of the Guarantor held on 30 October 2001 attached to the
Secretary's Certificate referred to in paragraph 8 below;
6. a copy of an extract from the minutes of the Finance Committee of the
Guarantor held on 31 October 2001 attached to the Secretary's
Certificate referred to in paragraph 8 below;
7. a copy of an extract from the minutes of a meeting of the Standing
Committee of the board of directors of the Guarantor held on 11
November 2003 attached to the Secretary's Certificate referred to in
paragraph 8 below;
8. the secretary's certificate dated 26 November 2003 in respect of the
Guarantor (the "Secretary's Certificate"); and
9. entries shown on CH Direct print outs obtained by us from the
Companies House database on 26 November 2003 of the file of the
Guarantor maintained at the Companies House (the "Company Searches").
This letter sets out our opinion on certain matters of the law of
England and Wales as at today's date. We have not made an investigation of, and
do not express any opinion on, any other law. This letter is to be construed in
accordance with the law of England and Wales.
For the purposes of this letter we have assumed:
(i) that the Diageo Indenture, the Guarantees and the Diageo Debt
Securities in substantially the form examined by us will have been
duly executed and delivered by the parties thereto;
(ii) the conformity to original documents of all copy or draft documents
examined by us and that the copy of the memorandum and articles of
association of the Guarantor examined by us (which is attached to the
Secretary's Certificate) is complete and accurate and conforms to the
original;
(iii) the Indentures, the Guarantees and the Diageo Debt Securities are
valid and binding on the parties under the laws of the State of New
York ("New York law") by which the Indentures, the Guarantees and the
Diageo Debt Securities are expressed to be governed;
(iv) that the Debt Securities will be duly issued, authenticated and
delivered in accordance with the provisions of the relevant Indenture;
(v) that each Issuer has the capacity, power and authority to effect the
execution, delivery or issue of the Guaranteed Debt Securities;
(vi) that no law of any jurisdiction outside England and Wales would render
such execution, delivery or issue illegal or ineffective and that,
insofar as any obligation under the Indentures, the Guarantees or the
Diageo Debt Securities is performed in, or is otherwise subject to,
any jurisdiction other than England and Wales, its performance will
not be illegal or ineffective by virtue of the law of that
jurisdiction;
(vii) that the aggregate initial offering price of all Debt Securities,
Warrants, Purchase Contracts, Units or Shares issued will not exceed
the amount to be registered as set forth in the Registration Statement
or in any additional registration statement filed pursuant to Rule
462(b) under the United States Securities Act of 1933 (as amended)
(the "Securities Act") and that each Debt Security will be in the form
set out in Article Two of the relevant Indenture and will be subject
to the terms and conditions of that Indenture;
(viii) that the terms and conditions applicable to the Debt Securities,
Warrants, Purchase Contracts, Units and Shares will not be
inconsistent with the Registration Statement;
(ix) that (1) the information disclosed by the Company Searches and by our
telephone search on 26 November 2003 at the Central Registry of
Winding-up Petitions in relation to the Guarantor was then complete,
up-to-date and accurate and has not since then been altered or added
to, (2) no petition for an administration order in respect of the
Guarantor has been presented in any court in England and Wales and (3)
the Company Searches and the telephone search did not fail to disclose
any information relevant for the purposes of this opinion. It should
be noted that the searches are not capable of revealing whether or not
a petition for winding-up or administration has been presented in a
County Court or District Registry or the High Court of Justice; notice
of a winding-up or administration order made or winding-up resolution
passed or receiver appointed may not be filed at Companies House
immediately. However, the Secretary's Certificate confirms that to the
Secretary's knowledge no such event had occurred as at 26 November
2003;
(x) that the minutes referred to in paragraphs 5, 6 and 7 above are a true
record of the proceedings described therein of duly convened,
constituted and conducted meetings of the Guarantor's board of
directors (and of the Finance and Standing Committees thereof) acting
in the interests and for a proper purpose of the Guarantor and that
the relevant meeting was duly held and that the authorisations given
thereat have not subsequently been amended, revoked or superseded and
that, in making any subsequent decision, the directors of the
Guarantor and any committee or person to whom they have delegated any
such decision will act in the interests and for a proper purpose of
the Guarantor;
(xi) that the Indentures, the Guarantees and the Diageo Debt Securities are
entered into by the Guarantor in good faith and in furtherance of its
objects under its memorandum and articles;
(xii) that the Indentures, the Guarantees and the Diageo Debt Securities are
in the best interests and to the advantage of the Guarantor;
(xiii) the accuracy and completeness of the statements made in the
Secretary's Certificate;
(xiv) that, for United Kingdom tax purposes, each of the Guarantor and
Diageo Capital plc is resident in the United Kingdom and that interest
and other amounts payable by Diageo Finance B.V. or Diageo Investment
Corporation on debt instruments issued by them do not have a UK
source;
(xv) that, for United Kingdom tax purposes, Diageo Investment Corporation
is resident in the United States of America, is not resident in the
United Kingdom and does not have a branch or agency in the United
Kingdom;
(xvi) that, for United Kingdom tax purposes, Diageo Finance B.V. is resident
in the Netherlands, is not resident in the United Kingdom and does not
have a branch or agency in the United Kingdom;
(xvii) that, in respect of each issue of Shares and of Warrants to purchase
Shares ("Equity Warrants"), the Guarantor will have sufficient
authorised but unissued share capital and the directors of the
Guarantor will have been granted the necessary authority to allot the
relevant Shares; and
(xviii) that the Indentures, the Guarantees and the Diageo Debt Securities
have the same meaning and effect as if they were governed by English
law.
Based on and subject to the foregoing and subject to the reservations
mentioned below and to any matters of fact not disclosed to us, we are of the
opinion that:
1. The Guarantor is a public limited company duly incorporated under the
laws of England and Wales and is a validly existing company.
2. The Indentures have been duly authorised by the Guarantor. The Diageo
Capital Indenture and the Diageo Investment Indenture have been, and
when executed and delivered the Diageo Finance Indenture and the
Diageo Indenture will be, duly executed and delivered by the
Guarantor.
3. On the assumption that the Diageo Capital Indenture and the Diageo
Investment Indenture do, and that the Diageo Finance Indenture, the
Diageo Indenture, the Guarantees and the Diageo Debt Securities will
(when executed and delivered), create valid and binding obligations of
the parties under New York law, English law will not prevent any
provisions of the Diageo Capital Indenture and the Diageo Investment
Indenture and, in the case of the Diageo Finance Indenture, the Diageo
Indenture, the Guarantees and the Diageo Debt Securities, when
executed and delivered, from being valid and binding obligations of
the Guarantor.
4. The statements in the Registration Statement in the eighth sentence of
the section headed "Enforceability of Certain Civil Liabilities", in
the last paragraph of the section headed "Description of Debt
Securities and Guarantees - Payment of Additional Amounts" and in the
sections headed "United Kingdom Taxation of Shares and ADSs" and
"United Kingdom Taxation of Debt Securities", insofar as they are
summaries of tax considerations or refer to statements of law or legal
conclusions, in all material respects present fairly the information
shown.
5. When the Shares are issued and delivered against full payment therefor
as contemplated in the Registration Statement and in conformity with
the Guarantor's memorandum and articles of association and so as not
to violate any applicable law, such Shares will have been validly
issued and fully paid up and no further contributions
in respect of such Shares will be required to be made to the Guarantor
by the holders thereof, by reason solely of their being such holders.
6. When (i) the equity warrant agreements relating to the Equity Warrants
have been duly authorised, executed and delivered, (ii) the terms of
the Equity Warrants and of their issuance and sale have been duly
established in conformity with the Guarantor's memorandum and articles
of association and so as not to violate any applicable law or breach
of any agreement binding on the Guarantor and (iii) the applicable
equity warrant agreements and the Equity Warrants have been duly
executed and delivered, the Equity Warrants will constitute valid and
binding obligations of the parties under English law.
7. When (i) the Purchase Contracts have been duly authorised, executed
and delivered and (ii) the terms of the Purchase Contracts and of
their issuance and sale have been duly established in conformity
with the Guarantor's memorandum and articles of association and so as
not to violate any applicable law or breach of any agreement binding
on the Guarantor, the Purchase Contracts will constitute valid and
binding obligations of the parties under English law.
Our reservations are as follows:
I. Undertakings, covenants and indemnities contained in the Indentures or
the Guarantees may not be enforceable before an English court insofar
as they purport to require payment or reimbursement of the costs of
any unsuccessful litigation brought before an English court.
II. Insofar as any obligation under the Indentures, the Guarantees or the
Diageo Debt Securities is to be performed in any jurisdiction other
than England and Wales, an English court may have to have regard to
the law of that jurisdiction in relation to the manner of performance
and the steps to be taken in the event of defective performance.
III. We express no opinion as to whether specific performance, injunctive
relief or any other form of equitable remedy would be available in
respect of any obligation of the Guarantor under or in respect of the
Indentures, the Guarantees or the Diageo Debt Securities.
IV. The obligations of the Guarantor under or in respect of the
Indentures, the Guarantees and the Diageo Debt Securities will be
subject to any law from time to time in force relating to liquidation
or administration or any other law or legal procedure affecting
generally the enforcement of creditors' rights.
V. In our opinion under English law there is doubt as to the
enforceability in the United Kingdom, in original actions or in
actions for enforcement of judgments of United States courts, of civil
liabilities predicated solely upon the United States Federal or State
securities laws.
This opinion is addressed to you in connection with the filing of the
Registration Statement.
We consent to the references to our name and opinion under the
captions "Enforceability of Certain Civil Liabilities", "Taxation - United
Kingdom Taxation" and "Validity of Securities" in the Registration Statement. In
giving this consent, we do not admit that we are within the category of
persons whose consent is required within section 7 of the Securities Act or the
rules and regulations of the SEC thereunder.
Yours faithfully,
Slaughter and May