Equity

Profit of bribery - jurisdiction of English court to order person bribing agent to account for profits made by corruption to principal - liability limited to benefits made on favourable contractual terms obtained by corruptionFyffes Group Ltd and others v Templeman and others: QBD (Toulson J): 22 May 2000.

The defendants secured service contracts with the claimants for transportation of the claimants' cargo, by paying commission to the claimants' employee.

On discovering the bribery, the claimants brought an action claiming damages and accounts of profits made out of the contracts on the grounds that, by securing contracts containing favourable terms for the defendants, the defendants had made unjustifiable profits at the expense of the claimants.

The defendants contended that the terms contained in the contracts were not objectionable by the standard expected of an honest and prudent negotiator, and therefore, the claimants had failed to establish any loss of chance to earn profits and in principle they could not be ordered to account for profits.Mark Howard QC and Antony White (instructed by Herbert Smith) for the claimants.

Alun Jones QC, John Lockey and Neil Hart (instructed by Dorman & Co) for the defendants.Held, awarding damages to the claimants, that a person who bribed an agent could be required to account to the principal for the profits he had made out of the contracts concluded by bribery; but that, where it appeared that the claimants would have entered into the contract even if the agent had not been dishonest, damages would be limited to the profit from contractual terms which had been more favourable to the defendants than would have been agreed by an honest and prudent negotiating agent of the claimants; and that, therefore, the claimants were not entitled to an account of ordinary profits which the defendants would have would have earned in any event from the provision of services to the claimants.