Bill Dixon, a partner in FSP’s Dispute Resolution team, looks at a recent High Court decision which considered whether a contract obtained through bribery was enforceable.
There has been a major international effort in recent years to combat corruption. This has led to successive pieces of legislation in the UK making it a criminal offence in many situations for individuals or businesses to be involved in corruption. In some circumstances, this may even apply to a UK business operating overseas.
The English courts sometimes refuse to enforce a contract on public policy grounds. For example, a court would not enforce a contract to carry out an illegal act. This would include a contract for payment of a bribe.
What if the contract itself is lawful but it was only obtained by the payment of a bribe? This was recently considered by Mr Justice Burton in National Iranian Oil Company v Crescent Petroleum. The case concerned a Middle East oil contract. The court concluded that there was no general public policy reason for the courts to refuse to enforce a contract which had been obtained by corrupt means, at least as a matter of general principle.
The judgment however only dealt with the contractual position. In practice anyone involved in a situation where a contract may have been obtained by corruption ought to take advice at the earliest possible opportunity given the wider criminal and regulatory issues which may be relevant.
This article is for information only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0118 951 6200.
