A signpost ruling has closed defence loophole for those offering bribes to curry favour in business, writes Roger Pearson.
A battle over bribery at the Port of Antwerp has set out new guidelines on how courts should treat employees who accept or tender illicit commissions.
The Commercial Court judgment of Mr Justice David Steel is said to be the first to deal with bribery since a Privy Council decision in the 1970s.
The case of Petrotrade Inc & ors v Clive Stafford Smith & ors is one of just a handful of such cases this century.
And Paul Fallon, fraud solicitor and partner at London-based Warner Cranston says it has "carved out new law".
The claim was against two companies involved in the provision of port agency services at Antwerp, Belgium.
It ended with the judge ordering the companies to pay up to £280,000 in respect of bribes paid to two oil company employees to secure business.
Mr Justice Steel ruled that Petrotrade was entitled to the payment as a result of money paid to its former operations manager and his assistant by SRN Shipping NV and Cisalpina NV (Alpina) to secure port agency services in respect of vessels chartered by Petrotrade.
He said that over a period of more than four years Petrotrade's former operations manager and his assistant had received £160,000 in "secret commissions" which he dubbed "bribes".
He conceded that it was both a legal and widespread practice for port agents to pay commission to a party responsible for their appointment. And he added that Petrotrade itself had commanded sub-stantial commission from chosen port agents.
However, the deal struck between Petrotrade's former operations manager and an Alpina manager cut out Petrotrade. It was for commission of 50 per cent of fees paid direct to the operations manager and his assistant.
Alpina had argued that the money could not be viewed as "bribes" as it had not resulted in a contract between Petrotrade and Alpina, but merely a contract between Alpina and various ship owners.
But the judge said: "Neither common sense nor authority supports the proposition that a payment must induce a contract between the principal of the recipient of the payment and the donor.
"The secret payment is just as corrupt in the absence of an agreement. In its ordinary meaning, the word bribe includes any reward given with a view to perverting the judgement or conduct of the recipient."
Fallon says: "The importance of the decision both as a matter of law and commercial practice is that the judge has stamped out probably the last remaining loophole for a party who tenders a bribe.
"In the light of this ruling it is no longer possible to side-step a claim by saying that no contract resulted from the arrangement.
"It recognises that the real mischief lies not in the narrow commercial outcome of the arrangement, but in the underlying corruption of the employee who receives the bribe.
"Because of the rarity of bribery-related case law, the decision is certain to become a leading authority in the field."