Abdel Hadi Abdallah Al Qahtani & Sons Beverage Industry Company v Antliff [2010] EWHC 1735 (Comm)

[2010] EWHC 1735 (Comm)Case No 2008 Folio 960
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 15 July 2010
Before
Jonathan Hirst Q.C.sitting as a Deputy Judge of the High Court
Between
Abdel Hadi Abdallah Al Qahtani & Sons Beverage Industry CompanyClaimants(a company established in theClaimantKingdom of Saudi Arabia)ClaimantAndrew AntliffDefendant
Jeffrey Chapman QC (instructed by Anderson Partnership) for ClaimantThomas Graham (instructed by Gillhams Solicitors LLP) for DefendantHearing Hearing dates: 21-25 and 28-29 June 2010
JUDGMENTMr Hirst QC :
[1]In this action, the Claimant (“AQS”), a Saudi company, seeks to recover bribes amounting to US$784,482.24 and £695,345.29 received by the Defendant (“Mr Antliff”) whilst he was employed as AQS’s Operation Manager. Mr Antliff admits that he received these sums as commissions from contractors whilst he was employed as AQS’s Operation Manager, but contends that the money was earned before he joined AQS. He contends that, in Saudi law, he acted entirely properly.

The facts

[2]The main facts are not in dispute. I will return to the few disputed factual issues later in this judgment.[3]Mr Antliff is a British Citizen but he has worked as a project manager in the Middle East for many years. He is currently living in Dubai. In 2005, Mr Antliff was working as production manager for Southern Can Manufacturing Limited (“SCMC”) in Saudi Arabia. On 1 March 2005, whilst in that employment, he entered into a contract (“the First Antliff Agreement”) with Intercan Group Limited (“Intercan”), a company registered in England and Wales with an office in Milton Keynes. Its managing director was Peter Strode. The First Antliff Agreement, signed by Strode and Mr Antliff, was in the following terms: Contract – Middle East Business Consultancy 1st January 2005 This Contract is between Intercan Group Limited (a UK registered company) and Andrew Antliff (a British ex-patriot [sic] citizen living in Saudi Arabia). Covering agreed business that Mr Antliff will assist in procuring for Intercan Group Limited. This is relating to the Middle East can manufacturing industry. Contract term: Variable, initially, Two years from 1st January 2005 to 31st December 2006. Remuneration: Will be agreed on a contract to contract basis by negotiation. Payments: Will be made against specific invoices issued by Mr Antliff. Exclusivity: During the period of the agreement Mr Antliff agrees not to work in a technical capacity for any installation company other than Intercan Group Limited. ... 1st March 2005[4]AQS has been established in Saudi Arabia for nearly 30 years. It is based in Khamis Mushayt in the Southern Province of the Kingdom. It is licensed by PepsiCo International to produce Pepsi Cola and other beverages. Until 2005, AQS was a 50% shareholder in SCMC, which supplied AQS with cans. But disagreements arose and, in anticipation of separating from SCMC, AQS needed to secure access to an alternative can supplier and it decided to construct its own 2-line can making facility in Jeddah. For this purpose, it set up a branch called Consolidated Can Manufacturing Company (“CCMC”) in Jeddah, which was registered with the Ministry of Commerce and Industry. CCMC is in effect a trading name of AQS. It has no separate legal personlity.[5]Mr Antliff was known to Mr Abdul Karim Al Yusuf, Managing Director of AQS who had been a director of SCMC. In summer 2005, Mr Antliff telephoned Mr Abdul Karim to say that he was leaving SCMC. He expressed a strong interest in working for AQS in setting up the new facility.[6]Mr Abdul Karim was interested in this proposal and arranged for Mr Antliff to meet Sheikh Khaled Al-Qahtani in London. At the meeting, they discusses the job of Operations manager at the proposed canning plant. After this meeting, Mr Antliff gave informal assistance to Mr Abdul Karim and AQS in connection with the can manufacturing project. He helped in the production of a specification for the can lines which was sent out to several potential suppliers, including Intercan. Mr Antliff was also in touch with Intercan and he agreed with Mr Strode that Intercan would pay him US$1 million per can line if it was successful in securing the contract from AQS.[7]On 1 October 2005, Mr Antliff and Sheikh Khaled executed an “Employment Offer” between AQS and Mr Antliff. It provided as follows: EMPLOYMENT OFFER Between [AQS] and [Mr Antliff] [AQS] agrees to provide the following remuneration package and conditions to [Mr Antliff] in return for his services to the Company. Position: Operation Manager Reports to: General Manager/Managing Director Basic Salary: SR28,500 per month Incentive for timely completion: 3 Basic Salaries if Erection/completion and commissioning is achieved as scheduled and within approved budget and timeframe of employer Vacation: ... One month annually, inclusive of local holidays, split into two parts, i.e. 2 weeks during Christmas time and 2 weeks during the summer. ... Housing: Company provided fully furnished and serviced accommodation up to SR 125,000 per year. Transportation ... Company provided fully serviced 7-seater car or SR 2,000 per month. Job Location: Jeddah (Western Province of Saudi Arabia) or any other location as may be determined by the company. Education Allowance: Cash payment against presentation of original invoices up to two children with a maximum amount of SR 35,000 per child per year. Contract Duration: Probation Period: Three years from date of joining. Probation period will be for six months from date of joining. The following provisions are an integrated part of this employment offer: · Adherence to Saudi Laws and Saudi culture is a requisite at all times. · Confidentiality is of utmost importance and [Mr Antliff] is to hold the Company and Group’s confidential information strictly to Company and Group’s benefit. · Not to conduct and/or involve in any other activities, during or outside working hours, specifically those that may cause a conflict of interest with the company. · All other terms and conditions not mentioned in this agreement shall be in accordance with Saudi Labour laws. Employment Offered by [Sheikh Khaled] Acknowledged & Accepted by [Mr Antliff][8]AQS received quotations from three suppliers including Intercan. Mr Antliff was a member of a panel which examined the quotations and made a report to Mr Abdul Karim. The other members were Mohammed Laboudi, an accountant, and Hisham Yaquot, an engineer. On 25 October 2005, the panel produced its report recommending that Intercan’s quotation of about US$28.5 million per line be accepted by AQS. The report commented on Intercan’s quotation as follows: A thorough quotation, 95% as per our request and specification, clear and easy to follow. Intercan and its personnel are well respected in the industry, and have been involved in can making projects for more than 20 years, mainly specialising in re-building and overhauling printers and coaters for Alcoa, and also Cuppers and die sets through its sister company TG Can. They have been involved in a number of conversions and up-grade projects in the last 2 years and have done complete full line installations in the past.” The report concluded:
“After many hours of deliberation and adjusting the quotations so we have a Like for Like comparison the team has decided we would prefer to use Intercan as the installation contractor, this decision is based on our working experiences with those companies. Both Hisham [Yaquot] and I have worked with Intercan’s intended project manager and found him to [have a] professional, competent attitude and above all approachable temperament. These qualities are very important when planning a project of this magnitude.”
Mr Antliff was the first signatory on the report and signed above the title “Operation Manager”. He did not disclose his personal agreement with Intercan.[9]On 29 October 2005, Mr Abdul Karim forwarded the report to the Board of Directors of AQS, adding his recommendation that the Intercan quotation be accepted.[10]On 24 October 2005, SCMC gave Mr Antliff notice of non-renewal of his contract of employment and his last day at work was 31 October. He then returned to the United Kingdom. On 7 November, he started working for AQS in England. The first two days were spent in London with Mr Abdul Karim at a meeting with Mr Strode of Intercan.[11]Mr Antliff’s time sheets show that for November he worked 18 full days, most at Intercan’s offices, some in London and one at TG Can. In December he worked 22 full days, mainly at Intercan. He spent 6 days in the Middle East. He sent a time sheet to AQS and was paid 18/22nds of his monthly salary for November and his full monthly salary for December. He also billed AQS for his expenses, including vehicle rent for the equivalent of SR 3,392 and fuel. AWS reimbursed Intercan for Mr Antliff’s use of office space during November and December 2005.[12]TG Can was to supply the coil handling and cupping system for the project and workshop/tooling equipment. Whilst Mr Antliff was in Saudi in December he met Mr Strode and agreed that they would split any commission that Intercan received from TG Can (“the Second Antliff Agreement”). That much is agreed. There is a dispute as to whether Mr Antliff gave instructions that TG Can should add £100,000 to their quotation for the supply of workshop/tooling equipment to allow for payment of commission to Intercan (to be shared with Mr Antliff). It is not in dispute that TG Can did pay £100,000 to Intercan as commission on the contract, and that Mr Antliff received 50% of this.[13]Mr Antliff continued to work for AQS in the United Kingdom till 7 January 2006, when he moved to Jeddah. Thereafter he was settled there. He was not granted a formal work permit until March 2006.[14]AQS and Intercan concluded a formal contract on 15 January 2006. The agreement recorded that it was made on 25 November 2005 to reflect the fact that preparatory work had been performed by Intercan as from that date. The contract named Michael Flannery as Intercan’s project manager and Mr Antliff as AQS’s nominated representative. They had authority to bind their principals on all necessary decisions. Clause 15.18 of the contract prevented Intercan from assigning or subcontracting any of its rights and duties under the contract without the written consent of AQS. In fact Intercan was a one man operation under Mr Strode and, unknown to anyone in AQS apart from Mr Antliff, Intercan had sub-contracted most of its responsibilities to NDH Technical Services Limited, a UK company engaged in design engineering and turnkey projects. Mr Flannery was the technical director of NDH. The staff on the project were employees of NDH.[15]Mr Antliff invoiced Intercan for payments of commission as and when AQS paid Intercan. Although it is not possible to find written proof of receipt of all payments, it is agreed that the following payments were in fact made by Intercan to Mr Antliff: Invoice Date Invoiced amount Received 1 18 January 2006 $177,000 £100,000 (on 3 February 2006) 2 18 February 2006 $141,600 £80,000 3 18 March 2006 $141,600 £79,918.73 4 7 April 2006 $141,600 £78,025.13 5 2 May 2006 $141,600 As part of £148,248.97 6 2 June 2006 $141,600 As part of £148,248.97 7 1 July 2006 $141,600 £75,912.72 8 1 August 2006 $141,600 £73,780.74 8A* 8 August 2006 £52,906 £52,906 9 4 September 2006 £141,600 As part of $201,571 9A* 14 September 2006 $59,971 As part of $201,571 10 4 October 2006 $88,034 $88,034 11 4 November 2006 $44,017 As part of $88,034 12 4 December 2006 $44,017 As part of $88,034 13 4 January 2007 $44,017 $44,017 14 23 January 2007 $44,017 $44,017 – as part of $196,632.24 15 23 January 2007 $44,017 $44,017 – as part of $196,632.24 16 23 January 2007 $44,017 $44,017 – as part of $196,632.24 16A* 23 January 2007 $62,949 $62,949 – as part of $196,632.24 16B* 4 May 2007 $25,000 $25,000 16C* 15 May 2007 £29,459 £29,459 17 15 May 2007 $44,017 $44,017 18 14 June 2007 $97,177 $97,177 TOTAL ADMITTED US$784,482.24 plus £695,345.29 The asterisked invoices were in respect of the Second Antliff Agreement.[16]In late October/early November 2007, Mr Antliff wrote to Mr Abdul Karim asking for a pay review. He stated that “on 7 November 2007 I will have been working for CCMC for two years”. An addendum was executed to his employment contract increasing his salary to SR 31,000 per month and improving other benefits.[17]By late 2007, disputes began to surface between Intercan, NDH and TG Can. The level of commission being paid to Intercan and on to Mr Antliff was a major cause of the tension between these parties. Mr Abdul Karim became suspicious as to whether Mr Antliff had been in receipt of secret commissions. On 24 January 2008, Mr Kenneth Crown, a Scottish certified accountant, wrote on instructions from Mr Flannery and Mr Hickman of NDH to Mr Abdul Karim setting out the commissions paid by NDH to Intercan. He said that “other ????” was in receipt of commission. Mr Abdul Karim continued his enquiries.[18]On 19 May 2008, Mr Abdul Karim and others summoned Mr Antliff for an interview. A number of written questions were put to him. He denied receipt of any commissions from suppliers. At the end of the meeting he was handed a letter of dismissal with immediate effect. The ground put forward was bribery. AQS retained Mr Antliff’s passport and some other personal effects. At the request of the British Consul, the Governor of Jeddah directed that AQS should return the passport on provision of satisfactory guarantees that he would return. No such guarantees were agreed, but Mr Antliff was able to leave the Kingdom without his British passport.[19]Mr Antliff commenced proceedings before the Saudi Primary Commission for Settlement of Labour Disputes. The claim was for one months’ salary in lieu of notice, an end of service award and compensation for arbitrary discharge. On 26 January 2009, the Primary Commission made its ruling. The short initial resolution records AQS’s allegation that Mr Antliff was discharged for receiving commissions for his personal benefit and that this was denied by Mr Antliff’s representative. The Commission decided that “given that [AQS] did not provide evidence for the reasons according to which it has discharged the claimant and given no legitimate reasons for discharge were proved”, Mr Antliff was entitled to the end of service reward and compensation. He was awarded SR 51,950 end of service award and SR 57,000 discharge compensation. AQS has appealed to the Higher Commission for Conflicts Settlement, as it is entitled to do. No decision has yet been made on the appeal.

The issues

[20]AQS commenced these proceedings on 19 September 2008. Originally the Defendants were Intercan and Mr Strode. They brought in Mr Antliff as a third party and he was then joined as a defendant to the main proceedings. The claims against Intercan and Mr Strode have been settled on terms unknown to the Court, leaving only Mr Antliff as a defendant. In May 2010, Mr Antliff applied to have the claim against him stayed on grounds of forum non conveniens but this application was dismissed by Burton J. on 25 May 2010.[21]As against Mr Antliff, AQS seeks a declaration that he is liable to account for all secret commissions and bribes received by him under the First and Second Antliff Agreements and an order that he pay these sums, alternatively damages, plus interest. As pleaded the claim is put on the following bases:(1) Mr Antliff’s acceptance of bribes or secret commissions was contrary to the terms of his written employment contract, especially the provision against conflicts of interest;(2) It was also against various Articles in the Labour Law of Saudi Arabia;(3) Sharia law expressly prohibits corrupt transactions in general and the general principle under Sharia law is that the taking of bribes or secret commissions by an employee is not permissible. The second case was not pursued because it was agreed between the experts that the Saudi Labour regulations only deal with employment issues and had no relevance to a claim for recovery of commissions/bribes. AQS also pleaded an alternative case in English law, but at trial the case was focussed on the Saudi law claims.[22]In his defence, Mr Antliff admits that he did not disclose the First or Second Antliff Agreement to AQS. The essence of his case is that his contract of employment with AQS did not commence till 7 January 2006 when he entered the Kingdom to take up his job. The Antliff Agreements were concluded before his employment commenced and the payments received after he started his employment were for services rendered prior to the employment. His acceptance of the payment “did not give rise to any risk that his personal interest would or might conflict with those of [AQS]”. The applicable law of the employment contact and his relationship with AQS was Saudi law. In Saudi law, Mr Antliff breached no duty to AQS and committed no crime. He is not liable to pay the commissions received to AQS. In the alternative, he contended that the decision of the Primary Commission gave rise to an estoppel by res judicata or an issue estoppel.[23]As I have already indicated, there was a limited factual dispute between the parties. The main issue was as to whether Mr Antliff instructed TG Can to increase its price by £100,000 to enable a commission to be paid to Intercan and shared with Mr Antliff.[24]There was a much more significant dispute as to Saudi law. The main issues were:(1) What duty or duties (if any) Mr Antliff owed AQS in Saudi law not to procure or accept any sums paid to him by Intercan in relation to the project;(2) What remedies (if any) would AQS be entitled to be awarded if Mr Antliff had acted in breach of duty;(3) Whether the decision of the Primary Commission for the Settlement of Labour Disputes gives rise to any and if so what estoppel under the laws of Saudi Arabia.

Factual Issues

[25]AQS called the following witnesses to give factual evidence: John Paterson, AQS’s group financial controller, Ian Williams, Group Managing Director of Williams Group which includes TG Can, and Allen Sheffield, Managing Director of TG Can. Additionally statements were put in by Abdul Karim, Michael Flannery, Kenneth Crown and Michael Delaney. Hearsay notices were served on behalf of these witnesses. The hearsay notices stated that they were not being called because they were beyond the seas. Mr Antliff gave evidence in his defence.[26]As I have indicated, the only real factual issue was as to whether Mr Antliff had required TG Can to increase its price by £100,000 to accommodate the commission payable to Intercan for sharing with Mr Antliff. Mr Williams evidence was that at a meeting at Intercan’s offices in the summer of 2006, Mr Antliff had told him that TG Can would have to add £100,000 to its quote because “I want something out of this”. TG Can was used to paying commissions to businesses like Intercan and 10% was normal. This demand was for much more than 10%. The conversation was sometime before 31 July 2006, because a revision schedule including that sum was produced on that date. Accordingly, TG Can added £100,000 to its quotation. He also said that at a later date, Mr Antliff made Mr Strode call Mr Williams to demand payment of commission to Intercan. Mr Sheffield also gave evidence that he had to deal with telephone calls from Mr Antliff in which Mr Antliff threatened that, unless TG Can sorted out payments of commission, he would put purchase orders somewhere else.[27]Mr Antliff, whilst not disputing that £100,000 commission had been paid by TG Can to Intercan or that he had received £50,000 of this, disputed that he had insisted on TG Can increasing its price or that he threatened TG Can.[28]Mr Williams attempts to date when Mr Antliff required the quotation to be increased by £100,000 were varied and unreliable, but I think he was a patently frank witness doing his best to assist the Court. Mr Sheffield was a careful and reliable witness. By contrast, I found Mr Antliff not to be a witness whose evidence I could trust. I take into account that he was self-evidently nervous in giving his evidence, but I did not believe him when he denied demanding that TG Can increased its price to exerting pressure on TG Can. Moreover there is some contemporary documentary evidence to support the charge made by Mr Williams. In an e-mail dated 27 October 2006 sent by Mr Strode to Mr Flannery, he recorded: “1. Coil handling and cupping system. Value was £4,550,000 and a retrospective goodwill commission was agreed at $70,000 (This had been quoted and price agreed before anyone asked for commission). 2. Tooling. We agreed 10% on £2,238.56. 3. Workshop equipment: AA told TG to put £100k ($185k) on top of their quote. I agreed to split 50/50 with AA. We have received so far $315,694 and paid AA $157,947. ... Whether you think I was right/authorised/generous or stupid, this is what I have done” (my emphasis) Mr Antliff did not call Mr Strode to give evidence. In my judgment this e-mail strongly supports Mr Williams’ evidence. I find that in the summer of 2006, Mr Antliff did require TG Can to increase its quotation to AQS by £100,000 to allow for payment of commission to Intercan, in which Mr Antliff was to share. I also find that Mr Antliff threatened TG Can with a loss of business unless commissions were actually paid to Intercan. He did so because he was determined to make sure he got what he saw as his share of the action.

Saudi Law

[29]I now turn to the crucial issues of Saudi law. Both parties called expert evidence on Saudi law. AQS called Dr Mujahid M Al-Sawwaf, a practising licensed attorney in Saudi Arabia. He holds a PhD from Oxford University in Koranic law and has been a visiting scholar at Harvard University and Professor of Islamic Law and Comparative Religions at Umm Al-Qura University at Mecca. Mr Antliff called Ian Edge, a practising barrister and the founding and current Director of the Centre of Islamic and Middle East Law at the School of Oriental and African Studies in the University of London. Both were impressive and fair witnesses. Dr Al-Sawwaf had the advantage of being a practising lawyer before the Saudi Courts, but his explanations were not always consistent. Mr Edge showed considerable scholarship and was able to explain his views clearly. I found their evidence very helpful.[30]As the experts explained to me, the legal system in Saudi Arabia is unique in the Arab world. It applies Islamic Law (“the Sharia”) more closely than any other Muslim state and its courts and tribunals seek to follow and apply its principles in all legal matters. Regulations made by the King or the Council of Ministers have supplemented the Sharia but they are generally specific and limited in nature – e.g. the Labour Code. There is no codified Civil or Penal Code. Nor is there a Commercial Code. In this Saudi Arabia differs from its Arab neighbours. There are no Regulations relevant to the claims made in this case. The Labour Code deals only with employment relations. If this case was being tried in Saudi Arabia it would be tried in the Sharia Court according to Sharia law[31]The main written sources of the Sharia are the Koran and the Sunna. The Koran contains about five hundred legal verses setting out legal rules and principles, but it is by no means a comprehensive code. The Sunna is the huge collection of stories relating to the life of the Prophet Mohammad (each known as an Haddith). Medieval Islamic jurists produced a number of encyclopaedic writings which collected together particular Haddiths. Saudi Arabia follows the conservative Hanbali School of Islamic Law and judges will rely on the Hanbali jurists, in particular six who were made canonical in about 1932. The Sahih Muslim is one of these jurists. Ibn Qudama is another. He produced a 13 volume work. The courts can however look more widely. Jurists from other Islamic traditions carry no weight. The medieval jurists wrote in a language which is opaque and inaccessible other than to scholars. In the late 19th century, a collection of Haddiths was translated and published as the Saudi Majelle. It is a large volume conveniently containing some 3,000 articles. It cross references particular Haddiths to different books of the Sunna, and enables a judge to form a view as to how authoritative a particular Haddith maybe. The Saudi Majelle (but not the Ottoman equivalent) has a measure of acceptance as an easily available collection of Hanbali Sharia principles of law and is regularly used by Saudi judges and lawyers.[32]There is no doctrine of precedent in Saudi law. Cases are not reported or cited to judges. It is up to each judge to decide what he considers Sharia law to be. The way a judge has acted in a particular case strictly has no relevance to the way he should act in another case. It follows that there is not always consistency between the courts, even on quite basic issues. Nor is there a modern tradition of text book writing by academic or practising lawyers, although (as explained below) there are sometimes relevant Fatwas issued by the Council of Senior Ulema, an important religious body which acts to give advice by way of legal opinions.[33]All this makes the job of an English judge seeking to establish Sharia law as interpreted in Saudi Arabia far from easy.[34]Dr Al-Sawwaf’s first point was that Sharia law recognises and enforces contracts, as long as they do not transgress the Koran. Mr Edge agreed. The issue between them was as to when the employment contract became effective. Dr Al-Sawwaf thought that the obligation not to have conflicts of interest arose on 1 October 2005, and at the latest on 7 November 2005. Mr Edge considered that it did not do so until Mr Antliff joined AQS and that did not occur until 7 January 2006 – Mr Antliff in his evidence argued it might not be till he got his work permit in March 2006. Dr Al-Sawwaf disagreed. There was no reason why Mr Anliff should not be treated as having joined AQS when he started paid work in the United Kingdom on 7 November 2005[35]If that were wrong, Dr Al-Sawwaf contended that Mr Antliff owed a duty in Sharia law to disclose any conflict of interest at the stage of face-to-face negotiation or “majlis al-aqd”. He cited the Sahih Muslim:
“Both parties in a business transaction have the right to annul it so long as they have not separated; and if they speak the truth and make everything clear they will be blessed in the transaction; but if they tell a lie and conceal anything, the blessing will be blotted out”
Mr Edge considered that this was much too broad a proposition. There is a recognised framework of cases where disclosure must be made – e.g. hiding that a horse was lame or tying up the udders of a cow to make it look more productive than is, and putting ink on a slave’s hand to indicate that he is literate. These are all examples of active misrepresentation. He also warned that it is important to distinguish between the law and moral exhortation.[36]Dr Al-Sawwaf secondly expressed the opinion that Mr Antliff would be liable criminally and civilly for bribery. Saudi Arabia has regulations dealing with bribery in some industries, for instance the defence industry, but there is no relevant regulation in this case. In Sharia law the source of the general bribery law is the following verse in the Koran:
“Consume not your goods between you in vanity; neither proffer it to the judges, that you may sinfully consume a portion of another man’s good and that wittingly” [Sura 2 Ayat 188] The Sunna includes a number of Haddiths cursing the briber and the bribed, but bribery is not defined. The experts were agreed that this principle had been extended beyond the bribery of judges and included public officials generally. Mr Edge’s opinion was that Sharia law went no further. Dr Al-Sawwaf considered that it went further and included “judges, rulers, governors, ordinary people”, including senior managers, “if they could influence and you could influence them”
. He said that this was a matter of common sense and that there had been many successful prosecutions.[37]In a supplemental written submission, he produced the so called “Bin BazWarning” against bribe payments issued by the Grand Mufti, His Eminence Sheikh Abdulaziz Bin Abdullah Bin Baz in the reign of King Faisal. The warning cited the verse from the Koran and the Sunna curse cited above. It stated:
“Of what is strictly prohibited in Islam is bribe, which is the payment of money against the performance of an interest, which interest should be performed by the person in charge without a payment. The prohibition is more strict if the purpose for such payment is to deny a right or give the right to the wrong or in injustice to somebody. In his margin, the late Ibn Abdeen states: “a bribe is what is given by a person to a governor or to another one in order to have him render a judgment in his favour or make the governor do what he desires”
. It is apparent from this definition that the bribe is more general than being money or a benefit put under somebody’s control or given to him. Governor means: the judge or somebody else, is everyone who is expected to perform the interest of the briber, whether being one of the states’ rulers, officials or those in charge of special businesses, such as agents of tradesmen, companies, owners of real estate and so forth.”[38]Mr Edge commented in response that a Fatwa was merely the opinion of an Islamic Jurist, although only the most learned and knowledgeable scholars are entitled to issue them. A judge may quote a Fatwa, but it is only a juristic opinion and not a binding precedent or a source of law. He thought the best analogy was the quoting of legal authors, such as Dicey & Morris on The Conflicts of Law: “they are useful and persuasive but not binding”.[39]Dr Al-Sawwaf’s third point was that Mr Antliff was liable in damages for theft and breach of trust. His argument was that theft was committed by indirect means, that is stealth, because of the failure by Mr Antliff to disclose that he would receive a commission on the award of the contract to Intercan. Alternatively. Mr Antliff was placed in a position of trust when he accepted the position of Operations Manager and when he accepted to act as one of the judges of the bids submitted for the project. The fee paid by Intercan to Mr Antliff was AQS’s property to dispose of as it saw fit. By concealing his interest in the payments and taking possession of them, Mr Antliff was guilty of wrongful conduct. AQS entrusted the funds to Intercan and did not consent to them being shared with its manager.[40]Mr Edge responded to these points, which only emerged shortly before trial, in his oral evidence. His opinion was that :(1) Theft is one of the few provisions where the Koran provides a legislative rule: it states that theft is punishable by Hadd or execution of a hand. The jurists have had to interpret what theft is. Lesser offences are ta’azir and subject to discretionary penalties. Theft requires a direct relation between the thief and the owner of property which the thief is taking.(2) Trust involved being given and entrusted with someone else’s property. In Sharia law, a trust is amana and it requires some form of property to be entrusted to the person. That did not happen in this case. Conclusions (1). Contractual claim[41]As I have already observed, a key issue between the parties was as to when the contract became effective. Mr Chapman QC for AQS submitted that it was effective when it was signed on 1 October, but his main submission was that it was effective on 7 November 2005 when Mr Antliff stated to do work for AQS and was paid a proportionate part of his salary: that was when he joined AQS. The contract expressly contemplated that Mr Anliff could be required to work away from Jeddah.[42]Mr Graham for Mr Antliff submitted that the contract did not become effective until 7 January 2006 when Mr Antliff entered the Kingdom and started work there as operations manager. Until he was in the Kingdom, he could not (and did not) access all the various benefits to which he was entitled under the employment contract, such as his housing, transportation and education allowances. He did not submit that the employment only started when the work permit was obtained in March 2006 – he accepted that there was usually a bureaucratic delay and this could not prevent the contract from commencing.[43]I reject the argument that Mr Antliff’s contractual duties became effective on 1 October 2005, when the contract was signed. First, both experts were agreed that it is a basic tenet of Sharia law that an individual can only have one employer at a time. As at 1 October, Mr Antliff was still employed by SCMC. He could not also be employed by AQS. Further it is difficult to see how the conflict of interest provision could operate. As was well known to both parties, he was working for SCMC, a competitor with whom AQS had an obvious conflict of interest. I do not consider that the fact that he signed the 25 October 2005 report as Operation Manager is decisive that his employment had actually commenced.[44]In my judgment it is quite clear from the terms of the contract that it was intended to be effective when Mr Antliff joined AQS. The question is when did he join AQS – was it when he started paid work on 7 November 2005 or when he entered the Kingdom on 7 January 2006? I have reached the clear conclusion that Mr Antliff joined AQS as Operation Manager on 7 November 2005. That is when he started paid work for AQS. There was no suggestion that there was a separate arrangement made to cover his work between 7 November and 7 January. Mr Antliff was paid on the basis of his contractual salary from that date, as he clearly expected. It is true that he did not access other benefits till January 2006, but that is not to my mind a decisive factor. As from 7 November he was doing important work for AQS as Operation Manager fine tuning the Intercan proposal and specification. He charged expenses including car hire. He visited the Kingdom in December. I think some support is gained for my conclusion in Mr Antliff’s letter sent in 2007 seeking a salary increase from 7 November 2007 when “I will have been working for CCMC for two years”.[45]I also reject Dr Al-Sawwaf’s argument that Mr Antliff was under a duty in Sharia law to disclose his arrangements with Intercan for payment of a commission at the time of the face to face negotiation. He was not able to point to any support for this general duty. I prefer Mr Edge’s view that such a duty only arises in certain well established categories, of which employment is not one.[46]It follows in my view that as from 7 November 2005, Mr Antliff became under a contractual duty “not to conduct and/or involve in any other activities, during or outside working hours, specifically those that may cause a conflict of interest with the company”[47]Mr Chapman submitted that by continuing with his consultancy with Intercan under which he was obliged to assist in procuring business for Intercan, Mr Antliff was conducting or being involved in other activities during and outside working hours which did cause a conflict of interest with the company. Mr Graham responded that all the work had been done by Mr Antliff under at least the First Antliff Agreement before the 7 November and that there was no conflict of interest.[48]I reject Mr Graham’s submission. In my judgment it is obvious that, by continuing with his consultancy with Intercan, pursuant to which he was obliged to assist in procuring business for Intercan, Mr Antliff was conducting or being involved in other activities during and outside working hours which did cause a conflict of interest with the company. No contract was concluded with Intercan until 15 January 2006. He was working with Intercan to finalise the specification. The conflict was obvious. It is well illustrated by two factors:(1) Under his contract of employment, Mr Antliff earned SR28,500 per month. Under the commission terms he had negotiated with Intercan he could expect to receive very much larger sums: as can be seen from the table at paragraph 15 above, for many months he received over $140,000 each month from Intercan. It was not in his personal interests to drive a hard bargain for AQS. He could not possibly protect and represent his employers’ interests properly against Intercan.(2) This is illustrated by the terms of the report which he signed on 25 October 2005. This was before the contract came into operation, but it was a continuing recommendation. In the report, Mr Antliff took the lead in recommending Intercan. The report stated that it was the sister company of TG Can – that was not true to his knowledge. Nor was it true (as he knew) that the intended manager, Mr Flannery, was employed by Intercan as the Report inferred. Mr Antliff was concealing from AQS the fact that Intercan was a one man company of no real substance. The position is still clearer with the Second Antliff Agreement. This was concluded after the contract of employment came into effect and Mr Antliff insisted on the TG Can quotation being increased by £100,000 to allow for payment of commission.[49]I hold that Mr Antliff was in breach of contract from 7 November 2005.

Bribery

[50]There is of course no doubt that Mr Antliff’s conduct involved the receipt of bribes in English law. It is less clear cut whether Sharia law extends the bribery rules beyond judges and public officials, but on the balance of probabilities I consider that Sharia law would hold that the Sharia bribery rules apply to senior managers in a position to influence the choice of contractors. The “Bin BazWarning” seems to be to be entitled to considerable weight, having been issued by a distinguished Saudi scholar. I accept that a Fatwa is not binding on a court but Mr Edge drew the analogy with the status of legal authors in this jurisdiction, such as Dicey & Morris on The Conflicts of Law. That suggests that a Fatwa would be regarded as having considerable weight. As an agent of AQS – indeed a senior employee – performing an important role in dealing with suppliers, in my judgment Mr Antliff would be treated by a Saudi Sharia Court as within the prohibition on the receipt of bribes. On the evidence, it cannot be doubted that Mr Antliff was in receipt of bribes from Intercan, that he was being expected by Intercan to perform in its interest, and that he is liable in damages in Sharia law.

Theft and Breach of Trust

[51]I was not persuaded that Sharia law would regard Mr Antliff as a thief or in breach of trust. He did not take AQS’s property, and the money from which the bribes were paid was never entrusted to him.

Res Judicata

[52]Both experts were agreed that, if tried in Saudi Arabia, AQS’s claims would have to be brought before a Sharia Court and that the Primary Commission would have had no jurisdiction to entertain them. It only deals with labour disputes. A Sharia Court would not be bound by the decision of the Primary Commission. Whatever was decided by the Primary Commission, everything would be open for full consideration before a Sharia Court.[53]In those circumstances, Mr Chapman argued that as a matter of English conflicts of law, no estoppel by res judicata or other issue estoppel could arise. He referred me to Nouvion v. Freeman (1889) 15 App Cas 1 (HL), and to Carl Zeiss Stiftung v. Rayner & Keeler Ltd (No. 2) [1967] AC 853 (HL) and in particular to Lord Reid’s judgment in the latter at p. 918-919: I can see no reason in principle why we should deny the possibility of issue estoppel based on a foreign judgment, but there appear to me to be at least three reasons for being cautious in any particular case. In the first place, we are not familiar with modes of procedure in many foreign countries, and it may not be easy to be sure that a particular issue has been decided or that its decision was a basis of the foreign judgment and not merely collateral or obiter. Secondly, I have already alluded to the practical difficulties of a defendant in deciding whether, even in this country, he should incur the trouble and expense of deploying his full case in a trivial case: it might be most unjust to hold that a litigant here should be estopped from putting forward his case because it was impracticable for him to do so in an earlier case of a trivial character abroad, with the result that the decision in that case went against him. These two reasons do not apply in the present case. The case for the Stiftung, or on this issue those who purported to represent it, was fought as tenaciously in West Germany as this case has been fought here, and it is not difficult to see what were the grounds on which the West German judgment was based. But the third reason for caution does raise a difficult problem with which I must now deal. It is clear that there can be no estoppel of this character unless the former judgment was a final judgment on the merits. But what does that mean in connection with issue estoppel? When we are dealing with cause of action estoppel it means that the merits of the cause of action must be finally disposed of so that the matter cannot be raised again in the foreign country. In this connection the case of Nouvion v. Freeman is important. There had been in Spain a final judgment in a summary form of procedure. But that was not necessarily the end of the matter, because it was possible to reopen the whole question by commencing a different kind of action: so the summary judgment was not res judicata in Spain. I do not find it surprising that the House unanimously refused to give effect in England to that summary judgment. When we come to issue estoppel I think that, by parity of reasoning, we should have to be satisfied that the issues in question cannot be relitigated in the foreign country. In other words, it would have to be proved in this case that the courts of the German Federal Republic would not allow the re-opening in any new case between the same parties of the issues decided by the Supreme Court in 1960, which are now said to found an estoppel here. There would seem to be no authority of any kind on this matter, but it seems to me to verge on absurdity that we should regard as conclusive something in a German judgment which the German courts themselves would not regard as conclusive. It is quite true that estoppel is a matter for the lex fori but the lex fori ought to be developed in a manner consistent with good sense. Lords Guest (p.936B), Upjohn (p. 949C) and Lord Wilberforce (p. 971B) agreed.[54]Mr Graham made no contrary submissions.[55]I accept Mr Chapman’s submission. The decision of the Primary Commission creates no issue estoppel in Saudi Arabia. No more should it do so in this jurisdiction. I should add that even if it did, it is not at all clear what the Commission decided. Even if it is to be taken as having decided that there was no commission/bribe paid to Mr Antliff, in the light of the admissions made in this Court, in my judgment it would be grossly unjust to hold that AQS was estopped from alleging that Mr Antliff had been in receipt of bribes from Intercan.

Damages

[56]Dr Al-Sawwaf’s evidence was that, whether there was a finding against Mr Antliff for breach of contract or bribery, the Saudi Court would award damages in the amount of the commission/bribes received by Mr Antliff from Intercan. In Mr Edge’s opinion, this was not inevitable. He said that Mr Antliff was only liable for the loss caused by his misconduct. The Court would have to be satisfied that there was a loss, but the starting point would be the amount received by Mr Antliff. The burden of proof would be on Mr Antliff to show that AQS had not actually suffered any damage, or had suffered less damage.[57]In my judgment, it is highly probable that, if Mr Antliff had not demanded payment of bribes, he could have negotiated Intercan down by at least the amount of the bribe. That is particularly clear in relation to TG Can quotation. Indeed, if there had been no bribery I expect that Intercan would not have been involved at all, that NDH would have contracted with AQS directly at the price it charged Intercan, and that AQS would have saved more. It follows that in my judgment, even assuming the burden of proof was on it, AQS has established loss at least equal to the sums received by Mr Antliff. Applying Mr Edge’s test, the result is a fortiori – Mr Antliff has not established that AQS’s loss was less than the bribes received.[58]I will therefore enter judgment in favour of AQS against Mr Antliff for the sums of £695,345.29 and US$784,482.24.[59]It was submitted by Mr Graham that I could not make an award of interest because that would be contrary to the prohibition of interest in Sharia law. I accept that Sharia law contains such a prohibition, but an award of simple interest under section 35A of the Senior Courts Act 1981 is a matter of English procedural law, and Saudi Law does not apply: Midland International Trade Services Ltd v. Al Sudairy (11 April 1990 Hobhouse J. unrep.) and Maher v. Groupama Grand Est [2009] EWCA Civ 1191 (CA) per Moore-Bick L.J. at §§25-40. I will hear counsel on the appropriate order I should make. ___________________________

Cited in 2 later judgments