Practice and Procedure


PUBLISHED November 25, 2003

A representation agreement between the claimant and the defendant was not contrary to English public policy or the law of Guinea and was enforceable by the claimant.Claim by a company ('T') for sums alleged to be due under a representation agreement with the defendant ('G') which G argued was unenforceable as contrary to public policy under English law and the law of Guinea, West Africa. In 1999, a company ('ACG') took over the running of a state-owned refinery in Guinea, which processed bauxite into alumina, under a lease management and concession agreement. G held 75 per cent of the shares in ACG and was incorporated in the Cayman Islands. There was a management agreement between ACG and G whereby G undertook off-shore management services for ACG in relation to the refinery in return for 8 per cent of ACG's annual net sales. There was also a representation agreement between G and T, which acted as intermediary in arranging the lease management and concession agreement, under which G was obliged to pay substantial sums to T for its services. G made payments to T under the representation agreement. In 2002, G and ACG were taken over and the new owner declined to honour the representation agreement. T sued for the payments due. G counterclaimed for the sums previously paid. The representation agreement provided for T to receive an initial fee of $4 million as a brokerage, financial facilitator and finders' fee and to receive a carrying fee in respect of each tonne of alumina produced by ACG. T's duties under the agreement included assisting G in maintaining good commercial and political relations with the government of Guinea. By an addendum to the representation agreement G and T agreed not to pay any consideration of any nature to any official, agent or employee of any government. G's case was that the individuals who had incorporated T had considerable influence with the government of Guinea and had exercised that influence in order to persuade the government of Guinea to deal with G. G submitted that the representation agreement was unenforceable as contrary to public policy under the law of England and contrary to the criminal law of Guinea.HELD: (1) Corruption or bribery of any government official was not alleged. T provided real and substantial services acting as the agent of G and the investors in G in dealing with the government of Guinea in the negotiations leading to the lease management agreement. It would have been entitled to remuneration for those services on a quantum meruit basis. The individuals behind T had a good relationship with the government of Guinea. There was a genuine negotiation with the government in good faith. (2) There was no abuse of influence or sale of influence contrary to the criminal law of Guinea. The representation agreement was a contract for genuine services. If an intermediary had influence in the sense that he was known, respected and trusted by the party with whom he negotiated he was not guilty of an offence of trafficking or peddling in influence if he undertook to negotiate. It was not intended that the government should be persuaded by the use of influence to do anything which was not in its best interests. The representation agreement did not infringe the criminal law of Guinea. (3) The agreement was not in breach of English criminal law. (4) The agreement did not involve any sale of influence contrary to English public policy. The agreement rewarded T's activity in introducing the parties and negotiating. (5) There was no bar to enforcement of the agreement. T's claim for the moneys due under it succeeded and the counterclaim failed.Claim allowed.

[2003] EWHC 2577 (QB)