Abdel Hadi Abdallah Al Qahtani & Sons Beverage Industry Company v Antliff

An employee who receives undisclosed commissions from a contractor dealing with his employer acts in a conflict of interest where the arrangement affects his ability to protect the employer’s interests. Under Saudi Sharia law, the prohibition on bribery may extend to a senior manager able to influence the choice of contractors. A foreign labour tribunal’s decision creates no issue estoppel where that tribunal lacked jurisdiction over the underlying claim and its decision was not final on the merits. Interest awarded under Senior Courts Act 1981, section 35 A, is procedural English law and is not displaced by a foreign law prohibition on interest.

The claimant, a Saudi beverage company, employed the defendant as its operations manager for a can-manufacturing project. Before and during his employment, the defendant agreed to receive commissions from contractors involved in the project and received substantial sums without disclosure.

The claimant sought recovery under Saudi law for breach of contract, bribery and related wrongdoing. The defendant argued that his employment began only after the relevant services had been performed and relied alternatively on a decision of the Saudi Primary Commission for Settlement of Labour Disputes. The issues concerned the commencement of the employment duties, the application of Sharia bribery principles, the effect of the Saudi labour decision, damages and interest.

1. Contractual duty. The employment contract became effective when the defendant began paid work for the claimant on 7 November 2005, not when it was signed and not when he entered Saudi Arabia. From that date he was subject to the contractual obligation not to engage in activities causing a conflict of interest.
2. Breach and bribery. Continuing the consultancy with the contractor created an obvious conflict. The defendant could not properly represent the claimant’s interests while expecting much larger payments from the contractor. His conduct also amounted to bribery under English law. On the balance of probabilities, Saudi Sharia law extended its bribery prohibition to senior managers able to influence the selection of contractors. The defendant was therefore liable in damages.
3. Theft and breach of trust. Those alternative claims failed. The defendant had not taken the claimant’s property, and the bribe money had not been entrusted to him.
4. Issue estoppel. The Saudi Primary Commission had jurisdiction only over labour disputes. Its decision was not binding on a Saudi Sharia Court and did not finally determine the underlying claims. Applying the principles in Nouvion v Freeman and Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2), it created no issue estoppel in England. In any event, applying an estoppel would have been unjust in light of the defendant’s admissions.
5. Loss and interest. The claimant established loss at least equal to the commissions received. Judgment was entered for £695,345.29 and US$784,482.24. Interest under section 35 A of the Senior Courts Act 1981 was a matter of English procedural law, notwithstanding the prohibition of interest in Sharia law.

not stated in the judgment.