Jalal Bezee Mejel Al-Gaood & Partner & Anor v Innospec Ltd & Ors

A civil conspiracy claim based on bribery requires proof of the specific decision allegedly procured, the connection between the bribery and that decision, and causation of the loss claimed. Criminal admissions of bribery do not establish those matters automatically. The court must analyse what was paid or promised, to whom, for what purpose, and whether it changed the relevant commercial decision. Where the counterfactual case depends on a proposed substitution of products, technical capability, commercial cost, operational conditions and alternative causes of the decision must be examined. Bribery which did not prevent the relevant sales, or which could not have caused the claimed loss, is insufficient.

The claimants, distributors of MMT fuel additive, alleged that Innospec and its representatives had conspired by bribing Iraqi Ministry of Oil officials to preserve sales of TEL and prevent the replacement of TEL by MMT. They claimed damages for lost MMT sales from 2004 to 2011.

The claim depended on establishing that the Ministry had decided in October or November 2003 to replace TEL with MMT; that bribery procured the 2004 long-term TEL agreement and prevented MMT sales; and that, without the bribery, the proposed switch would have occurred and caused the claimed loss. The court also considered admissions and convictions arising from related criminal investigations.

Claim dismissed.

1. The claimants had to prove three linked matters on the balance of probabilities: a decision by the Iraqi Ministry of Oil in October or November 2003 to replace TEL with MMT; bribery which procured the 2004 long-term TEL agreement and prevented MMT sales; and causation of the claimed counterfactual loss.
2. No such decision to replace TEL with MMT had been made. The contemporaneous material showed continuing technical uncertainty, the need for further testing, the poor condition of the refineries, and a continuing need for TEL. The benzene enhancer committee recommended purchasing MMT in parallel with a three-year TEL agreement, not substituting MMT for TEL.
3. The 2004 long-term TEL agreement was not proved to have been procured by bribery. The ultimate decision was approved by the responsible senior official and endorsed by the American authorities. The negotiations were protracted and contested. Later bribery, including the admitted promise of payments concerning the 2008 agreement, did not justify inferring that the 2004 agreement had been induced by bribery.
4. The criminal admissions did not establish civil causation. Some payments were retained by the intermediary, some concerned Trade Bank officials rather than Ministry officials, and the payment connected with two TEL shipments did not show that the earlier agreement had been procured by bribery. The field test was not shown to be a bribery-induced charade and, in any event, MMT did not fail it in the manner alleged.
5. Even if bribery had occurred, the claimants failed to show that it caused the loss. The low octane of the base gasoline at Baiji and Basra meant that TEL remained necessary. The technical and commercial feasibility of using MMT and TEL together was uncertain, and the Ministry continued purchasing TEL after the 2008 agreement ceased to operate. The court therefore dismissed the claim.