Guralp Systems Limited v The Director of the Serious Fraud Office

A deferred prosecution agreement must be construed as a statutory instrument of public justice, while applying ordinary contractual construction principles. Its terms must be read together with the statutory scheme, the agreement’s purpose and the background known when it was made. Where the agreement requires payment by a specified date but provides machinery for dealing with non-payment, it may remain in force after that date so that breach proceedings can be brought. The court may allow a reasonable period for the prosecutor to give notice and make an application. Post-contract correspondence showing the parties’ subjective understanding is inadmissible to construe the agreement.

Guralp Systems Limited appealed by case stated under section 28 of the Senior Courts Act 1981 against a Crown Court decision concerning a deferred prosecution agreement made with the Serious Fraud Office under Schedule 17 to the Crime and Courts Act 2013.

The Crown Court had held that the DPA remained in force when the SFO applied to determine an alleged failure to pay the agreed disgorgement sum, and that it had jurisdiction to determine the alleged breach. The central issues were whether the DPA expired on 22 October 2024 despite non-payment, and whether the Crown Court consequently retained jurisdiction.

1. Jurisdiction. The High Court had jurisdiction to hear the appeal by case stated. A judicial decision concerning a DPA during the statutory suspension of the indictment does not relate to a trial on indictment within section 28(2)(a) of the Senior Courts Act 1981. During suspension, a trial is impossible unless the DPA is terminated and the suspension lifted.
2. Construction of the DPA. The DPA was to be construed by identifying the objective intention of the parties, applying the ordinary principles summarised in [2015] AC 1619. The agreement had to be read as a whole and in its statutory and public-interest context. The court’s approval under Schedule 17, together with the material before the approving judge and the judge’s reasons, formed part of the background reasonably available when the DPA was concluded.
3. Clause 4 did not mean that Guralp was relieved of unpaid disgorgement when the five-year payment period ended. Read with clauses 7, 14, 25 and 26, and paragraphs 9 to 11 of Schedule 17, it provided for expiry when the financial terms had been fully satisfied. If they were not satisfied, the DPA remained in force to enable variation or breach proceedings.
4. The notice and response machinery in clauses 25 and 26 gave the SFO a reasonable period to decide whether to apply to the court. The application made on 21 November 2024 was within that reasonable period. The Crown Court therefore had jurisdiction to determine whether Guralp had failed to comply and could exercise the powers in paragraph 9(3) of Schedule 17.
5. The two questions stated for the opinion of the High Court were answered “YES”. The SFO’s proceedings were validly constituted and the Crown Court had jurisdiction to proceed.

• High Court (Administrative Court): answered both questions stated by the Crown Court “YES”, confirming that the DPA remained in force and that the Crown Court had jurisdiction.
• Crown Court: on 31 January 2025, held that the DPA remained in force and that it had jurisdiction to determine the alleged breach; the case was stated on 14 February 2025.