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Cite as: [2016] 1 Cr App R 21, [2016] EWCA Crim 2, [2016] Lloyd's Rep FC 80, [2016] 2 WLR 1287, [2016] QB 763, [2016] WLR(D) 8

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Neutral Citation Number: [2016] EWCA Crim 2
Case No: 201505085 C3

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT SOUTHWARK
HIS HONOUR JUDGE PEGDEN QC
T20140065

Royal Courts of Justice
Strand, London, WC2A 2LL
15/01/2016

B e f o r e :

THE PRESIDENT OF THE QUEEN'S BENCH DIVISION
(SIR BRIAN LEVESON)
MR JUSTICE HADDON-CAVE
and
THE RECORDER OF MIDDLESBROUGH
(HIS HONOUR JUDGE BOURNE-ARTON Q.C.)
sitting as a Judge of the Court of Appeal (Criminal Division)

____________________

Between:
THE QUEEN
Appellant
- and -

AIL, GH and RH
Respondent

____________________

Simon Farrell Q.C., Rachel Scott and Will Hays for the Appellant
Alexander Cameron Q.C. and Nichola Higgins for the Respondent AIL
William Clegg Q.C. and Gideon Cammerman for the Respondent GH
Jonathan Barnard for the Respondent RH
Hearing date : 8 December 2015

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Sir Brian Leveson P :

  1. The short, but critically important, question raised by this appeal is whether, prior to 2001, it was a criminal offence in the UK to corrupt the agent of a foreign principal. On 10 November 2015, in the Crown Court at Southwark, during the course of a preparatory hearing conducted under s. 7 of the Criminal Justice Act 1987 ("the 1987 Act"), His Honour Judge Pegden Q.C. was invited to rule upon that issue identified in the following terms:
  2. Prior to the coming into force of the Anti-Terrorism, Crime and Security Act 2001 ("the 2001 Act"), did the Prevention of Corruption Act 1906 ("the 1906 Act") make it an offence to corrupt an agent of a foreign principal or a foreign body even if the actus reus of the offence took place within this jurisdiction?
  3. Judge Pegden answered the question in the negative. He held that, prior to the coming into force of the 2001 Act on 14 February 2002, it was not an offence under the 1906 Act to corrupt an agent of a foreign principal or foreign public body, even in a case where the actus reus of the alleged offence took place within the territorial jurisdiction of England and Wales.
  4. With the leave of the judge, the prosecution now appeal that decision pursuant to s. 9(11) of the 1987 Act; s. 9(14) of the 1987 Act provides that this court may confirm, reverse or vary the ruling which is the subject of the appeal. The provisions of s.11 of the 1987 Act also apply so that reporting of these proceedings is restricted: to that end, we have summarised the alleged facts somewhat obliquely and anonymised the names of the respondents and the organisations said to have been involved.
  5. The Allegation

  6. AIL is a company incorporated in England and Wales which is part of a multinational conglomerate ("the Group") operating in the power generation and transport sectors. In November 2000, GH was appointed chairman and chief executive of AIL; RH was managing director of an Indian subsidiary within the Group.
  7. In short, it is alleged by the Serious Fraud Office ("SFO") responsible for the conduct of this prosecution that, between June 2000 and November 2006, AIL paid bribes in order to secure various transport contracts for companies or divisions within the Group. The bribes were all paid from an English bank account to officials or other agents of three foreign organisations in India, Poland and Tunisia. It is said that the bribes were disguised as legitimate payments to 'consultants' for apparently genuine services. In aid of this subterfuge, AIL entered into so-called 'consultancy agreements' for the benefit of Group companies hoping to win the business. In fact, no genuine consultancy services were rendered. The 'consultancy agreements' were merely a front to disguise the bribery.
  8. The SFO allege that GH was involved in the corrupt payments in both India and Poland and RH was involved in negotiating and arranging two false 'consultancy agreements' in India. As a result, the respondents are charged with both substantive offences and offences under s.1 of the 1906 Act and with conspiracies. These facts which form the basis of these charges have not been tested in any way and nothing in this judgment is to be construed as suggesting any conclusion as to their accuracy.
  9. At the preliminary hearing, the respondents submitted that, prior to 14 February 2002, no offence could be committed under the 1906 Act in circumstances where the bribes targeted the agent of a foreign principal, even if all the relevant parties were present in England and all the conduct took place in this jurisdiction. The respondents argued that this conclusion followed from the true construction of the legislation. The significance of the proposition (if accurate) was clear: much of the alleged conduct pre-dates 14 February 2002, which was the date on which the 2001 Act came into force.
  10. The point of law is also of general significance because of its implications for other bribery and corruption prosecutions which it is understood from Counsel are pending. It was in those circumstances that the ruling in the preparatory hearing came about.
  11. The Legislative History

  12. The question of law involves analysis of three English statutes concerned with bribery and corruption: the Public Bodies Corrupt Practices Act 1889 ("the 1889 Act"), the Prevention of Corruption Act 1906 ("the 1906 Act") and the Prevention of Corruption Act 1916 ("the 1916 Act"). This legislation arose against a background of 19th century anti-bribery laws which addressed corruption in the public sphere only. The common law offence of bribery has always been limited to the public sphere.
  13. The history of this legislation has been the subject of a scholarly review by Lord Thomas CJ in R v. J and others [2013] EWCA Crim 2287 (at [9] to [21]). However, for the sake of completeness, it is necessary to set out many aspects of the legislation and its history in detail below.
  14. We start with the 1889 Act which was solely concerned with bribery and corruption in public bodies. The short title of the 1889 Act is: "An Act to amend the Law relating to the Prevention of Corruption"; the long title is: "An Act for the more effectual Prevention and Punishment of Bribery and Corruption of and by Members, Officers, or Servants of Corporations, Councils, Boards, Commissions, or other Public Bodies".
  15. By s. 1 of the 1889 Act a new statutory offence of "corruption" was created. It provides as follows:
  16. "(1) Every person who shall by himself or by or in conjunction with any other person, corruptly solicit or receive, or agree to receive, for himself, or for any other person, any gift, loan, fee, reward, or advantage whatever as an inducement to, or reward for, or otherwise on account of any member, officer, or servant of a public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which the said public body is concerned, shall be guilty of a misdemeanour.
    (2) Every person who shall by himself or by or in conjunction with any other person corruptly give, promise, or offer any gift, loan, fee, reward, or advantage whatsoever to any person, whether for the benefit of that person or of another person, as an inducement to or reward for or otherwise on account of any member, officer, or servant of any public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body as aforesaid is concerned, shall be guilty of a misdemeanour."
  17. Section 3(1) of the 1889 Act provides inter alia the following saving:
  18. "Where any offence under this Act is also punishable under any other enactment, or at common law, such offence may be prosecuted and punished either under that Act, or under the other enactment, or at common law, but so that no person shall be punished twice for the same offence. …"

  19. The interpretation provisions are contained within s. 7 of the 1889 Act in these terms:
  20. "In this Act-
    The expression "public body" means any council of a county or county of a city or town, any council of a municipal borough, also any board, commissioners, select vestry, or other body which has power to act under and for the purposes of any Act relating to local government, or the public health, or to poor law or otherwise to administer money raised by rates in pursuance of any public general Act, but does not include any public body as above defined existing elsewhere than in the United Kingdom:
    The expression "public office" means any office or employment of a person as a member, officer, or servant of such public body:
    The expression "person" includes a body of persons, corporate or unincorporate:
    The expression "advantage" includes any office or dignity, and any forbearance to demand any money or money's worth or valuable thing, and includes any aid, vote, consent, or influence, or pretended aid, vote, consent, or influence, and also includes any promise or procurement of or agreement or endeavour to procure, or the holding out of any expectation of any gift, loan, fee, reward, or advantage, as before defined. …"
  21. Thus, the 1889 Act was concerned with gifts to any "member, officer, or servant" of a "public body". "Public body" was narrowly defined in s.7 and expressly excluded "any public body… existing elsewhere than in the United Kingdom". Accordingly, in 1889 it was not an offence to corrupt foreign public bodies.
  22. There was growing public concern that bribery and corruption in the private sector was rife and had to be addressed. The genesis of the 1906 Act is usefully charted by Albert Crew in his monograph entitled The Law Relating to Secret Commissions and Bribes (Christmas Boxes, Gratuities, Tips, Etc). As he explained (at p. 57):
  23. "With the growth and development of the nineteenth century there came an army of commission agents. As competition grew keener, business was sought for by devious and crooked ways. Bribes under many guises were given for the purpose of facilitating trade when other and fairer methods were exhaustive or ineffective. In course of time, bribes became so usual an accompaniment of certain profession and trades as almost to partake of a custom. Cosi fan tutti (so do they all) was a not uncommon defence."
  24. Albert Crew cited correspondence in The Times during this period which referred to the 'canker' of bribery affecting solicitors, banker, auctioneers, architects, insurance agents and accountants and the shipbroking trade being 'honeycombed' with the same evil (see ibid, p. 59).
  25. The public concern created a sea-change in opinion and led to the appointment of a committee of the London Chambers of Commerce to consider the question of secret profits. In its Report published in 1899, the Special Committee of Secret Commissions concluded that the practice of secret commissions "was prevalent in almost all trades and professions to a great extent" and recommended legislation. The Committee observed:
  26. "The mass of corruption which the evidence before the Committee shows to exist may appear to some persons so great and complex as to render it hopeless to struggle towards purity. Your Committee do not take this view of the matter. They believe that the discussion of the subject and the publicity of some cases before the Law Courts have already done some good; and they recall the undoubted fact that corruption formerly existed in this country in regions where it is entirely unknown; and that there are cases in past times in which bribery threw a stain upon the occupants of the Bench; that at one time a large number of members of the House of Commons were in the pay of the Crown; and that commissions and other secret forms of bribery abounded in Government departments. Your Committee accept the improvement which has taken place in these directions in the last fifty years as a fact of full encouragement for the commercial community of Great Britain."
  27. Following this report, a new Act was promoted by Lord Russell and Sir Edward Fry in 1899 which was aimed at "trade" generally so as "to stamp out fraud in commercial dealings and to enforce honesty in business life". Lord Russell introduced a bill in the House of Lords which was read in Parliament but never entered into law.
  28. A government bill on the same topic was subsequently introduced by Lord Halsbury in 1901, eventually passing into law and coming into force on 1 January 1907. This was the 1906 Act. In the course of the Parliamentary debates, there appears to have been no discussion as to the position of the corruption in respect of foreign principals and agents. Equally, there was no suggestion that the draft legislation was aimed solely at domestic or intra-UK trade and business dealings. Without deciding whether it would be appropriate to consider the material, we were informed by counsel that no assistance either way on this question is to be found in the travaux preparatoires.
  29. Turning to the 1906 Act, its short title is: "An Act for the better Prevention of Corruption". Albert Crew states that the objects of the 1906 Act were concisely summarised in the memorandum to Lord Russell's Secrets Commission Bill:
  30. "The object of the Bill may be shortly stated as an effort to check, by making them criminal, a large number of inequitable and illegal secret payments, all of which are dishonest, and tend to stifle confidence between man and man and to discourage honest trade and enterprise."
  31. By s. 1(1) of the 1906 Act it is provided:
  32. "If any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act, done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour, to any ;person in relation to his principal's affairs or business ; or
    If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business; or
    If any person knowingly gives to any agent, or if any agent knowingly uses with intent to deceive his principal, any receipt, account, or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous or defective in any material particular, and which to his knowledge is intended to mislead the principal;
    he shall be guilty of a misdemeanour, and shall be liable on conviction on indictment to imprisonment, with or without hard labour, for a term not exceeding two years, or to a fine not exceeding five hundred pounds, or to both such imprisonment and such fine, or on summary conviction to imprisonment, with or without hard labour, for a term not exceeding four months, or to a fine not exceeding fifty pounds, or to both such imprisonment and such fine."
  33. Section 1 of the 1906 Act goes on:
  34. "(2) For the purposes of this Act… the expression "agent" includes any person employed by or acting for another; and the expression "principal" includes an employer.
    (3) A person serving under the Crown or under any corporation or any municipal, borough, county, or district council, or any board of guardians, is an agent within the meaning of this Act."
  35. Passing on to the 1916 Act, it was enacted to deal with scandals in the War Office that had come to light. The short title is: "An Act to amend the Law relating to the Prevention of Corruption" and s. 1 increased the maximum penalty on conviction of offences under the 1906 Act and 1889 Act to 7 years.
  36. The 1916 Act also introduced a "presumption" of corruption, including in cases involving a "public body". Thus, s. 2 provides:
  37. "Where in any proceedings against a person for an offence under the Prevention of Corruption Act 1906, or the Public Bodies Corrupt Practices Act 1889, it is proved that any money, gift, or other consideration has been paid or given to or received by a person in the employment of His Majesty or any Government Department or a public body by or from a person, or agent of a person, holding or seeking to obtain a contract from His Majesty or any Government Department or public body the money, gift, or consideration shall be deemed to have been paid or given and received corruptly as such inducement or reward as is mentioned in such Act unless the contrary is proved."
  38. By s. 3, summary proceedings under the 1906 Act could be instituted within 6 months of discovery of the offence and s. 4 provides inter alia as follows:
  39. "(2) In this Act and in the Public Bodies Corrupt Practices Act 1889, the expression "public body" includes, in addition to the bodies mentioned in the last-mentioned Act, local and public authorities of all descriptions.
    (3) A person serving under any such public body is an agent within the meaning of the Prevention of Corruption Act 1906, and the expressions "agent" and "consideration" in this Act have the same meaning as in the Prevention of Corruption Act 1906, as amended by this Act."
  40. There matters rested until the latter part of the 20th Century and, in particular, until 17 December 1997, when the United Kingdom signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ("the 1997 Convention"). Article 1 of the 1997 Convention required signatories to take steps to ensure that the "bribery of foreign public officials" was a criminal offence. Article 4 concerned the issue of "jurisdiction":
  41. "1. Each Party shall take such measures as may be necessary to establish its jurisdiction over the bribery of a foreign public official when the offence is committed in whole or in part in its territory.
    2. Each Party which has jurisdiction to prosecute its nationals for offences committed abroad shall take such measures as may be necessary to establish its jurisdiction to do so in respect of the bribery of a foreign public official, according to the same principles.
    3. When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution.
    4. Each Party shall review whether its current basis for jurisdiction is effective in the fight against the bribery of foreign public officials and, if it is not, shall take remedial steps."
  42. Thus, the 1997 Convention required signatories, including the United Kingdom, to ensure that the bribery of a foreign public official was an offence in two situations. These were, first, in a case where the conduct constituting the offence of bribery of a foreign public official occurred in whole or in part in the United Kingdom; and, secondly, in a case where the bribery of a foreign public official occurred wholly outside the United Kingdom (where that the United Kingdom had jurisdiction to prosecute its nationals for offences committed abroad).
  43. Following the 1997 Convention, on 3 March 1998, the Law Commission published its Report entitled Legislating the Criminal Code: Corruption (Report Law Com No. 2480). The Law Commission reviewed UK law on corruption and analysed the 1889 Act, the 1906 Act and the 1916 Act in detail. The Law Commission stated "it is not entirely clear whether a public body existing outside the United Kingdom was a 'public body' within the meaning of the Acts" and expressed the provisional view that the bribery of an employee of a foreign public body would not be an offence under the 1889 Act and the presumption under s.2 of the 1916 Act would not apply (paragraph 3.17). However, it went on to state that if an official was "employed by or acting for" a public body, "he or she would be an agent within the original definition in section 1(2) of the 1906 Act, and the question of whether the body qualified as a public body would for this purposes be immaterial" (paragraph 3.18).
  44. Nevertheless, the Law Commission concluded that the present law on corruption was "in an unsatisfactory state" and it recommended that the "common law offence of bribery and the statutory offences of corruption should be replaced by a modern statute" (paragraph 2.33). It was for this reason that Bribery Act 2010 was eventually promulgated and then brought into force.
  45. Prior to the new legislation, in 1999, the OECD published a Review of Implementation of the Convention and 1997 Recommendation ("the 1999 Review"). The UK Government argued that its existing legislation adequately complied with the 1997 Convention. However, the 1999 Review expressed "serious concerns" as to the applicability of s.1 of the 1906 Act to the bribery of foreign public officials and urged the UK Government to enact a statute specifically prohibiting the bribery of foreign officials and raised other concerns (pp. 24-25).
  46. This led, in June 2000, to the publication by the government of a paper entitled Raising Standards and Upholding Integrity: The Prevention of Corruption in which it expressed the intention to bring forward legislation along the lines proposed by the Law Commission to the effect that "public official" is not confined to the public of the United Kingdom (para. 2.11). The result was ss.106-110 of the 2001 Act of which s.108 is material.
  47. Section 108 of the 2001 Act is headed "Bribery and corruption: foreign officers etc." and provides as follows:
  48. This section has no associated Explanatory Notes

    (1) For the purposes of any common law offence of bribery it is immaterial if the functions of the person who receives or is offered a reward have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom.
    (2) In section 1 of the Prevention of Corruption Act 1906 (c. 34) (corrupt transactions with agents) insert this subsection after subsection (3)—
    '(4) For the purposes of this Act it is immaterial if—
    (a) the principal's affairs or business have no connection with the United Kingdom and are conducted in a country or territory outside the United Kingdom;
    (b) the agent's functions have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom.'
    (3) In section 7 of the Public Bodies Corrupt Practices Act 1889 (c. 69) (interpretation relating to corruption in office) in the definition of "public body" for "but does not include any public body as above defined existing elsewhere than in the United Kingdom" substitute" and includes any body which exists in a country or territory outside the United Kingdom and is equivalent to any body described above ".
    (4) In section 4(2) of the Prevention of Corruption Act 1916 (c. 64) (in the 1889 and 1916 Acts public body includes local and public authorities of all descriptions) after "descriptions" insert "(including authorities existing in a country or territory outside the United Kingdom) ".
  49. In 2003, the OECD published a further review entitled Review of Implementation of the Convention and 1997 Recommendation Phase 1 Bis Report ("the 2003 Review"). The 2003 Review observed that s. 108 of the 2001 Act clarified that the existing offences of bribery extend to persons outside the United Kingdom (p.7). It also noted the commitment of the UK Government to pursue a wider reform of corruption law and recommended that it proceed with this reform.
  50. That brings us to the Bribery Act 2010 ("the 2010 Act") which represented the modernisation of the UK bribery law presaged by the 1998 Law Commission Report. The 2010 Act created a generic offence of bribery and repealed the 1889 Act, the 1906 Act, the 1916 Act and ss.108-110 of the 2001 Act. The 2010 Act came into force on 1 July 2011. There is no doubt that this legislation covers the bribery or corruption of an agent of a foreign principal.
  51. The Judge's Ruling

  52. In his clear and careful written ruling dated 10 November 2015, His Honour Judge Pegden QC held that the 1906 Act in its original form did not make it an offence to corrupt an agent of a foreign principal or foreign public body. Essentially, he agreed with the submissions advanced by counsel for the respondents.
  53. The judge's reasoning can be summarised as follows (using his numbering):
  54. a) The 1889 to 1916 Acts had to be read as a 'suite' of Acts.

    b) The 1889 Act only concerned corruption of UK public bodies (see s.7).

    c) The 1906 Act was concerned with anti-corruption legislation in the private sector and defined "agent" as including "any person acting for another".

    d) The 1906 Act made no express provision as to where the agents or principals existed (in contrast to the 1889 Act).

    e) Section 4(3) of the 1916 Act defined "agent" in the 1906 Act as including someone serving under "public body" and "agent" as to have the same meaning in all three Acts.

    f) If Parliament had intended the bribery of an agent of a foreign principal to be a crime, it would have said so clearly; and no-one should be penalised except under clear law (R v. Z [2005] UKHL 35, per Lord Bingham at para.16).

    g) The need to pass the 2001 legislation was indicative that a change of the law was required.

    h) There was little assistance to be gleaned from the government's representations to the OECD or the Law Commission's view or the authorities, although in R v. J and others [2013] EWCA Crim 2287 Lord Thomas CJ seemed to be of the view that the 2001 Act extended the 1906 Act to agents and principals overseas.

    HHJ Pegden QC concluded that it was not until 2001 and, in particular, the specific amendments made by the 2001 Act to the 1906 Act, that it became an offence to corrupt an agent of a foreign principal or foreign public body.

  55. The respondents accepted that the judge was in error in two respects in his reasons. First, as regards (c) above, the 1906 Act was concerned with anti-corruption legislation in the public and private sectors. Second, as regards (e) above, the word "agent" did not appear in all three Acts but only in the 1906 and 1916 Acts. The Respondents submitted, however, that in all other respects the Judge's reasoning was correct and his ruling should be upheld. The SFO submit that the ruling was wrong in law.
  56. Analysis

  57. The issue in this appeal is not one about territorial jurisdiction. The respondents accept for present purposes that sufficient conduct took place within the jurisdiction for the matter to be tried within England and Wales. This would accord with the common law test set out in R v Smith (Wallace Duncan) No 4 [2004] QB 1418).
  58. The issue before us is one of pure statutory construction, in respect of which the usual principles apply. Absent an indication to the contrary, the words of a statute are to be given their plain, ordinary and natural meaning. We bear well in mind the need for legal certainty in criminal law (per Lord Bingham in R v. Z [2005] UKHL 35, at [16]). The test is one of "sufficient rather than absolute certainty" (see R v Misra [2005] 1 Cr App R 27 at [32-37]; Kokkinakis v Greece (1994) 17 EHRR 397 at [44-46]).
  59. English criminal law defines offences, whether common law or statutory, simply by reference to the elements of the offence. Leaving aside threshold questions of jurisdiction, there is no general principle which excludes crimes committed by or against foreign persons. Absent clear words, the nationality, residence or location of the victim or perpetrator is irrelevant to the ingredients of the offence.
  60. We turn first to the 1906 Act which created an entirely new statutory offence of corruption. The offence was framed in terms of "principal" and "agent" (per Lord Thomas CJ in R v. J and others [2013] EWCA Crim 2287 at [27]). Its matrix was very different from the 1889 Act. The 1906 Act does not use the term "public body" and that expression appears nowhere in the 1906 Act; furthermore, the term "agent" does not appear anywhere in the 1889 Act.
  61. The key element of the 1906 Act offence is corrupt conduct of an "agent" in connection with the affairs of his "principal". Unlike the 1889 Act, the 1906 Act covered corruption in public and private sectors. Section 1(1) created three "agent" offences: the first concerning the "agent" himself; the second concerning the person engaged in a corrupt transaction with the "agent"; and the third concerning any deception of the "principal" by his "agent".
  62. Against that background, the starting point is to consider the plain, ordinary, natural meaning of the words "agent" and "principal" in the 1906 Act. In our judgment, the meaning of these words is clear: absent other indications, the words include both foreign and domestic persons or organisations.
  63. In that regard, the expressions "agent" and "principal" are well understood and have long been in common usage. In common parlance, they denote a relationship in which the former acts for and/or represents the latter in business or other contexts. At common law, an agent has the power to change the legal relations of his principal. The expressions "agent" and "principal" are neutral in terms of nationality, location or territory.
  64. The development of late 19th and early 20th century English mercantile law tracked the expansion of global trade. The jurisprudence of the law of agency at this time was redolent with examples of domestic and foreign "agents" and "principals" (see e.g. the case tried by Sir George Jessel MR in 1877 involving a Bombay shipping agent referred to by Albert Crew, supra). Accordingly, early 20th century law-makers would have had no difficulty with the concept of "agents" and "principals" embracing both foreign and domestic persons.
  65. Consider further the definitions of words "agent" and "principal" in the 1906 Act, which are wide and untrammelled. Section 1(2) defines "agent" widely and non-exhaustively (viz. "the expression "agent" includes any person employed or acting for another…"). Section 1(3) includes a Crown servant in the category of "agent" ("A person serving under the Crown… is an agent…"): in that way, the complication of the true nature of office holders is avoided. Section 1(2) defines "principal" equally widely and non-exhaustively (viz. "the expression "principal" includes an employer").
  66. In our view, ss. 1(2) and (3) were designed to ensure that the statutory definition of the expressions "agent" and "principal" are understood as bearing their (broader) ordinary and natural meaning rather than their (narrower) legal meaning. Under the law of agency, servants, employees or independent contractors are not necessarily treated as "agents" (c.f. Attorney-General of Ceylon v Silva [1953] AC 461 (PC) and Chitty on Contracts, 32nd edn, para. 31-008). Thus, by expressly including in the expressions "agent" and "principal" persons who might in contractual law terms otherwise be excluded, the draftsman was seeking to ensure that these terms were given their ordinary English language meaning rather than their technical legal meaning. By way of example, see R v. Barrett [1976] 1 WLR 946 where an additional superintendant of births, deaths and marriages, who accepted £4 for granting an early marriage date, was held to acting on behalf of the Crown in the performance of his duties and an "agent" for the purposes of the 1906 Act.
  67. In our judgment, the key point in this appeal is that the two statutes of 1889 and 1906 provide for two species of corruption offence which exist in parallel. The 1889 Act addresses corruption connected with "public bodies". The 1906 Act addresses corruption connected with "agents" and "principals". The footprint of the two species overlap to some extent (c.f. a Venn diagram), but they remain separate and distinct offences which are capable of being separately charged.
  68. Thus, the fundamental problem facing the respondents is that, unlike the 1889 Act which expressly limits the meaning of "public body" to UK public bodies (s. 7), the 1906 Act contains no similar wording which limits the meaning of "agent" or "principal" to UK persons. The various sophisticated arguments on construction advanced by the respondents are all designed to get round this difficulty. In our judgment, however, none of the Respondents' arguments provide an answer to the straightforward construction of the plain words of the 1906 Act. If Parliament had intended to exclude foreign principals from the scope of the 1906 Act, it would have done so.
  69. From that basic premise, we turn to consider in more detail some of the principal arguments raised by counsel. The first concerns the proper construction of the 1906 Act. Thus, the respondents argued that s. 1(2) of the 1906 Act defined "agent" as including "any person employed by or acting for another"; that a public body fell within the definition of "another" but the 1906 Act did not repeal s. 7 of the 1889 Act which expressly excluded from the definition of "public body", those existing outside the United Kingdom; accordingly, s. 1 of the 1906 Act was governed by the limitation in s. 7 of the 1889 Act. In our view, however, this attempted syllogism does not survive the clear meaning of the terms "agent" and "principal" in the 1906 Act as we have set out above. The 1906 Act simply does not incorporate the definitions of the 1889 Act.
  70. Second, the respondents placed great weight on what was said to be the effect of s. 4(3) of the 1916 Act on the definition of "agent" in the 1906 Act. The argument can be summarised as follows: since s. 4(3) of the 1916 Act extended the definition of a "public body" whilst retaining its domestic limitation imposed by s.7 of the 1889 Act, and since a person serving a "public body" so defined would qualify as an "agent" for the purposes of the 1906 Act by virtue of s. 1(3), it followed logically, that the true construction of the expression "agent" must exclude agents of foreign public bodies.
  71. In short, the respondents contended that the effect of s. 4(3) of the 1916 Act was to 'import' the UK-based definition of a "public body" contained in the 1889 Act into the 1906 Act. In that regard, the respondents relied on the fact that s. 4(1) provides that the 1889 Act, the 1906 Act and the 1916 Act could be cited together as the "Prevention of Corruption Acts 1889 to 1916", i.e. they could be read together as a 'suite' of Acts. Counsel for the respondents also referred us to various well-known sections in Bennion on Statutory Construction, 6th edition (Sections 209, 234 and 262).
  72. In our view, however, the respondents' somewhat attenuated argument based on s. 4(3) of the 1916 Act suffers from a number of flaws. The first flaw is that it ignores the fact that ss. 1(2) and (3) of the 1906 Act uses non-exhaustive language (see above) which militates against the Respondents' restrictive construction. This non-exhaustive or inclusive language in the 1906 Act is to be seen in contrast to the exhaustive or exclusive language in s. 7 of the 1889 Act ("the expression "public office" means…").
  73. The second flaw is that the respondents' argument ignores the clear construction and effect of the 1916 Act. Section 4(2) of 1916 Act extended the meaning of "public body" in the 1889 Act to all "local and public authorities of all descriptions, in addition to those mentioned in the 1889 Act" (albeit it was accepted by the prosecution not those existing outside of the United Kingdom). Section 4(3) of 1916 Act simply made it clear that "a person serving under any such public body" was an "agent" under the 1906 Act in the same way as a person "serving under the Crown" was an "agent" under s. 1(3) of the 1906 Act. The 1916 Act thereby aligned the two species of servant under the umbrella of "agent". Section 4(3) further widened the definition of "agent" by adding to the non-exhaustive list in s. 1(3) of the 1906 Act persons to be included within the definition of "agent". Nowhere, however, does the 1916 Act purport to touch upon, let alone alter, the definition of the term "principal" in the 1906 Act.
  74. The third flaw is that s. 2 of the 1916 Act created a presumption of corruption which applies equally to offences under the 1889 Act and the 1906 Act, but only to employees of public bodies within the United Kingdom, and only where they receive a benefit from a person holding or seeking a contract with such a body. It is to be assumed that, for policy or political reasons, Parliament did not at this stage see fit to impose the same reverse burden of proof on private bodies or foreign public bodies. Finally, we ought to add that the mere fact that a raft of statutes covering the same area may be cited collectively (e.g. the Merchant Shipping Acts 1894 to 1994) does not mean that basic rules of statutory construction can be ignored.
  75. The third argument raised by the respondents concerned public policy. It was submitted that the construction placed upon the legislation by the prosecution would amount to an illegitimate 'long-arm' interference with the affairs of a foreign body. They also suggested that there was an incongruity in a foreign agent being criminally liable in England for making payments of a sort which would be perfectly lawful in the foreign jurisdiction.
  76. In our view, however, there is nothing in this point. It has always been within the purview of the English legislature and courts to categorise conduct of persons within their territory as criminal, and regardless of whether that same conduct would be lawful if carried on elsewhere in the world. Further, there are no sound reasons of public policy why the scope of the corruption offences under the 1906 Act should be restrictively construed so as to exclude foreign principals contrary to the natural meaning of the words used. Indeed, to do so, would lead to anomalies.
  77. The Respondents also relied upon the rule of construction against evasion (see Bennion on Statutory Construction, 6th edition, Sections 319-326). We did not find this argument easy to follow. As we understand it, the respondents made two essential submissions. First, a later statute would not implicitly override a limit in an earlier statute. Second, it would be an abuse for a prosecuting authority to select a later Act and construe it in a manner inconsistent with the first Act. In our view, however, there is no basis for these complaints. In short, for the reasons we have explained above, we do not accept the respondents' construction of the legislation: the 1889 Act and the 1906 Act comprise different offences and the SFO were and are entitled to prosecute under whichever they deemed appropriate.
  78. Finally, the respondents relied upon the 2001 amendments to the 1906 Act and submitted that it was clearly thought necessary to amend the 1906 Act to widen its scope to include foreign principals, thereby lending support to the construction preferred by the judge. In our view, this argument carries no weight. We accept that, following the enactment of s. 108(2) of the 2001 Act, it was beyond argument that foreign agents and principals fell within the scope of the offence contrary to s. 1 of the 1906 Act. However, it is equally clear that the 2001 amendments were enacted ex abundantae cautelae to address the concerns expressed by the OECD in the 1999 Review. This concern was notwithstanding the view expressed by the government (supported by the view of the Law Commission in para. 3.18 of its 1998 Report as to which see [29] above) that foreign agents and principals were covered by s. 1 of the 1906 Act: in our judgment, both were correct.
  79. We have reached these conclusions purely as a matter of statutory construction, it being common ground that there is no authority which directly deals with the question of law raised in this appeal. It would not be appropriate, however, to conclude this judgment without reference to the few authorities which, albeit not determinative, have some relevance to the issue.
  80. R v. Raud [1989] Crim LR 809 (CA) concerned an appeal against conviction for conspiracy to contravene s. 1 of the 1906 Act in circumstances in which the appellant, corruptly to obtain money for Irish passports, had conspired with an official working for and employed at the Irish Embassy. Territorial and jurisdictional issues were raised but it was at no stage suggested that the substantive offence could not be committed because the case involved a foreign government. More significantly, the point did not occur to the distinguished criminal lawyers that were the constitution of the court (Lord Lane CJ, Rose and Tucker JJ). Furthermore, as an example of the operation of the law, the Serious Fraud Office refer to R v. Van der Horst (3 January 1996, Southampton Crown Court), in which no point was taken that the corrupt payments were received by a foreign agent of a foreign principal which was a Bahamas registered subsidiary of the US company Exxon.
  81. In Kensington International Ltd v. Republic of Congo [2007] EWCA 1128, the Court of Appeal (Civil Division) was concerned with events subsequent to the coming into force of the 2001 Act and did not have to consider the law prior to that date. Having cited the offences contained within the 1889 Act and the 1906 Act, Moore-Bick LJ observed (at [54]):
  82. "All these offences are capable of being committed in relation to agents and public officials abroad and by United Kingdom nationals abroad by virtue of sections sections 108 and 109 of the [2001 Act]"
  83. Given that the 2001 Act put the matter beyond argument and that the court was not considering the position prior to the passage of that legislation, the comment does not take the matter further. Similarly, in R v. J and others [2013] EWCA Crim 2287, having analysed the legislative history of bribery and corruption, Lord Thomas CJ expressed the view obiter (at [31]) that the 2001 Act extended the 1906 Act "to cover agents and principals overseas". That case also concerned a very different issue, namely, whether it was a necessary ingredient of the 1906 Act offence for the prosecution separately to prove lack of informed consent, i.e. that the payment for the prohibited purpose had been made secretly. The issue in this case neither arose nor appears to have been argued. In the circumstances, whilst we accord the observation respect, we do not accept that he was, in reality, correctly expressing what the law, prior to 2001, had been.
  84. Conclusion

  85. For the above set out reasons, we are satisfied that prior to the coming into force of the Anti-Terrorism, Crime and Security Act 2001, it was an offence under s.1 of the Prevention of Corruption Act 1906 to corrupt an agent of a foreign principal or a foreign body. In the circumstances, this appeal is allowed and, pursuant to s. 9(14) of the 1987 Act, the ruling of Judge Pegden is reversed.


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