The Criminal Division of the U.K. Court of Appeal on Tuesday upheld the conviction of Alstom Network UK, the British subsidiary of French power and transportation company Alstom, over a bribery case concerning an infrastructure contract in Tunisia.
At the heart of the decision, the court found that “directing minds” of the company do not need to be present for a corporate defendant to get a fair trial.
The main question in this case before the Court of Appeal in Southwark Crown Court: “Can there be a fair trial of a corporate defendant … for conspiracy where its guilt depends on the guilt of individual Y—its ‘directing mind and will’ (DMW)—in circumstances where Y is neither indicted as a co-conspirator nor otherwise available to give evidence at the trial?”
On April 10, 2018, Alstom Network was found guilty of one count of conspiracy to corrupt for paying €2.4 million ($2.7 million) in bribes to Construction et Gestion Nevco to secure an €85 million (U.S. $95 million) tram and infrastructure contract in Tunisia, as alleged by the Serious Fraud Office. Alstom Network appealed, arguing the trial was unfair because the “directing minds” (the executives at the center of the case) were absent.
Those executives were Jean-Daniel Lainé, former senior vice president of ethics and compliance, and Bruno Kaelin, former group head of compliance. Ultimately, the Serious Fraud Office did not prosecute Lainé in the Tunisia case. Kaelin was in Switzerland and could not be extradited.
In its decision, the Court of Appeal disagreed with Alstom’s argument that the trial was unfair. Judge Peter Gross, the lead judge on the Court of Appeal panel, said in the decision that the appeal “can only succeed if we are of the view that there is an arguable case that, absent the DMWs, a fair trial could not be conducted in respect of the Tunisian contract.”
The court agreed with the SFO’s counsel that the case “has to go so far as demonstrating unfairness, akin to an abuse of process, in order to succeed.” But that was not the case here, the panel found. Assuming the presence of Kaelin or Lainé would have been helpful, the ruling stated, “it falls a long way short of demonstrating, even arguably, that the trial was unfair and the conviction unsafe.”
“However important the DMW, a company is and remains a separate legal entity from the person or persons constituting its DMW,” the decision stated. “[T]he fact that the DMW is absent from the trial does not mean that the company is absent. In the present case, [Alstom] was very much present and enjoyed the benefit of powerful legal representation; there can be no doubt that [Alstom] participated effectively in its trial.”
The court also noted Alstom Network’s counsel distanced himself from any suggestion that a corporate conspirator could never be tried in the absence of a directing mind. “[I]t is plain that, if well-founded, his principal submission would have wide and untoward ramifications,” the panel held. “As a matter of principle and policy, we are unable to accept his core proposition.”
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