On 18 June 2014, two individuals involved in the Innospec corruption of Indonesian officials, were convicted for conspiracy to commit corruption.  This is the first ever contested prosecution for overseas corruption brought by the Serious Fraud Office (“SFO”) concerning bribery of public officials under the pre-Bribery Act 2010 corruption regime.


These prosecutions were brought against Innospec Limited’s (“Innospec”) former executives following the corporate pleading guilty to bribing foreign officials and agreeing to pay fines to, amongst others, the SFO in December 2009.  This was part of a sentencing deal negotiated with the UK and US authorities (who had uncovered the wrongdoing as part of an investigation into Innospec’s US parent, Innospec Inc, relating to the UN Oil for Food Programme).  Innospec admitted that it had paid US$8m in bribes to employees of Pertamina (an Indonesian state owned refinery) and other government officials in Indonesia to secure contracts worth US$170m for the supply of Tetraethyl lead.

A “global settlement” was reached in December 2009 and a plea agreement was entered into between Innospec Inc, the US Department of Justice (“DoJ”), the SEC, the Office of Foreign Asset Control and the SFO.  This was a global settlement of US$28.8m, comprising fines of US$14.1m for the US authorities and US$12.7m for the SFO, subject to the US and UK courts’ approval.  The UK fine was begrudgingly approved by the English court on 26 March 2010 (see our previous LawNow regarding the judge’s comments here).  However, the court noted that the SFO did not have the power to enter into such agreements and no such deal should be entered into again.  This judgment was one of the drivers for the introduction earlier this year of deferred prosecution agreements (“DPAs”) as a tool for resolving corporate economic crime cases.

Following the corporate settlement, four Innospec executives were charged with conspiracy to corrupt: Dr Miltiades Papachristos (former regional sales director for the Asia Pacific region), Dennis Kerrison (former CEO), Paul Jennings (former CEO) and Dr David Turner (global sales and marketing director).  The offences took place between 2002 and 2008 and were, therefore, pre-Bribery Act 2010 offences.  Both Mr Jennings and Dr Turner pleaded guilty (to various counts of conspiracy to corrupt), while Dr Papachristos and Mr Kerrison entered not guilty pleas and went to trial, following which they have now been convicted.  All four executives are expected to be sentenced on 25 July 2014.


The jury’s unanimous verdict represents a positive outcome for the SFO, following what has been a lengthy (and no doubt costly) investigation and trial process.  These convictions are particularly notable as they are for offences under the pre-Bribery Act 2010 regime, which are considered notoriously difficult to prosecute – that difficulty being one of the key reasons for the introduction of the more straightforward offences under the Bribery Act 2010.  This success may, therefore, give the SFO confidence to pursue more individual prosecutions for overseas corruption, particularly for offences under the Bribery Act.

It also demonstrates the extent of national and international co-operation between authorities, with the SFO crediting the DoJ, DEC, City of London Police, Cheshire Constabulary and authorities in Indonesia, Switzerland and Singapore for their assistance in securing this outcome.

Finally, it will be interesting to see how the court approaches sentencing of the four individuals, given two had pleaded guilty at an early stage, while the others contested the charges; the sentences may provide an early indicator of the court’s approach under recently published sentencing guidelines for corruption offences, although those guidelines do not technically come into force until October 2014. 

It may be that Innospec’s well-publicised plea agreement played a role in the jury’s decision-making.  This may further encourage the SFO, given the recent introduction of DPAs, which require publication of an agreed statement of facts regarding the wrongdoing and an undertaking that the corporate will co-operate with the SFO in the investigation and prosecution of individual wrongdoers, including employees.  This brings into focus concerns that DPAs, which may be agreed by corporates for commercial and pragmatic reasons even where there may be weaknesses in the prosecution’s case, could harm the defences of those individuals later prosecuted for the underlying wrongdoing, as juries may note that the corporate had been willing to settle its potential liability through a DPA and view that as an implicit (if not explicit) acknowledgement that a crime had occurred.