Proprietary rights in payment of bribes and secret commissions coming home? Perhaps this week.

The Football World Cup as global drama seems, by dint of the sheer brilliance of the players, to have shaken off preoccupations about the beautiful game’s darker subplot – including the Qatari allegations of bribes and secret commissions. It is currently speculated that such payments, if proven could result in a re-run of the entire bidding process for the staging of the 2022 World Cup. The case of FHR Ventures LLP v Cedar Capital Partners (and Mr Mankarious) is more modest in remedial terms – the principal seeking to recover back the value received by the agent (the first measure of the agent’s enrichment), or the value surviving (the second measure of enrichment) or traceable in the hands of the agent or third parties (if a proprietary claim is for the first time recognised by the Supreme Court) in agency type cases.

Relevance of this bribery case to Universities:

All Government contracts contain provisions relating to the criminal law and the Bribery Act 2010, however any University would still have to fall back on the common law to seek the recovery of bribes and secret commissions in all their general contracts so this week’s appeal is highly relevant to our general contracting position and a useful reminder of the current state of the law.

The question before the UK Supreme Court this week does not perhaps include the category of corrupt payments in the form of a bribe, however it does include the remedial consequences of secret commissions, and bribes to agents, and whether the beneficiaries could seek recovery not merely as a personal claim but also upon a constructive trust, and allow recovery on a proprietary basis.

This is an age old problem – best illustrated by the nineteenth century case of Lister v Stubbs [1890] 45 Ch D 1 (the claim against an agent receiving a secret commission, the principal being confined to only a personal claim for value received by the agent) closing off any possibility of a proprietary claim by trust, constructive or otherwise. Lister was not followed in the later Privy Council decision (a bribe case involving a Government prosecuting official) in Hong Kong v Reid [1994] 1 AC 324.

The Supreme Court website has put the question on appeal as follows:
Does an agent who receives a secret commission hold the sum paid on constructive trust for his principal(s) giving rise to proprietary rights?
The facts
The applicants in the appeal are a company called Cedar Capital Partners (CCP/’Cedar’) who together with a Mr Mankarious entered into an agreement (an exclusive Brokerage Agreement) with the owners of a hotel in Monte Carlo, for Cedar to arrange for the sale of the hotel in exchange for a fee of €10m. Cedar subsequently acted as agent on behalf of the respondents in the appeal, who were a consortium who wished to purchase the hotel for €211.5m. The €10m fee was paid to Cedar in accordance with the Brokerage Agreement within 5 days of the owners of the hotel receiving the payment price for the hotel from the consortium. The €10m fee (paid by the vendor to the agent Cedar) was a payment unknown to the consortium (purchasers) on the facts.
When the consortium discovered the payment of the €10m to Cedar/Mr Mankarious, they sought recovery of the payment from Cedar/Mr Mankarious. They succeeded before Justice Simon in obtaining an account for the €10m, however the judge held that the claim was personal only (‘in personam’) and the money held by Mr Mankarious was not held on a proprietary basis, on a constructive trust or otherwise.

The Court of Appeal reversed this decision, and held that in receiving the secret commission, Cedar/Mr Mankarious had exploited an opportunity properly belonging to the consortium, and accordingly the €10m fee was to be held on a constructive trust, which was proprietary in nature, and therefore traceable as surviving enrichments in substitutions (eg. where the €10m was used to purchase property as a substitute for the original enrichment, or paid into or converted into property through other media such a bank account etc).
This proprietary quality in the enrichment is the subject of the appeal – a claim and legal right not previously recognised at the highest Court level in relation to agents receiving secret commissions or bribes.
The general concern has been to disallow a beneficiary principal gaining priority in an insolvency claim in the insolvent fraudster’s estate, but this legal policy might change next week.

There are seven Supreme Court Justices listed; and Lord Collins has been called back into the squad as an impact player for his understanding of Company law, insolvency and priority. It would be mixing metaphors to say he has come off the bench, in fact being called back ‘to’ the Bench!

Lord Collins appears to have been the first instance judge in Daraydan (etc) v Solland (etc) [2004] EWHC 622, involving the recovery of bribes and secret commissions charged in the refurbishment of luxury properties in London and – er Qatar. In the event that the current law of Equity undergoes a change this week, in recognising that the receipt of a secret commission or a bribe has proprietary consequences and that beneficiaries could indeed engage in the process of tracing, identify and follow substitutions made in the property to its ultimate surviving value or indeed into the hands of a third party, it will arguably add to the armoury of the victims on the margins of bribery and fraud. So as in the World Cup, there is still ‘everything to play for.’

First Instance decision of Simon J:

Court of Appeal decision of Lewison LJ:

the decision of Lawrence Collins J in Daraydan (etc) v Solland (etc) [2004] EWHC 622:

Contract Review Process

The University has a Contracts and Compliance officer, Chris Kenning. He provides internal legal support and expertise in the area of research and funding.

He looks into Research Contracts in the University sector, with growing interest in ensuring the distribution of academic research for the enhancement of learning and the protection of the University’s commercially exploitable academic and scientific knowledge to the benefit of the University and staff where applicable.

This document takes you through the Contracts Review Process

If you need further support:


Case study RETS



SU Lead Person 

Funding body Interreg

Prof. Jon Fairburn


Project Partners

12 European partners (local authorities, development agencies, NGOs, chambers of commerce – see project website)

Project title Renewable Energies Transfer Scheme (RETS)



The main objective of RETS was to improve the knowledge and competencies of local and regional policymakers in renewable energies in order to facilitate the deployment of renewable energy policies.The core RETS activities concerned the creation of simple usable tools for local authorities in order to help them make informed choices for the implementation of the right renewable energy strategy within their territories.
When did it run? 2010 -2012
What were the outcomes? A wide range of academic and professional staff learned what was involved with an INTERREG project as well as EU projects in general. The project as a whole produced:

Future / ongoing activities as a result of this project We are still in contact with the lead and we hope to develop other projects together in the next funding round.An excellent project we learnt a lot and contributed a lot.
Top tips for this funder Be able to demonstrate communication and networking activities.
How easy was the application? The lead was ADEC who managed the application process
Think this project looks interesting? What NextFor further support from the External projects team contact: or call 01785 353774

Temporary copies (on-screen) and the cached copies: not requiring permission of the copyright holder? The European Court wades in ‘Meltwater’

Public Relations Consultants Association Ltd v Newspaper Licensing Authority and others
Newspaper Licensing Authority v Meltwater [2013] UKSC 18

The Court of Justice of the European Union – Judgment made on 5 June 2014 – Temporary acts of (copyright) reproduction within section 28A of the Copyright Deigns and Patents Act 1988

This blog is an update from those previous, dealing with the above Meltwater Judgment of the UK Supreme Court (see links below). The facts can be found in the previous blogs on this subject; however it is clear that the decision is of great assistance to the consultant company (Meltwater) and its Association; the case will presumably be remitted back to the UK Court to finalise the issue of costs – what appears to be a substantial victory in terms of their accessing temporary copies of copyright works. In the writers’ view this appears to be a logical result in terms of the general functionality of the Internet, but the writer anticipates that ‘Paywalls’ and other secure access portals to copyright works, such as News media will perhaps proliferate to a greater extent. Readers will recall the gist of the UK Supreme Court decision, namely that viewing the Meltwater report(s) on the website appears to be covered by the ‘temporary copies’ exception within section 28A of the Copyright Designs and Patents Act 1988.

The reference to the Court of Justice of the European Union

It will also hopefully be recalled (from the previous blog) that Lord Sumption stated that the issue in the appeal has a ‘transnational dimension’ and that the application of copyright law to internet use has important implications for many millions of people across the EU making use of what has become a basic technical facility.’

The questions referred by the UK Supreme Court were as follows (see paragraph 20 of the CJEU judgment):
In circumstances where :

an end-user views a web-page without downloading, printing or otherwise setting out to make a copy of it ;
copies of that web-page are automatically made on screen and in the internet “cache” on the end-user’s hard disk;
the creation of those copies is indispensable to the technical processes involved in correct and efficient internet browsing;

the screen copy remains on screen until the end-user moves away from the relevant web-page, when it is automatically deleted by the normal operation of the computer;

the cached copy remains in the cache until it is overwritten by other material as the end-user views further web-pages, when it is automatically deleted by the normal operation of the computer;
and the copies are retained for no longer than the ordinary processes associated with internet use referred to at (iv) and (v) above continue;

Are such copies (i) temporary, (ii) transient or incidental and (iii) an integral and essential part of the technological process within the meaning of Article 5(1) of Directive 2001/29/EC1 ?
1 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
The European Court of Justice’ answer:

On those grounds the Court (Fourth Chamber hereby rules:

“Article 5 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the copies on the user’s computer screen and the copies in the internet ‘cache’ of that computer’s hard disk, made by an end-user in the course of viewing a website, satisfy the conditions that those copies must be temporary, that they must be transient or incidental in nature and that they must constitute an integral and essential part of a technological process, as well as the conditions laid down in Article 5(5) of that directive, and that they may therefore be made without the authorisation of the copyright holders.”

The following are important to note from the CJEU Judgment:

1. Paragraph 26: the on-screen and cached copies from a computer are ‘temporary in nature;

2. Paragraph 33: on-screen and cached copies are regarded as ‘an integral part of the technological process’ at issue in the main (ie.UK) proceedings

3. Paragraph 37: the on-screen copies and the cached copies are ‘an essential part of the technological process’ at issue in the UK proceedings;

4. Paragraph 46: the period during which the on-screen copies remain in existence is limited to what is necessary for the proper functioning of the technical process used for viewing websites. Consequently the copies must be regarded as ‘transient’.

5. Paragraph 54, 60 and 63: Art 5(5) of the Directive (cf. the exemption applying provided it ‘does not conflict with a normal exploitation of the work and…not unreasonably prejudice the legitimate interests of the rights holders’ was not breached and could therefore be made without authorisation from the copyright holders.

The CJEU judgment (5 June 2014) can be found at:
The Court of Appeal decision can be found at:
The decision at first instance, of Mrs Justice Proudman can be found at:
The UK Supreme Court Press Summary can be found at:

Click to access UKSC_2011_0202_PressSummary.pdf

The UK Supreme Court decision (lead judgment by Lord Sumption) can be found at:

Click to access UKSC_2011_0202_Judgment.pdf

and on the Bailii Site at:

Click to access 18.pdf

Factsheet on Knowledge Alliances fund under Erasmus+

The European Commission are encouraging Higher Education institutions to work in partnership with businesses on innovative projects that address teaching and learning. The projects are expected to generate long term partnerships which develop entrepreneurship.

The funding is called Knowledge Alliances and is part of the Erasmus+ scheme. Although the deadline for 2014 has recently closed, it takes time to develop a strong consortium and project idea. The External Projects Team is encouraging staff to get thinking on project ideas for 2015. To help have we have created a factsheet giving an overview of the fund.

It is expected that the 2015 deadlines will be in March/April, with calls coming out around November 2014.

Download Knowledge Alliance factsheet here

The External Projects Team can help you to find project partners and can help develop project ideas. Anyone who is interested should contact the team on


Horizon 2020: Notes on the Annotated Model Grant Agreement : the General MGA

Please find attached the link to discussion document issued by the Commission in relation to the General MGA. The preliminary discussion document refers mainly to Finance and financial information. However, it is informative in relation to clarification of contractual terms, such as the Intellectual property clauses.

For Intellectual property the following are noteworthy, the 2008 Recommendations have been well and truly dusted off, and re-emphasised:

1. the Notes emphasise the obligation to take measures to implement the ‘Commission Recommendation’ on the management of intellectual property in knowledge transfer activities (see page 23 – Section 3: Rights and Obligations related to Background (IP) and Results). The recommendation principles were that member states are required: (i) to ensure that all public research organisations define Knowledge Transfer as a strategic mission and (ii) encourage public research organisations to establish in public policies and procedures for the management of intellectual property in line with the Code of Practice set out in Annex 1 (see link to the Commission Recommendations below).

Click to access h2020-amga_en.pdf

the Link to the 2008 ‘Commission Recommendations on the Management of Intellectual Property in Knowledge Transfer Activities’

2. Article 26.4, is noteworthy (at page 179) whereby as ownership to protect Results, the Agency/Commission,
“may with the consent of the beneficiary concerned, assume ownership of results, ‘to protect them’, if a beneficiary intends up to four years after the period set out in Article 3 – to disseminate results…”

It will remain to be seen how this provision and its exceptions will operate, especially in light of the fact that Universities and commercial parties might not have had sufficient time to assess whether the IP could be commercially exploited – even after the period of 4 years following the contractual period set out in Article 3.

There are many useful Notes in the attached, including some curiosities (such as at Article 26.2, page 178). In relation to joint ownership of IP by reason of joint creation, which (in the view of the writer) begs more questions than it answers. It is arguable that the parties would separately agree ownership regardless of the manner of creation of the IP – an issue that will be further discussed in relation to Article 26.2 – the joint ownership agreements will require closer consideration.

3. At the top of page 180, there is the Note which reads: ‘Best Practice: To avoid or resolve ownership disputes, beneficiears are advised to keep documents such as laboratory notebooks to show how and when they produced the results’ Laboratory Notebooks have been the subject of a previous Blog, however the Notes cover other useful ‘Best Practice’ gems such as this.

May’s Wider Outlook is here!


Welcome to May’s Wider Outlook—the team have chosen the theme of  working with others and collaboration we have identified a number of opportunities including : working with overseas partners, NIHR, Arts related funding, and sandpits.

Our lead article looks at recent collaborative work undertaken by Universities in the US, Canada and Ireland on the impact of Star academics on the wider university academic staff. Enjoy this edition and as ever do contact us with any comments, ideas or suggestions at

Costs in the Intellectual Property Enterprise Court: Considering conduct of the parties when assessing costs – Access to Justice?

Please find attached an interesting short article (following the previous Blog of 26 March 2014 herein) on the issue of costs in the recent case for making groundless threats of infringement of patent (contrary to section 70 of the Patents Act 1977), that was brought against Mr Perry.

Mr Perry apparently on 26 March 2014 circulated a letter purportedly written by ‘Mr Justice Hacon’; bizarrely reversing the decision in the proceedings. What happens in relation to costs in the light of this and other ‘intemperate’conduct as classified by the Judge?

One of the reasons the IPEC has been celebrated as a great success in terms of Access to Justice for Intellectual Property litigants, small businesses and individuals alike, is that win, lose or draw, the costs cap is set at £50,000.00. The IPEC has been a successful model Court because of the constraint put on costs – can a party’s conduct lead to release of such constraint?

The Judge indicated that the circulation of the purported letter by Mr Perry was a further example of ‘intemperate and eccentric behaviour’ (paragraph 14) in the conduct of of those proceedings; however it is difficult (in the view of the writer) to discern when the conduct of a party becomes ‘truly exceptional’ having regard to the conduct of the parties when assessing costs. Judge Hacon’s decision, notably paragraphs 10 to 17 (under the heading ‘Departure from the costs cap and scale of costs’) explains why in this case the total award of costs against Mr Perry was not granted above the cap of £50,000.00.

Further Judgment of Judge Hacon of the Intellectual Property Enterprise Court (IPEC) dated 2 April 2014

IPKat Blog discussing the above costs decision:

A comparison of FP7 and Horizon 2020


The most important changes are outlined below:

Description FP7 Horizon2020
Focus Research Research and Innovation
Budget 55 billion € ~ 79 billion €
Components Cooperation, Capacities, People, Ideas, Euratom, JRC Excellent Science, Industrial Leadership, Societal challenges,   Spreading Excellence, Science for Society, EIT, JRC, Euratom
Funding rate (up to) for research 75% 100%
Funding rate (up to) for Demonstration/ Innovation projects 50% 70%
100% for non-profit organizations
Overhead/indirect costs Different   models (20% 60% or actual) 25%
Time-to-grant 12 months in average after submission of proposal reduced to 8 months
Ex-ante financial viability check All   beneficiaries exceeding 500,000 EUR EU contribution Coordinators
Audit certificates to be submitted All beneficiaries exceeding 375,000 EUR EU contribution – cumulative   in periods All beneficiaries exceeding 325,000 EUR EU contribution – only one at   the end of the project
Interest on pre-financing Reported by the coordinator No need to declare
Thematic approach “Cooperation” 10 themes Will be under “Industrial leadership” and “Societal challenges”
Frontier Research, ERC New in FP7 – Ideas block Extended under the “Excellent Science” pillar


March’s Wider Outlook is here!

Welcome to March’s Wider Outlook—

the team have chosen the themes of alternatives to EU research funding and alternatives to research council funding –page one considers alternative sources of funding for developing ideas that could have commercial opportunities. Page two highlights External Project Team events coming up in March and April.

As ever do contact us with any comments, ideas or suggestions at