The High Court has upheld the decision of the Crown Court that the SFO can apply to the court to terminate a DPA after the date upon which it was stated to come to an end.
Guralp Systems entered into a DPA with the SFO in October 2019, following an investigation into allegations that it bribed foreign officials to buy its technology. Given its parlous financial state, the DPA provided for it to disgorge a relatively low amount of profits of just over £2 million. The DPA did not state a date by which this payment needed to be made, in a departure from other DPAs. The DPA was stated to be effective for a period "ending on or before 22 October 2024, when the financial terms ... have been fully satisfied".
In June 2023 Guralp wrote to the SFO, stating that it might not be able to meet its financial obligations under the DPA and that a variation of the terms might be needed. An exchange then took place with the SFO proposing a part payment by October 2024 and the rest by 2027 with interest payable at 8%. No response was received to this by 22 October 2024, and so the SFO applied for a hearing to deal with the breach.
The jurisdiction question
Guralp then argued that the court lacked jurisdiction to deal with the breach. The power of the court under Schedule 17 of the Crime and Courts Act 2013 may be exercised "at any time when a DPA is in force". Guralp pointed to the fact that the DPA was stated to be effective for a period ending on 22 October 2024.
In the Crown Court in January 2025, Davis LJ applied the usual rules of contractual interpretation to the DPA. What was critical was the intention of the parties at the time the DPA was entered into. The judge held that "The quid pro quo for avoiding prosecution will be payment of a penalty or a confiscatory payment or both. Prima facie the agreement will be interpreted in such a way as to ensure payment is made."
In this case that was not difficult. The stated end date for the DPA was framed not just with a date but with a requirement that the financial terms were satisfied. Given the lack of a payment timetable, payment of the disgorgement of profits would only be late if it were not made before 22 October 2024. The DPA envisaged consequences if the payment was made late, and so it necessarily remained effective after 22 October 2024.
The High Court has now upheld this ruling, which it heard by way of case stated from Davis LJ in the Crown Court. Edis LJ and Calver J delivered a single judgment, in which they held that, following the usual rules of construing commercial contracts, the DPA remained in force after 22 October and the SFO was afforded a reasonable period of time in which to apply to court if the terms of the DPA had not been satisfied.
Points to note
DPAs have overwhelmingly expired without the need for further involvement of the court, so this is a rare case and worthy of note. The key takeaway is that a DPA is a contract like any other and will be interpreted in the same way, but the intention of the parties will reflect the statutory purpose of DPAs and the court will be slow to adopt an interpretation that undermines that. It will be of interest to see how the court deals with the breach now that the jurisdiction hurdle has been cleared.
