Lloyd's Maritime and Commercial Law Quarterly
BRIBES, RESTITUTION AND THE CONFLICT OF LAWS
Thahir v. Pertamina 1
General Thahir was employed by Pertamina, an Indonesian state enterprise, from October 1968 to his death in July 1976. During this time his annual salary was approximately U.S. $9,000. By the date of his death he had accumulated DM 53,972,374.12 and U.S. $1,202,208.73 in various bank accounts at the Singapore branch of Sumitomo Bank. Unsurprisingly, the Singapore Court of Appeal had little difficulty upholding Lai, J’s finding of fact that the bank accounts denominated in Deutschmarks represented the proceeds of bribes received by General Thahir during the course of his employment by Pertamina.2 They also experienced little difficulty in upholding Lai, J’s finding that Pertamina’s claims to recover the bribes from General Thahir’s widow, who was the joint holder of the bank accounts, were governed by Singapore, rather than Indonesian law. However, the conflict of laws issues raised by the case are not as straightforward as would appear from the Court of Appeal’s treatment of them.
The Court of Appeal assumed, presumably because of the way in which the case was argued, that Pertamina’s claims to recover the bribes at law as money had and received and in equity as subject to a constructive trust were to be characterized as restitution or, as it is more aptly described, unjust enrichment for the purposes of the conflict of laws. However, while the remedies sought by Pertamina were clearly restitutionary, it is arguable that this is not sufficient to characterize the claims as restitution or unjust enrichment for the purpose of the conflict of laws. The right to restitution of a bribe from the bribed agent as either money had and received or in equity is well recognized.3 However, the precise legal nature of that right is ambiguous. It can be described as restitution for the wrong of either fraud, in the case of the common law action, or breach of fiduciary duty, in the case of the equitable action. Alternatively, the plaintiff seeking restitution of a bribe may also be able to make out a case of what Birks4 describes as unjust enrichment by subtraction. That is, the plaintiff can occasionally also establish a cause of action based, not on the bribed agent’s wrong, but on the bribed agent’s receipt of an enrichment at the expense of the plaintiff in circumstances which the law declares call for restitution. The plaintiff will only be able to establish this alternative cause of action in unjust enrichment by subtraction where the “receipt obtained from a third hand [(the briber)] would certainly have accrued to the plaintiff if it had not been intercepted [by the bribed agent]”5 or where, as in Arab Monetary Fund v. Hashim,6 the plaintiff’s money is paid by the briber directly to the bribed agent. Unfortunately, the analysis in the Court of Appeal’s judgment is such that it is not possible to state with absolute certainty whether Pertamina was relying on restitution for wrongs, unjust enrichment by subtraction or, as is most likely, both. The added complication in Thahir is that, although the Court of Appeal relied on case law concerning bribed agents, the appeal concerned a
1. Thahir v. P. T. Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) (25 August 1994) Unrep. (Singapore C.A.).
2. Sumitomo Bank Ltd. v. Thahir [1993] 1 S.L.R. 735.
3. See Mahesan v. Malaysia Housing Soc. [1979] A.C. 375.
4. P. Birks, An Introduction to the Law of Restitution, (revised paperback edn, Oxford 1989).
5. Ibid., 339.
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