What is the ratio in FHR European Ventures v Cedar Capital?

The ratio establishes that bribes and secret commissions received by fiduciaries are automatically held on constructive trust for the principal from the moment of receipt.

What did the court decide in FHR European Ventures v Cedar Capital?

The Supreme Court decided that principals have proprietary rather than merely personal remedies against fiduciaries who receive bribes, overruling the long-standing decision in Lister v Stubbs.

Why is FHR European Ventures important for equity and trusts?

It revolutionized fiduciary law by strengthening protection for principals and ensuring fiduciaries cannot benefit from breaches of duty, even in insolvency situations.

What is the ratio in FHR European Ventures v Cedar Capital?

The ratio establishes that bribes and secret commissions received by fiduciaries are automatically held on constructive trust for the principal from the moment of receipt.

What did the court decide in FHR European Ventures v Cedar Capital?

The Supreme Court decided that principals have proprietary rather than merely personal remedies against fiduciaries who receive bribes, overruling the long-standing decision in Lister v Stubbs.

Why is FHR European Ventures important for equity and trusts?

It revolutionized fiduciary law by strengthening protection for principals and ensuring fiduciaries cannot benefit from breaches of duty, even in insolvency situations.

Equity & Trusts1 min read

FHR European Ventures v Cedar Capital

[2014] UKSC 45Supreme Court2014

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“Supreme Court grants proprietary remedies for bribes taken by agents”

Facts

Cedar Capital Partners acted as agents for FHR European Ventures in acquiring hotels in Europe. Cedar secretly received €10 million in commission from the sellers without disclosing this to FHR. When FHR discovered the secret commission, they sought proprietary remedies claiming the money was held on constructive trust.

Issues

Whether a principal has proprietary remedies against an agent who receives a bribe or secret commission, or only personal remedies for breach of fiduciary duty

Held

The Supreme Court unanimously held that bribes and secret commissions received by agents are held on constructive trust for the principal, giving rise to proprietary remedies

Significance

This decision significantly strengthens principals' rights against corrupt agents by providing proprietary remedies and overturns over 120 years of English precedent dating back to Lister & Co v Stubbs.

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OSCOLA Citation

FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45, [2015] AC 250

Equity and TrustsAgency LawFiduciary Duties

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