On the issue of attribution of knowledge of a person to a corporate entity, Cypriot Courts have in inter alia the cases of Police v Vasili Vasileiou Case no. 15408/07, 9/06/2008, The Republic v Rikkou Erotokritou & Others, Case No. 9208/15, 8/2/2017 and Kypros Kyprianou v Police, Criminal Appeal No. 234/2016, 13/02/2018, cited with approval the leading English cases on this matter, namely, the cases of Lennard's Carrying Co v Asiatic Petroleum Co [1915] AC 705, Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 and Jetivia v Bilta [2015] UKSC 23.

According to the case of Lennard's Carrying Co v Asiatic Petroleum Co [1915] AC 705, a company is fixed with the knowledge of the ‘’directing mind and will of the corproration, the very ego and centre of the personality of the corporation’’.

As it was explained by Lord Hoffman in the Privy Council case of Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, to ascertain the ‘’directing mind and will’’ of the corporation one has to consider the available ’rules of attribution’.

The primary rules of attribution are generally found in the company’s constitution and articles of association and some of them might even be implied, such as "the unanimous decision of all the shareholders in a solvent company about anything which the company under its memorandum of association has power to do shall be the decision of the company".

However, since these primary rules are not enough for the company to go out into the world and do business, they are supplemented by ‘’general rules of attribution which are equally available to natural persons, namely, the principles of agency’’. This means that a company ‘’will also make itself subject to the general rules by which liability for the acts of others can be attributed to natural persons, such as estoppel or ostensible authority in contract and vicarious liability in tort’’.

However, in the exceptional cases in which ‘’a rule of law, either expressly or by implication, excludes attribution on the basis of the general principles of agency or vicarious liability’’, the above rules will not provide an answer. This will generally be the position under criminal law.

Interesting on these issues is the decision of the Jersey Court in Federal Republic of Brazil and Another v Durant International Corporation and Another [2012] JRC 211, in which the Jersey Court followed the English case law on the issue of attribution of knowledge and went on to reach the conclusion that where the acts/omissions in question are those of someone who is ‘’intimately associated with the ultimate ownership and control of the company’’ like the defendants in that case, that there ‘’could be no room for doubt’’ as to whose knowledge should be attributed to the relevant Companies.

The flexible test adopted in this case takes into consideration the policy considerations which aim to eliminate financial crime within an offshore centre like Jersey.

For further information on this topic please contact

Mr. Kyriakos Pittas( [email protected] ) at SOTERIS PITTAS & CO LLC,

by telephone (+357 25 028460) or by fax (+357 25 028461)

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