UK Supreme Court Rules On Secret Commission Case

• Secret commission accepted by an agent is held on trust for his principal;
• Benefit acquired by an agent arising out of his fiduciary position, or pursuant to an opportunity which results from his fiduciary position, the general equitable rule is to treat the benefit as having acquired on behalf of his principal, therefore beneficially owned by the principal;
• Agent owes a duty of undivided loyalty to the principal, so principal is entitled to the entire benefit of the agent's acts in the course of his agency, including but not limited to benefits arising out of acceptance of bribe or secret commission.

Recently, the Supreme Court of United Kingdom ("UK Supreme Court") in FHR European Ventures LLP and others v. Cedar Capital Partners LLC¹, has opined on an interesting question of law, whether a bribe or secret commission received by an agent is held by that agent on trust for his principal, or whether the principal merely has a claim for equitable compensation