The Plea That Crossed The Sea

Article by Michael O'Kane and Jasvinder

Nakhwal, lawyers at Peters & Peters who acted

in the ground-breaking Marine Hose case.

A groundbreaking direct settlement deal has taken

US/UK antitrust enforcement co-operation to a new level.

Michael O'Kane and Jasvinder Nakhwal warn that cartel

participants from countries that have not criminalised such

conduct are at a distinct disadvantage.

In addition to having in their armoury the simplified mutual

legal assistance and extradition procedures between many

jurisdictions, in a recent case the US Department of Justice

(DoJ) and the UK's Office of Fair Trading (OFT) have

demonstrated their joint determination to tackle cartels by

adding a new and imaginative dimension to cross-jurisdictional

co-operation and enforcement.

On 2 May 2007, the DoJ arrested eight foreign executives in

Houston, Texas in relation to alleged cartel conduct. On 3

December, the DoJ filed a one-count felony charge that from

early 1999 to May 2007, the defendants participated in a

conspiracy, the primary purpose of which was to suppress and

eliminate competition by rigging bids, fixing prices and

allocating market shares for sales of marine hoses in the

US.

In furtherance of the conspiracy, it was alleged that the

defendants attended meetings and engaged in discussions with

executives from other marine hose manufacturers. On conviction

for a violation of section 1 of the Sherman Act 1890, each of

the defendants could have faced a maximum of ten years

imprisonment.

Meanwhile, in the UK, the OFT launched a simultaneous

criminal investigation into suspected cartel conduct in

relation to that country's market for marine hoses.

Innovative Plea

What is most notable about this case is the innovative plea

agreement reached with the three UK nationals arrested in

Houston. In essence, they agreed to plead guilty in the US to

conduct that had an impact in that country and then to have

their sentences deferred for them to return to the UK and plead

guilty to cartel conduct that occurred in the UK and which

affected the UK market.

The way in which the conduct was split between the UK and

the US was intended to minimise the risk of the double jeopardy

bar to extradition being engaged. Typically, a foreign national

sentenced to imprisonment in the US would need to apply under

the prisoner transfer treaties to serve part of his sentence

outside of the US, a process that can take an average of 12

months to organise.

The most novel aspect of...