CYPRUS : English Court Guidance on the liability of an agent – towards his principal for benefits and assets acquired during agency
In a recent decision of the English Supreme Court inFHR EUROPEAN VENTURES LLP –V- CEDAR CAPITAL HOLDINGS LLC (2015) it has been held that, where an agent acquires a benefit, which came to his notice, as a result of his fiduciary or trustee position (including a business opportunity), the equitable rule is that the agent shall be treated as having acquired the benefit, or opportunity on behalf and for the account of his principal. The principal is considered as the beneficial owner of such benefit, and has a proprietary remedy to trace and recover such benefits, in addition to his personal remedy against his agent. The principal can elect between the two remedies.
The agent is liable to account to his principal, as a constructive trustee for all monies, and benefits received by him, directly or indirectly, arising out from the mere fact that, his profits had been made in breach of his fiduciary duties towards his principal.
Should agents as fiduciaries disguise or hide assets, or benefits, which they have obtained in breach of their duties, and if these assets decline in value in their possession or control, the Court will allow a principal to elect, to require his agent to personally account for the value of the assets which he no longer holds.
For further information on this topic please contact Mr. Soteris Pittas (spittas@pittaslegal.com) at Soteris Pittas & Co L.L.C., by phone +357 25 028460 or by fax +357 25 028461