Güralp systems: can the SFO prosecute after failed convictions?

Companies can only commit crimes through the criminal acts and intent of individuals. Prior to the introduction of deferred prosecution agreements, this meant that on the rare occasions that a company was prosecuted alongside the individuals whose actions exposed it to criminal liability, a prosecutor would have to be satisfied that there was sufficient evidence before charges were brought, and having seen the evidence, the company would decide whether to plead guilty or take its chances at trial alongside the individuals. 

That changed with the introduction of deferred prosecution agreements. Pursuit of a DPA means a company instructs its own lawyers to investigate and share evidence with the prosecutor with a view to reaching an agreement about what happened. The benefits to the company include a speedier process and lower overall cost, avoiding disbarment from public contracts, and the likelihood of a more favourable narrative for stakeholders. 

However, we have seen time and again that resolution through agreement and resolution through trial results in very different outcomes, as evidenced by the almost non-existent conviction rate following DPAs. 

The case of Güralp Systems Limited (GSL) poses awkward questions about the interaction between DPAs and prosecution. Is it possible for a company to obtain the advantages of a DPA, but then rely on the subsequent acquittal of individuals to escape punishment? 

The GSL DPA

GSL designs and manufactures seismological instruments. On 22 October 2019, GSL entered a DPA with the SFO concerning two offences. A conspiracy to make corrupt payments, and failure to prevent bribery. 

The DPA instituted but then immediately suspended criminal proceedings against GSL and required it to (i) cooperate with the SFO’s investigation into individuals, (ii) disgorge just over £2m of profits, and (iii) review and maintain its compliance programme.

At the time the DPA was approved, the court was aware that GSL’s financial situation was such that it could not immediately pay the disgorgement sum, and that there was a chance that it may need to apply to vary the DPA. 

The DPA was to expire on 22 October 2024, but GSL failed to pay any of the disgorged profits to the SFO. On 21 November 2024, the SFO made an application to the Crown Court for a determination that GSL was in breach of the DPA. 

Breach application – jurisdiction 

GSL asserted that the court did not have jurisdiction to hear the application. It argued that the DPA had to be in force at the time of the application for the court to have jurisdiction, whereas the DPA said on its face that it expired on 22 October 2024. 

The court rejected GSL’s argument. GSL appealed to the High Court by way of case stated. 

On 13 January 2026 the High Court handed down its judgment. The court construed the DPA considering the statutory framework under which it had been negotiated and approved. It was an agreement that was intended to operate in the public interest. The court noted that GSL’s financial difficulties were reflected in the lengthy period it was given to pay the disgorgement sum, but it was clear in the judgment approving the DPA that if GSL did not pay by the expiry date, the parties and the court knew that the SFO could take steps to renew the criminal proceedings. 

The High Court found that the failure to comply with the terms of the DPA only became apparent after the time for payment expired. It found that the terms of the DPA were not satisfied, so the SFO was free to prosecute GSL. On 10 February 2026, the High Court refused Güralp Systems Ltd permission to appeal this ruling to the Supreme Court. This decision confirmed that the DPA had not automatically expired, so the court had jurisdiction to hear the application. 

What next 

The SFO can now ask the Crown Court to terminate the DPA and thereby recommence the prosecution. 

The DPA includes a 17-page statement of facts. It describes the payment of bribes to a public official in South Korea, who was said to have exploited his position to influence the award of contracts to GSL. It describes the alleged actions of three employees, said to be responsible for the payment of bribes to the public official to recommend GSL products, advise on GSL’s pricing and strategy, influence specifications in favour of GSL and provide GSL with confidential information. 

Although the statement of facts reflects an agreement between GSL and the SFO, the DPA provides that the statement may be used as an admission by GSL of those facts, in accordance with section 10 Criminal Justice Act 1967, should it be prosecuted. 

Section 10 admissions are essentially a case management tool. They permit parties in criminal proceedings to agree non-contentious facts without requiring evidence to be adduced at trial. This helps to narrow the issues, streamline the evidence, and present it in a form which is easy for juries to understand. 

That is a very different situation to that which GSL finds itself in. Since the statement of facts was agreed, the SFO prosecuted the three employees on essentially the same factual case. All three were acquitted. For that reason, GSL will no doubt seek leave to withdraw the admissions. 

Difficult questions

Whilst it is understandable that the SFO wants to send a strong message to protect the integrity of the DPA process, pursuing GSL poses some very difficult questions.

Having tried and failed to convict the individuals on the same evidence upon which it now relies, can the SFO be satisfied that there is a realistic prospect of convicting GSL? If not, the Code for Crown Prosecutors dictates that it should not prosecute. 

Even if it does pass the evidential sufficiency test, the SFO also must be satisfied that prosecution would be in the public interest. Bearing in mind that GSL was unable to pay the disgorgement sum, would a financial penalty on conviction put the future of the company in jeopardy? Would collateral damage to employees and suppliers be in the public interest? 

Further, this all falls to be considered in the context of the disclosure regime. The SFO will have to serve any material that undermines its own case or supports the defence. This means that anything which came out at trial which is potentially helpful will have to be disclosed. Given the recently revealed issues with the SFO’s document review process at the time, this may require the whole disclosure exercise to be re-done at considerable cost. 

Graham McNulty QPM, who became Interim Director on 6 April 2026, faces a difficult start. He must decide how to handle high-profile cases such as Güralp while a permanent Director is sought later in the year.