Catering giant Compass is to pay £40m to settle two lawsuits alleging it obtained United Nations foodservice contracts through rigged bids and fraud.

Two competitors - Es-Ko International and Supreme Foodservice - brought US law suits over alleged wrongdoing, relating to Compass subsidiary Eurest Support Services’ contracts with the UN.

ES-KO alleged Compass obtained food and water deals in nine countries, including Sudan, Lebanon and Syria, after obtaining sensitive information on rival bids, enabling it to undercut competitors. The two groups filed for £600m worth of damages.

Compass has not admitted liability and CEO Richard Cousins explained that while any claims would have been resolutely defended, he believed it was in the best interests of the business and shareholders, and good management "to avoid the uncertainties and costs associated with prolonged litigation".

Said Cousins: "My focus is on the future and this settlement is a major step in putting the matter behind us. Moreover, I am determined to ensure that our reputation for the ethical treatment of clients, suppliers and competitors, over and above any issues of legal liability, is underlined."