Aluminium Bahrain (Alba) has settled a $447m fraud suit against the US’ Alcoa in a deal that will involve the US firm paying Alba $85m in cash and long-term raw materials contracts that will save the company $362m.

The case, which was originally filed in the US in 2008, alleged that Alcoa had been overcharging Alba for raw materials for years and using the proceeds to bribe Bahraini officials.

Alcoa said the decision to settle does not involve admission of liability and “represents the best possible outcome and avoids the time and expense of complex litigation”.

The settlement is the first time a foreign business has taken a case against a US business to a US court. The case potentially opens the way for other foreign companies to launch legal action against US firms that they think have used bribery in securing contracts.