Govt responds to Blackstone’s BAE threat

The government has responded to the judicial review threat hanging over the Serious Fraud Office (SFO) that alleges its decision to drop a BAE-Saudi Arabia investigation was unlawful.

As first reported on www.thelawyer.com (18 December 2006), Blackstone Chambers has launched legal action against the SFO, the Attorney General and Prime Minister Tony Blair over the decision to drop an investigation into BAE Systems’ involvement with a Saudi Arabian defence contract.

A heavyweight team from Blackstone, which includes Dinah Rose QC and top judicial review silk David Pannick QC, has applied for judicial review with Leigh Day & Co partner Richard Stein. The lawyers are currently considering the government’s response, and will made a further announcement later this month.

Stein has been instructed by the Campaign Against the Arms Trade (CAAT) and environmental and social justice movement The Corner House to launch the claim, which has three main aspects.

The claimants allege that the SFO’s decision to drop the probe into BAE was unlawful because it took into account international relations with Saudi Arabia, which is in breach of the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention.

They also claim that the Prime Minister’s advice to the SFO was unlawful for the same reason and that it amounted to a direction rather than pure advice.

SFO director Robert Wardle announced that the two-year, £2m investigation into allegations that BAE bribed Saudi officials to win the Al Yamamah defence contract was being dropped on 14 December last year (2006).

The decision followed advice given to the SFO by the Attorney General Lord Goldsmith and the Prime Minister. BAE was advised by Allen & Overy.