Lords uphold SFO appeal against BAE bribe ruling
The Law Lords have upheld an appeal from the Serious Fraud Office (SFO) against the High Court’s ruling that it acted unlawfully in terminating an investigation into BAE Systems’ arms deals with Saudi Arabia.
The appeal followed a judicial review in April which found that the SFO had acted unlawfully in dropping the investigation into allegations of corruption around BAE’s £43bn Al Yamamah arms contract with Saudi Arabia due to national security concerns (TheLawyer.com, 24 April).
The judicial review was brought by lobby groups The Campaign Against Arms Trade (CAAT) and The Corner House.
In a unanimous 5-0 ruling, the Lords ruled that the Serious Fraud Office’s decision to halt the investigation was lawful, notwithstanding the threats made by senior Saudi officials to halt cooperation on counter-terrorism efforts if the investigations continued.
Lord Bingham, the senior Law Lord, said: "The Director was confronted by an ugly and obviously unwelcome threat... The issue in these proceedings is not whether his decision was right or wrong, nor whether the Divisional Court nor the House [of Lords] agrees with it, but whether it was a decision the Director was lawfully entitled to make. Such an approach involves no affront to the rule of law".
Baroness Hale added that "it is extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort. The great British public may still believe that it was the risk to British commercial interests which caused him to give way, but the evidence is quite clear that this was not so."
"Although I would wish that the world were a better place where honest and conscientious public servants were not put in impossible situations such as this, I agree that [the Director’s] decision was lawful."
Nicholas Hildyard of The Corner House criticized the appeal decision, saying: “With the law as it is, a government can simply invoke ‘national security’ to drive a coach and horses through international anti-bribery legislation, as the UK government has done, to stop corruption investigations.”
In April, Lord Justice Moses and Mr Justice Sullivan handed down a damning verdict on the actions of the government and the SFO, saying: “No-one, whether within this country or outside, is entitled to interfere with the course of our justice. It is the failure of Government and the defendant to bear that essential principle in mind that justifies the intervention of this court.”
Leigh Day & Co advised Corner House and CAAT, instructing Blackstone Chambers Dinah Rose QC and Matrix Chambers’ Philippe Sands QC.
Allen & Overy advised BAE Systems, instructing Matrix Chambers’ Clare Montgomery QC. 11KBW’s Philip Sales QC and Treasury solicitors acted for the director of the SFO, Robert Wardle.
Brick Court's Jonathan Sumption QC led Phil Sales QC and Karen Steyn for the SFO.
Rule of law lobby group Justice was granted leave by the House of Lords to intervene in the case, arguing that it is always unlawful for a prosecutor to give into a threat of any kind.
Eric Metcalfe, Justice’s director of human rights policy said: "The Law Lords have delivered a disappointingly narrow judgment. Justice is usually blindfolded but today she is hamstrung as well.
"It is a sad day for the rule of law when a senior prosecutor bows to threats from a foreign government and our most senior judges will do nothing to stop it."
Readers' comments (7)
John Bull | 30-Jul-2008 11:55 am
How depressing
The story follows a very clear case of corruption in which the government intervened to protect British business.
Whether that was the right thing to do or not is a different question - I'd advocate that they shouldn't have signed the anti-corruption treaty if they weren't going to uphold it - but it's depressing to see the courts defend what is very clearly an illegal act.
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Bobby Smith | 30-Jul-2008 12:14 pm
SFO appeal against BAE bribe upheld
This is actually a very sad day for democracy in this country, aswell as a bad day for the reputation of the Lords.
Every voter should now be aware that the UK government is no longer in control of foreign policy and that the Lords are actually in favour of corruption for UK plc.
This decision means that the UK government can never again lecture other countries on the rule of law and is yet another example of the rush to rule by fear!
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Michael Knowles | 30-Jul-2008 12:42 pm
Common Sense
What a good day for common sense.
My children woke this morning from a lovely sleep about a nice pink world where ponies pranced and lemonade flowed freely from fountains. It appears there are many who live there permanently.
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Graham Lawrence | 30-Jul-2008 12:48 pm
Common sense?
Common sense my Aunt Sally. Rule of Law is a critical distinguisher between a first-world democracy and a banana republic - government interference into it is something that few British governments have tried often or at all, and that has almost always rebutted by the judiciary. Their mutual failing here is neither common sense nor traditional.
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Michael Knowles | 30-Jul-2008 5:27 pm
common sense
Quite agree with you,however we are in a global economy and to remain a 'first-world democracy' we must be able to play the game effectively or we are simply outdone by those aspiring to replace us at the top.
The deal represented employment for many - this, I believe, outweighs any sensitivities we may hold as to the rights and wrongs of dealing with others who do not place our high moral code so highly.If you wrestle with a chimney sweep you will always come out looking dirty.
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Andrew Haslam-Jones | 30-Jul-2008 5:53 pm
Morality
Probably the House of Lords and the Attorney General were right. The letter of the law has not been broken. What has happened was possible within the current legal structure.
How do we avoid it happening again? Perhaps the only way for an international treaty to be enforced is for it to be done by an international court. (We are a cynical profession but we should employ that cyncism in the quest for a better solution, rather than in the negation of hope.)
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Anonymous | 31-Jul-2008 10:02 am
BAE SFO
Properly appointed prosecutors are lawfully and constitutionally entitled to make decisions on proceedings they are considering - including lawfully declining to prosecute - at any point.
As a former (Scots and English) prosecutor I have observed that English lawyers in particular seem to have difficulty at times with (or a 'manufactured disinclination' to follow) this fundamental principle that is also a core part of the exercise of the 'Separation of Powers' - Legislative / Judicial / Executive.
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