Lords uphold SFO appeal against BAE bribe ruling

The Law Lords have upheld an appeal by the Serious Fraud Office against a High Court ruling that it acted unlawfully in terminating a probe into a BAE Systems arms deal.

Lords uphold SFO appeal against BAE bribe rulingThe 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.”