The High Court this morning ruled that the Director of the
Serious Fraud Office (SFO) acted unlawfully when he stopped a corruption investigation into
BAE Systems' arms deals with Saudi Arabia.
The case was brought by
Leigh Day & Co on behalf of
Campaign Against Arms Trade (CAAT) and the
Corner House in response the to controversial decision to discontinue the investigation announced in December 2006.
The case was heard by senior judges, Lord Justice Moses and Mr Justice Sullivan, who have prepared their own summary of the judgment which highlights the serious affront to the rule of law perpetrated in this case. In the light of this judgment, the Serious Fraud Office must reopen the BAE-Saudi corruption investigation immediately. Both groups are calling upon the SFO to work jointly with US and Swiss investigators in doing so.
The judges detailed how BAE lobbied the Government by suggesting that the company would lose a large Saudi arms sale if the investigation was not dropped.
When the SFO was about to obtain access to Swiss bank accounts, Saudi Arabia threatened not only to cancel the arms deal but also to withdraw diplomatic and intelligence co-operation. This threat was made by Prince Bandar, who was allegedly complicit in the corruption under investigation.
The judges described the SFO Director's subsequent termination of the investigation on 14th December 2006 as a "successful attempt by a foreign government to pervert the course of justice in the United Kingdom".
They ruled that: "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 [the Director of the Serious Fraud Office] to bear that essential principle in mind that justifies the intervention of this court."
In explaining their reasons for ruling in favour of The Corner House and CAAT, the judges found that:
- The Director of the Serious Fraud Office had failed to exercise his independent judgment in halting the investigation.
- The Director had failed to convince the court that he had done all in his power to resist the threat in order to uphold the rule of law.
They stated:
“The Director failed to appreciate that protection of the rule of law demanded that he should not yield to the threat . . . We are driven to the conclusion that the Director's submission to the threat was unlawful."
The judges were scathing about the Government's arguments for ending the investigation
"It is obvious . . . that the decision to halt the investigation suited the objectives of the executive. Stopping the investigation avoided uncomfortable consequences, both commercial and diplomatic."
As to whether the SFO Director's action had broken the OECD's Anti-Bribery Convention, the judges concluded that the SFO Director should answer to the OECD's Working Group on Bribery.
In a joint statement CAAT & Corner House said today: “Since the Serious Fraud Office's investigation was dropped, we have been overwhelmed by the support we have received from people in all walks of life. Their support and encouragement has been a constant reminder to us of the public importance of this issue. Thousands of individuals made donations to CAAT and The Corner House to make this case possible.
“This is not just CAAT and Corner House's case. It is yours too. It belongs to everyone who is troubled by corruption, by the arms trade, by corporate power, and by the misuse of national security arguments to protect the powerful.”
The judgment comes just weeks after Gordon Brown's Government announced that it is planning to give the Attorney General the power to stop criminal investigations and prosecutions by citing "national security" without the decision being subjected to judicial consideration or meaningful Parliamentary oversight. In the light of today's judgment, The Corner House and CAAT insist that this proposed legislation, contained in the Constitutional Renewal Bill, must be abandoned.
Richard Stein &
Jamie Beagent conducted the case on behalf of CAAT & Corner House.
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