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Monday 7th July - Tuesday 8th July 2008

Serious Fraud Office Appeal in the House of Lords

On 7th-8th July 2008, the Appellate Committee of the House of Lords heard the appeal by the Director of the Serious Fraud Office (SFO) against the High Court ruling on 10 April 2008 that the SFO acted unlawfully in December 2006 when it terminated its investigation into alleged corruption by BAE Systems in recent arms deals with Saudi Arabia.

The ruling was a result of a judicial review brought by The Corner House and Campaign Against Arms Trade (CAAT) that was held on 14th-15th February 2008 at the High Court before Lord Justice Moses and Mr Justice Sullivan.

CAAT and The Corner House lawyers maintained that the Serious Fraud Office Director's appeal should be dismissed because his decision to stop the SFO investigation breached the constitutional principle of the rule of law in allowing threats/blackmail to influence his decision, and breached Article 5 of the OECD Anti-Bribery Convention (click Here to read our printed case).

Campaign Against Arms Trade (CAAT) submitted a second witness statement updating the Lords on the continuing US and Swiss official investigations into alleged corruption in the BAE-Saudi arms deals.

JUSTICE, the independent human rights and law reform organisation that is the British section of the International Commission of Jurists, intervened in the Appeal in writing to address the domestic legal principles by which the legality of a prosecutor's decision to halt a criminal investigation in response to a threat should be assessed, and the relevant international obligations at issue, the OECD Anti-Bribery Convention.

As part of its appeal, the Director of the Serious Fraud Office submitted three new witness statements from:

1. Dr John Jenkins, Foreign and Commonwealth Office
2. Helen Garlick, Assistant Director of the Serious Fraud Office (2nd witness statement)
3. Robert Wardle, (now former) Director of the Serious Fraud Office

The two-day hearing was before an Appellate Committee of five law lords:

• Lord Bingham of Cornhill
• Lord Hoffman
• Lord Rodger of Earlsferry
• Baroness Hale of Richmond, and
• Lord Brown of Eaton-under-Heywood

The Appellate Committee will "report to the House [of Lords] in due course."

NOTES

1. For a time line of the judicial review, including links to arguments presented and key legal documents and evidence, please go to ControlBAE Judicial Review

2. The Serious Fraud Office is a UK government department that investigates and prosecutes complex fraud. It aims to contribute to "the delivery of justice and the rule of law."

3. The High Court ruled on 10th April 2008 that:

   1. The Director of the Serious Fraud Office had failed to exercise his independent judgment in halting the investigation.
   2. 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.

   The threat was from Saudi Arabia to cancel an arms deal and withdraw diplomatic and intelligence co-operation if the investigation was not stopped.

   Full judgment

   Summary of judgment

4. On 24th April 2008, the High Court gave the SFO permission to appeal to the House of Lords against their ruling on two principles of law:

   • the Rule of Law;
   • compliance with the OECD Anti-Bribery Convention.

5. The "rule of law" simply means the best way of protecting everyone's rights from the arbitrary exercise of power is to apply and uphold legal rules impartially. Doing so requires an independent judiciary (prosecutors, judges, magistrates, courts) that acts "without fear, favour or prejudice". Any action that undermines the impartial application and upholding of the law undermines the rule of law.

6. The OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions (known as the OECD Anti-Bribery Convention) is a multilateral treaty aiming to ensure that all OECD countries present a combined and united front against bribery and corruption of foreign public officials.

   Article 1 of the Convention requires parties to make it a criminal offence to bribe a foreign public official, which the UK did in Section 109 of the Anti-Terrorism, Crime and Security Act 2001.

   Article 5 of the OECD Anti-Bribery Convention makes various provisions to enforce Article 1. It rules out the termination of corruption investigations on grounds other than the merits of the case. Signatory governments undertake not to be influenced "by the potential effect [of an investigation or prosecution] upon relations with another State." Article 5 also prevents signatories from being "influenced by considerations of national economic interest" in deciding whether to terminate an investigation.