Opinions of the Lords of Appeal
In BAE-SFO-Saudi judicial review

by Lord Bingham, Lord Hoffmann, Lord Rodger, Baroness Hale and Lord Brown

first published 30 July 2008

On 30 July 2008, five Law Lords overturned the High Court's ruling of April 2008 when they stated that the SFO Director had acted lawfully in stopping a corruption investigation into BAE Systems' arms deals with Saudi Arabia when faced with a threat to national security. They stated that the Director's discretion to drop criminal proceedings legally extended to taking account of the threat uttered by Saudi Arabia that it would withdraw diplomatic and intelligence cooperation with the UK if the investigation continued, even though the threat was "ugly and obviously unwelcome".

One of the five Law Lords, Baroness Hale, said that she would have liked to have been able to say that it was wrong to stop the investigation as it was "extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort." She maintained that the threats and risks were matters that the Director was entitled to take into account, but unlike the other four law lords, she did not "accept that this was the only decision he could have made."

The Law Lords approached the decision of the SFO Director to stop the BAE-Saudi investigation solely from the perspective of whether the Director had exceeded his discretion in weighing the public interest in continuing the investigation and the competing public interest in safeguarding British lives by discontinuing it -- they concluded that he had not exceeded his discretion. (In contrast the High Court approached the decision from the perspective of whether the SFO Director could have taken any other course of action when confronted with the threat and whether the circumstances amounted to those of "utmost necessity".)

The Law Lords also ruled that it was not for the UK courts to determine whether the SFO Director's decision was compatible or not with Article 5 of the OECD Anti-bribery Convention, or to interpret and construe the meaning of Article 5, but for the OECD's Working Group on Bribery to do so as the dispute mechanism provided for in the Convention. They were also swayed by the SFO Director's admission that he would have taken the same decision irrespective of the Convention.

The House of Lords judgment makes it clear that the UK has failed to incorporate Article 5 of the Anti-bribery Convention into its domestic legislation, that the government and the SFO are not prepared to follow it, and that the Article's provisions (and even those of the whole Convention) are completely unenforceable in the UK. This means that, regardless of whether or not it was unlawful for the SFO to halt its BAE-Saudi investigation, the UK is in breach of its international law obligations.