BAE-Saudi arms deals investigation legal challenge
by The Corner House and CAAT
first published 8 November 2007
PRESS DIARY NOTE
Royal Courts of Justice, The Strand, London
Friday 9 November 2007, 10.30am
At an oral hearing in the UK High Court on Friday 9 November, lawyers for Campaign Against Arms Trade (CAAT) and The Corner House will argue that permission should be granted for a full judicial review hearing against the UK Government's decision to cut short an investigation by the Serious Fraud Office (SFO) into alleged corruption by BAE Systems in recent arms deals with Saudi Arabia.
The two groups contend that the decision is unlawful under the OECD's Anti-Bribery Convention, which the UK signed in 1997. The Government has denied any breach of the Convention - but has declared that it would have taken the decision to terminate the investigation, regardless of international law, on the grounds of "national security".
The campaigners' lawyers will argue that the SFO decision failed to take into account the national security implications of not proceeding with the investigation. They will contend that the UK Government's willingness to turn a blind eye to corruption within Saudi Arabia has the potential to encourage more international resentment towards the UK.
The legal challenge process began last year, when the UK Government's Serious Fraud Office (SFO) suspended its investigation on 14th December 2006 into BAE's arms deals with Saudi Arabia. The Serious Fraud Office is a government department that investigates and prosecutes complex fraud.
On 18th December 2006, The Corner House and CAAT wrote to the UK Government arguing that the SFO decision was unlawful and should be reversed.
It was not until 23rd February 2007 that the groups were able to begin the formal judicial review process, and on 18th April 2007 filed papers at the High Court in a judicial review against the UK Government's decision to terminate the SFO investigation.
A month later, on 29th May 2007, the High Court refused to grant permission for a judicial review hearing on the grounds that "national security must always prevail". The oral hearing this Friday is in response to that decision.
The basis for our legal challenge hinges on Article 5 of the OECD Anti-Bribery Convention. The SFO decision was purportedly based on considerations of potential damage to relations with Saudi Arabia, and thus to the UK's national security, if the BAE-Saudi arms deals investigation continued. This is expressly forbidden under Article 5, which rules out the termination of corruption investigations on grounds other than the merits of the case. Signatory governments specifically undertake not to be influenced "by the potential effect [of an investigation] upon relations with another State . . . .".
The groups' lawyers will further argue at the oral hearing that the then Prime Minister, Tony Blair, in his advice to the Attorney General and the SFO, improperly took into account considerations of damage to diplomatic relations. His advice amounted to a direction to discontinue the investigation, which is an unlawful interference with the independence of prosecutors under domestic and international law.
Since the Serious Fraud Office terminated its investigation in December last year, the Department of Justice in the United States has launched a criminal inquiry into alleged corruption in BAE Systems' deals with Saudi Arabia and the company's compliance with US anti-corruption laws. The Department made an official request for 'mutual legal assistance' to the Home Office, which has delayed passing the request to the Serious Fraud Office. The SFO has important documentation relevant to an investigation gained from its inquiry into payments made to members of the Saudi royal family.
In addition, a US pension fund and BAE shareholder started to sue past and present directors of BAE Systems in September this year over allegations that the company spent more than $2 billion bribing Saudi Arabian officials to win business. The fund charges the company officers with breaching their fiduciary duties.
For the latest news on the court case, go to the Control BAE website.
And look at the BAE files documented by The Guardian newspaper.