Times Law Report: Director entitled to drop bribery investigation

The Serious Fraud Office’s controversial decision to halt a corruption inquiry into a lucrative arms deal between Saudi Arabia and BAE Systems, Europe's biggest defence contractor, won the unanimous backing of Britain’s highest court today.

In a resounding victory five law lords ruled that the then Director of the Serious Fraud Office, Robert Wardle, acted lawfully and “courageously” when he concluded he had no option but to halt the inquiry in the interests of national security.

The ruling is welcome vindication for the SFO, which has been embattled over its decision in December 2006 to discontinue the inquiry — most recently in the High Court. But it was greeted with disappointment by the campaigning groups who brought and won the original High Court ruling.

In April Lord Justice Moses and Mr Justice Sullivan said the SFO and the Government made an “abject surrender” to “blatant threats” and that the decision to drop the inquiry was unlawful.

They said that the SFO, acting on government advice, had dropped the investigation following lobbying by BAE and a threat from Saudi Arabia to withdraw diplomatic and intelligence co-operation if the investigation were not dropped.

But today the law lords upheld the SFO’s appeal against that ruling won by anti-corruption groups, the Campaign Against Arms Trade (CAAT) and The Corner House.

Lord Bingham of Cornhill, the senior law lord, said that the director was “confronted by an ugly and obviously unwelcome threat” and had to decide what, if anything, to do.

The evidence showed that the SFO director had reached his decision to halt the investigation “with extreme reluctance”.

He added: “What determined the decision was the director’s judgment that the public interest in saving British lives outweighed the public interest in pursuing BAE to conviction.

“It was a courageous decision, since the director could have avoided making it by disingenuously adopting the Attorney-General’s view (with which he did not agree) that the case was evidentially weak.”

Had he done so, Lord Bingham added, the High Court would have been likely to uphold his decision as it regarded the threat as “the essential point” in the case.

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