BAE probe decision overturned

The High Court has ruled the decision to stop investigating a BAE arms deal was unlawful, dealing a bitter blow to the Government.

The Serious Fraud Office (SFO) launched an inquiry into allegations of bribery and corruption which arose from the £43 billion contract between BAE Systems and Saudi Arabia in 1985.

But in December 2006, the then attorney general, Lord Goldsmith, announced that the investigation into the arms company was to be dropped, but allegations soon emerged that it was under pressure from the Government to do so.

In a landmark victory, Corner House Research, which campaigns against corruption in international trade, and the Campaign Against Arms Trade (CAAT) have won their challenge against the SFO decision in the High Court.

During a recent hearing it was suggested that the law in Britain was "powerless" to resist threats from Saudi Arabia that it would not co-operate in the fight against terrorism unless the probe was dropped.

Tony Blair, prime minister at the time, said that the Saudis had privately threatened to cut intelligence co-operation with Britain unless the inquiry was stopped.

Lord Justice Moses and Mr Justice Sullivan, sitting at the High Court in London, ruled that SFO director Robert Wardle "was required to satisfy the court that all that could reasonably be done had been done to resist the threat. He has failed to do so."

The court did not order any immediate action but it is thought the SFO will most likely have to reconsider its decision.

Documents released to the court alleged that threats had been made by the Saudis to make it easier for terrorists to attack London by holding back security information.

The judges heard investigators were told there could be "another 7/7" with the loss of "British lives on British streets".

Prince Bandar, the head of the Saudi national security council and son of the crown prince, was alleged to be behind the threats.

The judge said of the director and his reaction to the threats: "He submitted too readily because he, like the executive, concentrated on the effects which were feared should the threat be carried out and not on how the threat might be resisted.

"No one, whether in this country or outside, is entitled to interfere with the course of our justice.

"It is the failure of Government and the defendant (SFO director) to bear that essential principle in mind that justifies the intervention of this court."

Lawyers for Corner House and CAAT had argued that the SFO decision to stop the investigation was tainted by Government concerns about trade with Saudi Arabia and diplomatic considerations, something Tony Blair always denied.

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