The Serious Fraud Office (SFO) is considering whether to appeal against a High Court judgement today that ruled it "acted unlawfully" when it dropped an investigation into bribery and corruption in arms deals between BAE systems, Europe's largest defence company, and Saudi Arabia.
Legal sources close to the case said that the SFO was considering an appeal as a last ditch attempt to get out of reopening the BAE-Saudi investigation.
If the case is reactivated it threatens to sour relations with the Saudis, cutting the UK off from terrorist intelligence and also threatening a £20 billion deal with BAE, signed in September last year, for 72 Eurofighter Typhoons.
Today's judgment is a victory for anti-bribery pressure group Corner House Research and the Campaign Against Arms Trade who brought the case to the High Court after the former Attorney-General, Lord Goldsmith, announced in December 2006 that the investigation into the arms company was to be discontinued.
At the time, the Prime Minister, Tony Blair, drew widespread criticism after saying that if the SFO had proceeded with its investigation, it would damage Britain’s national security. BAE was then bidding to win a contract to supply Typhoon Eurofighter jets to Saudi Arabia. That contract was signed in September 2007.
Robert Wardle, Director of the SFO, was also accused of buckling under government pressure to drop the inquiry. Mr Wardle maintained that he had acted independently and in the interests of national security.
Lord Justice Moses told the High Court today: "To preserve the integrity and independence of the judgment demanded resistance to the pressure exerted by means of a specific threat.
“That threat was intended to prevent the [SFO] director from pursuing the course of investigation he had chosen to adopt. It achieved its purpose."
Lord Justice Moses added: "No one, whether within this country or outside, is entitled to interfere with the course of our justice. It is the failure of government and the defendant to bear that essential principle in mind that justifies the intervention of this court.”
The SFO investigation arose out of BAE’s £43 billion Al-Yamamah arms deal with Saudi Arabia in 1985, which provided Tornado and Hawk jets plus other military equipment.
The SFO said that it was " carefully considering the implications of the judgement and the way forward".
BAE said: “The case was between two campaign groups and the director of the SFO. It concerned the legality of a decision made by the director of the SFO. BAE Systems played no part in that decision.”