Monday, April 21, 2008

High Court rules UK SFO termination of BAe-Saudi investigation illegal

The Campaign Against the Arms Trade and The Corner House have won their legal case over the UK Serious Fraud Office's termination of its investigation of corruption involved in BAe's arms sales to Saudia Arabia. In a long, detailed and meticulous judgement Lord Justice Moses and Mr Justice Sullivan severely criticise the government's stance in the affair. Extract:

  1. Between 30 July 2004 and 14 December 2006 a team of Serious Fraud Office lawyers, accountants, financial investigators and police officers carried out an investigation into allegations of bribery by BAE Systems plc (BAE) in relation to the Al-Yamamah military aircraft contracts with the Kingdom of Saudi Arabia. On 14 December 2006 the Director of the Serious Fraud Office announced that he was ending the SFO's investigation.
  2. In October 2005 BAE sought to persuade the Attorney General and the SFO to stop the investigation on the grounds that its continued investigation would be contrary to the public interest: it would adversely affect relations between the United Kingdom and Saudi Arabia and prevent the United Kingdom securing what it described as the largest export contract in the last decade. Despite representations from Ministers, the Attorney General and the Director stood firm. The investigation continued throughout the first half of 2006.
  3. In July 2006 the SFO was about to obtain access to Swiss bank accounts. The reaction of those described discreetly as "Saudi representatives" was to make a specific threat to the Prime Minister's Chief of Staff, Jonathan Powell: if the investigation was not stopped, there would be no contract for the export of Typhoon aircraft and the previous close intelligence and diplomatic relationship would cease.
  4. Ministers advised the Attorney General and the Director that if the investigation continued those threats would be carried out; the consequences would be grave, both for the arms trade and for the safety of British citizens and service personnel. In the light of what he regarded as the grave risk to life, if the threat was carried out, the Director decided to stop the investigation.
  5. The defendant in name, although in reality the Government, contends that the Director was entitled to surrender to the threat. The law is powerless to resist the specific and, as it turns out, successful attempt by a foreign government to pervert the course of justice in the United Kingdom, by causing the investigation to be halted. The court must, so it is argued, accept that whilst the threats and their consequences are "a matter of regret", they are a "part of life".
  6. So bleak a picture of the impotence of the law invites at least dismay, if not outrage. The danger of so heated a reaction is that it generates steam; this obscures the search for legal principle. The challenge, triggered by this application, is to identify a legal principle which may be deployed in defence of so blatant a threat. However abject the surrender to that threat, if there is no identifiable legal principle by which the threat may be resisted, then the court must itself acquiesce in the capitulation...

  1. But to describe the claimants' application as a challenge either to the relevance of national security to the decision of the Director, or to the Government's assessment of the risk to national security misses the essential point of this application. The essential point, as we see it, derives from the threat uttered, it is said, by Prince Bandar to the Prime Minister's Chief of Staff. The nature and implications of that explicit threat have a significant impact on this application. The challenge was originally resisted, in part, on the basis that the Director was entitled to discontinue the investigation as a result of the very grave threats to national and international security (see e.g. Detailed Grounds of Resistance § 10). But there is an ambiguity in the use of the word threat in that context. Threat as used in response to the claimants' original challenge meant no more than risk. The Director's decision was taken after assessment of the risk to security. But the grounds of resistance did not mention the fact that representatives of a foreign state had issued a specific threat as to the consequences which would flow from a refusal to halt the investigation. It is one thing to assess the risk of damage which might flow from continuing an investigation, quite another to submit to a threat designed to compel the investigator to call a halt. When the threat involves the criminal jurisdiction of this country, then the issue is no longer a matter only for Government, the courts are bound to consider what steps they must take to preserve the integrity of the criminal justice system.
  2. The constitutional principle of the separation of powers requires the courts to resist encroachment on the territory for which they are responsible. In the instant application, the Government's response has failed to recognise that the threat uttered was not simply directed at this country's commercial, diplomatic and security interests; it was aimed at its legal system. In written argument, the Director suggested that we should attach significance to the fact that the threat was not directed against him. But it was. While he, personally, was not being threatened with any adverse consequences, the threat was effectively being made to him, in his capacity as Director, and in relation to his statutory functions. The Government acted merely as a conduit, passing the threat on to him with an assessment of the danger should it be carried out. That threat was made with the specific intention of interfering with the course of the investigation. The Saudis knew what was proposed: the SFO intended to inspect Swiss bank accounts. Those who uttered and adopted the threat intended to prevent the course which the SFO wished to pursue. It is unlikely that so blatant a threat would have been made had those responsible not believed that it might well succeed.
  3. Had such a threat been made by one who was subject to the criminal law of this country, he would risk being charged with an attempt to pervert the course of justice. The course of justice includes the process of criminal investigation (R v Cotter [2002] 2 Cr App R. 29 at § 30 and 31). But whether or not a criminal offence might have been committed, the essential feature is that it was the administration of public justice which was traduced, it was the exercise of the Director's statutory powers which was halted.
  4. Threats to the administration of public justice within the United Kingdom are the concern primarily of the courts, not the executive. It is the responsibility of the court to provide protection...

  1. The legal relationships of the different branches of government, and the separation of powers depend on internal constitutional arrangements. They are of no concern to foreign states (see Lord Millett in R v Lyons [2003] 1 AC 976 at § 105).
  2. Those decisions were not concerned with threats to the administration of justice within the United Kingdom. Such threats, as we have sought to demonstrate, are particularly within the scope of the courts' responsibility. It is difficult to identify any integrity in the role of the courts to uphold the rule of law, if the courts are to abdicate in response to a threat from a foreign power.
  3. Mr Sales' submission appears to us not to be one of principle but rather one of practicality: resistance is useless, the judgement of the Government is that the Saudi Arabian government will not listen and the authorities in the United Kingdom must surrender. That argument reveals the extent to which the Government has failed to appreciate the role of the courts in upholding and protecting the rule of law.
  4. The courts protect the rule of law by upholding the principle that when making decisions in the exercise of his statutory power an independent prosecutor is not entitled to surrender to the threat of a third party, even when that third party is a foreign state. The courts are entitled to exercise their own judgment as to how best they may protect the rule of law, even in cases where it is threatened from abroad. In the exercise of that judgment we are of the view that a resolute refusal to buckle to such a threat is the only way the law can resist...
  1. Certainly, for the future, those who wish to deliver a threat designed to interfere with our internal, domestic system of law, need to be told that they cannot achieve their objective. Any attempt to force a decision on those responsible for the administration of justice will fail, just as any similar attempt by the executive within the United Kingdom would fail...
  1. ... There is no evidence whatever that any consideration was given as to how to persuade the Saudis to withdraw the threat, let alone any attempt made to resist the threat. The Director did not himself consider this issue. His assessment of the threat and its consequences relied on the advice of others. There is nothing to suggest that those advising him on this issue had made any attempt to resist the threat. They merely transmitted the threat to the Director, and explained the consequences if it was carried out. When this question was raised, in argument, Mr Sales responded that that issue was not one which the defendant had come to court to meet. Moreover, he suggested the court should assume that due consideration had been given as to whether the Saudis might be persuaded to withdraw their threat and as to how its consequences might be avoided...
  1. Secondly, as this case demonstrates, too ready a submission may give rise to the suspicion that the threat was not the real ground for the decision at all; rather it was a useful pretext. It is obvious, in the present case, that the decision to halt the investigation suited the objectives of the executive. Stopping the investigation avoided uncomfortable consequences, both commercial and diplomatic. Whilst we have accepted the evidence as to the grounds of this decision, in future cases, absent a principle of necessity, it would be all too tempting to use a threat as a ground for a convenient conclusion. We fear for the reputation of the administration of justice if it can be perverted by a threat. Let it be accepted, as the defendant's grounds assert, that this was an exceptional case; how does it look if on the one occasion in recent memory, a threat is made to the administration of justice, the law buckles? The Government Legal Service has every reason to be proud of its reputation for giving independent and, on occasion, unpalatable advice; but can that be maintained if in exceptional cases, when a threat comes from a powerful and strategically important ally, it must yield to pressure? Our courts and lawyers have the luxury and privilege of common law and statutory protection against power which threatens the rule of law. All the more important, then, that they provide support and encouragement to those in a less happy position. How do they do so, if they endorse surrender, when in Uganda the courts are forced to resist when those whom they have released on bail are re-arrested on the court-room steps by armed agents of the executive, or when the Chief Justices of Fiji and Pakistan are deposed by military rulers?
  2. The Director failed to appreciate that protection of the rule of law demanded that he should not yield to the threat. Nor was adequate consideration given to the damage to national security and to the rule of law by submission to the threat. No-one took any steps to explain that the attempt to halt the investigation by making threats could not, by law, succeed. The Saudi threat would have been an exercise in futility, had anyone acknowledged that principle. We are driven to the conclusion that the Director's submission to the threat was unlawful."

The description of the facts of the case by Lord Justice Moses is the best I've seen anywhere. Meanwhile the government has not been idle. As part of the Constitutional Renewal Bill they have included some provisions related to this case, which some legal commentators suggest would make it impossible for this kind of judicial review to be pursued in the future. So success in the High Court may turn out to be a pyrrhic victory for the CAAT and the Corner House.

If you'd like a nice summary, look no further than Ruthie's Law.

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