03 September 2008

International fraud and asset tracing litigation news - summer: serious threats and bribery

Facts of the Case 

The Claimants applied to judicially review the decision of D to end an investigation into allegations of bribery made by a defence company, BAE Systems plc, in relation to Al Yamamah military aircraft contracts with Saudi Arabia. In summary, these allegations continued to be investigated between 2004 and 2006 up until the SFO was about to obtain access to Swiss bank accounts in July 2006.  Saudi representatives then made a specific threat that if the investigation was not stopped, contracts would be stopped and the close intelligence and diplomatic relationship between the UK and Saudi Arabia would cease. D decided to stop the investigation. The Claimants claimed that, in principle, it was unlawful for D to accede to the resulting threat on the basis that it was contrary to the rule of law and that D had failed to take into account the resultant threat imposed to the national security of the UK. 

The Decision 

The Claimants succeeded on the ground that D and the UK government failed to recognise that the rule of law required the decision to cease the investigation to be reached as an exercise of independent judgment. The Court emphasised that if a public authority surrendered to a threat or pressure this undermined the rule of law.  Surrendering to a threat was only lawful when there was no alternative course open to the decision maker and in this case there was no evidence that any consideration had been given as to how to persuade the Saudis to withdraw the threat.

Points of Interest 

The Court confirmed that D's power to investigate a suspected offence is conferred by s. 1(2) of the Criminal Justice Act 1987. Any decision D makes as to investigation or prosecution is for him to reach independently. The scope of D's discretion to prosecute is therefore wide and entitles him to take into account risk to life and national security when deciding whether to continue an investigation. In practice, the Courts are usually reluctant to interfere with the exercise of D's discretion.  However, when a threat involves the criminal jurisdiction of the UK, the Courts are then bound to step in. 

It was also held that a non-party to judicial review proceedings can have access to defence documents under CPR 5.4 C. Therefore, it is no longer necessary to obtain the Court's permission to obtain such documents and if a defendant wants to restrict access by non-parties, an application is now required. Prior to this case, such documents could not be accessed by non-parties. 

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