Court ruling for BAE

Posted on 3 Mar 2010 by The Manufacturer

The High Court has granted an injunction prohibiting the Director of the Serious Fraud Office from taking any further steps in its plea bargain settlement with BAE Systems.

The injunction is in force until the Court has decided whether or not to give permission to Campaign Against Arms Trade (CAAT) and The Corner House to apply for a judicial review of the settlement. It will make this decision by 20 March 2010. Lawyers acting for The Corner House and CAAT formally lodged papers seeking judicial review permission on Friday 26 February 2010, together with a request for the injunction.

The Serious Fraud Office (SFO) has been investigating alleged bribery and corruption in BAE’s arms deals since 2004 in several countries — including Chile, Czech Republic, Qatar, Romania, Saudi Arabia, South Africa and Tanzania. BAE is alleged to have paid bribes, often in the form of commissions, to ‘advisers’ in order to clinch the deals.

On 5 February 2010 the SFO announced its plea bargain settlement with BAE. Under the SFO’s proposed settlement, BAE would plead guilty in court to “accounting irregularities” in its 1999 sale of a radar system to Tanzania and would pay penalties of £30m. The SFO would not bring prosecutions relating to alleged bribery and corruption in BAE’s arms deals elsewhere, including in the Czech Republic, South Africa and Romania.

CAAT and The Corner House sent a Letter Before Claim to SFO Director Richard Alderman on 12 February, asking the Courts on 26 February 2010 for permission to apply for a judicial review of the settlement. The groups contend that the proposed settlement is unlawful because the SFO did not follow the correct prosecution guidance (including its own guidance) on plea bargains.

They argue that the agreement does not reflect the seriousness and extent of BAE’s alleged corruption and bribery offences, and does not provide the court with adequate sentencing powers. The groups also hold that the SFO unlawfully concluded that the factors weighing against prosecuting BAE on bribery and corruption charges outweighed those in favour of prosecution.