Page last updated at 10:29 GMT, Thursday, 24 April 2008 11:29 UK

SFO allowed to contest BAE ruling

Eurofighter Typhoon jets
Saudi Arabia is said to have threatened to cancel a Eurofighter order

The Serious Fraud Office (SFO) has been granted leave to appeal to the House of Lords against a ruling that it acted unlawfully in dropping a BAE probe.

The High Court had ruled that the SFO acted unlawfully by dropping the corruption inquiry into a 43bn BAE Systems arms deal with Saudi Arabia.

The SFO said national security would have been undermined by the inquiry while BAE maintained it acted lawfully.

Some opposition politicians have called for the inquiry to be reopened.

"The Administrative Court certified that there were points of law of general public importance and granted the Serious Fraud Office leave to appeal to the House of Lords. The SFO will be pursuing this appeal," a statement from the SFO said.

Earlier this month, judges said the decision to halt the inquiry represented an "abject surrender" to pressure from a foreign government.

Lord Justice Moses said that the SFO and the government had given into "blatant threats" that Saudi co-operation in the fight against terror would end unless the probe into corruption was halted.

'Diplomatic concerns'

The High Court case had been brought by Corner House and the Campaign Against Arms Trade, who said the SFO decision was influenced by government concerns about trade and diplomatic ties with Saudi Arabia.

The CAAT and Corner House has said they are "confident" they would be able to defend against the appeal.

Sarah Sexton of the Corner House said: "We remain confident of the strength of our case in the House of Lords. The principle that no one is above the law is fundamental to justice, as the High Court has clearly stated.

"It is now essential that the government abandons its draft legislation to give the attorney general the power to cancel a criminal investigation or prosecution by claiming 'national security' with no meaningful parliamentary or judicial oversight."

The al-Yamamah deal with Saudi Arabia was first signed in 1985 but ran into the 1990s and involved BAE selling Tornado and Hawk jets, other weapons and long-running maintenance and training contracts.

BAE was accused of illegal payments to Saudi officials, but the defence company maintains it acted lawfully.

In December 2006, the then Attorney General Lord Goldsmith, announced that the SFO was suspending its inquiry into the deal, saying it would have caused "serious damage" to UK-Saudi relations and, in turn, threatened national security.

Saudi Arabia is also reported to have threatened to cancel last year's 20bn deal to buy 72 Eurofighter Typhoon jets from BAE Systems.

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