UK fraud agency fights court ruling on BAE probe

LONDON, England (AP) -- Britain's Serious Fraud Office said Tuesday that it plans to appeal a High Court ruling that the agency acted unlawfully when it ended a corruption inquiry into a lucrative arms deal between Saudi Arabia and BAE Systems PLC.

The fraud agency said it wanted to seek a "definitive ruling" in the House of Lords, Britain's highest court of appeal, on the judiciary's ability to intervene in such a case.

The SFO's move to appeal is a blow for the Campaign Against Arms Trade and social lobby group Corner House, which successfully brought the High Court judicial review over the decision and had called on the SFO to immediately reopen the inquiry.

An appeal to the House of Lords could drag on for several months.

The fraud agency was investigating allegations that BAE, a leading global defense and aerospace company, had a multimillion pound "slush fund" offering sweeteners to officials from Saudi Arabia in return for lucrative contracts.

The High Court sharply criticized the SFO, the British government and the Saudi royal family when it ruled that the agency's 2006 decision to halt the inquiry was unlawful, saying it represented an "abject surrender" to pressure from a foreign government.

The SFO backed claims by Prime Minister Tony Blair that national security would have been undermined by the inquiry, but denied coming under any political pressure to drop it. Blair said there was a strong risk that the investigation would provoke the Saudi government to stop cooperating in combating terrorism.

The High Court judges said the SFO and the government had bowed to threats made by Saudi Prince Bandar bin Sultan, the former ambassador to the United States and now head of Saudi Arabia's National Security Council, that Saudi Arabia would drop a multibillion pound contract for Typhoon Eurofighter jets.

A £20 billion deal for 72 Typhoons was signed in September.

SFO Director Richard Alderman said the case raised questions about the court's role in reviewing the SFO's evaluation of the public interest.

"The Court itself has commented that the issues raised in this case are important points of public interest," said Alderman, who replaced former Director Robert Wardle earlier this month. "I will therefore be seeking permission to appeal to the House of Lords to obtain a definitive ruling."

The SFO will formally seek the appeal at a hearing in the case scheduled for Thursday E-mail to a friend

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