Apr 10, 2008, 10:01 GMT
London - A British court ruled Thursday that a decision to drop a corruption inquiry into a multi-billion arms deal with Saudi Arabia in 2006 was unlawful.
The High Court in London said that the Serious Fraud Office (SFO) acted unlawfully when it stopped the investigations into the 1985 Al- Yamamah arms deal totalling 43 billion pounds (85.2 billion dollars).
Leading British defence contractor BAE had been accused of making illegal payments to Saudi officials over the contract, but the firm maintained it acted in accordance with the law.
The SFO, the watchdog for the City, London's financial district, said at the time that continuation of the investigations would have undermined national security.
It was a view echoed by the then Labour government of Tony Blair, which was widely seen as having ordered the end of the investigations.
Thursday's High Court verdict represents a major victory for campaign groups who had brought the challenge, Corner House and the Campaign Against Arms Trade (CATT).
CATT in particular had argued that the decision was illegal under an international anti-bribery convention.
Blair said at the time that the Saudis had privately threatened to suspend anti-terrorism cooperation if the investigations were not stopped.
The Al-Yamamah deal, which goes back to the Conservative government of Margaret Thatcher, provided for the supply of Tornado and Hawk jets plus other military equipment.
However, the High Court made no formal orders as to what should happen next, which sources said would be decided at a further hearing.
It was expected that the SFO would be asked to 'reconsider' its decision.
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