BAE bribery suit may be taken to Supreme Court

A U.S. appeals court ruled this week against the fund for employees of the city of Harper Woods, Michigan. The court said English law, not U.S. law, governed the shareholder lawsuit over alleged bribes to Saudi Prince Bandar bin Sultan and others.

The appeals court, which upheld a lower court's finding, left the fund to pursue its case in Britain.

Patrick Coughlin, the plaintiffs' lead attorney, said the fund had no plans to take its case to England.

Instead, he said it may appeal to the high court against the dismissal of the case on Tuesday by the U.S. Court of Appeals for the District of Columbia.

Will consider going to the Supreme Court, Coughlin, of Coughlin, Stoia, Geller, Rudman, Robbins LLP, said in a terse email reply to Reuters. No current plans to litigate in England.

He did not respond to questions about why he did not plan to take the case to England. The original suit was brought in September 2007.

The pension fund has charged that current and former directors and executives of BAE, Britain's No. 1 arms maker, breached their fiduciary duties and wasted corporate assets by allegedly allowing illegal bribes and kickbacks in the 1980s arm deal known as al-Yamamah, or the Dove.

BAE has denied that wrongful payments were made to secure the deal in which Tornado fighter jets, Hawker trainer aircraft and other military hardware were sold to Saudi Arabia in exchange for oil starting in 1985. The value of the government-to-government barter has been estimated at up to $80 billion, Britain's costliest arms deal.

BAE welcomed the U.S. appeals court ruling, said Lindsay Walls, a company spokeswoman in London.

Lawyers for Bandar, a former ambassador to the United States, have denied any wrongdoing on his part.

The plaintiffs had argued the United States should have jurisdiction because more than $2 billion in alleged bribes went to Bandar through an account at Riggs Bank, a defunct Washington D.C. financial institution.

BAE defendants countered that nearly all of them reside outside the United States, and none in Washington D.C.

Britain's Serious Fraud Office in December 2006 dropped an inquiry into the al-Yamamah deal. Then-Prime Minister Tony Blair said pursuing the matter threatened national security and ties with Saudi Arabia, which he called crucial for counter-terrorism efforts and Middle East peace.

In June 2007, BAE said the U.S. Justice Department had opened its own investigation of BAE's compliance with anti-bribery laws, including dealings with Saudi Arabia. The department did not respond to a request for comment on its investigation.

(Reporting by Jim Wolf; Editing by David Gregorio)