UK fraud investigators lose battle in Unaoil-linked corruption probe

Supreme Court rules US engineering company KBR will not have to hand over documents to Serious Fraud Office

Abu Dhabi - February 26, 2009:  The KBR Display during the International Defence Exhibition and Conference 2009 (IDEX) at the Abu Dhabi National Exhibition Centre. ( Philip Cheung / The National ) *** Local Caption ***  PC0201-IDEX.jpgPC0201-IDEX.jpg
Powered by automated translation

The UK’s complex fraud investigation agency lost a court battle on Friday in its attempt to get documents from US engineering firm KBR as part of an international corruption probe into the award of lucrative contracts.

Judges at the UK’s highest court blocked the Serious Fraud Office’s (SFO) attempts to secure information held overseas as part of a sprawling investigation linked to Monaco-based Unaoil, whose senior executives have been convicted of bribery over contracts in post-Saddam Hussein Iraq.

The SFO opened a bribery and corruption investigation into KBR’s British business, its employees and agents in 2017. It demanded documents held outside the UK from a senior US-based executive during a meeting that year in Britain.

KBR, which employs 28,000 people worldwide with operations in 40 countries, refused. After losing an initial legal challenge in the UK in 2018, the decision was reversed by the Supreme Court on Friday.

The ruling is a blow to the SFO which is charged with conducting some of the most complex fraud and corruption cases, which usually involve alleged wrongdoing that crosses borders or is perpetrated in foreign countries.

"The presumption against extra-territorial effect clearly applies in this case because KBR Inc. is not a UK company, and has never had a registered office or carried on business in the UK," the court said.

The US engineering and procurement giant disclosed in 2016 that it was also under investigation in the US over international projects secured with the assistance of Unaoil.

Three former Unaoil executives have already been jailed in the UK for bribing Iraqi officials to clinch $1.7 billion of oil projects following a five-year inquiry by the SFO.

The investigation focused on how the Ahsani family, who ran Unaoil, secured energy contracts for blue-chip clients in the Middle East, Africa and Central Asia.

Brothers Cyrus and Saman Ahsani, Unaoil's British-Iranian former chief executive and chief operating officer, respectively, await sentencing in the US after pleading guilty to bribery in 2019.