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	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Guardian Newspapers Ltd, R (on the application of) [1998] EWCA Crim 2670 (30 September 1998) URL: http://www.bailii.org/ew/cases/EWCA/Crim/1998/2670.html Cite as: [1999] WLR 2130, [1999] 1 Cr App R 284, [1998] EWCA Crim 2670, [1999] 1 WLR 2130

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IN THE COURT OF APPEAL
(CRIMINAL DIVISION)

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 30th September 1998

LORD JUSTICE BROOKE:

PART I: The leave application

1. On 9th September 1998 Guardian Newspapers Ltd gave notice of application pursuant to Section 159(1)(b) of the Criminal Justice Act 1988 for leave to appeal against an order made by Collins J at the Central Criminal Court on 8th September 1998 pursuant to the inherent jurisdiction of the court that the part of the criminal proceedings before him which concerned the defendants' application to stay those proceedings as an abuse of process be held in camera.
2. Section 159(1)(b) provides for the possibility, if this court grants leave to appeal, for a person aggrieved to appeal to this court against an order restricting the access of the public to the whole or any part of a trial on indictment or to any proceedings ancillary to such a trial. Section 159(6) creates power to make special provision, by way of rules of court, as to the practice and procedure to be followed in relation, inter alia, to appeals from orders for hearings in camera.
3. On the face of it, Rule 16B of the Criminal Appeal Rules appears to make such provision. It is, however, expressly tied to proceedings in which one of the parties has served a notice under Rule 24A(1) of the Crown Court Rules 1982 of his intention to apply for an order that all or part of a trial be held in camera for reasons of national security or for the protection of a witness or any other person.
4. Rule 16B reads, so far as is material:

"(1) This rule applies to proceedings in which a prosecutor or a defendant has served a notice under rule 24A(1) of the Crown Court Rules 1982 of his intention to apply for an order that all or part of a trial be held in camera for reasons of national security or for the protection of a witness or any other person.

(2) Where a notice has been displayed under rule 24A(2) of the Crown Court Rules 1982, a person aggrieved may serve notice in writing on the Registrar as prescribed in Form 20 that he intends to appeal against any order that may be made on the prosecutor's or defendant's application, and he shall serve a copy of such notice on the appropriate officer of the Crown Court where the trial is to take place, on the prosecutor and the defendant and on any other interested person.

(3) Subject to paragraph (4) a notice shall be served on the Registrar under paragraph (2) within 7 days of the display of the notice under rule 24A(2) of the 1982 Rules and where such an order is made at the trial, the notice shall be treated as the application for leave to appeal against the order.

(4) Where an order is made at the trial, a person aggrieved who has not served a notice under paragraph (2) may apply for leave to appeal against the order by notice in writing as prescribed in Form 20 served on the Registrar within 24 hours after the making of the order, and he shall forthwith serve a copy of such notice on each of the persons who are to be served under paragraph (2).

(6) An application for leave to appeal shall be determined by a judge of the Court, or the Court as the case may be, without a hearing.

(7) Where leave to appeal is granted, the appeal shall be determined without a hearing."

5. In Ex p Guardian Newspapers Ltd The Times, October 26, 1993, this court has held that notwithstanding these provisions, written submissions from an appellant or applicant would be permitted, and we have received written submissions from all the parties in this case.
6. We have first to decide, however, whether Rule 16B on its proper construction does apply in the situation before us, or whether the rule-makers have completely failed to make rules providing for the present situation, notwithstanding their powers under Section 159(6) of the Act. To consider the force of this submission, it is necessary to say something about the stage the proceedings had reached when the judge made his order.
7. The two defendants faced an indictment containing five joint counts charging them with conspiracy to defraud and five individual counts of charging one or other of them with dishonesty of one kind or another. They had pleaded not guilty on arraignment, but they had not yet been put in charge of a jury. Indeed, the judge was hearing a number of applications which included an application to stay the proceedings for abuse of process. We were told that preparatory hearings were likely to take place off and on over the rest of this year, and the trial proper would not start till next year.
8. It has now been decided by the House of Lords that an order made on an application to stay proceedings for abuse of process is an order relating to trial on indictment within Section 29(3) of the Supreme Court Act 1981 and is not therefore amenable to judicial review. See In re Ashton [1994] 1 AC 9 where Lord Slynn of Hadley said at p 20D:

"In the present case where the order was made at the very beginning of the trial, or even if strictly just before the trial was due to begin, it is no less an order made 'as an integral part of the trial process ...'"

9. On the other hand this court has held that such an order does not fall within the range of orders which may be made at a preparatory hearing provided for by statute. The special statutory provision which allows for appeals against an order made at such a hearing does not, for this reason, create a path for an interlocutory appeal to this court. See Re Gunawardena 91 Cr App R 55 and Hedworth [1997] 1 Cr App R 421. The combined effect of these decisions is that no remedy is available to a defendant aggrieved by a refusal to stay proceedings on the grounds of abuse of process until a trial is over.
10. We should add that it is well settled that a trial does not start on arraignment, unless there is any statutory provision creating this effect. It starts when a jury is sworn and the defendant is put into the charge of the jury (Tonner 80 Cr App R 170). The entering of a plea of "not guilty" does not mark the commencement of a trial but merely establishes the need for a trial (Quazi v DPP [1988] Crim LR 529).
11. We are concerned in this case, however, with a different issue. Rule 24A(1) and (2) of the Crown Court Rules 1982, entitled "Hearings in camera", provide:

"(1) Where a prosecutor or a defendant intends to apply for an order that all or part of a trial be held in camera for reasons of national security or for the protection of the identity of a witness or any other person, he shall not less than seven days before the date on which the trial is expected to begin serve a notice in writing to that effect on the appropriate officer of the Crown Court and the prosecutor or the defendant as the case may be.

(2) On receiving such notice, the appropriate officer shall forthwith cause a copy thereof to be displayed in a prominent place within the precincts of the Court."

12. The lawyers acting for both defendants invoked the provisions of Rule 24A. Notices were served on the Crown Court at the appropriate time indicating an intention to apply for an order that part of the proceedings to be heard on 7th September 1998 and following be heard in camera, and although only one of these notices was displayed in a prominent place, no point is now taken about this, since the failure to display both notices was not due to any default by either defendant. A point is, however, taken that the notices failed to state whether national security or the protection of the identity of a witness was the reason for the application, and they also failed to specify to which part or parts of the proceedings the notice related.
13. A journalist for The Observer newspaper, Mr Michael Gillard, saw the notice and took exception to it, and it was in these circumstances that Guardian Newspapers Limited appeared by leading counsel on 8th September to oppose the making of an order of this kind. We have been able to read the submissions made by Mr Tugendhat QC to the judge. He also showed the judge a clip of newspaper cuttings which revealed how much information about this case was already in the public domain. The Crown took a neutral stand. The judge then heard submissions in camera from counsel for the immediate parties to the proceedings before making a ruling in these terms:

"Mr Tugendhat, I expect that you have received the message that I have decided, after hearing argument, that we ought to hear the application in camera. Now that, of course, does not mean that, necessarily, there will be any hearing in camera if the trial goes ahead because part of the application is that it is based on an abuse of process...

It is not possible for me to give reasons in open court as to why I have done that. I am quite prepared to give you reasons and I think that I can say things which are in the public domain, as it were, which give you, broadly, the reasons and they are essentially these...

Essentially, the matters that you referred to (that is to say, the newspaper cuttings) lie behind this and it has seemed to me that, essentially, for two main reasons:

(1) because of the need to protect any wide ranging consideration of matters which could affect public - national security and, more importantly, in the context of this case, could affect the interests of others, not only the defendants because matters, that are going to be put before me, will range beyond matters that are in the public domain already; by which, I mean, the matters in the newspapers. It would be quite impossible for counsel to make submissions freely and fully to me if I did not hear those applications in camera.

This does not mean, necessarily, that I will deem it necessary to give any ruling I make on the application in camera. That is a matter for consideration when I have heard the argument.

Equally, if I decide that, notwithstanding this application, the trial should continue, then I am, in no way, deciding matters of trial, which are covered by in the same area as this application, should themselves be heard in camera.

What I am really getting at is that I doubt, in the long run, if Mr Gillard and those who are interested would have lost anything by failing to hear the application in camera because, in all probability, although I am not making an advanced ruling, if the trial goes ahead, those matters will be heard in open court.

If the trial does not go ahead, then I will, obviously, have to consider how much I can give in my judgment in open court and I suspect that I will be able to give sufficient to indicate to the public why I have reached the decision that I have.

I am sorry that it is all a bit cryptic, however, you understand why that is.

However, I hope that that, at least, gives you an indication as to what has moved me and it, perhaps, confirms what you believe would be ... within the realm of the matters which are covered by the newspaper cuttings that you have referred me to.

Incidentally, I am satisfied, beyond any doubt, that the matters have been properly proved to me or established before me by evidence, the matter that you, Mr Tugendhat, were concerned about. I do not think that I can really say any more than that."

14. The following day Guardian Newspapers served on the Registrar of Criminal Appeals a notice seeking leave to appeal purportedly in compliance with Rule 16B of the Criminal Appeal Rules, and a question then arose whether the judge should adjourn the hearing he had been conducting in camera, by reason of the provisions of Rule 24A(3) of the Crown Court Rules which reads:

"(3) An application by a prosecutor or a defendant who has served such a notice for an order that all or part of a trial be heard in camera shall, unless the court orders otherwise, be made in camera, after the defendant has been arraigned but before the jury has been sworn and, if such an order is made, the trial shall be adjourned until whichever of the following shall be appropriate -

(a) 24 hours after the making of the order, where no application for leave to appeal from the order is made, or

(b) after the determination of an application for leave to appeal, where the application is dismissed, or

(c) after the determination of the appeal, where leave to appeal is granted."

15. The following day the judge heard Mr Tugendhat QC, and the other counsel in the case, address him on this issue, and in the upshot we have been told that he ruled that although Rule 24A did not, in his judgment, apply to the proceedings before him after all, and he was in fact exercising the inherent jurisdiction of the court in determining whether or not to sit in camera to hear the abuse of process application, he ought to conduct the proceedings as if Rule 24A applied, and he therefore adjourned them pending the appeal. We were told that he is likely to resume the hearings in this matter towards the end of October. We do not have a transcript of his ruling on 10th September, but counsel were agreed on the general effect of what the judge said.
16. It therefore falls to this court to decide for the first time whether the reference to "an order that all or part of a trial be heard in camera" in Rule 24A(1) is apt to refer to an order that a pre-trial application to stay proceedings for abuse of process be heard in camera. We have been told by Mr Edmund Lawson QC, who has great experience in these matters, that judges at the Central Criminal Court have treated the Rule as applying to such proceedings, but the point has never been definitively decided. If the Rule does not apply, then there are no rules of court requiring seven days, or indeed any public notice of such an application, and so far as this court is concerned, no special provision has been made in relation to the carriage of an appeal which undoubtedly lies pursuant to Section 159(1)(b) of the Act.
17. This would be an odd result, since it is well known that Parliament legislated in 1988 in anticipation of the outcome of proceedings taken against this country in the European Court of Human Rights by representatives of the Press who complained that English national law gave them no right to appeal against an order of a court denying them their right to report court proceedings pursuant to Article 10 of the European Convention on Human Rights (see R v Central Criminal Court, ex p Crook, The Times, 8th November 1984). It appears to us that we ought to interpret the relevant rules purposively in order, if possible, to comply with the clear intention of Parliament that our national law and procedures should be altered in order to bring them in line with the requirement of Article 13 of the Convention that national law should provide an effective remedy to citizens who complain that their Convention rights have been infringed.
18. Since issues of jurisdiction and procedure turned on the point, we heard oral arguments from all counsel on this matter as a preliminary to the leave application, although in the event Mr Edmund Lawson QC, who appeared for the defendant Palmer, took a neutral stance and Mr Boyle, whose stance on behalf of the Crown was conspicuously neutral on most issues, supported Mr Alun Jones QC, who appeared for the defendant Hashemi, on this issue, although he did not wish to add any supplementary argument of his own.
19. Mr Jones's argument, in essence, was to the effect that we should adopt a strict approach to construction, and if the result was thoroughly inconvenient for everyone, including the media, that is the rule-makers' fault and it is just too bad. He said that there is now a clear line of authority establishing what a trial is and when a trial starts, and when Rule 24A(1) refers to "all or part of a trial" it cannot be referring to any proceedings which take place before the start of a trial. He suggested that in 1989 the draftsman of the rule may not have anticipated the extent to which the courts might whittle down the apparent purpose of Parliament in the Criminal Justice Act 1987 to bring forward the date at which a trial starts to embrace preparatory hearings capable of embracing all kinds of interlocutory pre-trial applications (for which see Alun Jones QC, "the Decline and Fall of the Preparatory Hearing" [1996] Crim LR 460, in which the author observes that such hearings apparently spring in and out of a shapeless and ill-defined pre-trial process).
20. Mr Jones accepted that his construction meant that there would be no rules requiring seven days' notice of an application for an order to hold pre-trial proceedings in camera. Nor would there be any rules governing the procedure for appealing against such an order, since Rule 16B of the Criminal Appeal Rules relates only to appeals that follow the service of a notice under Rule 24A of the Crown Court Rules. He argued, however, that in the case of a pre-trial matter, there was not the same need for an abbreviated timetable (since the trial itself, with the defendants in the charge of a jury, would not be delayed by an appeal), and that the requirements that applications and appeals in this court should be determined without a hearing were inserted in view of the same need for speed, and they would not be so important in the event of a pre-trial appeal. He did not explain what rules this court should follow on an appeal by a representative of the media under Section 159(1)(b) of the Act, if his submissions were correct, since none of the other provisions of the Criminal Appeal Rules make any allowance for third party appeals of this kind.
21. It appears to us that this result is to be avoided if possible. It is at once noticeable that Parliament clearly intended effective new procedures to relate not only to the whole or any part of a trial conventionally so called, but also to any proceedings ancillary to such a trial (s 159(1)(b)), and that when it came to create new express rule-making powers it used almost the same language as is found in Section 29(3) of the Supreme Court Act 1981:

"... Rules of Court may make in relation to trials satisfying specified conditions special procedure as to the practice and procedure to be followed ..." (emphasis added)

21. It appears to us that in that context the draftsman was intending to use the word "trials" to embrace all hearings which formed an integral part of the trial process (compare Lord Slynn's language in ex p Ashton above), since it would make no sense if he did not intend to make provision for rules in relation to orders in proceedings ancillary to trials, for which an express right of appeal had also been created.

22. It appears to us that we can introduce a sense of coherence into these provisions if we interpret the word in Rule 24A(1) "all or part of a trial" as meaning "all or part of the trial process" in the sense that that expression was used by the House of Lords in ex p Ashton. The words "the date on which the trial is expected to begin" should be interpreted as "the date on which the relevant part of the trial process is expected to begin". Similarly, the words "the trial shall be adjourned" in Rule 24A(3) should be interpreted as "the relevant part of the trial process shall be adjourned". It is clear from Rule 24A(3) that the defendant must have been arraigned before the court can hear the application that a part of the trial process should be heard in camera, but that requirement should present no difficulty in practice. This approach to the interpretation of the Rule will have the beneficent effect that pre-trial proceedings of this kind are not left in an unregulated limbo, contrary to the clear intention of Parliament; that there is no need for hair-splitting distinctions between the orders that a court may or may not make at a preparatory hearing properly so called; and that even if a representative of the media wishes to challenge one of these orders, the court can get on with other pre-trial hearings which form part of the trial process and for which secrecy is not sought, without having to adjourn all its proceedings pending a decision by this court on an appeal. On this approach, the judge's order which will have been made post-arraignment, will have been made "at the trial" within the meaning of Rule 16B(3) and (4) of the Criminal Appeal Rules.
23. We are emboldened to adopt this rather broadbrush approach to the interpretation of the rules by the principles of statutory construction which are conveniently summarised in Halsbury's Laws (4th Edition, re-issue), vol 44(1), paras 1474-5 and 1478-82. The statutory scheme of which Rule 24A of the Crown Court Rules and Rule 16B of the Criminal Appeal Rules form an integral part was introduced in 1989 in order that this country should comply with its international obligations under the European Convention on Human Rights. The mischief the scheme was introduced to combat is obvious, and the right it was seeking to protect - the right of the news media to have an effective remedy against an order preventing them from exercising their Article 10(1) rights to receive information in court proceedings (and see also Article 6(1)) - is an important one. In our judgment it is incumbent on us to interpret this rule purposively (see the cases cited in note 5 to Halsbury's Laws, op cit, para 1475), and to presume that the rule-maker did not intend an unworkable or inconvenient result (ibid, paras 1478-9) when he was intent on ensuring that this country fulfils its international obligations in matters affecting freedom of expression.
24. We have considerable sympathy for the judge who was not willing to adopt such a bold approach to statutory construction and was thrown back to holding that he must have made his order (which was not, in the event, drawn up until this issue arose the following day) in the exercise of his inherent jurisdiction even though everybody thought that Rule 24A applied. While we can see no evidence in Section 159 of the 1988 Act that Parliament intended to extinguish the court's inherent jurisdiction (to protect its proceedings from abuse) altogether, we are of the clear view that the better approach is to bring pre-trial proceedings of this kind within the umbrella of Rule 24A (and Rule 16B of the Criminal Appeal Rules) if possible, since they provide a clear code of procedure which everybody can understand and follow.
25. These are the reasons why we announced at the end of the hearing on 15th September that we were satisfied that this was a Rule 24A case, and that we intended to proceed to dispose of the appeal without a hearing. We granted leave to appeal, and prescribed a timetable for any further written submissions the parties might wish to make on the appeal whether on an inter partes or on an ex parte basis.

PART II The appeal

26. In this part of our judgment we will consider the appellants' substantive challenge to Collins J's order of 8th September that the whole of the hearing of the abuse of process applications should be conducted in camera. Although we received some helpful Notes from counsel acting for the defendants on an ex parte basis, and these enabled us to understand the basis on which the judge made his order, we have not found it necessary to write any part of this judgment on that basis. We are deciding this appeal without a hearing, in compliance with the requirements of Rule 16B(7) of the Criminal Appeal Rules. It is first necessary to say rather more about the circumstances in which the appellants' involvement in these proceedings arose.
27. Mr Michael Gillard, who writes for The Observer, had a good knowledge of the background. He had conducted his own inquiries into the security services' involvement with the First Defendant Jamshid Hashemi Naini ("Hashemi") and with the current prosecution, and we have been shown two articles he has written in that newspaper about the case - "Arms trader arrested over Iran deals" (25.8.96) and "MI6 spooked over Iran fraud trial" (24.8.97). He knew that there were pre-trial hearings to be held in connection with the case at the Central Criminal Court during the week commencing 7th September 1998, which he wished to observe. That morning it was brought to his attention that on the previous Friday a notice had been posted (or was about to be posted) at that court to the effect that the Second Defendant intended to apply for an order that part of the proceedings to be heard on 7th September 1998 and following be held in camera. Mr Gillard told the judge that his newspaper wished to oppose this application, and the judge said that counsel instructed by the paper should initially appear in his court at 2 pm to discuss how the matter should be taken forward. He envisaged that this would give other counsel the opportunity to tell him what they felt able, on instructions, to tell him about the nature of the application which was to be made. In the event Mr Tugendhat maintains he was told by counsel for both defendants that their applications were based on considerations of national security and no other ground, and that in the circumstances it would not be proper or even lawful to reveal further information to the press.
28. When Mr Tugendhat appeared in court, the judge told him that since theCrown was not opposing the defendants' application, he was inclined to allow him to attend, with his solicitor, at the hearing of the application which would be made in private, but he would not be willing to allow his client to attend. This offer did not prove to be acceptable, and that idea went no further. The judge also made a direction, which The Observer did not oppose, that the proceedings should not be reported until after the trial was over or further order. Counsel was then given the opportunity to prepare his submissions overnight, not knowing the basis of the defendants' applications, save that they were founded on a contention that national security would be endangered if their abuse of process applications were not heard in camera.
29. Mr Tugendhat prepared his arguments in the form of a formal note, which we have been shown. He said that his clients would not oppose the making of an appropriate order to ensure that the purpose of the application under Rule 24A was not defeated by publicity about it. On the other hand he submitted that unless there were exceptional circumstances (of which there was no evidence or support before the court) which were strong enough to prevent any third party hearing what was said in support of the application, one of two courses would be appropriate. The first was what he called a postponement order under Section 4(2) of the Contempt of Court Act. The other was an order which would allow not only counsel and solicitor for The Observer, but also a responsible journalist - Mr Michael Gillard - to attend after they had given undertakings to the Court not to use or disclose any information obtained in the course of the hearing except for the purpose of any appeal that might be made in respect of the order the court might make. Alternatively, he said that the application should not be heard until The Observer had been told at least the type of evidential basis on which it was being made. We should say at once that the judge rejected this alternative suggestion because he had no power to order the parties to tell The Observer any more, and he did not wish to delay matters.
30. Mr Tugendhat said that whatever order was made should be proportionate to the risk which the court considered to be attendant upon disclosure and should be balanced against the rights of the press and public. This is clearly right. The court was exercising a discretion unfettered by statute, and since the House of Lords has made it clear that the rights conferred by Article 10 of the European Convention of Human Rights mirror the English common law approach on matters affecting the freedom of the press, it is not surprising that nobody queried the correctness of this submission.
31. Mr Tugendhat made it clear that he was basing his submissions solely on questions of the risk to national security which he had been told was the sole ground for the defendants' application. If the application was based on "the protection of the identity of a witness or any other person", he said that different considerations might apply to the extent to which the press could or should be informed of the basis of the application, and to the court's response to it.
32. Against this background, Mr Tugendhat developed his submissions on two fronts. He relied on Article 6(1) of the European Convention of Human Rights in support of his contention that there should be a fair hearing into his clients' claim that they had a right to be informed about the hearing of the application, and on Article 10 in support of his arguments based on the rights and duties of the press. In the first of these contexts, while The Observer was grateful for the proposal that counsel and solicitors might attend the hearing on terms that they could not tell their clients what they had heard, he submitted that this proposal could properly be extended to include Mr Gillard, and that there should be no objection to this either on practical grounds or in principle. As a matter of practice, the court was accustomed to making orders restraining the press from publishing material which was confidential and affected national security, but which was already known to the press, as in the Spycatcher and other cases where secrets had been leaked to the press and not yet published. The press could be trusted to honour such undertakings as Mr Gillard would be required and willing to give. Such an order had recently been made in the case of Mr Alcock, the Inland Revenue tax inspector, where Mr Gillard had been allowed to hear matters which could not be disclosed in public, and where he had been of assistance in telling the court of relevant matters which were not known by any of the parties before it.
33. As a matter of principle, the application for a case to be heard in camera was itself a proceeding to which the principles of fairness should apply, including those set out in Article 6(1) of the European Convention on Human Rights. The expression "civil rights and obligations" should be given a wide autonomous interpretation. This application affected The Observer's right to see justice being done and also its right and duty to the public. When the hearing was completed, the court should then hear any submission The Observer might make as to whether all or part of the material should be subject to reporting restrictions. Mr Tugendhat then repeated his alternative submission that the application should not be heard until his clients had been told at least the type of evidential basis upon which it was being made.
34. In so far as the common law recognised that proceedings might exceptionally be heard in camera on grounds of national security, he submitted that certain observations by Lord Diplock and Lord Scarman in Attorney-General v The Leveller Magazine Ltd [1979] AC 440 applied equally to the applications mentioned in Rule 24A. Lord Diplock said at p 451A-C:

"In the instant case the magistrates would have had power to sit in camera to hear the whole or part of the evidence of "Colonel B" if this had been requested by the prosecution; and although they would not have been bound to accede to such a request it would naturally and properly have carried great weight with them. So would the absence of any such request. Without it the magistrates, in my opinion, would have had no reasonable ground for believing that so drastic a derogation from the general principle of open justice as is involved in hearing evidence in a criminal case in camera was necessary in the interests of the due administration of justice." [Emphasis added]

35. Lord Scarman said at p 473H:

"There must be material (not necessarily evidence) made known to the court upon which it could reasonably reach its conclusion."

36. Mr Tugendhat complained that no indication had been given as to the source or nature of the material which was to be put before the court in support of the application. In those circumstances the judge should require each of the defendants to say publicly whether there was an affidavit, and if so by whom, and if not, why not, and what was the source of any facts which would be asserted to back the submissions that would be made in support of the application.
37. The second part of his submissions was founded on Article 10 of the European Convention on Human Rights. He reminded the judge that the right to freedom of expression included freedom to receive information as well as freedom to impart it, and of the approach of the court at Strasbourg to these matters in Observer and Guardian v UK [1992] 14 EHRR 153 at p 191:

"(a) Freedom of expression constitutes one of the essential foundations of a democratic society... Freedom of expression, as enshrined in Article 10, is subject to a number of exceptions which must, however, be narrowly interpreted and the necessity for any restriction must be convincingly established.

(b) These principles are of particular importance so far as the press is concerned. Whilst it must not overstep the bounds set, inter alia, in the 'interests of national security' ... it is nevertheless incumbent on it to impart information and ideas on matters of public interest. Not only does the press have the task of imparting such information and ideas: the press also has the right to receive them. Were it otherwise the press would be unable to play its vital role of 'public watchdog'..."

and at p 193:

"It has to be examined whether the actual restraints imposed were 'proportionate' to the legitimate aims pursued."

38. Mr Tugendhat submitted that unless The Observer was allowed to be present at the hearing, no submissions would be made to the court on these important tests. It was to be emphasised that the application was being made on grounds of national security, but it was not being made by the Crown, and the Crown were not apparently even supporting it. It was hard to see how these stringent tests could be satisfied in such a case. In this context he repeated the dictum of Lord Diplock in The Leveller which we have quoted above.
39. Finally, Mr Tugendhat submitted that it could not be "necessary" (Article 10(2)) to prevent the press from hearing and republishing matters which were already in the public domain. Since his clients did not know what (if anything) the court had been told what was, or what was not, still secret, he invited the judge to read a file of newspaper clippings so that he could see how much had already been disclosed to the public, in particular about Hashemi and MI6. This file, which had presumably been put together in a hurry, was in a most confusing order, and the judge certainly did not have the opportunity available to us to study it at leisure before he reached his decision. For convenience we are attaching a summary of it as an annex to this part of our judgment.
40. During the course of the hearing reference was made to certain witness statements made by people described as Witness A to H, from which it could be inferred that a degree of confidentiality attached to their identities. Mr Tugendhat said that in his limited experience, since these applications were being made only on the grounds of the risk to national security, it was surprising that they lacked the support of the Crown. If it should turn out that what the defendants were actually saying was that they were concerned about the protection of witnesses or about something else, then the whole thing had gone off to a false start. He discussed with the judge the notorious case of Mr Howard Marks, who had successfully suborned an actor to persuade the court that he was a secret agent of the Government of Mexico (which he was not), and he said that there was no reason to suppose that counsel instructed by the Serious Fraud Office would know one way or another whether what was being asserted by one of the defendants about security matters in camera was in fact correct.
41. In response to this submission Mr Alun Jones QC submitted that the prosecution represented the Crown in a broader sense, and that the judge should be entitled to look to them as representing the Crown for their submissions as to whether these abuse of process applications should be heard in camera or not. The judge replied that he ought to have proper evidence and proper material before him if he was to be satisfied that there were indeed, reasons of national security to be relied on to require that the court should sit in camera. While he would not be entitled to act on a letter from a third party which was unsupported by any material, he thought he would be entitled to rely on statements from members of the Security Service, even if these were in the form of Criminal Justice Act statements. Mr Tugendhat said that he would accept this proposition absolutely.
42. Mr Boyle, who appeared for the Crown, told the judge that the Crown adopted a position of interested neutrality. In due course he would be seeking leave for some of the Crown's witnesses to be heard in camera to protect their identity, but he had no submissions to make, one way or the other, on the defendants' present applications.
43. We have described in Part I of this judgment the course that events then took, and we have also recited in full the ex tempore judgment given by the judge after the lunch adjournment. None of the parties to the proceedings in camera, which lasted about 45 minutes, have sought to provide us with a transcript of what took place then, although we have received Notes which show us the points that were being made. It appears that the judge reached his decision before the adjournment, and that he decided that there was no other submission Mr Tugendhat could usefully make to him. He then set out the reasons he felt he could disclose in open court after the adjournment.
44. In this appeal Mr Tugendhat has largely repeated the submissions he made to the judge. In a supporting affidavit Mr Gillard has emphasised to us that he is particularly concerned that the judge failed to give sufficient weight to the special public interest that arises in cases involving abuse of process and the involvement of the security services. If the defendants' allegations were true, then public servants might have connived at or condoned criminal acts, or might be conniving at or condoning the imprisonment of innocent people, and/or misleading the courts. If, on the other hand, they were not soundly founded, then the defendants would be misleading the courts in an effort to avoid conviction. Mr Gillard told us that these concerns were increased on 10th September when the judge is said to have said that a reason for the request for the hearing to be held in camera was that there would be a discussion of Hashemi's role as an informant for the security services during the period in which he was being accused of operating a major international fraud, and that Hashemi was asserting that MI6 had left him "in the lurch" about this prosecution.
45. Mr Gillard says that this raised the prospect of claims being made in camera that MI6 were aware of and condoned the fraudulent activities by Hashemi which form the basis of some of the charges, and also that he had been in contact with MI6 regarding the prosecution in order to seek assistance in its suppression. He referred us in this context to his article of 24th August 1998 which mentioned that MI6 had been in contact with the Attorney-General regarding the Hashemi case. He said that he had obtained this information from reliable sources. Such claims by the defendants raised serious questions of public interest regarding MI6's activities, and he said that they should not be cloaked in secrecy merely to prevent exposure or embarrassment over matters which, if true, would cause substantial legitimate public concern.
46. He added that as a matter of principle it was particularly important that criminal matters were heard in open court so that what he called the trial could be subject to public scrutiny. Publicity, he said, is the safeguard by which we can ensure not only that a defendant gets a fair trial, but also that the judge is administering justice fairly and properly. A defendant giving evidence in public is likely to be discouraged from presenting, as fact, matters which are fiction, because he will be running the risk that his account of the facts will not stand up to close examination by members of the public who are in a position to know the truth. For those reasons, he said, it is of paramount importance that access to the public in criminal matters is not restricted, particularly in circumstances where the imposition of reporting restrictions are adequate to ensure a fair trial.
47. So far as questions of national security are concerned, Mr Tugendhat reminded us in his written submissions of well-known dicta taken from Lord Goff's speech in Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at pp 283E-284A, and from Lord Templeman's speech in Attorney-General v Guardian Newspapers Ltd [1987] 1 WLR 1248 at p 1297A-F. He submitted that considerations of national security only override open justice and freedom of expression if and when it is necessary that they should, and that any derogation from the application of those principles may be applied only if it is necessary in the public interest on the facts of a particular case. He suggested that abuse of process by the executive was itself so serious a threat to national security that an allegation of such abuse (if not itself abusive) should normally be adjudicated upon in public.
48. He reminded us that in R v Legal Aid Board ex p Kaim Todner [1998] 3 All ER 541 Lord Woolf MR gave four reasons at pp 549j - 550b for the principle of open justice. It deters inappropriate behaviour on the part of the court; it maintains public confidence in the administration of justice and enables the public to know that justice is being administered fairly; it may result in evidence becoming available which would not become available if the proceedings were not open; and it makes uninformed and inaccurate comment about court proceedings less likely.
49. We would add that considerations of this kind also underlay the Master of the Rolls's earlier important judgment in Hodgson v Imperial Tobacco Ltd [1998] 1 WLR 1056, in which he said at p 1071C that it remained a principle of the greatest importance that, unless there were compelling reasons for doing otherwise, there should be public access to hearings in chambers, and information available as to what occurred at such hearings. The new rules relating to hearings in chambers which the court set out in that case did not apply, he said, to the exceptional situations identified in Section 12(1) of the Administration of Justice Act 1960. One of those situations arises "where the court sits in private for reasons of national security during that part of the proceedings about which the information in question is published." (s 12(1)(c)).
50. Mr Tugendhat submitted that the first of the reasons given in ex p Todner should be stated more broadly. Open justice promotes the rule of law. Citizens of all ranks in a democracy must be subject to transparent legal restraint, especially those holding judicial or executive offices. Publicity, whether in the courts, the press, or both, is a powerful deterrent to abuse of power and improper behaviour.
51. He repeated his argument that it was hard to see how a defendant, without any evidential material forthcoming from the Crown, could present the material which might enable a judge to conclude properly that there should be a hearing in camera on grounds of national security. The only source of information on this topic must be the Crown, and the application could and should be made either by the prosecution or the Attorney-General. He suggested that if a defendant needed to reveal secret information of a kind which might prejudice national security if revealed, he should inform the prosecution, and the question of what to do about the possible threat to national security was then a matter for the Crown. The Crown could then either opt to do nothing (on the basis that it considered that there would be no prejudice to national security, or none that would outweigh the principles of open justice), or to apply, on evidence, for a hearing in camera, or to discontinue the proceedings. If the defendant does not forewarn the prosecution, and the judge has reason to think that the defendant is about to disclose information which may prejudice national security, then he should adjourn the proceedings to enable the Crown to make such application as it may be advised.
52. On this appeal Mr Boyle originally told us, both orally and in writing, that the Crown was continuing to adopt a neutral stance. When we gave the Crown an opportunity to make further submissions following the hearing on 15th September, we were told in due course that enquiries had now been made of the relevant Government Department as to the possible ambit of future in camera applications by the Crown, including (for example) the question whether the identity of witnesses might be protected by means other than hearing evidence in camera. The outcome of these inquiries, we were told, was that in addition to the question of the protection of certain witnesses, certain of the material contained in their witness statements was sensitive in its own right, although it would of course be disclosed to the defendants for use in the criminal trial. The sensitivity of some of the material required its protection, so far as possible, from wider dissemination. The Crown therefore wished to make it clear that in due course, in addition to its earlier position, application might be made for the court to sit in camera because of the sensitive nature of some of the material and the relationship it had to the national interest. It followed that the Crown could not now remain neutral and would invite the trial judge in due course that the abuse of process application be heard in camera.
53. At the outset of these proceedings we received written submissions from both defendants on an ex parte basis, explaining the nature of the concerns that led the judge to make the order he did. After we had given them the opportunity to make further submissions if they wished, we received an "open" submission, coupled with a short "ex parte" submission, from the Second Defendant.
54. The "open" submission concentrated on three matters. First, it was maintained that Rule 24A(1) does not require the notice served under the rule to specify the grounds of the application, or the particular "part of a trial" sought to be heard in camera. Alternatively, the notice could simply recite the grounds set out in the rule without greater specificity, and if there is such a requirement, the fact that the notice in this case did not do so was of no consequence. There might be occasions when it was impossible to be specific without revealing publicly the concerns which are sought to be protected from publicity. The object of the notice is to notify everyone that an in camera application is going to be made, and when the application is listed, the press or any interested person can then be heard, and the judge can decide whether further particulars of the application are necessary. Although the appellants had been told that the sole ground advanced was national security - there seems to be a dispute whether they were told this by one or both defendants, as they allege - it must have been apparent to the court from a skeleton argument submitted by the Second Defendant in advance of his in camera application that issues as to the safety of individuals arose. In any event, it was said that the appellants suffered no prejudice, because they could have advanced no argument to the judge as to the particular facts which gave rise to the application since they were, inevitably, ignorant of them, and the judge was familiar with the principles which underlie a court's consideration of whether to order proceedings to be held in camera.
55. Next, it was submitted that the words in Rule 24A "for the protection of the identity of a witness or any other person" are sufficiently wide, on their proper construction, to include a situation in which, although "the identity of a witness or any other person" can be protected, such a person would remain in danger if evidence relating to him was heard other than in camera. Mr Tugendhat had expressly conceded at the hearing of the leave application that a real apprehension as to harm being suffered by a person would justify an order under Rule 24A (or an order akin to such an order), and even ignoring that concession, it was submitted that the rule would apply where, assuming that the court approved the concealment of a witness's name (such as calling him "X" in a blackmail case), the facts to be spoken to in evidence could or would nonetheless lead to him being identified.
56. In such a case, it was said, that the witness could qualify for in camera protection if the court was satisfied that he might thereby be placed in danger. Such protection would be necessary "for the protection of his identity", since this concept must surely connote that some danger or prejudice might be suffered by the witness above and beyond his simply being embarrassed by the public revelation of his name. Alternatively, if the rule is to be narrowly construed, there must be an inherent jurisdiction to order proceedings to be held in camera if a witness's or other person's safety would or could otherwise be imperilled. If this was not the position, the interests of justice would be defeated.
57. Finally, it was accepted that the court would normally look to the Crown for assistance on issues of national security, but if the issue is raised by a defendant, the court must adjudicate upon it. In the present case, curiously, the Crown, represented by the Serious Fraud Office ("SFO"), was sitting on the fence, while giving warning of in camera applications it might make in future. It would have been helpful to the court if the SFO had come off the fence, and if the judge had required more assistance than he obtained from the SFO, he could have sought the intervention of the law officers.
58. In a short written response, the appellants maintained once again that they were told by the representatives of both defendants that the only ground for their application was one based on questions of national security. They said, correctly, that this was reflected in their Note which was before the judge, and that the transcript of the proceedings before the judge reflected no dissent from this position by counsel for either defendant. They added that if Mr Palmer's skeleton argument indicated that issues as to the safety of an individual arose, this fact was not indicated to them, notwithstanding the clear terms of their Note, which showed that they were proceeding on the understanding that the only issue was one of national security. (They might have added that this point was also made clear by Mr Tugendhat in his oral submissions to the judge, and that nobody gainsaid him then). Finally, they said that to say that they suffered no prejudice because the principles relating to the protection of witnesses were well-known to the judge was to assert that the right to be heard even on the national security point was of no value to them, since those principles must have been equally well known to the judge.
59. In our judgment, the judge's present order must be set aside, and he must consider the matter again de novo. We wish to make it clear that we have not ourselves read any of the witness statements in the case, although reference was made in an ex parte submission to some of the content of some of these statements. Although we asked the Crown to have the statements available in case any party suggested that we should look at them, we received no such suggestion until we received the Second Defendant's further written submission, and for reasons which will become apparent, we have not considered it necessary to delay the delivery of this judgment in order to consider the material to which he referred us.
60. The reason we take this view is that in our judgment the procedure which was adopted was seriously flawed. The contents of the Annex show that enough was known about the background to this case to make the application a very anxious one for any judge to decide. There was the possibility of considerable embarrassment to members of a former Government in relation to their time in office, to one of our major political parties, and to the security services themselves if some of the issues that had already been aired in the newspapers received an airing in open court, and, as the appellants point out, the hearing sought to be conducted in camera was the hearing of an application that the executive had so misconducted itself that the further prosecution of these criminal proceedings against the defendants represented an abuse of the judicial process. If ever a judge needed the widest available information before deciding what judicial techniques should be applied to the hearing of these applications, this was such an occasion.
61. In our judgment, Rule 24A means what it says. The words "notice to that effect" in Rule 24A(1) mean a notice that the relevant party intends to apply for an order that the relevant part of the trial process (if not the whole of it) be held in camera for reasons of national security or for the protection or identity of a witness. This was not done. We appreciate that there may be rare cases where it might invalidate the very purpose of the application to specify which of the two grounds was being relied on, and in such a case it would be proper for the party to use the language of the rule without being more specific. It is, of course, not necessary for a party to identify the witness for whom protection is being sought.
62. On the present occasion, to make matters worse, the appellants were told that although nothing appeared on the notices, the sole ground of the application related to national security. They were later given to understand that the reasons why the judge had made his order ranged more widely, and they were given no opportunity to address him on the principles he should apply in such a case.
63. It would be very much better if the notice sent to the court was dated, and if the copy of the notice which has to be displayed by the court "forthwith" upon receipt bore the date on which it was displayed. The reason why we say this is that although we were told that the parties sent the undated notices to the court on 28th August, it is unclear from the material before us when the copy of one of them was displayed at the court, and Mr Gillard told the judge that he was told about the order on Friday 4th September from a colleague who had seen the notice "going up or was told the notice was going up" (see transcript, 7th September, p 12E-F). If this was indeed the case, this was a further significant breach of the rule. The effect of the rule is that the notice should be displayed at least a week before the application is made. This will enable word to get round the media, and for any challenge to the application to be mounted in a well-ordered way by an objector or objectors who know which (if not both) of the statutory grounds is being relied on. If, as to which we heard no argument, a judge has the power to abridge the period of notice, he should be very slow to do so, because he has to take into account the interests of all the media, and not merely those of a watchful representative of the press who happens to have spotted an application for an in camera hearing of which short notice was given.
64. Next, if a defendant seeks to rely on reasons of national security, it is incumbent on the judge to ensure that he receives relevant evidence, in one form or another, from those who are the guardians of our national security, so that he can balance any potential risk to national security against the risk to justice if he were to direct that the whole or part of a hearing is to be conducted in camera. It has been traditional in this type of case to think primarily of the interests of the Crown or the interests of a defendant. The two recent cases of Hodgson and ex p Todner reflect very clearly that there are other interests a judge must take into account when he conducts his difficult balancing exercise, although he must always be appropriately protective of the proper interests of a defendant in a criminal case. We accept Mr Tugendhat's submissions as to the importance of the first reason articulated by the Court of Appeal in ex p Todner. We also adopt as our own the gloss he added to that reason. A fortiori, when a party is alleging that the Crown has so far misconducted itself that a fair trial is not possible, a judge must ensure that he is in command of the whole picture. We stress that nobody has suggested that the judge was wrong to restrict reporting in the way he did. The question is what further steps he should have taken.
65. A judge should not be left to infer, in the absence of relevant evidential material from the Crown, whether national security will be at risk if the whole or part of a hearing is not held in camera. If the issue is properly raised before him and he has not been told the attitude of the guardians of our national security to an application which is being made on national security grounds, he should adjourn the hearing and seek the assistance of the Attorney-General. Once he has been told whether the view is shared by the appropriate emanation of the Crown that national security would be at risk if he were to conduct any part of the hearing other than in camera, he will be in a much better position to weigh the interests of national security (and any other reason which may be urged on him in support of an in camera hearing) against the interests of open justice which were so clearly articulated in ex p Todner and any other interest which may tend towards the desirability of an open hearing.
66. We would add that we are not disposed to give the wording of Rule 24A(1) an elastic meaning, as suggested by Mr Lawson. On the other hand, we accept his submission that there may be other reasons why a court may properly, in the exercise of its inherent jurisdiction, direct that the whole or part of a hearing should be conducted in camera. If such a course is to be sought, the court should generally be astute to ensure that the procedure laid down in Rule 24A has been followed, mutatis mutandis, so that all approrpiate interests have been given proper notice of the application, and of the grounds (in general terms) on which it is to be made, so that any objection to it may be made in a well-ordered manner.
67. We must not be taken as suggesting that it would not be appropriate for the judge to make exactly the same order if the matter comes back to him for reconsideration. If questions of national security are to be relied on, he will then have the advantage of the opinion of the appropriate authorities on that question, and he might also do well to consider the judgment in Hodgson to see if it might be possible to use any other judicial technique in relation to any part of the hearing of the abuse of process applications. We would not wish to fetter his discretion in any way in his difficult task. We would add, however, that he has just as much of a duty, when he exercises his discretion, to do his best to ensure that this country complies with its international obligations as any minister has when he performs a duty entrusted to him by Parliament, and the language of both Article 6(1) (as to the judge's consideration of the civil rights of The Observer) and Article 10 provide useful guidance as to the matters which he should take into account, even if the Convention does not yet form part of our national law.
68. For these reasons we would allow the appeal, quash the judge's order, and direct that the applications be restored before him in a manner which complies with the requirements we have set out in this judgment. We also direct that there be no disclosure of the proceedings conducted in private before the judge on 8th, 9th and 10th September until further order by the judge.
69. We make no order as to the costs of these proceedings.

ANNEX Summary of the press cuttings submitted by The Observer

70. The First Defendant Jamshid Hashemi Naini ("Hashemi") is a citizen of Iran. He was born in that country shortly before the Second World War. His father was an executive of the Anglo-Iranian Oil Company, and Hashemi was sent to England for his education when he was 14. After the fall of the Shah, he went to live in the United States. Since about 1984 he has been based in England. He and his two brothers Reza and Cyrus were related to Ali Akbar Rafsanjani, who became successively Speaker of the Iranian Parliament and President of Iran, and Hashemi appears to have maintained that through this relationship and other contacts he had in Iran he was able to influence political opinion there. The brothers were frequently described in the British press as well-known arms dealers.
71. From time to time stories about them surfaced in the British press. For example, in the summer of 1991 there was a story that Hashemi and Cyrus had been present as middlemen at a meeting in Madrid in July 1980 at which Mr William Casey, Ronald Reagan's then campaign manager, had proposed to two Iranians (allegedly linked with that Government) that the release of the American hostages in Iran should be delayed until after the November Presidential elections. In that event the Reagan administration, if elected, would arrange for the release of frozen Iranian assets and military equipment. At a second such meeting it was alleged that broad agreement had been reached to this effect. At the same time it was said that the two brothers were among many Iranians who had been offering their services to the Carter administration as middlemen who could solve the hostage crisis by opening up a new negotiating channel to the Iranian Government. The story about the Madrid meeting was apparently linked with an informal inquiry then being conducted by Democrats in the House of Representatives into the events of 1980. Doubts on its accuracy were cast in one newspaper which maintained that when the two brothers were prosecuted by the Reagan administration in 1984-5 for violating US sanctions against Iran, there was no evidence that they had tried to blackmail that administration into dropping the charges against them.
72. According to another report at that time, Hashemi left the United States in the mid-1980s after his two brothers had been charged in connection with an 18-count indictment alleging the illegal sale of weapons to Iran. Reza was convicted and sentenced to a term of imprisonment, while Cyrus, described as a one-time CIA informant, died in unexplained circumstances in London in 1986.
73. In a television interview in about 1991 Hashemi is said to have claimed that he had been involved in a plan to sell US$150 million worth of Israeli arms to Iran as part of a plan to secure the release of the US hostages. He later retracted his claim that he had any personal role in the hostage deal.
74. In October 1993 a story surfaced to the effect that Hashemi had given £5,000 to Conservative party funds at the time of a fund-raising ball in February 1990. This was said to be one of several donations he had made, totalling up to £40,000. It was also said that shortly before this donation was made he had been targeted by a police inquiry in connection with allegations that Tagell Ltd, the arms trading company he had formed, was involved in a £50 million attempt to sell nuclear chemicals and biological suits to Iran. That police inquiry did not lead to any charges being preferred. This October 1993 story led to the Second Defendant Michael Palmer, who was Hashemi's London solicitor, making a statement in which he confirmed that the £5,000 donation had indeed been made. He added that his client had been involved in assisting the US Government with the hostage crisis. He had left the United States when he was indicted there, but that indictment had since been dropped, and the US Government no longer viewed him in a hostile way, and he was free to come and go as he chose.
75. In September 1994 the Sunday Times carried a new story. This arose out of an action Tagell had brought against a German firm ("Ibcol") in a Munich court claiming £10 million unpaid commission. Ibcol had represented the Chinese Government in the sale of Silkworm missiles to Iran, and Tagell claimed it had acted as a middleman in that deal. The main thrust of this story was that MI6 had learned about this deal in 1985, and had sent an undercover female agent, posing as Hashemi's secretary, on one of his ten business trips to China in connection with this deal. According to the story, MI6 wished to monitor this arms deal to ensure that Iraq did not outstrip Iran in the arms race.
76. In August 1996 Hashemi was arrested in connection with some of the matters that form the basis of the present charges. On 25th August Michael Gillard reported in The Observer that an American company ("Octagon") was one of a number of companies who were alleging that they had been defrauded by Hashemi in the manner that is described in greater detail in the witness statements on which some of the charges in the present indictment are based. They were complaining that they had provided performance bonds, which were in due course called up, in return for phoney promises of multi-million dollar deals to supply commodities like sugar, rice and grain. Hashemi was said to have been recently operating from offices in Germany. Following his arrest he was obliged to surrender his passport as one of the conditions of his release on bail.
77. In February 1997 The Sunday Times carried a front-page story about these matters. After setting out the background history up to 1986, the story alleged that until 1992 Hashemi had been reporting directly to MI6 about his involvement in military trade with countries including Iran, Germany and China. He was maintaining that he had been encouraged by MI6 to sell the Silkworm missiles to Iran, and he felt he had provided useful intelligence to the British Government. He also claimed that he had been asked by President Rafsanjani to make overtures to the Government to relax the trade sanctions and political isolation of Iran. He was now a sick man, suffering from coronary artery disease and diabetes, and he was bitter about the SFO's success in blocking his attempts to seek medical treatment abroad. He now claimed that he had first paid £50,000 to Conservative party funds in 1983, a few months after he had met the Prime Minister, at the Foreign Secretary's London residence, for the first time. He met her again at the Carlton Club, when he had paid £30,000 to the party. The final donation of £5,000 in 1990 had enabled him to meet her for the third time.
78. It was said in this report that the Conservative party and MI6 were concerned that if the case against him was brought to trial Hashemi might give details of his donations and his involvement in the sale of arms (with the full knowledge of British intelligence). He was feeling betrayed by the Government, after giving them information about the Iranian efforts to acquire conventional and nuclear weapons in the international arms trade.
79. The following month Sunday Business carried two stories. The first reported a complaint by Hashemi's solicitor to the SFO concerning the alleged involvement of a CIA agent in the current questioning of his client. It was being suggested that the SFO investigation had been set up by the US intelligence authorities. A week later, there was a story about a US Securities Exchange Commission judgment in September 1994 in which the evidence of one of Hashemi's companies was said to have been preferred to the evidence given by Octagon. The thrust of this story was that Hashemi was claiming that Octagon had tried to entrap him in what appeared to be a fraudulent deal involving forged export licences, and that he had backed out of the deal when he realised that the licences were bogus. Octagon had sued his company successfully for $1.2 million damages for breach of contract.
80. On 15 June 1997 The Sunday Times carried a full-page story about Hashemi's involvement with MI6. He was said to have told journalists that when he was charged in 1984 with 56 counts of illegal exports to Iran, his escape from the United States was engineered by the CIA. He was approached by MI6 when he arrived in this country. They wished him to help them monitor the international arms business with Iran he had transferred to this country. His MI6 controller saw all the orders he received from the Defence Ministry in Iran, and wished him to go ahead with these orders so that they could discover the source of Iran's arms. He would find a supplier, sign a contract and be ready to move on the order, and at that stage MI6 would ask him to back out. After this had happened a few times, Hashemi threatened to break off his business with Iran, but he said that MI6 then permitted him to arrange the sale and actual delivery of arms to Iran. Sales of 15 British-made motorboats, specially strengthened to carry guns, and a US$50 million contract for the sale of 100,000 rounds for 155mm cannon were mentioned in this contact. Arms transactions continued until 1993, with every step being monitored by MI6, who made no attempt to stop the sales.
81. The sale of Silkworm missiles featured in this article in two contexts. The first related to the story that MI6 wished Hashemi to order $15 million of these missile systems, so that they could find out how they worked. MI6 paid £250,000 to Hashemi's bank for the corrupt purchase of a "end-user" certificate which would be needed to show a false destination for the silkworms, and one of their agents accompanied him to Hong Kong as a bogus secretary when he clinched the deal with a Chinese middleman. The missiles were to be loaded into a 747 jet painted with Iran Air colours to deceive the Chinese suppliers. In the event this deal was called off because the US Government had succeeded in acquiring some of these missiles from another source, and were willing to pass two of them to the British. However, Hashemi was permitted to go on arranging the sale of Silkworm missiles to Iran, with MI6's full knowledge, and it was said that he arranged missile deals worth $500 million. He was now bitter because, despite all the help he said he had given to the British Government, his assets had frozen and he faced the present criminal charges.
82. In August 1997 Hashemi was remanded in custody by magistrates at Marylebone, and a fortnight later Mr Palmer appeared with him at Bow Street Magistrates' Court. The following Sunday Mr Gillard reported in The Observer that MI6 and Government law officers were displaying sensitivity over the coming fraud trial.