BAE had been accused of making illegal payments to Saudi officials to secure contracts in the 1980s – a claim it has consistently denied.
Anti-arms campaigners Corner House and the Campaign Against Arms Trade took the case to court earlier this year, alleging the decision to drop the probe was illegal under the Organisation for Economic Co-operation and Development’s Anti-Bribery Convention.
The SFO says the investigation was halted as national security would have been undermined by the inquiry.
One of the judges in the case, Lord Justice Moses, told the High Court that the director of the SFO had failed to assure them that everything had been done to meet the rule of law, the BBC reports.
“No one, whether within this country or outside, is entitled to interfere with the course of our justice,” he said.
“It is the failure of government and the defendant to bear that essential principle in mind that justifies the intervention of this court.”
BAE says the case was between two campaign groups the SFO and did not involve BAE.
By staff writer