LONDON (Reuters) - Kazakh mining group ENRC is entitled to damages from the UK's Serious Fraud Office over a decade-long corruption probe that the SFO eventually aborted, London's High Court ruled on Thursday.
ENRC has always denied any wrongdoing and argued the SFO would not have launched its investigation if the fraud agency had not first induced the company's former lawyer to act against its interests.
The mining group was seeking around 21 million pounds ($26.6 million) for "unnecessary" work which it blamed on the actions of the SFO and its former lawyers Dechert, whose former co-head of white-collar crime Neil Gerrard conducted an internal investigation for ENRC.
In the latest blow to the SFO, which has long been dogged by criticism of its conduct of the investigation, the High Court ruled in favour of ENRC on Thursday.
Judge David Waksman found that, "but for the SFO's wrongdoing", the fraud agency would not have opened the probe.
Waksman said in a ruling last year that Gerrard, who conducted an internal investigation for ENRC between 2011 and 2013, had engaged with senior SFO officials without authority in a "reckless breach of duty", and the SFO induced him to do so.
Gerrard's lawyers declined to comment on Thursday.
The sum to be paid relating to unnecessary work has yet to be decided, Thursday's court ruling said, but is dwarfed by the nearly $1 billion sought by ENRC over losses it says were caused by the SFO probe, which will be the subject of another trial.
The former FTSE 100 company was under investigation from 2013 in relation to alleged bribery to secure mining contracts in the Democratic Republic of Congo between 2009 and 2012.
The SFO dropped its probe in August, without any charges.
ENRC's lawyer Michael Roberts, a partner at Hogan Lovells, said the judgment "sends a clear message that the use by law enforcement of defence lawyers as covert informants against their clients is unlawful and will not be tolerated".
An SFO spokesperson said the ruling concerned "conduct by former SFO staff which took place over 10 years ago", adding that the fraud agency was disappointed by the court's findings and was "carefully considering" the judgment.
A Dechert spokesperson said it will seek "to resolve the damages issues resulting from the judgment as soon as possible".