New delay in Indian court hits 16-year case against Hindujas

The 16-year struggle by prosecutors in India to convict the billionaire Hinduja brothers in the Bofors arms scandal hit another snag yesterday when Delhi's High Court threw out the case on a technicality.

Justice R S Sodhi agreed with defence lawyers that the prosecuting agency, the Central Bureau of Investigation (CBI), had blundered when it failed to obtain permission from India's Central Vigilance Commission before launching the prosecution against the British-based businessmen. The judge dismissed the case, but told prosecutors they were free to file again once the error was fixed.

He also declined to waive the bail conditions imposed on the brothers last summer. Srichand, Gopichand and Prakash Hinduja were told to submit bonds worth more than 300m rupees (more than £4m), the highest in Indian legal history. And one of the brothers had to remain in India at all times.

Thus the long effort to convict the businessmen of accepting $8.3m in illegal commissions from the Swedish arms manufacturer Bofors AB, now defunct, is set to meander further. A spokesman for the CBI said there had been no error, because "permission from the Central Vigilance Commission is required only in the case of government officials, not private individuals". He said the ruling would be challenged in the Supreme Court.

The case dates back to the mid-1980s, when Bofors and the French arms company Sofma competed to supply the Indian Army with 155mm field guns. Sofma appeared to be trouncing Bofors in assessments, when following a meeting between the countries' leaders the positions were reversed. The $2.1bn deal for Bofors to supply the guns was done in record time.

A year later Swedish radio broke the story that the contract had been won by Bofors paying massive bribes to senior Indian politicians and defence figures. The charges were denied by India as "false, baseless and mischievous". And in 1988 The Hindu newspaper claimed that a company called Sangma, owned by the Hindujas and registered in the UK, had been one of the conduits for the bribes.

Throughout the 1990s the brothers fought in the Swiss courts to prevent the CBI getting access to documents relating to bank accounts.

Last July The Independent reported that the case was almost certain to fail: a letter sent to the CBI by Switzerland's Federal Office for Justice claimed that there was no direct evidence linking illegal payments made by Bofors to Hinduja accounts.