SFO unable to reveal all its evidence to fight Tchenguiz damage claims

The Serious Fraud Office has admitted that it may not be able to produce all the evidence it would like to use in its defence against £300m in damages claims from the property tycoon Tchenguiz brothers.

In an extraordinary development, the SFO told a court hearing yesterday that there are "statutory prohibitions" which mean it would be committing a criminal offence were it to discloses some of information it obtained in its investigations, in particular from the Financial Services Authority and HM Revenue & Customs.

Those same prohibitions would not have applied in a criminal case, however.

The court heard that the SFO's difficulties are compounded by the fact that many of its documents do not refer to the ultimate source, meaning it will have to go back to the original information provided by the FSA and HMRC. The deadline for disclosure is 1 August, ahead of a full trial next April.

The SFO is being sued by Vincent and Robert Tchenquiz after its botched investigation into the collapse of the Icelandic bank Kaupthing which involved arrests and searches of Tchenguiz properties.

It has hired the City law firm Slaughter & May to fight the case.