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The federal prosecution service is fighting back against a bid by SNC-Lavalin to quash the criminal case against it.

The Quebec engineering giant is hoping to show that the prosecution service acted in bad faith when it declined to negotiate a settlement – known as a deferred prosecution agreement – and instead insisted on seeking a conviction. The charges against the company relate to allegations of fraud and bribery in construction contracts in Libya between 2001 and 2011.

But SNC-Lavalin is alleging bad faith before the Federal Court of Appeal, when it did not do so before a lower court, where it lost its bid for a judicial review of the prosecutor’s decision in its case. The federal prosecution service says it should not be permitted to make a completely new argument in its appeal.

“It would be wholly inappropriate to allow SNC Lavalin to fundamentally change the nature of the issue and the facts on which the appeal is to be argued,” David Migicovsky, who has been retained by the Director of Public Prosecutions as outside counsel, said in a letter couriered to the court this week.

SNC-Lavalin has argued that it should be allowed to make the new argument because “new and deeply troubling facts have come to light.”

Judicial review is a process in which individuals or companies challenge government conduct. But it has long been established that prosecutorial decisions such as whether to continue with or drop a case cannot be challenged, unless the prosecutor has abused their powers.

SNC-Lavalin argued only that Kathleen Roussel, Director of Public Prosecutions, had not properly applied a new law allowing for deferred prosecution agreements for companies charged in cases of white-collar crime.

On March 8, Federal Court Justice Catherine Kane ruled against the company’s request for a judicial review.

But in its appeal, the company cites testimony from hearings held by a Commons committee into allegations of political interference – allegations that led to the resignations of two cabinet ministers and the Prime Minister’s principal secretary and the retirement of the country’s top civil servant. Those hearings were held after it argued the case on Feb. 1.

SNC says that it had sent additional information to Ms. Roussel, after a preliminary indication that it would not be invited to negotiate a settlement. It said the “new and deeply troubling facts” are that no one informed then-attorney-general Jody Wilson-Raybould of the additional information sent to Ms. Roussel, and therefore she did not have all the facts when she supported Ms. Roussel’s decision. (In those committee hearings, Ms. Wilson-Raybould said she had been improperly subjected to sustained pressure from the Prime Minister and senior officials.)

Mr. Migicovsky, on behalf of the prosecution service, is demanding an oral hearing, rather than letting the court decide on the basis of written arguments, as is usually done for such seemingly technical matters. One reason, he said, is that the judge hearing the arguments will likely have questions, so it would be more efficient to gather everyone together. But another reason, he said, is that “this litigation has generated significant public interest and widespread media coverage. The public and the media therefore have an interest in hearing the matter argued in open court.”

William McNamara, a lawyer representing SNC-Lavalin, said in an e-mail sent to the appeal court in response to the letter from Mr. Migicovsky that the request for an oral hearing is contrary to court rules and premature.

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