* Witness Bruce Hall sentenced to 16 months in prison
* Collapse of trial last year embarrassed the SFO
* Hall fined just over 3 million pounds
By Clare Hutchison
LONDON, July 21 Bruce Hall, a key witness in a high-profile British corruption trial that collapsed last year, was sentenced to 16 months in prison and ordered to pay 3 million pounds ($5.1 million) by a London court on Tuesday.
The sentence is some compensation for Britain's Serious Fraud Office (SFO), which was criticised by a judge for mismanagement after abandoning its prosecution of Victor Dahdaleh mid-trial - partly because of Hall's testimony.
The collapsed trial embarrassed the SFO at a time when its head, David Green, was trying to restore confidence in its crime-busting abilities after a series of blunders under previous management in other high-profile cases.
Having pleaded guilty to a charge of conspiracy to corrupt, Hall gave evidence for the prosecution in the case against Dahdaleh, a businessman accused of paying about $67 million in bribes to former managers of Aluminium Bahrain (Alba) in return for a cut in contracts worth more than $3 billion.
But Hall, a former chief executive of Alba, gave a markedly different account in court from the witness statement he had provided to the SFO.
His U-turn, and the decision by two key U.S. witnesses to refuse to testify in last year's UK trial, forced the SFO to drop its case against Dahdaleh and concede there was no longer a realistic prospect of a conviction.
The SFO said Hall received 2.9 million pounds in corrupt payments between 2002 and 2005, including 10,000 Bahraini dinars ($26,500) in cash from Sheikh Isa bin Ali Al Khalifa, a member of the Bahraini royal family and, at the time, Bahrain's minister of finance and Alba's chairman.
In return, Hall allowed corrupt arrangements that Sheikh Isa had been involved in before Hall's appointment to continue.
"Corruption has been described as an insidious plague that has corrosive effects across communities," said Judge Loraine-Smith. "This was an extremely serious use of corruption."
Hall must pay a fine of just over 3 million pounds in seven days or face an additional prison term of 10 years. He has also been ordered to pay Alba compensation of around 500,000 pounds and 100,000 pounds towards prosecution costs.
The 119 days he spent behind bars in Australia while awaiting extradition will count towards his sentence.
Had he failed to co-operate with the authorities and plead guilty, he would have faced a sentence of some six years - close to the maximum sentence for the offence - the judge said. ($1 = 0.5865 British Pounds) ($1 = 0.3770 Bahraini Dinars) (Additional reporting by Kirstin Ridley; editing by David Clarke)