Court Adjourns Case over Libyan Sovereign Wealth Fund

A British High Court has adjourned a case on Monday in which it was asked to decide which regime in Libya should be treated as the government of the country.

The case arose from the fact that two competing appointments to the Chairmanship of the Libyan Investment Authority (LIA) had been made, with Hassan Bouhadi being appointed by the internationally recognised government in Tobruk, and AbdulMajid Breish holding the office in the LIA's Tripoli head office.

The question is relevant to the conduct of court cases being taken by the $67-billion sovereign wealth fund against Goldman Sachs and Societe Generale (SocGen), relating to alleged mismanagement of funds. To enable those cases to go ahead, BDO was appointed as Receiver to the LIA last year.

Following a submission from the UK's Foreign and Commonwealth Office (FCO), Judge William Blair -- brother of the former British Prime Minister Tony Blair -- said it would be “premature” for him to make a decision at this time.

While the FCO said that the Tobruk-based House of Representatives (HoR) was the "legislative authority of the Libyan state", it added that it expects clarification on the leadership of the LIA after the proposed Government of National Accord (GNA) is approved by the HoR.

Commenting on the ruling, Hassan Bouhadi, today said:

“The Board of Directors has always been clear that it must do everything in its power to protect the litigations. As part of this, the receivership we secured in July 2015 was a protective measure, and today’s ruling ensures that protection remains in place until the House of Representatives has endorsed the proposed Government of National Accord.

“While the situation today in Libya is fragile, we remain hopeful there will soon be a Government of National Accord. However, until then, the Board of Directors of the LIA has a duty to do everything it can do to protect the assets of the LIA.

“Not doing so would deprive the Libyan people of billions of dollars. The Board of Directors feels strongly that it cannot let the sense of entitlement of one man, acting in association with those who have rejected and frustrated the democratic process, override an established government protocol. This protocol is enshrined in law and designed to protect Libya’s sovereign wealth from just such an attack.”

AbdulMagid Breish said:

“We welcome the court’s decision today. The FCO has made the position of the UK government perfectly clear.

“The international community and the friends of Libya should take note, and refrain from dealing with the parallel institutions in Tobruk that seek to duplicate and replace internationally recognised and technically qualified institutions such as the Central Bank, the National Oil Corporation and the LIA in Tripoli. These national institutions in Tripoli have acted independently and neutrally and should be allowed to continue to do so. 

“We always believed that this action was ill-considered, and that it never should have been brought. The leadership of the LIA is a matter for the Libyan people to decide. The LIA is a politically independent and neutral organisation, and continues to operate from Tripoli, where it has always been based. It is imperative that this remains the case. We must not lose sight of the main objective – to return the assets that we believe have been stolen from the Libyan people”.

(Court image via Shutterstock)

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