World News Libya: Will Gaddafi’s billions soon be unfrozen?

Posted by: Berhane Habtemariam

Date: Thursday, 13 January 2022

In depth

This article is part of the dossier: Gaddafi’s legacy Article 1/7

By Sarah Vernhes
Posted on Wednesday, 15 September 2021 19:07

Muammar Gaddafi at his residence in Bab el-Aziziya, Tripoli, on 10 April 2011. MAHMUD TURKIA/AFP

The last round of the dispute between the Kuwaiti group Al Kharafi and the Libyan Investment Authority (LIA) played out on 14 September before the Court of Cassation in Paris. The LIA may well end up losing several hundred million euros.

This is a burning issue for the Libyan Investment Authority. At stake is the Fnac building at Ternes in Paris, €150m of EMTN debt securities placed with Société Générale and several hundred million euros worth of securities placed with the BIA bank.

The Kuwaiti construction group is hoping for confirmation of the seizures it obtained in 2013, after the Egyptian arbitration court ruled in its favour.

Al Kharafi claimed nearly $1bn in compensation after a real estate project in Janzour, near Tripoli, was cancelled. This was because the contract signed in 2006, with the Libyan state, had never been finalised.

The Court of Cassation will have to make a decision based on two contradictory court rulings that were issued in 2019. On one hand, the Paris Court of Appeal validated Al Kharafi’s seizures, while on the other hand, the Versailles Court of Appeal granted the LIA immunity from execution, thus allowing it to protect its assets.

What about the asset freeze?

The question regarding the legality of seizing frozen assets was on the agenda as the assets of the sovereign wealth fund are covered by UN sanctions that were imposed in 2011.

This was one of the arguments of the LIA’s defence team, which also fears that the case will set a precedent. According to Al Kharafi’s lawyers, the aim will be to have the link between the sovereign wealth fund and the Libyan state recognised.

The French Treasury General Directorate had rejected the request to unfreeze the assets in October 2020, arguing that the LIA was not part of the contract signed between the Kuwaiti group and the Libyan state.

In June 2021, a new development arose in the legal battle that had begun in Egypt eight years ago. Egypt’s Supreme Court validated the arbitration that Al Kharafi had won in 2013. The Cairo Court of Appeal had overturned this initial award in June 2020, in favour of the LIA.

According to Deloitte’s latest report, the LIA’s assets were estimated to be worth nearly $68bn in 2019.

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