The British court system is leading the way on Libya
Whenever surveys are conducted into what it is that draws foreign investors to the UK, one of the factors that is always mentioned is the judiciary. We’re admired the world over for the independence of our judges, their ability to remain detached from whatever circus is unfolding and to reach measured, objective decisions. They’re not easily swayed or influenced; they definitely do not grandstand or seek the limelight.
Take Libya. Even the simple mention of the country conjures up an immediate image of chaos and conflict. It’s been like that for a decade – well, ever since 2011 when an international coalition led by the UK and France intervened to mount missile strikes and cause the overthrow of Libya’s then ruler, Colonel Gaddafi.
Arguably the rot had set in well before, but there’s no doubt their campaign, and Gaddafi’s subsequent toppling, made a bad situation much worse.
Instead of peace and stability – something the triumphant UK and French leaders famously hailed in front of the world’s cameras on their joint visit to Libya soon after Gaddafi’s demise – Libya plummeted into disorder and violence, with the formation of rival governments and hundreds of militias.
Today, Libya finds itself once again in a very precarious place. Foreign powers are circling, supplying rival sides with weapons and combat expertise. This “war by proxy” has also been joined by legions of overseas mercenaries.
Renegade commander Khalifa Haftar and his Libyan Arab Armed Forces, or LAAF, are holed up in the east of Libya, based around his stronghold of Tobruk. Last year, they launched an offensive to seize the capital, Tripoli, from the internationally recognised Government of National Accord, or GNA. Heavily reliant on military support from Turkey, the GNA has recently succeeded in pushing back Haftar, who enjoys the approval of Egypt, the UAE and Russia.
The situation is extremely volatile, the potential for further violence, even all-out war, is dangerously high. The temperature was raised further by the discovery of numerous mass graves of men, women and children in Tarhuna, the result of atrocities thought to have been committed in the past 12 months. The International Criminal Court in The Hague is investigating.
Much of the diplomatic and business interest, inevitably, can be explained by Libya’s substantial oil reserves. Oil has become a focal point for the struggle. Mercenaries from Russia, answering to Haftar, have seized control of Libya’s largest oilfield at Sharara. Libya’s oil exports have been blocked for the last six months – starving the Tripoli government of $6bn in lost revenue. Haftar made the move to put pressure on the government in order to bring it down. There are signals from the chair of the National Oil Corporation in Libya, Mustafa Sanallah, that crude oil will soon restart production.
Oil is vital to Libya’s wellbeing. There is, though, another pillar of the country’s beleaguered economy that is also critical and is attracting much overseas attention. This is Libya’s sovereign wealth fund, the Libyan Investment Authority, or LIA. Thanks to its oil surpluses, Libya amassed one of the world’s biggest such funds. At the last count, in 2012, the LIA had assets of $67bn, mostly in shares and bank deposits, much of them managed via London.
No less than four individuals have been laying claim to be the rightful chair of the LIA
The significance of the LIA to the chances of Libya’s future prosperity cannot be overstated. Along with the National Oil Corporation it must remain above the fray if Libya is to have any hope. If Libya is to recover, the LIA must be well-run and by the right people.
But in a move that could be seen as symptomatic of the almighty mess gripping Libya, no less than four individuals have been laying claim to be the rightful chair of the LIA.
The complex litigation has been wending its way through the courts in London, employing a small army of City lawyers (again, something for which the UK enjoys a world-leading reputation) in the process. Dr Ali Mahmoud claimed to be LIA chair by virtue of a resolution passed by the GNA in 2017; Dr Hussein Abdlmora said he’d got the job because he was appointed by a rival board of trustees reporting to a rival government; Abdulmagid Breish maintained he’d been made chair in 2013 by the predecessor to the GNA; and Dr Mohsen Derregia went back longer, saying he was appointed chair in 2012 by trustees answering to
the transitional government that took over for just 10 months after Gaddafi’s departure.
Finally, after hearing claims and counter-claims, the Court of Appeal has ruled: Dr Mahmoud is the chair of the LIA, certainly where its London-run assets are concerned.
Following a series of appalling bets on the markets towards the end of the Gaddafi era, the fund was made the subject of a United Nations freeze in 2011. Now at last with the imposition of clarity and Dr Mahmoud’s status having been resolved, renewed attempts are being made to establish who owns what exactly, and to have the UN sanctions lifted. At the same time, Deloitte has been asked to conduct an urgent audit of the LIA’s investments. The firm’s report is due next month.
Doubtless the LIA’s convoluted affairs will keep London’s lawyers occupied for years to come. But the English courts have at least provided certainty and pointed the LIA on the right path, and by extension the whole country – something the politicians have so far failed to do.