By Libya Herald reporter.
Malta, 3 September 2015:
The internationally recognized Libyan Investment Authority . . .[restrict](LIA) yesterday initiated proceedings in the Commercial Court in London to settle the question as to who has the ultimate authority to appoint the board of directors that manages Libyan assets in the UK.
The LIA’s assets are valued at an estimated US$ 67 billion.
The internationally recognized LIA is led by Chairman Hassan Bouhadi, appointed by the only internationally recognized Prime Minister Abdullah Thinni and his government based in the eastern city of Al-Beida which is in turn appointed by the Tobruk-based House of Representatives (HoR).
Hassan Bouhadi and his board of directors is being challenged by appointees of the Libya Dawn-GNC appointed ‘’Salvation government’’ based in Tripoli. This ‘’government’’ was appointed after militias occupied Tripoli in July 2014 forcing the democratically elected HoR and its government to flee to eastern Libya.
The internationally recognized LIA feels that claims of legitimacy and rights to appoint the LIA board by the Libya Dawn-GNC Tripoli based authorities has severely impaired its ability to manage its assets as well as disrupted its litigations in English Courts. This includes cases in which the LIA says that it is seeking to recover billions of dollars of Libyan funds lost between 2007 and 2011.
“We sincerely believe in the UN peace process led by Special Envoy Bernardino León and, like most Libyans, hope for a national unity government to be formed soon. However, bogus claims by individuals attempting to undermine the authority of the Board of Directors of the LIA must be laid to rest as soon as is practically possible; the UK courts have made this clear, LIA Chairman Bouhadi explained.
‘‘Therefore, in order to make sure that the damage caused by such spurious claims is ended, we must initiate proceedings today (Wednesday) and the court will decide the appropriate timetable. In the unlikely event that a unity government is not forthcoming during 2015, the UK court is the right place to test and settle these erroneous claims in order to protect the LIA’s assets in the UK, and to be fair to all those dealing with the LIA in the UK, including the proceedings involving Goldman Sachs and Société Générale.”.
The court application is likely to be heard in the English courts by early next year, the LIA says. However, it points out that should a unity government between the fighting parties be agreed in Libya, this court application would not need to progress.
However, the LIA feels that the UN-led negotiations which commenced in January 2015 are taking longer than many observers had anticipated, and may continue for weeks or months. The LIA say that the English courts have indicated that this cannot continue indefinitely.
In the meantime, the LIA says that challenges to the its assets are mounting and so the time has come when the it must start the process to address substantive challenges to the Chairman’s and Board of Directors’ authority. The LIA says it can no longer wait for the outcome of political negotiations without a concrete mechanism for resolving these challenges being in place.
Speaking of the court application, Bouhadi, said, “In our view the situation is black and white. This (court application) will end false and damaging claims from a very small minority who do not care for the interests or the will of the Libyan people.”
‘‘The Board of Directors of the LIA confirms that, while it remains very hopeful and committed to the UN peace process led by Special Envoy Bernardino León for a unity government, time is not on its side. The harsh realities of recent and ongoing attempts by some to defraud the Libyan people of their wealth and future prosperity during this febrile political climate is not only shocking, but it is threatening the ability of the Board of Directors of the LIA to protect and preserve Libyan assets and investments’’.
‘‘The first action it achieved was the appointment of a receiver in the two London litigations. In granting the receivership, however, Mr Justice Flaux required the issue of authority to be resolved swiftly and a further hearing before Mr Justice Flaux has been scheduled for 7 September to review the continuation of the receivership in this light’’.
‘‘Now, in order to preserve the continuity of the receivership and address the on-going damage being caused to the LIA more widely, this application establishes a legal mechanism by which the authority of the Board of Directors and its chairman under English law can be decided by the English Courts in separate proceedings. Although the Board understands that progress towards a unity government remains underway and provides the best hope of a swift resolution of the authority issue, it is necessary for this application to be made now on a precautionary basis’’.
Bouhadi continued: “We must meet our responsibilities, and take all reasonable and responsible steps to guarantee our authority for banks, commercial partners and investors. Today is the first of these steps as we initiate an application for a declaration from the English Courts. This is the only option open to us at this time to ensure that there is a process underway to protect our assets and provide a clear answer to the false claims affecting the LIA. We very much hope that it will not ultimately be needed.” [/restrict]