Libya’s Dickens of a muddle

By:
Published on:

It is tempting to wonder if the Libyan Investment Authority’s actions against Goldman Sachs and Société Générale could end up going the same way as Jarndyce and Jarndyce.

Charles Dickens’ Bleak House rests upon a lawsuit so old and tangled that everyone who was initially involved in it, from plaintiff to defendant to lawyers, has long since died. It is tempting to wonder if the Libyan Investment Authority’s actions against Goldman Sachs and Société Générale could end up going the same way.

On March 7, the UK High Court heard a case, not about the Libyan sovereign wealth fund’s actions against US and French banks, but the more rudimentary matter of who actually runs the LIA in the first place. 

As regular readers of Euromoney will know, two people claim to be in charge: Hassan Bouhadi in Malta, who is backed by the Tobruk-based, internationally recognised government of Libya, and Abdulmagid Breish, the former chairman (and in his view the returned chairman too) who occupies the LIA’s Tripoli offices. The High Court was supposed to rule on which one was correct so they could get on with the urgent business of suing Goldman and SG for more than $1 billion apiece.

Characteristically, the matter didn’t get far. The Honourable Mr Justice Blair – elder brother of a certain Tony – deferred it on the first morning of the hearing, saying the court "would be premature to decide the issues before it" until there is clarity upon who is the government, which is of course the whole reason the two sides went to court in the first place. 

A Government of National Accord, aimed at bringing the two sides together into a single government, is to be submitted to Libya’s House of Representatives, and Justice Blair wants to see what the outcome is before hearing the case. 

"The [UK] Foreign and Commonwealth Office expects this to occur within the coming weeks," said Blair. Euromoney is prepared to eat any nominated item of clothing if a unified government is accepted across Libya "within the coming weeks".

Meanwhile, the two sides have to communicate their instructions to their lawyers through a receiver, a sort of a referee; in this way, divided and fractious, they intend to take on perhaps the world’s most powerful investment bank in the High Court in June.