Libyan Investment Authority progresses litigations against Goldman Sachs, Société Générale S.A and others

Latest English Court hearing authorises the appointment of interim receivers to lead the litigations.

2 July 2015, LIA Headquarters, Tripoli

At a hearing in the English High Court today, Mr Justice Flaux approved the Libyan Investment Authority’s (LIA) application to appoint interim receivers on its behalf to manage the litigations against Goldman Sachs, Société Générale S.A and others.

The proceedings have stalled since April 2015 when Mr Hassan Bouhadi unilaterally brought to an end the collaborative effort of the internal litigation committee which had been managing the litigations on behalf of both the LIA headquarters and Mr Bouhadi. The intervention resulted in the LIA’s legal team, Enyo Law LLP, being forced to stand down from the cases.

The order today allows for the appointment of partners in BDO LLP as receivers to manage the litigations and the reappointment of Enyo Law LLP as solicitors.

Mr Breish and Mr Bouhadi have come together to take forward the litigations.

LIA Chairman and CEO Mr AbdulMagid Breish says:

“I welcome the Court’s willingness to implement our plan to appoint interim receivers to lead the litigations against Goldman Sachs, Société Générale S.A and others. I initiated these claims in 2014 as a critical part of our effort to recover for the Libyan people the billions of dollars lost through improper transactions during the Gaddafi regime.

The Libyan Investment Authority remains a neutral and independent institution committed to the protection and careful stewardship of the nation’s assets.”


Notes to Editors:

  • Mr AbdulMagid Breish was appointed Chairman and CEO of the LIA on 1 June 2013.
  • In early 2014, Mr Breish initiated legal proceedings against Goldman Sachs and Société Générale S.A to recover billions of dollars lost through improper transactions done in their dealings with the LIA during the Gaddafi regime.
  • Like many officials holding public office at the time, Mr Breish was asked to leave his positions pursuant to an inquiry under the Political Isolation Law passed by the General National Congress. Mr Breish therefore stepped aside on 8 June 2014 and appealed the decision.
  • While Mr Breish’s appeal was being considered, Mr Abdurahman Benyezza was appointed to serve as acting Chairman and CEO of the LIA, pending the decision of the court on Mr Breish’s appeal.  Mr Breish argued in his appeal that the law did not apply to him, and that he had been ousted due to the personal interests of others rather than for reasons of public policy.
  • On 13 April, the Libyan Court of Appeal ordered that the decision on the removal of Mr Breish in June 2013 be cancelled and ordered that he be restored to his previous positions immediately.
  • A legal opinion from the highly respected Libyan law firm Mukhtar, Kelbash & Elgharabli stated at the time that “Mr Breish should immediately be reinstated to … his positions as Chairman of the Board of Directors and CEO of LIA.”
  • Mr Breish formally returned as Chairman and CEO on 18 May.
  • Upon the creation of the House of Representatives and its installation in Tobruk, in the autumn of 2014 Mr Benyezza sought to ensure that the LIA maintained its political neutrality and independence, establishing in November 2014 a litigation committee also approved by Mr. Hassan Bouhadi.
  • The litigation committee was responsible for instructing the English law firm, Enyo Law, to pursue the litigations.
  • However, on 21 April 2015, Mr Bouhadi, unilaterally terminated the agreement underpinning the litigation committee.
  • These actions were an attack against the absolute necessity that the LIA like other organisations such as the Central Bank of Libya and the National Oil Company must remain neutral and independent during the current problems in Libya.
  • The importance of the LIA’s neutrality and independence is also advocated by the governments of the EU, including the United Kingdom, the United States and others. They said in a joint statement on 11 May 2015:
    • “At a time when the UN-sponsored political process is making progress towards a lasting resolution of the conflict in Libya, we express our concern at attempts to divert Libyan resources to the narrow benefit of any side in the conflict and to disrupt financial and economic institutions that belong to all Libyans. We reiterate our expectation that those on all sides representing Libya’s independent institutions, namely the Central Bank of Libya (CBL), the Libyan Investment Authority (LIA), the National Oil Corporation (NOC) and the Libyan Post Telecommunications and Information technology company (LPTIC) will continue to act in the long term interests of the Libyan people pending clarification of unified governance structures under a Government of National Accord.”
  • The most recent draft of a proposed political agreement, presented by Bernardino León, the UN Special Representative for Libya, demands that all sides recognise the continuing independence and integrity of independent institutions. Furthermore it states that “it shall not be permissible to control or dispose of [national assets and resources] unless by official state authorities and in accordance with the relevant Libyan legislations in force”.
  • In compliance with English law, Enyo Law has been unable to continue acting for the LIA on the litigations. Mr Bouhadi’s actions have thus caused the LIA to incur substantial unnecessary legal costs and have created serious risks to the litigations against Goldman Sachs, Société Générale S.A and others.
  • As a result of the receivership, Enyo Law LLP can now be re-instructed by the receivers to act in the litigations.
  • English law firm Stephenson Harwood are representing the LIA based in the Tripoli headquarters in relation to Mr Bouhadi’s actions.