Dr Ali Mahmoud Hassan Mohamed v Mr Abdulmagid Breish
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Baker |
| Judgment Date | 14 February 2019 |
| Neutral Citation | [2019] EWHC 306 (Comm) |
| Docket Number | Case No: CL-2018-000563 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 14 February 2019 |
[2019] EWHC 306 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Andrew Baker
Case No: CL-2018-000563
Christopher Pymont QC, Timothy Otty QC and Andrew Scott (instructed by Macfarlanes LLP) for the Claimant
Shaheed Fatima QC and Eesvan Krishnan (instructed by Stephenson Harwood LLP) for the First Defendant
Felicity Toube QC (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the Third Defendants
The Second and Fourth Defendants did not appear and were not represented at the hearing
Hearing dates: 14 th February 2019
APPROVED JUDGMENT
Thursday, 14 th February 2019
(15.07 pm)
Introduction
The Libyan Investment Authority (‘the LIA’) is Libya's sovereign wealth fund. It is a body corporate created under Libyan law by Law No 13 of 1378 DP (i.e. 2010 in our calendar) (‘Law 13’). That law was made by what was then the General People's Congress of Libya or, to give its then full title as a nation, the Great Socialist People's Libyan Arab Jamahiriya.
Article 3 of Law 13 in the translation I have been given provides for the LIA to have separate corporate personality, “ … and an independent financial capacity and shall report to the General People's Committee. The [LIA] may undertake all actions and dispositions necessary to achieve its objectives and carry out its activities according to the provisions hereof.” Article 4 of Law 13 provides that the LIA's head office and legal domicile are to be situated in Tripoli.
By Law 13, the LIA is to have a Board of Trustees which will have power, also under Law 13, to appoint a Board of Directors, including its Chairman.
Following the Libyan revolution of 2011, there is now no General People's Committee as referred to in Law 13. As well as being referred to in Article 3, the General People's Committee is referred to in the key provision of Law 13 for my purposes, Article 6. That prescribes that the Board of Trustees of the LIA is to be formed by a resolution of the General People's Committee. It goes on to provide, again always in translation, that: “The Board of Trustees shall be composed of the Secretary of the General People's Committee as Chairman and the membership of the General People's Committee Secretaries of the General People's Committee for planning, finance, economy and trade, the Governor of the Central Bank of Libya and a number of experts within the [LIA's] areas of work.”
The applicant before the court, Dr Mahmoud, contends that references in Law 13 to the General People's Committee or to particular Secretaries of that Committee, as they would have been in past years, are now, as a matter of Libyan law, to be read and interpreted as referring to the executive authority and Government of Libya from time to time, respectively to the ministers of state of the government of the day equivalent to those Secretaries.
The LIA has been engaged since at least 2014 in substantial litigation, in particular in London. The litigation in London has included, in particular, two substantial matters, in both of which the LIA was claimant and in both of which the defendant was a well-known international investment bank. Its claim against Goldman Sachs proceeded to a trial in the Chancery Division before Rose J (as she was then) in which the LIA's claims failed. Its claim against Société Générale proceeded to the eve of a trial in this court before Teare J. That claim generated a settlement on terms that are generally confidential, but in respect of which the evidence before me is that the LIA is permitted to inform the court that something close to US$1 billion was recovered for its benefit.
In the political turmoil of post-2011 Libya, rival contenders asserted that they were the duly appointed Chairman of the LIA, capable, therefore, amongst other things, of having responsibility for and giving instructions in relation to the litigation in the LIA's name. That conflict as to who properly represented the LIA threatened to derail the LIA's ability to pursue the litigation. The solution adopted to that particular problem has been the granting by this court of receivership orders over particular assets, essentially in the form of causes of action or possible causes of action to be pursued, therefore, by the appointed receivers on behalf of and for the benefit of the LIA, whoever might ultimately be determined properly to be in a position to represent the LIA and so at some stage to be able, therefore, to take matters over from the receivers, at which point the receiverships could be terminated.
The first such order in point of time was made in July 2015 by Flaux J (as he was then). He reserved to himself matters exclusively relating to the receivership itself and dealt with such matters, to some extent, after elevation to the Court of Appeal before passing that role to Picken J, who continues to hold it today. In the course of Flaux J's continuing to deal with the matter, a number of further receivership orders were made or amendments were made to existing receivership orders.
Pursuant to directions from the court in the context of the first (July 2015) receivership order, a Part 8 claim was commenced, claim number CL-2015-000641 in which Mr Bouhadi, as claimant, claimed against Mr Breish, as defendant, relief to resolve what was then the question as between the two of them of which, if either of them, was the duly appointed Chairman of the LIA. That claim proceeded to the point of trial in March 2016 before Blair J. As he explained in his judgment at [2016] EWHC 602 (Comm), he concluded that the trial should not proceed at that time in view of Her Majesty's Government's (‘HMG's’) then position of recognising neither of the bodies from whom ultimately Mr Bouhadi and Mr Breish claimed the validity of their appointment as the executive authority and Government of Libya, but anticipating the possibility that HMG would come to recognise what is now the Government of National Accord (‘the GNA’) created pursuant to a political settlement internationally brokered and referred to as the Libyan Political Agreement (‘the LPA’).
By my order of earlier this week, 11 February 2019, in anticipation of the hearing today, I directed, in circumstances where there would otherwise have been no relevant originating process, that the present applications, the nature of which I shall explain in a moment and which have been given the claim number CL-2018-000563, should be treated as a continuation of the 2015 claim that came before Blair J, but, as I have explained, was not determined by him. Accordingly, I directed that any requirement for a new claim form to be issued should be dispensed with.
The Applications
The present applications, then, issued by way of Part 23 Application Notices in August 2018 ('the Applications), in each case issued by Dr Mahmoud as applicant against a range of named respondents, seek in relation to each of the extant receiverships: firstly, a declaration that Dr Mahmoud has been since 15 July 2017 and remains validly appointed as Chairman of the LIA with authority, therefore, to exercise control over the property the subject of the receivership order in question; secondly, an order that the respective receivership order be discharged with whatever may be appropriate consequential orders and directions, including for transfers of assets in the hands of the receivers; thirdly, appropriate provision as to costs.
The respondents to the applications were, when issued, Mr Breish, Dr Alkizza (the then successor to Mr Bouhadi as contender to the title of Chairman of the LIA), Messrs Shaw and Crooks, the appointed receivers and managers, both of whom are partners in BDO Stoy Hayward, and the LIA itself.
In a position statement, an important document that has stood as Dr Mahmoud's statement of case in the Applications, Dr Mahmoud sets out his claim to have been validly appointed Chairman of the LIA as being that by a resolution number 12 of 2017 and dated 25 May 2017 (‘Resolution 12’), the council of ministers of the GNA constituted or appointed a Board of Trustees for the LIA and that, in turn, by a resolution number 1 of 2017 dated 15 July 2017 (‘Resolution 1’), that Board of Trustees appointed a Board of Directors for the LIA and, in particular, appointed Dr Mahmoud as Chairman of the LIA.
In view of Dr Mahmoud's contention that the proper interpretation, meaning and effect of Law 13 under Libyan law in the circumstances as they now obtain is that references to the General People's Committee are to be understood as now referring to the government of the day in Libya, and given the chain of instruments by which Dr Mahmoud claims validly to have been appointed, it naturally appeared that an important question in Dr Mahmoud's applications would or might be: who was in 2017 and/or is now the government of the day in Libya?
Against that background and in circumstances where it was understood that Dr Mahmoud's contention as to the meaning and effect of Law 13 in present circumstances under Libyan law might be either agreed or not contested by those with a direct interest in the outcome, a hearing in this court before Mr MacDonald Eggers QC, sitting as a deputy judge, resulted in an order for there to be the trial within the Applications of a preliminary issue as to whether (i) the matters set out in paragraph 8 of Dr Mahmoud's amended position statement conclude the ‘government question’ as a matter of English law, as set out in paragraph 9 of the amended...
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