Hassan Bouhadi v Abdulmagid Breish
| Jurisdiction | England & Wales |
| Judge | Mr Justice Blair |
| Judgment Date | 17 March 2016 |
| Neutral Citation | [2016] EWHC 602 (Comm) |
| Docket Number | Case No: CL-2015-000641 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 March 2016 |
[2016] EWHC 602 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Blair
Case No: CL-2015-000641
Mr. Jonathan Crow QC and Mr. James McClelland (instructed by Hogan Lovells International LLP) for the Claimant
Lord Pannick QC, Mr. Ricky DiwanQC andMr. David Peters (instructed by Stephenson Harwood LLP) for the Defendant
Hearing dates: 7 th March 2016
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This case came before the court on 7 March 2016 for trial. The court was due to hear claims as to which regime in Libya the court should treat as the government of that country.
For reasons which appear below, the court was concerned about continuing the hearing in present circumstances. Following submissions on behalf of the parties, the case was adjourned that day with liberty to restore, and this judgment contains the reasons for that decision.
The background to the case is the continuing instability in Libya following the fall of Colonel Gaddafi in 2011. The events since that time are complex, as are the parties' contentions, but it is not necessary or appropriate to go into them in any detail for present purposes.
The dispute concerns the Libyan Investment Authority (LIA), which is Libya's Sovereign Wealth Fund, established in 2006, with assets last valued at the end of 2012 at approximately US $67 billion.
The dispute arises in this way. It is common ground that the Libyan government is entitled to appoint the LIA's Board of Directors, including its Chairman. There is, however, a dispute as to which regime in Libya the courts in England should treat as the government of that country. This arises because two competing appointments to the chair of the LIA have been made, with the result that both the claimant, Mr Hassan Bouhadi, and the defendant, Mr Abdulmagid Breish, claim to be the chairman.
To support their appointments, they rely on the authority given by one of two regimes, to adopt the terminology adopted by the parties the "Tobruk government" and the "Tripoli government".
The claimant's case is that the "Tobruk government" is mandated by the Libyan House of Representatives elected in 2014. Following a series of attacks by militias in Tripoli (which is Libya's capital) in July to August 2014, this is based in Tobruk in the east of the country. The Libyan Ambassador accredited to the United Kingdom represents this government, and it has achieved international recognition. The claimant's authority is said to derive from it.
The defendant's case is that the "Tripoli government" based in Tripoli is mandated by the General National Congress. Its claim to be the constitutional government of the country is primarily based on two decisions of the Libyan Supreme Court of 6 November 2014, together with the asserted extent of its administrative control. The defendant's authority is said to derive from the Tripoli government, and/or from Libyan domestic law (which he argues the court should apply even if neither regime is recognised).
Despite the dispute, according to the evidence of Mr Bouhadi, the LIA continues to function out of Malta, though it is hampered in certain respects by international sanctions. Nothing in this judgment should be taken as casting any doubt on current arrangements.
The immediate reason that the dispute has arisen concerns the conduct of legal proceedings. These are principally two claims brought by the LIA, being actions begun in 2013 in the English courts against Goldman Sachs International and Société Générale and others which seek approximately £2 billion in damages.
On 28 April 2015, because of doubts as to who was authorised to give them instructions, the solicitors acting for the LIA in the proceedings came off the record.
It was obviously unacceptable for the claims simply to lapse. The claimant and the defendant therefore made a joint application to the court seeking a receivership order in respect of the claims. It is important to emphasise that the order was not sought in respect of the affairs of the LIA in general, but only in respect of the proceedings against the two banks, which are in themselves potentially valuable assets.
On 9 July 2015, Flaux J ordered the appointment of receivers over the proceedings, which have been conducted by the receivers since then.
The court was told that the basis on which the parties submitted to the jurisdiction on the receivership application was to get the authority question resolved. To achieve that, these proceeding were commenced on 2 September 2015. Directions were given by order of Flaux J dated 14 October 2015, it being directed that the claim and counterclaim should be heard on an expedited basis on the first available date after 15 February 2016.
The position of the British government (that is, Her Majesty's Government, or HMG) was clearly of potential importance to the resolution of the legal question, and the order dated 14 October 2015 also directed that the parties should send a joint letter to the Foreign and Commonwealth Office (FCO) in a form to be agreed.
This joint letter was duly sent on 16 October 2015 to the Secretary of State for Foreign and Commonwealth Affairs.
In the letter, the parties said that the proceedings "put in issue the identity of the government of Libya", and asked the FCO to assist the court by answering the following question:
'Does Her Majesty's Government recognise as the Government of Libya:
(a) the "Tobruk government", namely that mandated by the House of Representatives following the 2014 elections; or
(b) the "Tripoli government", namely that mandated by the General National Congress following the 2014 election, and which is sometimes referred to as the "National Salvation Government".'
No answer was forthcoming at this time, and the parties continued to prepare for the trial, which was fixed for 7 March 2016 with a time estimate given by the parties of 4–5 days.
Meanwhile, a number of developments took place consolidating earlier moves towards a resolution of the political conflict in Libya by establishing a "Government of National Accord". The following have been particularly identified in the material before the court:
i) An international Ministerial Conference held in Rome on 13 December 2015 issued a joint Communiqué stating that the participants "… recognize and support the Libya Political Agreement and the institutions validated by it, and pledge our support for a Government of National Accord as the sole legitimate government of Libya. …".
ii) On 17 December 2015, the Libyan Political Agreement ( LPA) was signed in Skhirat, Morocco.
iii) On 23 December 2015, the UN Security Council through the unanimous adoption of Resolution 2259 (2015) endorsed the Rome Communiqué to support the Government of National Accord as the sole legitimate government of Libya.
The parties differ as to the significance of these developments for the question of recognition.
The claimant submits that under the Libyan Political Agreement, the Government of National Accord does not yet exist, and has not yet been approved by the House of Representatives. The exhortations which have been made about dealing only with the Government of National Accord (GNA) and no one else are forward looking, and do not change the current position, which is that the Tobruk government is recognised by HMG (and the international community) as the legitimate government of Libya.
The defendant submits that because HMG's policy is to promote a Government of National Accord as the sole legitimate government of Libya, it necessarily follows that HMG's policy is that it does not currently accept either the Tobruk government or the Tripoli government as the legitimate government of Libya. That is for the reason that any such recognition would impede the policy objective of securing a consensual government.
On 3 March 2016, that is to say four days before the trial was due to start, the court and the parties received a letter from the Foreign and Commonwealth Office in response to that sent by the parties on 16 October 2015. The operative part of the letter is set out in full in the Annex.
The FCO letter of 3 March 2016 made the following points in particular:
i) HMG has not recognised as the Government of Libya either the "Tobruk government" or the "Tripoli government". Following the 1980 change in policy, HMG recognises states rather than governments.
ii) In its dealings with the various participants in the political crisis in Libya, HMG's highest priority is to support the efforts of the United Nations and the international community to establish a Government of National Accord. The signature of the Libyan Political Agreement on 17 December 2015 was a "major milestone" in this respect, providing for the institutional structures of the GNA and a process for its formation.
iii) Reference is made to a number of instruments, including UNSCR 2259 (2015) (see above) which in paragraph 9 " Further calls upon the Government of National Accord to...
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