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Emerging Markets IMF editions, October 2015 

If it is true that Libya has arrived at a national unity government, then word does not appear to have reached the feuding parties who claim to run the $67 billion Libyan Investment Authority, who crossed swords in the English courts yesterday (Friday).

Economic progress in Libya has been stifled by the fact that two governments – one in Tripoli, one in Tobruk – claim to run the country. On Thursday night Bernardino Leon, the UN envoy for Libya, said that a unity government had been agreed upon, and that names of candidates for the government had been decided. He named Fayez Sarraj, a member of the Tripoli-based parliament, as Prime Minister, with three deputies (one each from the east, west and south of the country) and two further ministers completing a presidential council.

Yet if there was a mood of rapprochement in Libya, it was not reflected in London, where the Commercial Court was hearing a motion to fast-track a decision on which side the UK government recognises. In a microcosm of the country itself, two different people believe themselves to be chairman of the LIA: Hassan Bouhadi, who operates from Malta and is backed by the government in Tobruk (the one most widely recognised in the west); and AbdulMagid Breish, who operates from Tripoli and is backed by the more Islamist GNC.

Resolution on who actually runs the fund is particularly vital since it is in the midst of multi-billion dollar litigation against Goldman Sachs and Societe Generale. Until that resolution comes, the two men must communicate their legal instructions through a receiver, BDO.


Bouhadi had sought to fast-track a decision on which is the legitimate authority in Libya, but the application was denied by the Commercial Court. Justice Flaux instead ordered that the question be put to the UK Foreign and Commonwealth Office.


Each side provided Emerging Markets with statements either victorious or barbed. Breish said: “To try and rush such an important issue through the English High Court reveals the Malta-based group’s motives for what they are – an attempt to gain control of Libya’s assets for their own political ends.”


Bouhadi said he welcomed the decision because it put in place a procedure to settle the authority dispute, and sets a long-stop date of March 2016 to settle the issue. “In the meantime, the LIA still needs legal confirmation; we must still look to the Court to provide this,” he said.


In any event, there is some doubt as to just how cohesive the new unity government really is. A source in Libya told Emerging Markets yesterday that the GNC had not accepted the proposed names. “It is not a unity government. It is a continuation of the discussion of the names,” said someone familiar with negotiations, saying there was 80% agreement but that GNC was the unwilling party.


Nevertheless, Breish said yesterday: “We are delighted to hear that the United Nations has today proposed a National Unity Government for our country and sincerely hope that this will rapidly and peacefully obtain the approval of all parties and succeed.” Bouhadi, whose internationally-recognised government in Tobruk has apparently agreed to the proposed names, said the announcement “is good news. We very much hope that it will bring unity a step closer, and provide a basis for Libya’s future.”

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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