Libyan Investment Authority reports success in its redemption dispute with Bermuda investment fund

Further to the Bermuda’s Supreme Court January 2016 ruling in Cornhill Natural Resources Fund Limited v Libyan Investment Authority et al [2016] SC Bda 9 Comm (discussed in a previous Blog post, and also discussed on the European Sanctions blog), the Libyan Investment Authority has recently announced that, after a three-year battle, it has finally recovered US$53.8 million which had been invested through UK-based Cornhill Capital, in the latter’s Bermuda-domiciled Cornhill Natural Resources Fund.

In October 2013, the LIA tried to withdraw what remained from an initial investment of $100 million. However, Cornhill Capital delayed making a redemption payment on the grounds that to do so would violate international sanctions. The United Nations Security Council had imposed an asset freeze on the LIA in 2011 to prevent the country’s wealth being spirited away after the fall of Gaddafi. A substantial portion of the LIA’s assets remain frozen, but the redemption proceeds from Cornhill have now been paid into a sanctioned account.

The leadership of the LIA is contested by multiple individuals. One of these, AbdulMagid Breish, who was appointed LIA chairman in June 2013, said the decision in the Cornhill case was “an encouraging result”. Mr. Breish is also reported to have made the following statement:

We are of course pleased that the difficult judicial process has finally resulted in the termination of the management of LIA funds by Cornhill. This is an encouraging result in our ongoing struggle to restore the wealth of the Libyan people. We however believe that Cornhill Capital has caused the LIA a substantial loss of capital. We will be investigating this with a view to obtaining a determination as to what further action is required“.

 

 

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