In the turmoil that has followed the 2011 overthrow of Libyan leader Muammar Gaddafi, the question has arisen of which government other states are to recognise as sovereign in place of the regime he led.
It’s an issue that has been troubling courts and countries since then — particularly in relation to Libya’s sovereign wealth fund, the Libyan Investment Authority (LIA). Management of the fund has been under dispute, with rival claims over control of this almost fabulous oil-derived wealth.
In the UK, where more than $1bn of the LIA’s assets are held or managed, the control of the fund’s "English assets" has been the subject of litigation since at least 2014.
Initially, after the fall of the Gaddafi regime, a national transitional council was formed to govern Libya.
For some time, that was recognised internationally. But splintering factions led to a government being declared in Tripoli, in the west of Libya, and another in Tobruk, in the east.
After the UN Security Council attempted to broker an agreement between them, the Libyan Political Dialogue was established and given widespread support. Other iterations followed, all attempting to resolve the question of what government the world should recognise as the Libyan state.
Litigation around the LIA in the UK has been intense, with four rival claimants seeking recognition as the lawful administrator of Libya’s English assets.
Earlier this year a court recognised Ali Mahmoud Hassan Mohamed as the validly appointed chair of the LIA. His rivals challenged that decision, and three appeal court judges have now resolved the question.
Splintering factions led to a Libyan government being declared in Tripoli, and another in Tobruk
Last week they held that the "one voice" principle applies: where the UK government recognises a foreign state, "or a person or body as the government" of that state, the courts in the UK are bound to treat that state as sovereign when it comes to their own determinations, and the government as the government of a sovereign state.
This "one voice" principle arises from the separation of powers: recognition of foreign states and governments falls, constitutionally, to the executive. And the different arms of the state must "speak with one voice" when it comes to this aspect of international relations, the judges said.
Mahmoud’s rivals had argued that they had a right to be recognised as entitled to manage the LIA’s English assets.
But, the court said, the UK government has certified "in unqualified terms" that it recognises the presidency council of the Government of National Accord in Libya — the government in Tripoli — as the Libyan sovereign.
Where the UK executive has recognised a body as the government of a foreign state, that body is, "so far as the English court is concerned, the government of that foreign state for all purposes, so that the court is not entitled to reach a contrary conclusion".
Mahmoud’s claim to control the sovereign wealth fund was thus recognised as valid, as it is based on the fact that the council of ministers of the Government of National Accord had appointed him chair of the LIA in May 2017.
Charting a new course
Shortly before the appeal judgment was delivered, Mahmoud told the Libya Herald that the affairs of the LIA have been chaotic for the past six years. In 2012 the fund was estimated at $67bn, but there has since been a lack of proper supervision of its assets.
He said his first task has been to compile full accounts and make an assessment of all the LIA’s investments. This is being undertaken by auditing group Deloitte, and a tender for an external audit of its results will go out later this month.
Despite Mahmoud’s confident statements on the LIA’s future, his rival claimants continue to criticise his right to speak for the fund. But with the UK appeal judges applying the "one voice" rule, the legal dispute around administration, at least, seems to have reached the end of the road.
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