Macfarlanes guides Libyan Investment Authority to success in Court of Appeal decision

20 May 2020

Following a successful decision in the English Commercial Court in March 2020, the Court of Appeal has also found in favour of Macfarlanes’ client Dr Ali Mahmoud Hassan Mohamed (Dr Mahmoud) in proceedings regarding the validity of his appointment as the Chairman of Libya’s sovereign wealth fund – the Libyan Investment Authority (LIA). This result is a conclusive victory for Dr Mahmoud, the LIA and Libya’s Government of National Accord (GNA).

By a judgment handed down on 15 May 2020, the Court of Appeal comprehensively dismissed an appeal by two individuals who also make claims to the chairmanship of the LIA, Mr Breish and Dr Hussein. Those parties sought to appeal an earlier decision of the High Court that they were precluded by the “one voice” principle from challenging the constitutionality of the GNA in circumstances where Her Majesty’s Government (HMG) “has certified in unqualified terms that it recognises the Presidency Council/GNA as the government of Libya”.

In an appeal heard by King LJ, Males LJ and Popplewell LJ, the appellants were seeking to challenge the scope and effect of the long-established “one voice” principle. This principle is a pillar of UK constitutional law. It provides that it is constitutionally part of the function of the executive to decide how to conduct foreign relations and, where HMG speaks clearly on such issues, as it has in recognition of Libya’s GNA, the Court must follow HMG’s adopted position as, to do otherwise, would risk two arms of the state reaching different conclusions – causing constitutional embarrassment.

This judgment is the most recent decision in the long-running dispute as to the identity of the lawfully-appointed Chairman of the LIA. The Court of Appeal’s decision confirmed that HMG’s recognition of the GNA precludes Mr Breish and Dr Hussein from raising arguments against the legitimacy/constitutionality of the GNA in the proceedings. As a result, there remain no grounds for those parties to challenge the English Court’s declaration in March 2020 as to the validity of Dr Mahmoud’s appointment as LIA Chairman in 2017. The Court of Appeal confirmed this, stating that the judgments (of 25 March and 15 May 2020) “finally resolve the chairmanship issue so far as the English Court and the English Assets are concerned”.

This judgment was a significant political victory for the GNA, the internationally supported government of Libya, at a time when political and civil unrest prevails across the country. The judgment resolves questions of international importance and reaffirms a fundamental principle of UK constitutional law.

The Macfarlanes team was led by litigation and dispute resolution partner Simon Nurney alongside partner Jonathan Arr, senior counsel Aalia Datoo, senior solicitor Fred Snowball and solicitor Will Fletcher. Dr Mahmoud was also represented by Counsel Chris Pymont QC and Benjamin John of Maitland Chambers and Tim Otty QC of Blackstone Chambers.