Supreme Court of Bermuda does not allow LIA to redeem shares

The Supreme Court of Bermuda, a British Overseas Territory, has upheld Cornhill Natural Resources Fund Limited’s (the Fund) decision not to allow the Libyan Investment Authority (LIA) to redeem investment shares held in it by its nominee HSBC (link to judgment here).

The Fund argued that, under The Libya (Restrictive Measures) (Overseas Territories) Order 2011 as amended (which implements UN sanctions on Libya), it could not process LIA’s request without a licence from the Governor of Bermuda given that the Order froze LIA’s assets.  Responding, LIA stated that Article 12(1)(b) of the Order allowed payments into frozen accounts due under contracts, agreements, or obligations that were concluded or arose prior to the date on which an account holder became a designated person, noting that their investment in the Fund occurred in 2008, prior to the Order which froze their assets.  However, the Court rejected LIA’s submission, finding that LIA was not a designated person and its assets were frozen on separate grounds, and so Article 12(1)(b) offered it no relief.  Instead, the Court suggested that the remedy was to seek a licence, which statements made by the Governor in March 2015 indicated he would have no objection to.

This entry was posted in Libya by Maya Lester QC. Bookmark the permalink.

About Maya Lester QC

Maya Lester QC has a wide ranging practice in public law, European law, competition law, international law, human rights & civil liberties. She has a particular expertise in sanctions. As the most recent (2016) Chambers & Partners directory put it, she "owns the world of sanctions". She spent 2011-12 in New York at Columbia Law School lecturing and writing on sanctions. She represents and advises hundreds of companies and individuals before the European and English courts and has acted in most of the leading cases, including Kadi, Tay Za, Central Bank of Iran, NITC and IRISL.

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