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.