Payment of statutory demand doesn’t breach sanctions on LIA; Court of Appeal judgment in Maud

The Court of Appeal has allowed the Libyan Investment Authority’s (the LIA’s) appeal against a High Court judgment setting aside the LIA’s statutory demand for payment under a 2008 guarantee made by Glenn Maud – Libyan Investment Authority v Maud [2016] EWCA Civ 788 (see previous blog).  A link to the judgment is here.

Mr Maud had successfully argued at first instance that any payment he made to LIA would breach the EU’s sanctions relating to Libya, which froze LIA’s assets, and therefore the demand for payment should be set aside. The Court of Appeal said the EU’s sanctions measures must be construed as far as possible compatibly with the UN Security Council Resolutions they were intended to implement, and noted the easing of UN sanctions on the LIA “to enable the Libyan people to have the benefit” of its assets.  Mr Maud argued that his guarantee fell within the definition of funds, and so payment under the guarantee would breach the requirement that the LIA’s existing funds or assets should remain frozen. The Court held that payment of the guarantee was caught by a separate prohibition on making funds available to the LIA, from which EU and UN sanctions provide a derogation for payments due under agreements that were concluded before the person was designated and paid into frozen accounts and which in any event no longer applies to the LIA, as is the case with Mr Maud’s guarantee to the LIA.  The Court also dismissed Mr Maud’s argument that the LIA’s statutory demand for payment was a form of claim, and so by not setting it aside the Court would be satisfying a claim on behalf of the LIA in contravention of a prohibition on doing so under EU sanctions.

This entry was posted in English court cases, 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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