The French Court of Cassation has upheld a ruling that annuls the seizure procedures taken by Kuwait's Khraifi Group against the Libyan Investment Authority's assets in France. This decision, made on October 1, 2026, is now final and binding. The Libyan Investment Authority stated that the ruling validates its stance, emphasizing that there was no valid contractual relationship or legal obligation between it and Khraifi Group.
The case originated from a dispute over a 2006 agreement where the Libyan Tourism Development Authority granted Khraifi Group a 90-year lease to develop a tourist complex in Tripoli. However, the project stalled, and the Libyan side withdrew its approval in 2010. Khraifi Group then sought arbitration, claiming compensation for losses and foregone profits. An arbitration tribunal in Cairo ruled in favor of Khraifi Group in March 2013, awarding approximately $937 million plus interest.
Khraifi Group sought to enforce this award against assets held by the Libyan Investment Authority and its affiliate, Lafico, in France, valued at around €1 billion. However, French sanctions imposed on Libya since 2011 complicated these efforts, requiring special licenses to seize or transfer these assets. In response, Khraifi Group obtained approval to seize rights related to assets of the National Oil Corporation in France, valued at nearly €844 million.
The Libyan Investment Authority was not initially informed of the seizure procedures, learning of them only later. The Authority contested these actions, arguing that the arbitration award, which it was not a party to, could not be enforced against its assets. The French court's decision supports this stance, confirming that Khraifi Group's actions were unlawful.
This ruling marks a significant legal victory for the Libyan Investment Authority, protecting its assets in France from seizure by Khraifi Group. The Authority has been proactive in defending its rights and challenging actions it deems unjust. The decision also underscores the complexities of international arbitration and enforcement, particularly under sanctions regimes.
The dispute highlights the challenges faced by companies operating in Libya and the importance of clear contractual agreements. For Khraifi Group, the setback represents a significant obstacle in its efforts to secure compensation for its stalled project. The group had pursued extensive legal actions in multiple jurisdictions to enforce its claims.
The final judgment by the French Court of Cassation brings closure to this phase of the dispute, affirming the Libyan Investment Authority's legal position. Key points include the annulment of Khraifi Group's seizure actions, the lack of a valid contractual relationship between the parties, and the impact of international sanctions on asset seizures.
Key points
- The French Court of Cassation has annulled Khraifi Group's seizure of Libyan Investment Authority assets in France.
- The ruling confirms there was no valid contractual relationship between Khraifi Group and the Libyan Investment Authority.
- The dispute originated from a stalled tourist project in Tripoli, for which Khraifi Group sought $937 million in compensation.
