The Kharafi Group, a Kuwaiti construction company, has obtained permission to seize assets belonging to Libya's National Oil Corporation in France. This development comes after a 15-year dispute between the two parties. According to a report by the French intelligence website Africa Intelligence, the Kharafi Group was granted the right to seize Libyan assets in France following a French court ruling in 2022. The ruling stated that the National Oil Corporation was owned by the Libyan state.
The dispute between the Kharafi Group and the Libyan state dates back to 2010. At that time, the Libyan state terminated a contract with the Kharafi Group for a tourism investment project. The Kharafi Group then turned to the assets of the National Oil Corporation. In 2013, an Egyptian arbitration court ordered the Libyan government to pay nearly $1 billion to the Kharafi Group. The Kharafi Group subsequently sought an enforcement order in French courts and successfully obtained a freezing order on Libyan properties in France.
The Kharafi Group targeted assets held by the Libyan Investment Authority, the country's sovereign wealth fund. In February, a French court ruled that such seizures, including a building owned by the Libyan Investment Authority in Paris, required prior approval from the French Ministry of Finance. The Kharafi Group is seeking to recover approximately 844 million euros from Libyan assets in France. The group obtained permission to seize the rights of the National Oil Corporation in its joint venture with TotalEnergies and oil operations in Mabrouk.
The National Oil Corporation, a state-owned entity, immediately appealed the decision, citing procedural irregularities. The corporation argued that the seizure was invalid due to non-compliance with Article L211-3 of the French report. However, the judge rejected these arguments, citing the lack of functional independence of the National Oil Corporation from the Libyan state. The Kharafi Group's efforts to seize Libyan assets in France have been ongoing for several years.
The French court's decision has significant implications for the Libyan state's assets in France. The Kharafi Group's successful bid to seize Libyan assets may set a precedent for other creditors seeking to recover debts from the Libyan state. The Libyan Investment Authority has significant assets frozen in France, which could be targeted by creditors in the future.
The dispute between the Kharafi Group and the Libyan state highlights the complexities of international arbitration and enforcement. The case has involved multiple jurisdictions, including Egypt and France, and has spanned over a decade. The Kharafi Group's success in seizing Libyan assets in France demonstrates the importance of understanding the legal frameworks of different countries.
The seizure of Libyan assets in France may have implications for Libya's economy and its relationships with foreign investors. The country's National Oil Corporation plays a critical role in Libya's economy, and the seizure of its assets may impact the country's oil production and revenue. The Libyan government may need to reassess its strategy for managing its assets abroad and protecting its interests in international disputes.
Key points
- The Kharafi Group has obtained permission to seize Libyan assets in France worth approximately 844 million euros.
- The dispute between the Kharafi Group and the Libyan state dates back to 2010 and has involved multiple jurisdictions.
- The French court's decision may set a precedent for other creditors seeking to recover debts from the Libyan state.
