Libya: Rival governments unite for LIA against financial institutions

Fighting between Libya’s two rival governments continues and efforts to end it have still proven unsuccessful but the two parties have decided to unite behind the Libyan Investment Authority (LIA) in its battle in court against Goldman Sachs and Société Générale.

Delegates of the Tobruk and Tripoli governments agreed in Berlin on Thursday to forgo their battle for authority over LIA in order to allow it to continue the litigation against the two giant institutions at the London High Court.

LIA is the country’s sovereign wealth fund. It accuses Goldman Sachs and Société Générale of luring it into a complex derivative transaction that turned sour with a loss of hundreds of millions of dollars during the Gadhafi era.

To make the deal go through, Société Générale has allegedly facilitated the bribing of senior officials of the former regime.

Hearings at the London court suffered a setback due to tensions between the two rival governments for the control of LIA. The tensions prompted Enyo, the law firm of the fund, to quit.

The announcement of an agreement by the two governments to unify their efforts in the LIA case will mark the beginning of talks with Enyo to resume the defense of the Libyan fund. When Enyo decided to walk away from the $3.5bn case, both governments had appointed different lawyers to take over.

After the announcement of the agreement, LIA stated that it “remains a neutral and independent institution committed to the protection and careful stewardship of the nation’s assets.” It added that it continues to be “confident that this proposal to appoint a receiver will be welcomed by everyone as a constructive way to unlock the litigations against Goldman Sachs, Société Générale and others.”