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Commercial Court grants final charging order against the State of Libya

On 22 March 2024, the Commercial Court made a final charging order over a substantial London property (the “Property”) owned by the State of Libya (“Libya”). 

The charging order was sought by General Dynamics United Kingdom Ltd (“GDUK”) as part of its efforts to enforce an ICC arbitral award which it obtained against Libya in 2016. 

GDUK commenced proceedings in England in 2018 for permission to enforce the award. After a lengthy appellate process on the issue of service, which was the subject of a Supreme Court decision in 2021, GDUK was given final permission to enforce the award in March 2022. In April 2022, it applied for a charging order over the Property, a seven-bedroom detached dwelling in Hampstead Garden Suburb. 

Following GDUK’s application, an interim charging order was made by His Honour Judge Pelling KC (sitting as a High Court Judge) in February 2023. 

Libya opposed the making of a final charging order. It did so on the basis that: (a) it was entitled to immunity from enforcement under s.13(2) of the State Immunity Act 1978 (the “SIA”); and (b) the Property had become the residence of a diplomat in April 2023 and was entitled to diplomatic immunity under the Diplomatic Privileges Act 1964. The diplomatic immunity argument was withdrawn shortly before the hearing, following surveillance evidence adduced by GDUK which showed that the Property was not in use as the residence of a diplomat. 

In relation to the SIA issue, GDUK submitted that Libya had given written consent to enforcement under s.13(3) of the SIA and had thereby waived its enforcement immunity. The consent was said to be found in the written contract between the parties, which was governed by Swiss law and which provided that any arbitral award would be “final, binding and wholly enforceable” (emphasis added). 

His Honour Judge Pelling KC (sitting as a High Court Judge) considered the requirements for written consent under s.13(3) of the SIA and concluded that written consent had been given by Libya. In particular, the Judge concluded that, applying the applicable principles of Swiss law, the words “wholly enforceable” meant that the award could be enforced against Libya’s assets. 

The Judge granted Libya permission to appeal. Indemnity costs were awarded in relation to the issue of diplomatic immunity. 

Daniel Toledano KC and James Ruddell instructed by Alston & Bird (City) LLP acted for GDUK. The judgment is available here.