British Arab Commercial Bank Plc v The National Transitional Council of the State of Libya

In foreign-relations matters, the courts and the executive speak with one voice. A certificate by the Foreign Secretary identifying the government recognised by Her Majesty’s Government is conclusive on that issue. Accreditation of a diplomatic mission and its head is likewise a matter for the executive. Bank accounts held for a diplomatic mission should, in principle, be operated on the instructions of the currently accredited representatives, subject to the bank satisfying itself that a properly given mandate exists. Final declaratory relief may be granted under CPR Part 8 where the legal and factual position is sufficiently clear and urgency makes relief appropriate. An unrecognised government has no locus standi in the English courts.

The claimant bank held nine accounts operated for the Libyan embassy in London. Following the United Kingdom’s recognition of the National Transitional Council as the sole governmental authority in Libya, the bank received conflicting instructions from representatives of the former Qadhafi regime and from the newly accredited Libyan chargé d’affaires. The Foreign Secretary issued a certificate confirming the United Kingdom’s recognition of the NTC and non-recognition of any other Libyan government. The bank sought urgent declaratory relief under CPR Part 8 to determine whether it could act on instructions from the NTC’s diplomatic mission, particularly to release student grants. The central issues were recognition, accreditation, the authority to operate the accounts, the propriety of final declaratory relief, and whether the hearing should be adjourned.

1. Recognition. The Foreign Secretary’s certificate was conclusive that the NTC was the Government of Libya and that the former Qadhafi regime was not recognised as the government of any part of Libya. In foreign relations, the Crown speaks with one voice: Gur Corporation v Trust Bank of Africa Ltd [1987] 1 QB 599 and The Arantzazu Mendi [1939] AC 256. The same principle had recently been applied in The Queen on the Application of HRH Sultan of Pahang v Secretary of State for the Home Department [2011] EWCA Civ 616.
2. Accreditation. The Libyan embassy and Mr Mahmud Nacua constituted the accredited diplomatic mission and its chargé d’affaires. Accreditation was a matter for the executive under the Royal Prerogative, described as a fact of state: Khurts Bat v The Investigating Judge of the German Federal Court [2011] EWHC 2029.
3. Accounts and mandate. All nine accounts were accounts of the diplomatic mission, including the account styled “Libyan Cultural Affairs Office – Education Affairs”. In principle, such accounts were to be operated on the instructions of the newly accredited representatives. The bank nevertheless had to satisfy itself that the mandate was properly given and act in accordance with it. The account was treated as indivisible in the relevant context, following the approach in Alcom Ltd v Republic of Colombia [1984] AC 580.
4. Relief and adjournment. Final declaratory relief was appropriate under CPR Part 40.20, given the unusual facts and urgent need to make student payments. Adjournment was refused. An unrecognised government had no locus standi in the English courts: City of Berne v Bank of England (1804) 9 Ves. Jun. 346.
5. The precise terms of the declaration were to be settled after further submissions.