Bouhadi v Breish

Where the Foreign and Commonwealth Office gives the court a formal communication about the Government’s position on recognition, that communication is the relevant governmental position for legal purposes. The court may interpret it, but should not disregard it and examine other material to identify a different position.

An express certificate recognising a government is binding. In the absence of such a certificate, the court may investigate the factual and legal position, but an unequivocal governmental position may be compelling. The court should not determine a sensitive recognition issue where doing so would cut across current Government policy, unless a countervailing and paramount factor requires an immediate ruling.

The claimant and defendant each claimed to be chairman of the Libyan Investment Authority, relying on authority derived from competing Libyan regimes. The proceedings were brought to determine which regime the English court should treat as Libya’s government and, consequently, who was entitled to act for the Authority.

Shortly before the trial, the Foreign and Commonwealth Office stated that Her Majesty’s Government recognised states rather than governments and had recognised neither competing regime. It also stated that its highest priority was establishing a Government of National Accord, which was expected to clarify the Authority’s leadership after approval of its Cabinet. The central issue was whether the court should proceed to determine the recognition and chairmanship questions or adjourn them.

1. The proceedings were adjourned with liberty to restore. Costs were reserved. The court declined to determine either the current or historical chairmanship of the Libyan Investment Authority.

2. An express governmental certificate of recognition is binding on the court, as illustrated by British Arab Commercial Bank plc v National Transitional Council of the State of Libya [2011] EWHC 2274 (Comm). In the absence of such a certificate, the court should apply the approach in Republic of Somalia v Woodhouse & Carey (Suisse) S.A. [1993] QB 54, subject to evaluating the relevant factors in the circumstances of the particular case.

3. The FCO’s formal communication was not a certificate of recognition. Nevertheless, it was the relevant voice of Her Majesty’s Government for legal purposes. The court could interpret the communication, but could not set it aside and examine other material in an attempt to identify a different governmental position.

4. The communication stated that the Government’s highest priority was to support the establishment of a Government of National Accord as Libya’s sole legitimate government. It also addressed the leadership of the Authority directly, stating that its leadership would be clarified after approval of the Cabinet. In those circumstances, determining the chairmanship would risk cutting across Government policy. Applying Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, public policy therefore pointed against imposing a different solution.

5. No countervailing and paramount factor required an immediate ruling. The valuable bank litigation was protected by a receivership, and there was no evidence that the arrangement was causing difficulty. The position could be reviewed if circumstances changed. The receivers retained the right to seek directions from the court, and a judge was assigned to the proceedings and receivership.

The judgment records procedural orders made by Flaux J appointing receivers and directing an expedited trial, but no lower-court judgment or appeal. The proceedings were adjourned at first instance.