Mohamed v Breish & Ors

Under Libyan law, an administrative decision made by a body with relevant power is presumed valid and effective unless withdrawn, superseded, suspended or cancelled by the competent court. A legal defect may therefore make a decision liable to cancellation without depriving it of present effect.

A statutory requirement that an investment authority have a seven-member board was substantive. Constituting a five-member board was a violation of law, but did not presently invalidate the appointment made by the resolution. A formal defect concerning remuneration did not justify cancellation where the relevant remuneration was already fixed by an extant resolution. A purported administrative custom could not supplement a statutory appointment procedure where it conflicted with the governing legislation.

The applicant claimed declarations that he had been validly appointed Chairman of the Board of Directors of the Libyan Investment Authority and consequential relief concerning receiverships over LIA assets. The respondents challenged his appointment on grounds including abuse of power, the constitution of a five-member rather than seven-member board, failure to specify remuneration, failure to identify the appointing trustees, failure to complete a handover, and alleged obligations under the Libyan Political Agreement to consult the House of Representatives.

The court proceeded on the basis of its earlier ruling that the Government of National Accord was the executive authority and government of Libya for the relevant purposes. The central issues were whether the statutory references to the former governmental structure adapted to the government of the day, whether the appointment resolutions remained effective despite potential grounds for cancellation in Libya, and whether the receiverships should continue.

1. Statutory construction. The references in Article 6 of Law 13 of 2010 to the former General People’s Committee referred to Libya’s executive government from time to time. Otherwise the provision would create a legal vacuum. The Government of National Accord therefore had power to appoint the LIA Board of Trustees.
2. Presumed validity. Under Libyan law, an administrative decision is presumed valid and immediately effective when issued by a body having the relevant power. A challenge does not suspend its operation unless the competent court orders suspension. The doctrine applied to the resolutions in issue and preserved their present legal effect.
3. Defects in Resolution 1. Article 10 required a seven-member Board of Directors. Resolution 1 constituted a five-member board and thereby violated law for the purposes of Article 2(5) of Law 88 of 1971. Subject to any limitation period, it would probably be cancelled by the Libyan administrative courts. That did not, however, deprive the resolution of current validity or the applicant of current authority.
4. The failure to state remuneration contravened Article 10 as a defect of form. The defect was not sufficiently serious to justify cancellation because the remuneration was already stipulated by an earlier resolution that remained in force. No Libyan law required Resolution 1 to name the members of the Board of Trustees.
5. No binding handover custom was established. A handover requirement would in any event conflict with Article 10, which made appointment dependent on the Board of Trustees’ resolution alone. The alleged practice lacked the required consistent practice and belief in legal obligation.
6. The Libyan Political Agreement, Law 4 of 2014 and Law 10 of 2010 did not require consultation with, or approval by, the House of Representatives before appointment of the LIA Board of Trustees or Chairman. Article 61 of the Agreement imposed priorities concerning cooperation, coordination and the public interest, but did not require House of Representatives involvement.
7. The court declared that the applicant was validly appointed Chairman on 15 July 2017 and remained so appointed. The receiverships were continued because the Court of Appeal appeals remained pending and the practical consequences of discharge required further consideration. The applicant was given liberty to renew the applications for discharge before Picken J, not before the later of 20 July 2020 and the handing down of judgment in those appeals.

The court proceeded on the basis of earlier judgments concerning recognition of the Government of National Accord, including [2019] EWHC 306 (Comm), [2019] EWHC 786 (Comm) and [2019] EWHC 1765 (Comm). Appeals against the preliminary ‘one voice’ rulings were pending before the Court of Appeal. This judgment granted declaratory relief but continued the receiverships pending those appeals and further consideration of discharge.