Hogan Lovells joins Enyo, Keystone and Stephenson Harwood on $3bn LIA battle

Hogan Lovells has made an application to the High Court for its client, the Libyan Investment Authority (LIA), to settle the question of authority over the management of Libya’s assets in the UK.

The assets form part of Libya’s $67bn sovereign wealth fund, which is administered by the LIA, a body marred by internal political divisions regarding who is its rightful chairman.

The Commercial Court proceedings will determine who is in charge of the LIA’s $3.3bn (£1.9bn) battle against Goldman Sachs and French Bank Société Générale (SocGen).

Hogan Lovells partner Charles Brasted with counsel team 4 Stone Buildings’ Jonathan Crow QC and Fountain Court Chambers’ James McClelland is leading advice for the LIA on the application, which was filed on 2 September.

A directions hearing on the application will be held in mid-October pending the defendant filing its defence by the end of the month.

The LIA instructed Keystone Law on the dual proceedings against Goldman Sachs and SocGen after its lawyers Enyo Law walked away from the case in April.

However The Lawyer can reveal Enyo is once again involved in the case as counsel to the receiver, BDO International. 

Mr Justice Flaux appointed receivers in both proceedings in July following a joint application by LIA chairman Hassan Bouhadi and Abdul Magid Breish, who also claims to be the rightful chairman. Flaux J extended the receivership on Monday (7 September).

Enyo managing partner Simon Twigden is understood to be leading for the receivers, while Breish has instructed Stephenson Harwood on his claim that he should have control of the fund.

In a statement regarding the recent High Court application, LIA chairman Bouhadi said: “Bogus claims by individuals attempting to undermine the authority of the Board of Directors of the LIA must be laid to rest as soon as is practically possible; the UK courts have made this clear. Therefore, in order to make sure that the damage caused by such spurious claims is ended, we must initiate proceedings today and the court will decide the appropriate timetable. 

“In the unlikely event that a unity government is not forthcoming during 2015, the UK court is the right place to test and settle these erroneous claims in order to protect the LIA’s assets in the UK, and to be fair to all those dealing with the LIA in the UK, including the proceedings involving Goldman Sachs and Société Générale.”

Breish has criticised Bouhadi’s application, stating: ”We shall continue to resist attempts by Mr Bouhadi and his political associates from accessing the LIA’s resources, which have been entrusted to us for the benefit of present and future generations of Libyans. To this end, we shall continue to oppose Mr Bouhadi’s campaign to unfreeze the LIA’s assets that are subject to UN and other sanctions.”

The LIA is seeking $1.2bn from Goldman Sachs and $2.1bn from the French bank in compensation following recission of a series of trades it entered into between 2007 and 2008.

Herbert Smith Freehills is representing both Goldman Sachs and SocGen on the litigation, with partners Damien Byrne Hill, Gary Milner-Moore and Harry Edwards acting for Goldman, and Natasha Johnson and Rupert Lewis acting for SocGen.

The LIA claims Goldman executives pocketed fees and convinced LIA officials to take on derivatives trades they did not understand. It also alleged they improperly courted the fund by taking staff on expensive trips.

In a witness statement last year former Allen & Overy (A&O) associate Catherine McDougall said she was “shocked” by Goldman’s inappropriate relationship with the fund while on secondment to the bank. McDougall left A&O in 2008 amid the fallout related to the trades.

In a second case, the LIA claims Societe Generale and Libyan businessman Walid al-Giahmi channelled millions of pounds to individuals linked to the Gaddafi regime in Libya before it was overthrown in 2011.

The LIA was set up to invest Libya’s oil wealth in the mid-2000s following the freeing up of around $60bn of the country’s oil money.

The legal lineup:

In the application for a ruling on appointment of board directors

For the applicant, Hassan Bouhadi in his capacity as LIA chairman

4 Stone Buildings’ Jonathan Crow QC and Fountain Court Chambers’ James McClelland, instructed by Hogan Lovells partner Charles Brasted

For the defendant, Abdul Magid Braish

Essex Court Chambers’ Ricky Diwan QC and David Peters, instructed by Stephenson Harwood partner John Wilkinson

In the joint application for receivership

For the applicant, Hassan Bouhadi in his capacity as LIA chairman

Brick Court Chambers’ Charles Hollander QC, Tony Singla and Geoffrey Kuehne, instructed by Keystone Law solicitors Stuart Hill and Hinko Kostanjevec

For the applicant, Abdul Magid Braish

Essex Court Chambers’ Ricky Diwan QC and David Peters, instructed by Stephenson Harwood partner John Wilkinson

For the receiver, BDO

Enyo Law partners Simon Twigden, Pietro Marino, Edward Allen and Jonathan Brook

In the pending litigation between the LIA and Goldman Sachs

For the claimant, the LIA

Keystone Law pending re-instruction of solicitors by the receiver

For the defendant, Goldman Sachs

HSF partners Damien Byrne Hill, Gary Milner-Moore and Harry Edwards

In the pending litigation between the LIA and SocGen

For the claimant, the LIA

Keystone Law pending re-instruction of solicitors by the receiver

For the defendant, SocGen

3 Verulum Buildings’ Adrian Beltrami QC and Sandy Phipps QC instructed by HSF partners Natasha Johnson and Rupert Lewis