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Cornhill Natural Resources Fund Limited -v- Libyan et al [2016] SC (Bda) 9 Com

January 2016 CompaniesFreezing OrdersPublic International LawRedemption of Shares

BERMUDA

SUPREME COURT

FROZEN ASSETS – INTERPRETATION OF STATUTE – PUBLIC INTERNATIONAL LAW

This case concerned the application of UK legislation (The Libya (Restrictive Measures) (Overseas Territories) Order 2011) (the “Order”) giving effect to UN Security Council Resolutions requiring various measures against Libya, including freezing assets held by certain individuals or entities. The Plaintiff was an investment fund (“the “Fund”) in which the sole investor was the second Defendant (“HSBC”) as a nominee for the first Defendant, the Libyan Investment Authority (“LIA”). In October 2013, HSBC requested the redemption of all of its shares in the Fund, the cash proceeds of which were to be paid to the LIA’s bank account in the UK, which had been frozen. The Fund, anxious to avoid breaching the UK legislation, was concerned as to whether they would require approvals or licences from certain regulatory authorities including the Governor of Bermuda. It sought the Court’s guidance on whether a licence from the Governor was necessary in order to process the redemption request. The LIA contested that not only was no licence necessary, but also that as a result of amendments to the Order, the Investment Shares were no longer frozen.

 

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