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Libya lost its tribunal appeal on 27 May against an earlier ruling in favour of Austrian construction company Strabag at a U.S. District of Columbia court.
This appeal arises out of six contracts between Libya and a subsidiary of Strabag SE. Under the contracts, Libya made advance payments to the subsidiary, to be recovered as Libya withheld portions of later instalment payments.
Strabag provided security for the advance payments by posting irrevocable bank guarantees that would be released only after Strabag finished its work. Strabag never finished its work and invoked force majeure after the onset of the 2011 Libyan Civil War.
It later turned to international arbitration to recover past due payments and other damages from Libya. The tribunal ruled unanimously for Strabag on liability, but it divided on Libya’s argument that any damages should be set off against the advance payments that Strabag had received for work ultimately not performed.
Libya asked the district court to modify the award to prevent Strabag from obtaining its own windfall through a combination of the unreduced damages award and retention of the advance payments. The district court denied Libya’s petition and confirmed the award. The appeal affirmed this ruling.
