In a ruling publicised today, the North Benghazi Court has terminated the land lease agreement with the Kuwaiti company Al-Kharafi, nullifying the international arbitration award, and ordered the company to compensate the Libyan state.
The rulings are as follows:
· The land lease agreement dated June 8, 2006, for the establishment of the tourism investment project is terminated and considered null and void.
· The company is obligated to pay the Libyan state 10 billion Libyan dinars in material compensation for losses and lost profits resulting from the breach of contractual obligations and failure to implement the project.
· The company is obligated to pay the Libyan state 5 billion Libyan dinars in moral damages for the harm inflicted on its investment and economic reputation, and for the disputes and reputational damages resulting from the company's conduct.
· The arbitration award issued in March 2013 is declared null and void in its entirety and its effects and is not recognized within or outside Libya.
· The company is obligated to pay court costs.
· The court found that Al-Kharafi Company breached its obligations and failed to commence the project despite the passage of many years since the contract was signed.
· The company did not take the necessary steps to finance, open, and implement the project in accordance with the legal and contractual timelines and requirements.
· The court: The dispute concerns land and benefits belonging to the Libyan state and an investment within the national territory, thus establishing Libyan jurisdiction. (Ruling)
It will be recalled that an arbitration award in March 2013 obliged Libya to pay US$ 936, 940 million in compensation to the Kuwaiti company.
Arbitration award against Libya | to Kuwaiti Kharafi Group | |
1 | US$ 30 million | Compensation for ‘‘moral damages’’ |
2 | US$ 5 million | Representing the value of losses and expenses. |
3 | US$ 900 million | Compensation for lost profits resulting from real and certain lost opportunities. |
4 | US$ 1.94 million | Arbitration costs and expenses. |
5 | 4% interest rate | Shall apply to all amounts awarded from date of issuance of decision until full settlement |
Total: 936, 940 million |
French Court Rules in Favor of Libyan Investment Authority Against Al-Kharafi Group
Egypt Court Annuls $1 Billion Arbitration Award Against Libya
French Court Overturns $100 Million Freeze on Central Bank of Libya Assets
Kharafi Group Abandons Legal Bid to Seize Libyan Aircraft in France
Kuwait's Al-Kharafi Group Attempts to Seize Libyan Jet in Paris
Libya Ordered to Pay $1 Billion to Kuwaiti Firm Over Cancelled Tourism Project