Glenn Maud v The Libyan Investment Authority

On 8 June 2015 Rose J set aside a statutory demand in the first case to consider the interplay between the UN and EU financial sanctions regimes and English Insolvency law. Mr Maud applied to set aside a Statutory Demand based on an acknowledged debt owed under a guarantee which became payable before the Libyan Investment Authority (LIA)  became the subject of both UN and EU assets freezing measures. Those measures themselves have been substantially modified over the years since the fall of the Gaddafi regime. The legal issues decided by Rose J centred upon the correct construction of the principal EU Regulation concerning restrictive measures in view of the situation in Libya, Council Regulation (EU) No. 204/2011. The Judge had to address how obligations to pay substantial sums under pre-freezing measure guarantees were caught, if at all, on the correct construction of this Regulation, and how the sanctions regimes interplay with domestic insolvency procedures where the debtor would not have a basis to refuse payment absent reliance upon the Regulations. The Judge decided that a guarantee was a chose in action located outside Libya which was caught by the sanctions and further that, distinguishing English common law cases, the burden was upon the creditor (and not upon the debtor) to show that a licence could be obtained and that there was no impediment to payment.

This case was also the first to consider the scope of the immunity from civil claims under this Regulation (and to be found in many other sanctions regimes). Rose J held that this immunity applied to preclude a creditor not only from suing and taking actual enforcement action on the basis of debts but also to prevent process such as a statutory demand being issued. The Judge gave a broad construction to the immunity and observed that it was meant to apply across the different legal systems of Member States to generally bar any claims being made against those who could not perform contracts which were affected by the EU sanctions regimes.

The full judgment can be read here: http://www.bailii.org/ew/cases/EWHC/Ch/2015/1625.html
 
Pushpinder Saini QC instructed by Squire Patton Boggs (UK) LLP acted on behalf of the Applicant, Glenn Maud