One of the customers of British Arab Commercial Bank (BACB) is the Libyan embassy in London, which has large amounts on deposit with the bank. Until the summer of 2011, BACB made regular payments from the account to Libyan students studying in the UK (₤2.5 to 3.5 million in grants per month). Then came the revolution and conflicting instructions to the bank: from Libyan Foreign Bank, BACB’s majority shareholder and a Libyan state-owned entity, a direction to freeze the payments; from the London diplomatic representative of the National Transitional Council (NTC), the direction to make the payments as usual.

BACB sought the High Court’s intervention in British Arab Commercial Bank plc v National Transitional Council of the State of Libya, [2011] EWHC 2274 [Link available here]. The UK government and the NTC were represented at the hearing, as was BACB. The bank also attempted service on representatives of the Gaddhafi régime, but they were unavailable. English counsel to the Gaddhafi régime sought an adjournment until instructions could be obtained from his clients.

Blair J concluded that in light of the UK government’s recognition of the NTC as the legitimate government of Libya (as certified by the Foreign Secretary for these proceedings), its duly accredited representative in the UK could properly instruct the bank. The Gaddhafi régime, as an unrecognised government, had no standing to seek an adjournment or to challenge the NTC’s claim to the account. A final declaration was granted, allowing disbursement of the student grants.