Libya

It is clear that the role of arbitration and mediation is significant in supporting investments as predictable dispute settlement resolution system facilitates the actual movement of investments. On the contrary, poorly designed legal framework which does not adequately protect investors may inhibit the influx of investments in the country. Chapter IV of the Libyan Civil and Commercial Procedure Code (LCCPC) governs arbitration taking place in Libya. It was first issued on 20 February 1954 and has been amended since then. Section 6 of Chapter I of the LCCPC (Articles 405 to 411) deal with the enforcement of court orders in Libya and arbitration awards made outside Libya.
Libyan government contracts are considered as “administrative contracts” and regulated by the Administrative Contracts Regulations (Decree no. 563/2007). Article 83 of the current Administrative Contracts Regulation No 563/2007 allows government contracts to be subjected to international arbitration mechanism but under the approval by the Council of Ministers.
Article 23.2 of the Exploration and Production Sharing Agreements (EPSAs) provide for ICC arbitration to resolve disputes between the National Oil Corporation and its foreign partners. “Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be finally settled by arbitration, in accordance with the Rules of Arbitration of the International Chamber of Commerce, in Paris, France, in Arabic or English as the Parties may agree, by three (3) arbitrators”.
Establishment of the Libyan Center for international commercial arbitration undoubtedly constitutes a step forward on promotion of the arbitration in Libya. Article 3 of the Statute of Libyan Center for international commercial arbitration provides that “the Libyan Center for International Commercial Arbitration considers the commercial disputes arising from national and international trade relations, among the Libyan citizens among themselves, or if one of the parties to the dispute is Libya, or if the dispute results from an international relationship or conventions to which the Libyan State is a party, if the parties to the contract agree to resort to the Center in the event of the occurrence of the conflict or after its outbreak” Article 4 stipulates that “the Libyan center for international arbitration (LCICA) ……seeks to spread the culture of arbitration in Libya and Arab world, through training courses for different interlocutors in this field.”
The Libyan rules regarding arbitration are not based on the UNCITRAL model. The Libyan Code of Civil Procedure regulates international arbitration. Thus, under the Libyan law, an arbitration agreement has to be concluded in writing and must be signed by a person having authority and capacity, and its subject must be an arbitrable dispute. Pursuant to Article 740 of the Code of Civil Procedure, arbitration is prohibited in disputes involving matters of public policy, nationality, civil status (with the exception of pecuniary disputes and family matters that are considered arbitrable by the Shari’a), as well social security, work accidents and professional illnesses. Additionally, a general principle excludes arbitration in disputes that cannot be settled by way of compromise or conciliation.
Under Article 740 of the LCCPC, the following matters cannot be the subject of arbitrations:
matters of public order;
labour disputes relating to industrial injury and social security cover; and
nationality and personal status.
Libyan courts adopt a rather strict approach in determining arbitrability and give due regard to the agreement of the parties on their choice of law governing arbitrations, subject to public order restrictions. A court in Libya can intervene in the selection of arbitrators only if the agreed method of selection fails for any reason. Intervention requires a joint or individual request of the parties.
An arbitral tribunal in Libya can take decisions and measures necessary for the proper conduct of the arbitration but cannot award preliminary or interim relief. Such measures can only be ordered by a court that has jurisdiction over the subject matter upon request of the arbitration tribunal. According to Articles 758 and 759 of the LCCPC, an arbitration tribunal cannot order provisional attachments, compel witnesses to appear or investigate forgery of fake documents. For such matters the arbitration tribunal will seek the intervention of courts. Power of compulsion is vested with the chairman of the court that has jurisdiction over the subject matter, who should, upon request from the arbitration tribunal, compel witnesses and experts to appear or face penalties (Article 759 of the LCCPC). The arbitration tribunal can order production of documents.
Libyan law does not allow the use of emergency arbitration and there are no provisions regulating this subject.
Judicial delegation is regulated by Article 152 of the LCCPC, which stipulates that a Libyan court may request a foreign judicial authority to carry out certain measures by sending the request through diplomatic channels. Following rules of reciprocity, a Libyan court should be expected to carry out similar measures if a request is duly received from a foreign-seated arbitration.
The award must be given within the time limit fixed in the terms of reference, unless duly extended. If no such time limit is set, the award must be rendered within three months from date of appointing the tribunal unless extended by court order.
Unless waived in writing, an arbitral award can be appealed for any reasons pertaining to law and facts. The procedure is to file the appeal with the court which has jurisdiction to decide an appeal from the lower court that had jurisdiction over the subject matter of the dispute. The standard of judicial review of the merits of a case is the de novo standard. This comes as a consequence that Libya has not signed or ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, hence, the courts maintain a reserved approach towards arbitration. The national judiciary is not supposed to review the merits of the dispute and should follow a deferential point of view towards the arbitral award. However, enforcement mattes are not easy or straightforward. Enforcement could be tedious, complicated and may take a long time. All awards, even in international arbitration, may be appealed under Libyan law.
However, Libya is party to the 1984 Maghreb Convention on Legal and Judicial Cooperation and the April 1983 Riyadh Convention on Judicial Cooperation. Both Conventions provide a simplified procedure for the recognition and enforcement of court orders and arbitration awards among member Arab countries. The fifth chapter of the Riyadh Convention on Judicial Cooperation provides for the recognition of judgments pronounced in civil, commercial, administrative and personal statute actions, including specific provisions that are applicable to arbitral awards and adjudications (Article 37 of the Convention).
For foreign awards issued outside Libya and submitted for enforcement in Libya, Article 408 of the LCCPC requires that such awards be final and enforceable in the country where they were issued. Libyan courts apply reciprocity rules with the country where the award was issued. For awards made in Libya, the court that has jurisdiction over the subject matter of the dispute and in whose chambers the award is deposited will grant an enforcement order for the award.
It has to be established to the Libyan court that the laws of the country where the foreign award was issued allow enforcement of awards issued in Libya. The procedure for enforcement starts with filing a request with the court of first instance where enforcement is sought. The request must be duly notified to all parties.
Before rendering an enforcement order (“exequatur”) the Libyan court will verify that:
the award was issued by a tribunal having jurisdiction and has acquired the force of a res judicata; in other words it is final and enforceable in the country where it was rendered;
the parties were duly notified and represented;
the award does not contradict another award or court order issued in Libya; and
the award does not violate public order in Libya.

Libyan law does not provide for class-action and group arbitration. All arbitration agreements must be made in writing, not only for a purpose of evidence (Article 742 of the Code of Civil Procedure: arbitration agreements may only be evidenced by a written instrument), but also as a condition for their validity (Article 150 of the Civil Code: all clauses limiting the jurisdiction of the Courts are void if not made in writing).
National Courts may address the jurisdiction of an arbitral tribunal when examining a request for the recognition, the enforcement or the annulment of an award. However, they may not review the decision of an arbitral tribunal as to its own jurisdiction, which is not open to appeal.
Regarding the duration of the arbitration, unless the parties have determined a different time-limit, the arbitrators must render their award within three months following the acceptance of the last arbitrator to be appointed (Article 752 of the Code of Civil Procedure). They may request an extension only once, for the sole purpose of further investigations and provided that such extension
does not exceed three months. The extension must be granted in writing by all of the parties. Special events may also affect the timelimit (thirty-days extension upon the dismissal or replacement of an arbitrator, or the death of a party, Articles 750 and 751; unlimited suspension upon the deferral to the Courts of a matter which is not within the jurisdiction of the arbitral tribunal, Article 757).
As provided by Article 769 of the Code of Civil Procedure, a final award may be set aside on the following limited grounds
- the nullity, inexistence or expiration of the arbitration agreement; the lack of capacity of a party;
- the inarbitrability of the dispute;
- the irregular appointment of the arbitrators, or their lack of
capacity;
- the breach of one of the provisions of Article 760 of the Code of Civil Procedure, regarding the legal requirements of an award;
- the failure of the arbitrators to comply with their mission, or the unauthorised issuance of the award (for instance by a minority of arbitrators, or in the absence of the others);
- the breach of a mandatory rule of procedure, or the expiration of the time-period agreed upon for arbitration; or
- there is an obvious contradiction contained in the award.
The request for annulment may be submitted to the Court which has original jurisdiction over the dispute within 30 days of the notification of the award, and no later than one year after the order of enforcement (Article 770 of the Code of Civil Procedure). Upon annulment of the award, the Court may either settle the dispute or transfer it to a judge for further investigation (Article 771).
Additionally, arbitral awards may be subject to a request for rehearing (notably, in the event of a fraud, or in the event of the disclosure of vital evidence after its issuance), as provided by
Article 768 of the Code of Civil Procedure.
Arbitral awards are only enforceable by virtue of a Court order granting leave to enforce. Regarding awards made in Libya, such order is granted upon the request of a party by the judge of summary proceedings (juge des référés) of the Court which has original jurisdiction over the
dispute, provided that the award was duly registered with such Court, along with the original arbitration agreement and within five days following its issuance (Article 762 and 763 of the Code of Civil Procedure). The leave of enforcement is notified to the parties, after establishing the formal validity of the award and the arbitration agreement, and its compliance with the Libyan public order. Such ruling is made without consideration of the merits of the case. A refusal may be appealed.
Regarding awards made outside Libya, which are governed by the rules applicable to judgments made abroad (Articles 406 and 407, upon reference of Article 761), an enforcement order is granted, still with no consideration for the merits of the dispute, by the Court of First Instance of the venue where the enforcement is sought, after establishing:
■ the competence of the arbitral tribunal and the due representation of the parties under the law of the country where the award was made;
■ the compliance of the award with Libyan public order, and the absence of contradiction with a previous judgment of the Libyan Courts;
■ that the award has the force of a final judgment and is enforceable in the country where it was made (Article 408); and
■ that this country allows the enforcement of Libyan judgments
according to the rule of reciprocity (Article 405).

By way of conclusion, arbitral awards are appealable under the Libyan law. Libya has not ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and has not signed the Washington Convention of 1965. The national courts do not maintain a liberal approach towards arbitration.