A South African appeal court has opened a new chapter in one of the most significant disputes involving the Libyan Investment Authority (LIA), issuing a ruling that paves the way for ending a long-standing partnership between the Libyan sovereign wealth fund and the owners of the Legacy Hotels Group.
The dispute centres on the ownership structure of the hotel group. Ensemble Hotel Holdings, a company owned by the Libyan Investment Authority, holds a 39.8% stake, while Legacy Management Holdings, controlled by the group’s founders, owns 40.8%. The remaining shares are held by other investors.
The disagreement intensified after 2011, when the Libyan Investment Authority’s assets were frozen under United Nations Security Council sanctions. The restrictions complicated corporate governance and decision-making within the company.
In 2022, the Libyan shareholder sought to resolve the dispute through a private auction that would have allowed the highest bidder to acquire the other party’s shares and take control of the business.
However, South Africa’s Supreme Court of Appeal rejected that approach. Instead, it ruled that the Libyan stake should be independently valued before being sold to Legacy Hotels and Resorts at the price determined by the appointed expert. The court said this mechanism better reflected the agreements governing the partnership.
If implemented, the ruling would result in the Libyan Investment Authority leaving the group’s ownership structure, with full control passing to the South African shareholders. Representatives of the Libyan side would also step down from the company’s board.
Although the court acknowledged that the Libyan Investment Authority’s shares remain subject to international sanctions, it ruled that the restrictions do not prevent the transaction from proceeding, provided all required legal procedures are completed and the necessary approvals are obtained from the relevant authorities.
The case extends beyond a commercial dispute. It highlights the continuing impact of international sanctions on the management of Libyan sovereign assets overseas and underlines the legal and financial challenges facing the Libyan Investment Authority as it seeks to preserve or restructure foreign investments that have remained under restrictions since 2011.