A court in the Dutch Caribbean island of Curaçao has rejected an attempt to enforce an international arbitration award against Libya valued at nearly $20 million, dealing a setback to a Turkish contractor seeking compensation through foreign courts.
According to a report by Global Arbitration Review, the court ruled that the Libyan assets targeted by the claimant cannot be seized because they are protected by sovereign immunity from enforcement measures. The decision effectively prevents the investor from collecting the arbitration award through the assets previously identified in the case.
The dispute originates from an international arbitration ruling that ordered Libya to pay compensation to the Turkish contractor following a commercial disagreement related to past business activities. After the award was issued, the investor sought to enforce the ruling by pursuing Libyan assets abroad, a common strategy used by claimants when governments fail to settle arbitration payments voluntarily.
However, the Curaçao court determined that the assets in question fall under sovereign immunity protections, which shield certain state-owned properties from seizure or enforcement by foreign courts. Under international legal principles, assets belonging to a sovereign state and used for public or governmental purposes cannot generally be subject to attachment or forced execution.
The ruling highlights one of the main challenges investors face when attempting to enforce arbitration awards against sovereign states. While international conventions such as the New York Convention facilitate the recognition of arbitral awards across jurisdictions, enforcement often depends on whether the assets involved are commercial in nature or linked to government functions.
