Gargour Family v. Libya (II) Members of the Gargour Family v. Libya

Case summary

At a glance

Parties: State of Libya (appellant; respondent in the arbitration) v. 19 heirs of the former shareholders of T. Limited, members of the Gargour family who are Lebanese and Jordanian nationals (respondents in the appeal; claimants in the arbitration)
Case no.: Swiss Federal Tribunal 4A_78/2024; underlying arbitration PCA Case No. 2019-41
Forum and rules: Civil-law appeal (set-aside) to the Swiss Federal Tribunal under Articles 190–192 PILA against an award of a tribunal seated in Geneva. The arbitration was conducted under the 1976 UNCITRAL Arbitration Rules.
Treaty: Agreement for the Promotion, Protection and Guarantee of Investments among Member States of the OIC (5 June 1981). The France–Libya BIT of 19 April 2004, Article 7(3), was imported through the MFN clause.
Court: Swiss Federal Tribunal, First Civil Law Court: Judges Hurni (President), Kiss, Denys, Rüedi and May Canellas
Underlying award(s): Award of 22 December 2023, made by majority; the arbitrator appointed by Libya dissented. A rectification award of 26 February 2024 corrected the amount of compensation. The arbitrators' names are anonymised in the judgment.
Sector: Nationalised trading company (import-export, agriculture, real estate)
Outcome: Appeal dismissed (3 June 2025). The arbitral tribunal was properly constituted and rightly found that it had jurisdiction.
Amount: Award: USD 73,750,140.67 plus interest from the date of the award; the amount was later corrected by the rectification award, and the corrected figure is not stated. Federal Tribunal: court costs of CHF 145,000 on Libya, and CHF 190,000 in party costs to the heirs, paid out of the security Libya had deposited.

The dispute

T. Limited was formed in Libya in 1952 as the Libyan subsidiary of a family group. Law No. 108 of 7 September 1970 nationalised it and promised its shareholders compensation in 15-year Libyan treasury bonds, once committees had valued the assets. For decades the shareholders and their heirs sought that compensation through letters and through Libyan court proceedings. A court expert valued the assets, but an administrative claim for payment was dismissed on jurisdictional grounds in 2011 and on appeal by the Libyan Supreme Court in 2016. In 2018 nineteen Lebanese and Jordanian heirs began arbitration under Article 17 of the OIC Investment Agreement, alleging breaches of the treaty by Libya's executive and judiciary. Libya challenged the appointment of the presiding arbitrator through the PCA and the UNCITRAL Rules, and raised objections ratione temporis, fork-in-the-road, lack of consent, ratione materiae and ratione personae.

Key holdings

The tribunal was properly constituted. Article 17(2) of the OIC Agreement is incomplete: it does not say what happens if the OIC Secretary-General fails to appoint the presiding arbitrator. Its MFN clause (Article 8), whose terms "treatment" and "rights and privileges" cover procedural guarantees, allowed the claimants to import Article 7(3) of the France–Libya BIT and the UNCITRAL Rules. The import only filled a gap to avoid a denial of justice, so it did not substitute a different arbitration regime, unlike in Itisaluna. consid. 7.7.4
A Swiss supporting judge was not available. The seat was fixed in Geneva only after the president was appointed, and the new Article 179(2) PILA, in force from 1 January 2021, did not apply ratione temporis. The Federal Tribunal did not follow the Paris Court of Appeal's judgment in DS Construction, which does not bind it. consid. 7.7.3–7.7.4
Jurisdiction ratione temporis was upheld. A "dispute arising from this Agreement" under Article 17 is defined by its subject matter and legal basis. The treaty claims were a new dispute, distinct from the compensation claim under Libyan law pursued since 1971. They rest on facts from 2006 to 2016: the failure of the compensation committees and denials of justice by Libyan courts in 2011 and 2016. All of this came after the Agreement entered into force for Jordania and Lebanon. consid. 9.6.3
The fork-in-the-road clause (Article 16(2)) did not apply. It requires the dispute to have the same subject matter as the earlier domestic proceedings. The Libyan valuation and administrative proceedings did not cover the full series of acts and omissions brought before the arbitral tribunal. consid. 10.6
Article 17 contains a standing offer to arbitrate, which an investor accepts by filing a request for arbitration. The Court left open whether conciliation is a mandatory precondition. The claimants' notice of 5 April 2018 went unanswered for seven months, which sufficed in any event. consid. 11.5
Jurisdiction ratione materiae was upheld. The OIC Agreement also protects investments made before it entered into force, and the words "in accordance with the provisions of this Agreement" impose no time limit. The inherited right to compensation replaced, and continues, the original capital invested in Libya through T. Limited, and it need not be reinvested. consid. 12.6
Jurisdiction ratione personae was upheld. The heirs were Lebanese and Jordanian nationals when the arbitration began, and Article 1(6) does not require the investor to have made the investment actively itself (following ATF 146 III 142). consid. 13.6

Procedural history

7 September 1970Law No. 108 formalises the nationalisation of T. Limited and provides for compensation in treasury bonds.
2 December 2002 – 27 September 2016The heirs' administrative claim for payment is dismissed on jurisdictional grounds by the Tripoli Court of Appeal (3 January 2011). The Libyan Supreme Court dismisses their appeal (27 September 2016).
20 November 2018The 19 heirs begin arbitration against Libya under Article 17 of the OIC Agreement.
30 April – 6 September 2019The OIC Secretary-General does not act on the request to appoint a president. The PCA Secretary-General designates an appointing authority (16 July 2019), which appoints the presiding arbitrator (6 September 2019).
6 November 2019Terms of appointment fix the seat in Geneva and English as the language of the proceedings.
6–10 December 2021Hearing in The Hague.
22 December 2023Award by majority: jurisdiction upheld and USD 73,750,140.67 plus interest awarded. The arbitrator appointed by Libya dissents.
1 February 2024Libya files a civil-law appeal to the Swiss Federal Tribunal seeking annulment of the award.
26 February 2024Rectification award corrects the amount of compensation in the operative part.
3 June 2025The Swiss Federal Tribunal dismisses the appeal.