French Court Approves Middle East Firm's Seizure of Libya Oil Assets Over $1B Debt

A Middle East construction firm has secured a key legal victory allowing it to seize assets from Libya’s state oil company to recover nearly $1 billion following the cancellation of a tourist resort project.

A court in Paris has ruled that Kuwait's Al-Kharafi Group can pursue the National Oil Corporation's assets in France, including those held in a joint venture with French company TotalEnergies. The Libyan company does not own shares in TotalEnergies.

The dispute dates back to 2006, when Al-Kharafi signed a deal with Libya’s tourism authority during the rule of Muammar Qaddafi to build a five-star development east of Tripoli under a 90-year lease. The $130 million complex was planned to include apartments, a commercial centre, and restaurants, with a scheduled completion time of seven and a half years.

However, the project stalled shortly after the contract was signed as several Libyan public bodies claimed ownership of the land, leading to demands that Al-Kharafi vacate the site. The company reported incidents where workers were allegedly assaulted by police officers claiming land ownership. Although an alternative site was offered and declined, the Libyan government officially terminated the construction licence in 2010.

Following arbitration, Al-Kharafi was awarded $900 million in 2013 as compensation for projected profits across the 14 resorts and facilities included in the lease. Since then, the firm has actively pursued Libyan government assets to recoup the debt, previously attempting to seize a luxury jet formerly used by Qaddafi and assets belonging to the Libyan Investment Authority.

After earlier attempts involving the Libyan Investment Authority and a luxury Airbus A340 were blocked, Al-Kharafi focused its efforts on the National Oil Corporation. A French court ruled in 2022 that the National Oil Corporation is an extension of the Libyan state and thus liable for the debt. Approval was granted to target the National Oil Corporation's stake in joint ventures with TotalEnergies, which has operated in Libya since 1954.

The Paris Court of Justice dismissed the latest appeal by Libyan authorities, though further legal avenues remain available. With accumulated interest, the total debt owed to Al-Kharafi has reached $960.2 million.