Strike out of CMS case against LAIP confirmed

Strike out of CMS case against LAIP confirmed

As previously reported, on 21 March 2017, a multi-million dollar claim brought by Catalyst Managerial Services (CMS) against Libya Africa Investment Portfolio (LAIP) was struck out. On Thursday 6 April 2017, the English High Court confirmed that the strike out was final and further ordered that US$ 15 million of LAIP funds held in Court be returned to LAIP immediately.

CMS first brought its claim against LAIP in 2012 for US$ 15.4 million in alleged unpaid invoices and in excess of US$ 0.5 billion in estimated damages for alleged wrongful termination. LAIP denied the claim in its entirety and consistently asserted that it was a sham. In the latter stages of the proceedings, this was confirmed by CMS’ admission that a key agreement had not been signed with LAIP’s authority (despite CMS’ previous representations to the contrary).

In January 2016, LAIP voluntarily paid US$ 15 million into Court in order to resist CMS enforcing a previous summary judgment decision. LAIP successfully appealed the summary judgment decision in May 2016, and was granted permission by the High Court to advance a counterclaim in fraud against the individuals who appeared to be behind CMS’ claim, namely its CEO, Zia Qadir Qureshi, and a former employee of LAIP, Mohamed Said Shushan.

CMS’ repeated failure to comply with court orders led to its claim being struck out in its entirety, and CMS was ordered to pay LAIP’s costs of the action.

At a further hearing in April 2017, CMS claimed that the strike out should be set aside, and its claim should be relisted for trial in April 2017. The High Court denied CMS’ application, stating that CMS’ attempts were “too little, too late.” Mr Justice Andrew Baker ordered CMS to pay LAIP’s costs of the application. CMS was refused permission to appeal the decision. In addition, the Court granted LAIP’s application that the US$ 15 million be returned to LAIP without further delay.      

Commenting on LAIP’s latest success, Ahmed Kashadah, LAIP’s Managing Director, said:

“LAIP is delighted that the Court has confirmed its previous order that CMS’ claim is struck out in its entirety. In the four and a half years since CMS first brought its claim LAIP has been steadfast in its defence that the claim was dishonestly brought and without merit. LAIP believes that the claimant, and those individuals behind it, sought to take advantage of the instability in Libya. LAIP will not tolerate such conduct and will continue to defend robustly all of its rights against individuals and entities that seek to exploit Libya’s circumstances in this way.”