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Overview of the Libyan Commercial Arbitration Law No. 10 of 2023

Overview of the Libyan Commercial Arbitration Law No. 10 of 2023

By Albudery Shariha

Overview of the Libyan Commercial Arbitration Law No. 10 of 2023. Notwithstanding that there are different provisions in several laws that govern Arbitration in Libya – such as Law No. 25 of 1955 on the Petroleum Law, Law No. 9 of 2010 on Investment Promotion, and Law No. 12 of 2010 on Labor Relations – the main rules regulating arbitration in Libya are provided in section IV, Articles (739 -771) of the Civil and Commercial Procedure Code of 1954.

Since then, rules on arbitration have not been developed until the promulgation of a bill on arbitration law on April 17, 2023. The law has yet to be published. It contains 100 articles regulating commercial arbitration in Libya.

The Bill dates to 2008-2009, when the Libyan Ministry of Economy initiated a proposal on an arbitration law that no progress was ever made on. Bearing in mind that Libya still needs to join the New York Convention on the Recognition and Enforcement of Foreign ArbitralAwards 1958 and the Washington Convention on International Commercial Arbitration 1965.

A review of the Bill signifies the following salient points:

– An arbitration clause or an arbitration agreement must be written, whether presented formally, customarily, or electronically.

– In terms of validity, an arbitration agreement is independent of the original contract within which arbitration is stipulated.  

– Arbitration conducted virtually is binding and governed by the same rules as conventional arbitration.

– Arbitration is not a part of the public order, and the parties should submit it to the judge to comply with it.

– The judge of provisional matters may issue conservative measures or temporary measures at the request of a party before or during the commencement of arbitration measures.

-The arbitral award issued in Libya has the authenticity of the final and conclusive judgment, and the competent court shall append the arbitral award in the executive form at the request of one of its parties. It is automatically enforceable by the parties or made compulsory by the President of the Court of Appeal, of which the Arbitration Seat is located.

The presiding arbitrator or the arbitrator shall send a copy of the award to the parties within 15 days from the date of the award’s issuance. The original award shall be deposited together with the arbitration agreement to the clerk of the competent court. The clerk shall make a record of the deposit. The court shall deliver a copy of the executive formula within two days of depositing the award. 

– The law regulates cases of objection and appeal against arbitral awards issued in Libya in Article (54) and cases of complaint and appeal against the international arbitral award in accordance with Article (59) of the law.

– Article (60) of the Law, entitled “Recognition of the Arbitral Award”, provides that the arbitral award is a final and conclusive judgment, and the special rules on expedited execution are applied to it once the award is appended in the executive form by a decision of the President of the competent court.

– Article (62) of Section VII of the Law, entitled “Recognition of Foreign Arbitral Awards”, approves the enforcement of foreign arbitral awards in Libya in accordance with the principle of reciprocity. This is done by a written application submitted to the President of the Court of Appeal. The latter shall order the enforcement of the arbitral award and append it in the executive form within two days from the application date.  

– Finally, the law considers arbitration centres as legal entity derive their legitimacy from a decision by the Minister of Justice. The decision shall be published in the official gazette. The law also obligates all existing arbitration centres to re-register with the Ministry of Justice within six months of passing this law. Otherwise, their licenses are deemed revoked.