The Libyan Investment Authority v Goldman Sachs International

The Libyan Investment Authority v Goldman Sachs International

The court found that no protected relationship of trust and confidence existed between the LIA and Goldman Sachs; the relationship did not go beyond a normal commercial relationship. The LIA's decision-makers understood the nature of the trades, and there was no evidence of actual undue influence or unconscionable conduct. The profits earned by Goldman Sachs were not excessive given the nature and size of the trades, and the trades were not shown to be unsuitable in the context of the LIA's objectives and constraints. Accordingly, the claims for undue influence and unconscionable bargain failed.

Parties
Claimant: Libyan Investment Authority; Defendant: Goldman Sachs International
Jurisdiction
England and Wales
Judgment Date
14 October 2016
Procedural Posture
Civil / Judgment After Full Trial
Outcome
Claim dismissed
Legal Topics
Undue Influence, Unconscionable Bargain, Derivative Transactions, Sovereign Wealth Funds, Banking Law
Commercial Law Equity Undue Influence Unconscionable Bargain Derivative Transactions Sovereign Wealth Funds Banking Law

Case Brief

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Parties

Libyan Investment Authority

Claimant

Goldman Sachs International

Defendant

Procedural Posture

Civil / Judgment After Full Trial

Legal Issues

  1. 1 Whether Goldman Sachs exercised undue influence over the Libyan Investment Authority (LIA) in relation to nine disputed derivative trades
  2. 2 Whether the disputed trades constituted unconscionable bargains

Ratio Decidendi

The court found that no protected relationship of trust and confidence existed between the LIA and Goldman Sachs; the relationship did not go beyond a normal commercial relationship. The LIA's decision-makers understood the nature of the trades, and there was no evidence of actual undue influence or unconscionable conduct. The profits earned by Goldman Sachs were not excessive given the nature and size of the trades, and the trades were not shown to be unsuitable in the context of the LIA's objectives and constraints. Accordingly, the claims for undue influence and unconscionable bargain failed.

Court Disposition

Claim dismissed

Orders

  • The LIA's claim to set aside the disputed trades on grounds of undue influence and unconscionable bargain is dismissed.
  • No order for rescission or repayment of premiums.