US weapons dealer eyes £9m London Qaddafi mansion as payment for Libya debt

General Dynamics is in court fighting to secure proceeds of sale from home once owned by ex-leader's son

The former property of Saadi Qaddafi in London. Tariq Tahir / The National

US arms manufacturer General Dynamics has its sights on a £9 million property once owned by the Qaddafi family as payment for a weapons deal brokered with Libya, documents show.

The company, which makes the F-16 fighter jet and M1 Abrams tank, says it is owed £16 million ($20.34 million) for the supply of military vehicles and communications equipment to the country.

It has gone to court to secure the proceeds of any sale of the rotting mansion, which was once owned by Saadi Qaddafi, son of the former leader Muammar Qaddafi and former commander of Libya's special forces.

The property in Hampstead, the upmarket north London district favoured by international investors, has been the subject of complex ongoing legal battles stretching back to the overthrow of the Qaddafi regime in 2011, and was symbolic of the hunt for assets looted by his family and associates.

It was seized in the name of the Libyan people in 2012 after a court ruled Saadi was the beneficial owner of the property, which was bought through a British Virgin Islands registered front company named Capitana Seas.

But the house is now once again at the heart of a legal fight, this time between General Dynamics and Libya.

It sits in a cul-de-sac surrounded by other sprawling properties with expensive cars in their driveways.

The blinds were all closed apart from one downstairs when The National visited, and it revealed the dilapidated state of the inside of the house.

All that remains inside the bare room is a television surrounded by empty cupboards and shelves.

One neighbour, who declined to be identified, revealed there were recent signs of life at the property.

“I saw some gardeners there the other day. There's a rumour it's been put on the market,” he said. “I've never seen anyone living there.”

Legal saga

The contract between Libya and General Dynamics' UK subsidiary was signed in 2008 and, at the time of the protests against Qaddafi, it was reported the company appeared to be working with the Khamis Brigade, led by and named after one of Qaddafi’s sons.

The Khamis Brigade was the best equipped of Libya’s security forces and was directly involved in putting down the uprising in cities such as Misrata and Tripoli, where thousands were killed.

In a bid to recover the money it is owed, General Dynamics sought arbitration from the International Chamber of Commerce in Geneva, which ruled in its favour in 2016.

The company then applied to the English courts to enforce the debt, which was opposed by the Libyan government.

Eventually, Libya appealed to the UK’s Supreme Court and won on the basis that the proper procedure for recovering a debt against a foreign state had not been followed.

But the US firm is pressing on with its legal moves to recover its money.

Records show a Unilateral Notice was registered against the North London property earlier this year by General Dynamics.

The notice is used to register any interest that a third party may have in a particular property or estate and to notify the other party of its existence.

It has been made in respect of an interim charging order granted by a court in February, which is usually issued to stop an owner selling a property without letting a creditor know.

If a court grants a creditor a final charging order, this means that if the property is sold the owner must pay the creditor back out of the proceeds.

The seizure of the property in 2012 was heralded as the start of an assault on the looted overseas assets estimated at between $40 billion and $200 billion.

A 2016 study by consultants for anti-corruption group Transparency International suggested that $60 billion to $120 billion had been looted by former regime officials.

Only $20 million of that was returned to Libya and half of that was the London property.

The General Dynamics deal with Libya came after Qaddafi abandoned his nuclear weapons in 2003 and returned to mainstream international politics.

At the time of the protests against Qaddafi, documents revealed by Reuters showed General Dynamics was working to improve communications systems for tanks, artillery and armoured troop carriers for the Khamis Brigade.

The Libyan embassy in London has been approached for comment. General Dynamics declined to comment.