Libya’s $100 Million Finance Lawsuit Against Zimbabwe

The Libyan Foreign Bank has filed a $100 million lawsuit against Zimbabwe in the UK High Court, seeking to recover unpaid amounts from a 2001 oil credit facility signed during the Mugabe and Gaddafi era. The claim, lodged in November 2025, names Finance Minister Mthuli Ncube in his capacity as guarantor and the National Oil Infrastructure Company of Zimbabwe (NOIC) as defendants.¹²

What the 2001 Deal Was

In September 2001, President Robert Mugabe traveled to Tripoli and signed a $90 million agreement with Libya for the supply of 60,000 tons of oil, roughly three months of Zimbabwe’s fuel needs. Zimbabwe was two years into a foreign currency crisis that had produced chronic gasoline and diesel shortages.³

The arrangement was structured as a credit facility between the Libyan Foreign Bank (LFB), a subsidiary of the Central Bank of Libya, and NOIC. The funds paid the Netherlands-based trading firm Oilinvest BV, itself wholly owned by the Libyan state, for petroleum deliveries into Zimbabwe.¹⁴

The piece of the deal that now matters most: then-Finance Minister Simbarashe Makoni signed a sovereign guarantee on behalf of Zimbabwe’s Ministry of Finance, making the government directly liable if NOIC defaulted.⁵ Nearly half of the facility was drawn down within two years.¹

How the Debt Grew to $100 Million

Very little was repaid for over a decade. LFB alleges that between 2013 and 2023, NOIC made just four installments totaling $5.5 million. With accumulated interest, the outstanding balance now exceeds $100 million.¹⁶

According to the bank, Zimbabwean officials acknowledged the debt on multiple occasions in correspondence dating back to 2005.⁷ Those acknowledgments matter legally. LFB argues that under English law, each written acknowledgment interrupted the statutory limitation period, keeping the claim enforceable even though the underlying loan is more than two decades old.⁵

Where the Case Stands in the UK High Court

LFB filed in the Commercial Division of the UK High Court in November 2025. The case is before Justice Richard Jacobs, appointed to the High Court in 2018 after nearly four decades in commercial dispute practice at Essex Court Chambers.⁸⁹

Zimbabwe initially signaled it would challenge the UK court’s jurisdiction. Minister Ncube ultimately conceded and accepted that the case could proceed in London, a move legal commentators described as a strategic retreat from procedural resistance.¹⁰⁵

Justice Jacobs originally ordered the defendants to file a defense by the end of January 2026. A subsequent order extended that deadline to the end of June 2026.²¹ Neither LFB nor the Zimbabwean authorities have commented publicly on the litigation.¹⁰

Zimbabwe’s Defense: Time-Barred

Zimbabwe’s finance minister has formally denied liability, arguing that the claim is “time-barred.”¹¹ That defense collides directly with LFB’s position that repeated debt acknowledgments by Zimbabwean officials reset the limitation clock. The resolution of that dispute is likely to be central to the case.

Can a UK Court Hear It, and Can Libya Collect?

Under the UK’s State Immunity Act 1978, foreign states are generally immune from English court jurisdiction, but a well-established exception applies to commercial transactions, including loans, supply contracts, and financial guarantees.¹² The 2001 credit facility financed fuel purchases and was backed by a government guarantee, so it fits squarely within that exception.

Winning the judgment and collecting on it are separate problems. State property in the UK is generally immune from seizure unless it is being used for commercial purposes, and central bank assets receive enhanced protection.¹² A separate 2026 UK Supreme Court ruling, in a case brought by investors against Zimbabwe over expropriated timber assets, confirmed that while Zimbabwe cannot invoke sovereign immunity to block the registration of arbitration awards, immunity from execution against state-owned property remains intact absent a specific waiver.¹³

Why the Case Matters Beyond the Dollar Figure

The lawsuit lands on top of a much larger debt problem. As of September 2025, Zimbabwe’s total public and publicly guaranteed debt stood at $23.4 billion, with external debt of $13.6 billion, of which $7.7 billion is in arrears. The country is rated as being in “debt distress.”¹⁴¹⁵¹⁶

The government has been working through a Structured Dialogue Platform, established in December 2022, to chart a coordinated route back to creditworthiness. The process is championed by African Development Bank President Akinwumi Adesina and facilitated by former Mozambican President Joaquim Chissano, with Paris-based Global Sovereign Advisory as financial advisor and law firm Kepler-Karst as legal advisor.¹⁷¹⁸ In February 2026, the IMF reached a staff-level agreement with Zimbabwe on a 10-month Staff Monitored Program aimed at building the reform track record needed to advance arrears clearance and debt restructuring.¹⁹

A creditor breaking away to pursue litigation in a foreign court cuts against that coordinated posture. Legal analysts have said the case illustrates a growing trend of creditors turning to English courts to enforce dormant sovereign debts when broader restructuring efforts stall, and that an adverse ruling could embolden other creditors holding old claims against Zimbabwe.⁵

The case also spotlights the sovereign guarantee at its heart. When Makoni signed in 2001, he converted what was nominally a commercial loan to a parastatal into a direct government obligation, moving the risk of default onto Zimbabwe’s public balance sheet. That signature, more than any recent event, is what puts the finance minister in a London courtroom in 2026.⁵

1
Business Front. Libya Zimbabwe Court Oil Loan
2
Bloomberg. Libya Seeks 100 Million as Zimbabwe’s Debt Disputes Deepen
3
VOA News. Libya Zimbabwe Oil Agreement
4
FinalScout. Oilinvest Group
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Afronomics Law. Sovereign Debt News Update No. 157 – Libya
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Libya Herald. Libyan Foreign Bank Files for US 100 Million Lawsuit Against Zimbabwean Entities for a 2001 Debt
7
Libya Observer. Libyan Foreign Bank Seeks to Recover 100 Million From Zimbabwe
8
UK Judiciary. Mr Justice Jacobs
9
New Zimbabwe. Zimbabwe’s Debt Disputes Deepen as Libya Sues Finance Minister Mthuli Ncube, NOIC for Over US100 Million
10
CGTN Africa. Libya’s Central Bank Sues Zimbabwe Over 100 Million Fuel Debt
11
Law360. Zimbabwe Minister Says 102M Libyan Bank Claim Is Too Late
12
SCIRP. Sovereign Immunity and Commercial Transactions
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Hogan Lovells. UK Supreme Court Confirms That States Cannot Invoke Sovereign Immunity to Prevent Registration
14
Enviropress Zimbabwe. Public Debt Hits US23.4 Billion as Domestic Arrears Surge
15
Zimbabwe Treasury. Public Debt Report End September 2025
16
Veritas Zimbabwe. Medium-Term Debt Management Strategy 2026-30
17
Zimbabwe Treasury. Arrears Clearance and Debt Resolution Process
18
Bloomberg. Zimbabwe Hires Advisers Over 21 Billion Defaulted Debt Pile
19
IMF. IMF Reaches Staff-Level Agreement With Zimbabwe on a New Staff-Monitored Program