AGENCY IN LIBYA
OVERVIEW
HISTORY



In1971, the Agency Law permitted the Libyan
nationals to carry out activities of commercial
agency
In 1975, the Libyan government prohibited the
private entities from practicing agency
activities
In 2004, the Commercial Agency Law No. 6 of
2004 was enacted regulating the activates of
commercial agency
LEGAL SOURCES
Agency in Libya is governed by the
following:

Civil Code (Article 89 to 163)

Commercial Code of 1953

Commercial Agency Law no. 6 of 2004

GPC Decree no. 315 of 2008
COMMERCIAL AGENT




Supply of goods or provision of services by foreign supplier must be
channeled through a commercial agent. Accordingly, the
supplier/service provider must appoint a commercial agent.
(Exception: Food products and construction supplies)
The Agency Law did not recognize any differences between the
various types of commercial intermediaries (contract agents,
negotiating agents, commission agents, distributors and brokers).
Therefore, All these types of commercial intermediaries are subject
to the same legal requirements.
Commercial agent must be Libyan National or, in case of
companies, fully owned by Libyans.
Commercial agent must be registered as an agent at the Agents
Register
AGENCY AGREEMENT


1.
The agency agreement must be made in writing
The agreement must explicitly specify the following:
Type of commercial intermediary
2.
Term of the agreement (Fixed term-no automatic renewal)
3.
Scope of Services
4.
Commission payable to the commercial agent

The agency agreement has to be registered in the
Companies Department.
EXCLUSIVITY

Exclusivity should be explicitly mentioned in the agency agreement.

Exclusivity can be made for a specific area or specific product

The commercial agent may appoint sub-agents unless otherwise
agreed in the agency agreement

It should be noted that Article 5 of the Executive Regulation of the
Agency Law limited the number of commercial agencies permitted
to each commercial agent as follows:
(3 agencies for natural entities- 5 agencies for Tasharokiat (special
type partnership fully owned by Libyans-10 agencies for public and
private companies).
COMMISSION

Commission is due on transactions expressly agreed upon

Commercial agent is entitled to commission for contracts duly
performed

As per the Commercial Law, commission is payable for
transactions concluded by the principal without the participation of
the commercial agent in the agent’s territory unless agreed
otherwise

Commission is also payable If a contract is not fulfilled due to
reasons for which the principal is responsible
TERMINATION

A fixed term agency agreement is terminated at the end of
its term

Indefinite agency agreements can be terminated by serving
upon the other party a three month notice. Such notice can
be substituted by the way of compensation.
EARLY TERMINATION
The agency agreement may be terminated on the occurrence
of any of the following events:

Breach of the agency agreement

The commercial agent is bankrupt

The commercial agent is De-registered as a reason of a criminal
act, or provision of false information or the commercial agent fails to
keep one of the the requirements set by the law (i.e. company not
fully owned by Libyans)
GOODWILL COMPENSATION


Goodwill compensation is not set under the Libyan laws
Damages for unjustified termination as well as the duration
of the agency agreement are considered while calculating
goodwill compensation
APPLICABLE LAW

As per Article 19 para. 1 of the Libyan Civil Code
states that the parties to a contract may agree on the
application of a specific law

The provisions of foreign law are applied by Libyan
courts only to the extent that these provisions do not
conflict with mandatory provisions of Libyan law.
DISPUTE RESOLUTION

The principal and the commercial agent are free to recorse to
arbitration or litigation for dispute settlement (preferably arbitration).

However, under Article 3 of the Civil and Procedural Law, a Libyan
court is likely to declare its competence to decide to settle an
agency agreement performed in Libya. Accordingly, a clause
contained in the agency agreement under which a foreign court has
jurisdiction on disputes arising out of the agreement is not likely to
be held as valid ground for Libyan courts to decline jurisdiction
since the Libyan courts are likely to retain jurisdiction on the basis
that the obligations arose in Libya or that the obligations were
performed or should have been performed in Libya

A foreign award issued by a foreign court having jurisdiction under
the contract may be enforced in Libya if it satisfies the required
conditions for enforcement of foreign awards
ENFORCEMENT OF FOREIGN
JUDGMENTS

Libya is not a member of the New York UN Convention on the
Recognition and Enforcement of Foreign Arbitral Awards of June 10,
1958. Therefore, the recognition of foreign arbitral awards is
exclusively governed by Libyan law

To enforce a foreign judgment in Libya, the judgment should be a
final judgment and provided that the principle of reciprocity applies.
Furthermore, the foreign judgment must not contradict with the
Libyan courts decisions as well as the public order