Enforcement meets sanctions: when winning the arbitration is not the end of the story

A recent judgment of the French Cour de cassation offers a useful reminder of a point that international arbitration practitioners sometimes learn the hard way: an award may be enforceable without being immediately enforceable.

In its judgment of 1 October 2026, the Court considered enforcement proceedings brought against assets held by the Libyan Investment Authority (LIA) in France.

The underlying award had been rendered in favour of Al-Kharafi and had already been declared enforceable in France. The creditor subsequently sought to attach funds held by Société Générale in the name of the LIA, treating the LIA as an emanation of the Libyan State.

Two aspects of the judgment are particularly noteworthy.

First, the Court drew a procedural distinction between the State debtor and its emanation: although the attachment had been notified to Libya, the LIA had not itself been notified. The Court held that, because the LIA is a separate legal person, the time limit for challenging the attachment could not begin to run against it until it had itself become aware of the measure. The fact that an entity may be treated as an emanation of a State for purposes of execution against its assets does not erase its separate legal personality for purposes of its procedural rights.

Second, the sanctions: the assets held by the LIA were subject to the EU Libya asset-freezing regime. The creditor had obtained no prior authorisation from the French competent authority, the Direction générale du Trésor, to release the frozen funds. The Cour de cassation held that this was fatal to the attachment. Importantly, the Court did not regard the authorisation requirement as something arising only when the creditor eventually seeks payment. The authorisation had to come before the attachment itself.

This approach shows how sanctions can operate not merely as a restrictions on payment, but as a constraint on the very architecture of post-award enforcement.

For arbitration practitioners, that has a practical consequence: asset tracing and sanctions analysis should not be treated as an afterthought once an award has been obtained. A creditor cannot use enforcement to obtain, even provisionally, what the sanctions regime prohibits it from obtaining without prior authorisation.