Libya’s state-owned foreign investment bank has taken Burkina Faso to an international tribunal after Captain Ibrahim Traoré’s military government nationalised a commercial lender they previously owned together.
The Libyan Foreign Bank filed the claim on 17 August at the World Bank Group’s International Centre for Settlement of Investment Disputes.
ICSID registered the proceeding as Libyan Foreign Bank v Burkina Faso, case number ARB(AF)/26/3.
The dispute concerns Banque Commerciale du Burkina, which was established in 1997 as a 50-50 venture between the Libyan institution and the Burkinabe state. Burkina Faso nationalised the entire bank in May 2024.
The amount of compensation sought by the Libyan Foreign Bank has not been publicly disclosed.
**Two states fight over one commercial bank**
According to *African Law & Business,* the Libyan Foreign Bank is represented by the Paris office of international law firm Eversheds Sutherland.
The legal publication disclosed the filing and the parties behind the case on 25 August.
Burkina Faso said when announcing the nationalisation that the commercial bank had experienced operational difficulties.
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Its government accused the Libyan partner of failing to provide the support required for the institution to operate properly.
It said the takeover followed unsuccessful exchanges between the two shareholders. The Libyan Foreign Bank rejected that account.
The lender maintained that it had complied with the agreement establishing the bank, regional banking requirements and corporate laws applying across much of West and Central Africa.
It accused Burkina Faso of violating the agreement between the parties and decisions made under the West African banking system.
Those are competing claims. No international tribunal has ruled that either party breached its obligations.
**The bank behind the case**
The Libyan Foreign Bank was established in 1972 and is owned by the Central Bank of Libya.
It was created to manage Libyan investments and banking interests outside the country.
For decades, Libya used state-owned institutions and bilateral ventures to extend its economic influence across Africa. The Burkina Faso bank was one result of that strategy.
By nationalising it, Traoré’s government took control not only of a domestic banking institution but also of an asset half-owned by another African state.
That cross-border ownership transforms the dispute from a domestic banking intervention into an international investment case.
**Part of a wider nationalisation drive**
Traoré seized power in a military coup in September 2022. His government has sought greater state control over strategic assets, particularly in mining.
Burkina Faso nationalised two gold mines and transferred several exploration licences to a state-owned company in 2025.
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The government has presented its actions as necessary to increase national control over resources and ensure that more economic value remains inside the country.
Foreign investors have responded with legal claims. Australian mining company Sarama Resources has separately pursued arbitration after Burkina Faso withdrew an exploration permit.
The Libyan banking case expands the legal risk beyond gold and mining into financial services.
It also introduces an unusual state-against-state commercial conflict. The claimant is not a conventional private investor but a bank owned by Libya’s central bank.
**What the tribunal will consider**
The arbitration is at an early stage. A tribunal will have to determine whether it has jurisdiction before considering whether Burkina Faso violated the rights of the Libyan Foreign Bank.
The case could examine the agreement used to establish the commercial bank, the legal process followed during nationalisation and whether Burkina Faso offered compensation for the Libyan stake.
It could also consider Burkina Faso’s claim that its partner failed to meet obligations essential to the bank’s survival.
The filing does not reverse the nationalisation. Banque Commerciale du Burkina remains under Burkinabe state control unless the parties reach another arrangement.
An eventual tribunal could reject the claim, award compensation or record a settlement between the two sides.
The absence of a published damages figure makes it impossible to calculate Burkina Faso’s financial exposure.
The case nevertheless adds another international challenge to Traoré’s strategy of bringing strategic assets under state control.