A judge at a U.K. high court has ordered Goldman Sachs to pay the legal costs of the Libyan sovereign wealth fund, after the U.S. investment bank tried to have a $1 billion lawsuit filed by the fund in January dismissed.
The bank will now have pay at least £200,000 ($321,301) to the Libyan Investment Authority (LIA) within the next 14 days.
The Libyan fund, set up in 2006 while the country was still under the dictatorship of Muammar Gaddafi, claims the bank deliberately misled the sovereign fund in order to make "substantial" profits of $350 million. It's also alleged that the bank knew of the fund's lack of financial expertise but encouraged it to enter a number of complex financial derivative transactions earning Goldman Sachs a "very large" premium.
Goldman denies the allegations and tried to dismiss the case by sending it to a smaller "summary trial" rather than a full hearing. A representative of Goldman Sachs told CNBC on Monday that the bank continues to believe this case is entirely without merit and intends to contest it vigorously as it moves through the legal process.
Back in August, the bank dropped this attempt and a two-day hearing was held in London this week to see if the bank would have to pay the costs associated with the LIA's response to the original summary judgment application.
At the hearing which ended on Tuesday afternoon, Judge Vivien Rose stated that the summary judgment application by Goldman Sachs was misconceived and should never have been issued. The £200,000 is a guaranteed payment but could rise to £680,000 which is the full amount that the LIA had asked for. If the two parties are unable to decide on the full amount in the near future then a judge will be appointed. Costs were awarded on an "indemnity basis" which is rare and is deemed to be more generous that costs awarded on "standard basis".