U.N. Court Allows Libyan Sanctions : Pan Am bombing: Kadafi’s last-ditch appeal over custody of suspects is rejected. Restrictions against defiant nation on flights and arms sales take effect.

Libya lost its last chance to avert U.N. sanctions Tuesday when the International Court of Justice dismissed Col. Moammar Kadafi’s plea that Britain and the United States have no right to demand custody of the two suspects in the 1988 terrorist bombing of a Pan Am flight over Scotland.

With the 11-5 decision clearing all legal obstacles, the sanctions descended upon the erratically led North African country, one of the few official pariahs in U.N. history, at one minute past midnight this morning, New York time.

The punishment fell upon a country already cut off from the world. In a bizarre and histrionic twist, Kadafi decided to deprive his people of all transportation and communications a day early. While he called these self-imposed sanctions a commemorative mourning for the U.S. bombing of Tripoli and Benghazi six years ago, they had all the earmarks of a bitter protest against the United Nations.

Even before the rejection by the World Court, it was clear that Libya was already failing in still another in its long series of attempts to avoid sanctions by offering some kind of conditional surrender that failed to satisfy U.S. and British demands.

Trying to fashion an 11th-hour compromise, the Arab League informed the United Nations that Libya had agreed to turn over the two accused agents to the government of the Mediterranean island nation of Malta for trial there. Malta figured prominently in the investigation of the bombing because the terrorists were believed to have been based there when the bomb was placed aboard its initial flight, an Air Malta plane bound for Frankfurt, Germany.

But this proposal, like similar ones before, won little support. “It falls short,” State Department spokeswoman Margaret Tutwiler said. “It does not meet the requirements of compliance. And Libya knows very well what it has to do in order to be in compliance.”

After a closed session of the Security Council, British Ambassador David Hannay said that a trial in Malta was “not acceptable.” At the most, he said, the U.S. and British governments will accept a delivery of the men to Malta, provided that they end up in either the United States or Scotland for trial.

While some Third World ambassadors asked the Security Council to delay the sanctions so that the Arab League could keep trying to persuade Libya to comply, Hannay said that “the council did not agree that a case had been made for delay.”

Under the sanctions, all countries are required to halt commercial air flights to and from Libya, ban arms sales to the Kadafi government and reduce the numbers of Libyan diplomats allowed abroad. If the sanctions work the way they are supposed to, Libya’s only international links would be the highways to Cairo and Tunis and a ferry to Malta.

Some outsiders believe it may be difficult to enforce the sanctions. In Washington, a senior Defense Department official, who asked not to be identified, said the Pentagon has received no orders to prepare to enforce or expand the Libyan embargo.

“We’ve received no ‘tasking,’ ” the official said. “Besides, we’re not in the business of shooting down airliners. Each country will be required to see to it that planes do not use their airspace to reach Libya.”

The Bush Administration welcomed the decision by the World Court. President Bush, talking with reporters in Detroit, called it “good news.”

Hailing “a very favorable decision,” Secretary of State James A. Baker III said: “We are delighted to see that the World Court is not going to attempt to interfere with the decisions of the United Nations Security Council taken after solemn deliberations of the council.”

At The Hague in the Netherlands, seat of the World Court, Shigeru Oda of Japan, the presiding judge, read the ruling that shattered Libya’s last recourse. The logic of the ruling, however, could cause some misgivings, because it lent credence to the suspicions of those Third World governments that had pleaded that it was unfair to vote for sanctions while the case was before the court.

Libya had argued that the United States and Britain could not demand the extradition of the suspected terrorists because Libya had the right under international treaties to try them itself. But the court ruled that any case that Libya might have had was superseded by the Security Council’s decision to impose sanctions.

Oda said the obligations of U.N. members to carry out the decisions of the Security Council “prevail over their obligations under any other international agreement.”

Jean Salmon, Libya’s Belgian lawyer, called the decision “a very sad ruling.”

The judges who voted to dismiss the Libyan plea came from the United States, Britain, France, Japan, Poland, Italy, China, Norway, Russia, Guyana and Venezuela. The judges who supported Libya came from Algeria, Sri Lanka, Madagascar, Nigeria and Egypt.

Kadafi’s refusal to give up the two suspects despite the threat of sanctions raised the question of whether the Bush Administration would resort to military action to punish him further.

But an Administration official, speaking anonymously, said there was no consideration of military action at this point.

“Military action would have to be unilateral,” he said, “and in the Arab world there would be a lot of protest against it.”

He said the standoff could continue for some time. Implying that the White House was still uncertain about its next step, he said, “People are thinking about what to do.”

Under the Security Council resolution passed two weeks ago, sanctions will not be lifted until Libya complies with three demands:

* Give up the two agents accused of destroying Pan Am Flight 103 over Lockerbie, Scotland, in December, 1988, killing 270 people.

* Allow a French magistrate full access to four suspects and their records in the terrorist bombing of a UTA airliner over West Africa in 1989 that left 171 dead.

* Commit itself to cease all forms of terrorist action.

In its strange dress rehearsal, Libya disconnected its telephones and stopped all flights one minute after midnight Tuesday. Kadafi said that he was doing this to mark the anniversary of the 1986 U.S. air raids that killed 41 people, including his adopted daughter.

In justifying the 1986 attack, the Reagan Administration blamed Libya for the bombing of a Berlin discotheque in which a civilian woman and one U.S. serviceman were killed. Later evidence, however, raised doubt as to whether Libyan agents had been involved.

Jana, the Libyan news agency, said the Libyan flag flew at half-staff throughout the country and that many Libyans were wearing black badges and black clothes.

Hours before the shutdown, Kadafi’s chief lieutenant, Abdul-Salam Jalloud, in a fiery speech urging Arabs to ignore the sanctions, told a convention of labor leaders that “Libya will never give up its sons.”

Times staff writers James Gerstenzang and John M. Broder in Washington contributed to this report.

BACKGROUND

The World Court, known formally as the International Court of Justice, was formed in 1945 as the judicial organ of the United Nations amid hopes for a peaceful new order after World War II. Although it has a mandate to interpret treaties and resolve legal disputes between nations, it often has been handicapped by the refusal of many nations to recognize its jurisdiction and accept its decisions. One of its cases was the settlement of monetary claims stemming from the detention of hostages at the U.S. Embassy in Iran. The court is composed of judges elected to nine-year terms by the General Assembly and the Security Council. It is headquartered in the Peace Palace in The Hague, Netherlands.