Libya says arbitrator appointed in row with Swiss

TRIPOLI Feb 14 (Reuters) - Libya said it had agreed with Switzerland on the appointment of a chief arbitrator to help repair relations that were stretched to breaking point by a diplomatic dispute last year.

Libya's foreign affairs ministry said representatives of the two countries "have mutually agreed to appoint Canadian international law expert Philippe Kirsch ... to chair the Arbitration Tribunal sitting in Berlin" after consultation with arbitrators appointed by the two countries.

The spat began two years ago when Swiss police briefly arrested Hannibal Gaddafi, a son of Libyan leader Muammar Gaddafi, though he was later released without charge.

Soon after the arrest, Libya withdrew millions of dollars from Swiss banks, halted oil exports to Switzerland and barred two Swiss businessmen working in Libya from leaving the country.

As the dispute escalated, Libya stopped issuing visas to citizens of European Union countries and warned U.S. energy firms their business interests in Libya could be affected.

The row was calmed -- though not completely resolved -- when the last of the two Swiss businessmen, Max Goeldi, was allowed to fly to Zurich after serving a four-month sentence in Libya for immigration violations.

Libyan officials deny the Swiss men's case had anything to do with Hannibal Gaddafi's arrest, but Goeldi's supporters said he was an innocent pawn caught up in Libya's retaliation against Switzerland. (Reporting by Ali Shuaib and Salah Sarrar; Editing by Maria Golovnina)