A Libyan appeals court has overturned a 16-month jail term handed down to Swiss businessman Rachid Hamdani on immigration violations.

Mr Hamdani and fellow Swiss businessman Max Göldi were arrested on charges of overstaying their visas in July of last year. The two were later released on bail and went to stay at the Swiss embassy. They were convicted in absentia in December last year. The two men also face charges of illegal business activities.

Analysts say the cases were brought in retaliation for the arrest of Hannibal Gaddafi, the son of Libyan leader Muammar Gaddafi, on charges of assaulting two hotel servants in Geneva in July 2008. The incident led to a diplomatic row between Libya and Switzerland. So far, Swiss attempts to secure the release of the two businessmen have failed.

The appeals court will hand down its ruling in the appeal filed by Max Göldi on Thursday. The rulings in the appeals against the illegal economic activities charges are expected next weekend.

Photo: Rachid Hamdani and Max Göldi in Tripoli (ANP/EPA)