Forum arbitral shopping hinges on the core concern to avail oneself of a legal regime favourable to arbitration. Hence, choosing the right arbitration seat is crucial to ensuring an efficient arbitration and an enforceable award. In this vein, Lebanon boasts all the advantages of an effective and efficient seat for international commercial arbitration.
This article will highlight the main hallmarks that would impinge on the parties’ choice of the arbitral seat including, among other relevant features, the particularities of the Lebanese arbitration legal infrastructure, while showering attention on the role of the courts in the ever-increasing development of the arbitral jurisprudence, to finally conclude that Lebanon is an excellent choice for an international commercial arbitration seat.
Ideal location and easy accessibility
Lebanon’s geographical location as a gateway to Asia, Africa and Europe is highly convenient for international business and arbitrations in terms of facilities and easy accessibility.
Legal and international business expertise
Lebanon has always been renowned for its outstanding educational institutions, particularly in the legal field. Arbitration is included in the law schools curriculums, which are taught in Arabic plus French or English, thereby promoting the capacity to embrace a diversity of legal cultures. By the same token, the expansion of international legal studies and practice abroad gave rise to an increase in the number of legal practitioners skilled in international arbitration and dispute resolution as well as in the enforcement of foreign arbitral awards before domestic courts.
It is noteworthy that Lebanon’s rapid and sustained progress in information technology triggered the evolution and globalisation of various economic sectors, which has a direct impact on arbitration and alternative dispute resolution methods and efficiency.1 In fact, the World Economic Forum Global Information Technology Report in 2016 ranked Lebanon 14th out of 144 countries for its quality of education and fourth in mathematics and science. The report highlights that, in comparison to other countries in the region, in terms of the time taken to transform a knowledge economy into a more developed, innovation-harnessing one, certain concentrations will absolutely catapult Lebanon into the top entrepreneurial countries worldwide.
Arbitration legal regime
Lebanon was a pioneer among the Arab countries in adopting a modern arbitration law. Its effective arbitration regime is known as ‘one of the most liberal’ and ‘the most supportive and highly rated’ in the Middle East.2 Lebanese laws and jurisprudence have been significantly characterised by an arbitration-friendly approach, supportive of the principles and modern practices of international arbitration.
Arbitration law and conventions
As a former French colony, Lebanese law, doctrine and jurisprudence borrowed largely from the French legal system.3 By the same token, the legal provisions on arbitration4 are contained in the Lebanese Code of Civil Procedure (LCCP) were nearly a replica of the old French Code of Civil Procedure (FCCP).5
Subsequently, with the aim of enhancing economic growth, Lebanon adopted various measures to protect investments by providing a legal framework tailored to suit the international transactions and the disputes resulting therefrom.
To that end, Law No. 440 of 29 July 20026 amended and complemented some arbitration provisions set out in the LCCP.7
On the international level, Lebanon signed and ratified a number of arbitration conventions8 including the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States9 and the 1958 New York Convention (NYC).10
Key features of the arbitration legal system
No restrictions on international arbitration agreements
An international arbitration agreement is not subject to any mandatory form or content requirements.11 Its existence may be proven by any means.12 Although the written form is required to obtain exequatur of the award,13 the Lebanese courts have been lenient in that respect as they granted exequatur on the basis of exchange of emails referring to a contract containing an arbitration clause.14
Conversely, in domestic arbitration, it is required that the clause be in writing ad validitatem15 and the submission agreement be in writing ad probationem.16 However, the Lebanese courts held that the domestic arbitration clause ought not to be written in the main contract but possibly in an unsigned addendum17 or by evidence of correspondence.18
Broad definition of ‘international’ arbitration
Inspired by the French arbitration law, the LCCP draws a distinction between domestic and international arbitration, thereby offering international arbitration more liberal and flexible rules, suited to the needs of international trade.
In the same vein, the LCCP describes ‘international’ arbitration as being one that ‘involves the interests of international trade’.19 Following the French economic criteria, such characterisation is principally based on the economic operation involving movement of goods or services, or payment across borders.20 It hence neither depends on the seat of arbitration, the parties’ habitual residence, places of business21 nor on their nationalities.
Variety of contracts subject to arbitration
All arbitrable disputes arising from the validity, performance or interpretation of civil or commercial contracts may be settled by arbitration.22
Disputes arising from administrative contracts may also be referred to arbitration. In fact, the LCCP recognises the right of the state and other public entities to have recourse to both domestic and international arbitration.23 Still, an arbitration clause in administrative contracts is subject to prior approval, either by decree from the Lebanese Council of Ministers upon a recommendation of the relevant minister for contracts with the state, or from the appropriate regulatory authority for contracts with public law entities.24
In view of the fact that the LCCP grants the parties to arbitration freedom to choose a foreign applicable law or usages,25 one may assume that recourse of the state to arbitration might potentially entail the exclusion of the Lebanese administrative law. Nonetheless, Law No. 440 made an exception with respect to actions of annulment for excess of power, which shall exclusively remain within the jurisdiction of administrative courts.26
Wide extent of arbitrable disputes
The Lebanese laws exclude from arbitration disputes relating to public policy, bankruptcy, lease and rental, employment and social security, personal status, capacity, inheritance and personal rights falling beyond the scope of trade.
Nevertheless, pecuniary interests arising from non-arbitrable disputes can be subject to arbitration.27 Indeed, a dispute relating to the compensation of damages in connection with personal status or criminal matters can be arbitrated.28
By the same token, disputes over acquired hereditary rights including distribution of inherited assets and properties may be subject to arbitration, provided the quantum of such rights is specified.29
Even in bankruptcy matters where national courts have exclusive jurisdiction,30 the Lebanese courts held that partners in a company under bankruptcy may agree to settle any dispute arising from the liquidation via arbitration.31
The Customs Law and the Code of Money and Credit also provide for disputes to be settled by arbitration.32
As for commercial agencies and distributorships, the law provided commercial agents and sole distributors with a particular protection by granting the courts of the place where the commercial representative carries on its activities exclusive jurisdiction over disputes arising out of the commercial representation agreement, notwithstanding anything to the contrary.33
Notwithstanding the above provisions, the Lebanese courts upheld and granted exequatur to foreign arbitration awards that applied Lebanese law on the issue of commercial agency.34 The rationale behind that approach is that the legislation’s ultimate goal is to afford sufficient protection to the representative or rather, to strike a fair balance between both parties,35 which was deemed already attained through arbitration.
In any case, parties may agree to arbitration concerning a dispute arising during the term of the agency contract.36 Moreover, the Court of Cassation held that signing a submission agreement after the dispute arises might occasionally be deemed as a waiver of the agent’s right to any protection.37 Yet, the courts have been adopting divergent approaches in that respect.
A relatively recent decision, however, looks promising in respect of solving this dilemma. In fact, the court upheld the arbitration clause inserted into the sole agency agreement, and thus declared its lack of jurisdiction to hear the case. It affirmed that both the object of the sole agency contract and the issue of damages resulting therefrom are not related to public policy and are therefore arbitrable per se.38 In addition, the exclusion of an extrajudicial dispute resolution method should occur only where it is expressly provided for by law39 or where the resolution of the dispute by arbitration is deemed contrary to public policy. Further, the court stated that the exclusive jurisdiction of the courts is not mandatory with respect to non-judicial jurisdictions.40
Recognition of the principle of separability
The separability of the arbitration clause from the main agreement is widely recognised and admitted by the Lebanese courts.41 It was held that even the nullity of the main agreement due to lack of consent shall not encroach on the arbitration clause included therein.42
Recognition of the principle of Kompetenz-Kompetenz
The arbitral tribunal may rule on its own jurisdiction in accordance with article 785 of the LCCP. The Lebanese law therefore recognises the Kompetenz-Kompetenz principle only in its ‘positive effect’.43 The Lebanese courts have, however, constantly affirmed their lack of competence to hear the case44 since the arbitration procedure shall prevail and continue notwithstanding any jurisdictional challenge before the courts.45
Extension of the scope of application of the arbitration agreement
Jurisprudence has acknowledged the parties’ right to expand, albeit implicitly, the scope of the arbitration agreement.46 In a similar vein, the Court of Cassation recognised the arbitrators’ competence to rule on concurrent claims connected to the subject matter of arbitration, thereby allowing a comprehensive interpretation of the parties’ will.47
Incorporation by reference
The provisions on domestic arbitration stipulate that the arbitration clause may be either in the main contract, or in a document that is referred to in such a contract.48 In other words, an arbitration clause included in a contract or document is deemed valid and binding upon the parties to another contract if the latter refers to the contract or document containing the arbitration clause.
Nevertheless, the Lebanese jurisprudence went further to establish that the incorporation by reference theory shall be applicable to international contracts, notwithstanding the absence of an explicit legal provision with regard to international arbitration.49
In any event, as the LCCP recognises the arbitral tribunal’s right to apply trade usages including lex mercatoria, the presumption of acceptance of the arbitration clause incorporated by reference can be based on trade usages.50
Extension of the arbitration clause to non-signatories
It is recognised that the transfer,51 subrogation52 and succession53 of a contract lead to the transfer of the aritration clause included therein.54 An arbitration clause may also extend from the main contract to ancillary or related ones.55
Extension of the arbitration clause is recognised by the Lebanese courts56 that broadened the scope of application of the arbitration clause by extending of arbitration clauses to non-signatories in a number of instances. Indeed, the Beirut Court of Appeals held that an arbitration clause included in one contract, which is part of a series of contracts not containing an arbitration clause, albeit forming a single economic unity, shall extend rationae materiae to the said contracts even though not involving the same parties, thereby settling all the disputes arising therefrom via arbitration.57
An arbitration clause included in an international contract may also be extended rationae personae to all parties directly involved in the performance of the contract and disputes arising therefrom, if it is presumed from their situation and activities that they were aware of the existence and scope of that clause.58
Parties’ freedom and flexibility in the arbitral process
An ongoing court litigation can be arbitrated
Parties to national courts’ proceedings can agree to refer their dispute to arbitration according to the provisions of a law chosen by them including a foreign law or usage.59
Choice of arbitrators
In international arbitration, it is not mandatory for the parties to designate the arbitrators or to refer to the procedure of their appointment in the arbitration agreement.60
In any event, should a difficulty arise in the appointment of arbitrators in an international arbitration seated in Lebanon or subject to the Lebanese procedural laws, a party may request the president of the First Instance Court to make such appointment, unless otherwise agreed.61 The role of the judiciary is strictly limited to assisting the parties in overcoming any hurdles with respect to the implementation of their mutual consent.62
Lebanese laws do not set out any restrictions on the qualifications, citizenship, religion or gender of arbitrators. More importantly, there are no legal provisions holding an arbitrator liable for any act or omission in connection with the arbitral proceedings.63
Choice of procedural rules
Parties to international arbitrations are free to choose the procedural rules and the language of the proceedings, directly or by reference to arbitration rules.64
In any case, the arbitral tribunal is entitled to fill the gaps in the applicable procedural rules65 provided due process is respected.
Choice of law applicable to the merits of the dispute
The liberal approach also involves the parties’ freedom to choose the law applicable to the merits of the dispute in international arbitration. Party autonomy may choose the ‘rules of law’ that shall govern the dispute including any national law or even anational rules of law such as lex mercatoria or general principles of law.66
Failing an explicit agreement between the parties, the arbitral tribunal shall enjoy wide discretionary powers to choose the applicable ‘rules of law’ they deem appropriate to the merits of the dispute. Indeed, the Lebanese law requires the arbitral tribunal to take into account trade usages, thus mirroring the law’s liberal approach towards arbitration for the purposes of international commerce.67
By the same token, the parties are free to agree on granting the arbitrator the power to act as ‘amiable compositeur’.68 However, such agreement ought to be obvious and explicit.
Interim measures of protection
In accordance with article 789 LCCP, which refers to article 589 LCCP, the arbitral tribunal has the power to order any interim or conservatory measures it deems necessary taking into account the nature of the dispute.69 Prior to the constitution of the arbitral tribunal, any interim or provisional measures of protection shall be ordered by the judge-in-chambers without being deemed as a waiver of the right to arbitrate.
The arbitral tribunal has also jurisdiction to rule on the verification of the authenticity of handwritten signatures.70
Witnesses are heard without oath
Many jurisdictions in the MENA region741 require a witness to swear a specific oath72 under penalty of annulment and refusal to enforce the arbitral award.73
Conversely, the Lebanese provisions on arbitration are very liberal in this regard. Indeed, article 779 LCCP clearly states that witnesses are heard without oath.
Article 786 LCCP allows third-party joinder provided the agreement of parties.
It is noteworthy that that the Lebanese courts have recognised the confidential nature of arbitration procedure and the award.74
Criminal proceedings shall not necessarily stay arbitration proceedings
The French principle that criminal cases take precedence over civil cases (le criminel tient le civil en l’état) is recognised by Lebanese law. In fact, the LCCP provides for a stay of arbitration proceedings if criminal actions relating to the dispute were filed, until the arbitrators are notified of the final judgment rendered by the criminal court.75
On the other hand, the Lebanese courts held that such principle shall not be inevitably applied in arbitrations. In effect, an action for setting aside an arbitral award was submitted on the ground of violation of public policy as the arbitral tribunal failed to stay the arbitral proceedings up till a decision was made in the related criminal proceedings.76 The Court of Appeals rejected the action holding that the arbitral tribunal made a reasoned award after having perused all the documents filed before the criminal courts and concluded that such action need not stay the arbitration procedure, which is not deemed contrary to public policy.
This Lebanese trend is aimed at preventing the parties from adopting dilatory tactics to derail the arbitration procedure.
Time limit for rendering the arbitral award
Unless agreed otherwise in the arbitration agreement, the LCCP provides for a time limit of six months running from the date of the last-appointed arbitrator’s acceptance of its appointment. This period can be extended by the parties’ agreement or by a decision from the President of the First Instance Court upon a party’s or the arbitral tribunal’s request.77
With an aim to safeguard the arbitration procedure, the Lebanese courts have been flexible with regards to the extension of the arbitration period. In fact, the Court of Cassation affirmed that the parties’ consent towards extension may be implied even by the parties’ silence under certain circumstances,78 or deduced from presumptions such as continuing to participate in the procedure without any objection.79
No restrictions on the form of the international award
In other jurisdictions, restrictions are imposed in terms of the form of the award. For instance, an award seated in the UAE shall be physically rendered at the seat of arbitration,80 and signed by the arbitrators on each page containing the reasoning and the operative part,81 under penalty of annulment and denial of enforcement.
However, the seat of arbitration is recognised by the Lebanese courts as being a legal jurisdiction that determines the arbitral procedure and the courts that shall assist the arbitration and rule on recourse against the award.82
Consequently, arbitration awards seated in Lebanon ought not to be physically signed and issued in Lebanon. By the same token, the physical presence of the arbitrators during the deliberations is not required.83 Furthermore, the award need not contain that deliberations between arbitrators have taken place. Such occurrence may be evidenced by any means.84
Finally, the award may be issued by the majority of arbitrators. Failure to sign the award by the minority shall not affect its validity.85
Interests may be awarded
Several countries in the Middle East and Africa have legal systems based on shariah that do not allow awarding interest in an arbitral award.86
However, Lebanon has adopted a legal system of civil law devoid of any religious influence. As a result, Lebanese laws do not prohibit awarding interests in arbitration awards.
Recognition and availability of institutional arbitration
The Code recognises the parties’ right to agree on institutional arbitration.87 Similarly, courts are familiar with and supportive of institutional arbitration.88
The most popular arbitration institution is the Lebanese Arbitration Centre of the Chamber of Commerce, Industry and Agriculture of Beirut and Mount Lebanon, which administers national and international arbitrations under its own rules that were inspired by the 1998 ICC Rules.
Recently, the Beirut Bar Association established the Lebanese and International Arbitration Centre (LIAC-BBA), whose modern rules are in line with international arbitration practices.
It is worth noting that the International Chamber of Commerce and the Chartered Institute of Arbitrators also operate through their national committee (ICC) or local branch (CIArb).
The courts’ supportive and liberal arbitration policy
Following in the footsteps of French doctrine and jurisprudence, the Lebanese courts have proven to be lenient and innovative in their endeavour to uphold the arbitration agreements and awards.
National courts do not interfere in the arbitral process
The courts play a role in the arbitral process insofar as they assist the parties in overcoming any impediments to upholding their consent to arbitrate without examining the merits of the dispute.89 Examples include instances where the court is requested to appoint an arbitrator or an additional one,90 to rule on a challenge of an arbitrator,91 or to extend the time limit for the award issuance.92
The arbitral tribunal shall request the competent courts to impose sanctions against a defaulting witness or to issue letters rogatory.93
As necessary within the scope of application of international arbitration rules, Beirut courts shall substitute for the court of the seat of arbitration abroad.94
The Lebanese jurisprudence did not offer the judiciary any advantage over the arbitrators.95 By contrast, the Court of Cassation affirmed the principle of non-interference of national courts in the arbitration procedure and held that the courts are not entitled to grant anti-suit injunctions preventing the arbitral tribunal from assuming jurisdiction.96
Recourse against international arbitral awards
Indirect recourse against an arbitration award made abroad is available via appeal of the decision on the recognition or exequatur of the said award.97 On the other hand, the only possible remedy against international arbitral awards made in Lebanon is the action for setting aside.
Limited grounds for setting aside
The action for setting aside an international arbitration award shall be based on the same grounds set out for appeal of the decision granting recognition or exequatur to awards made abroad or international awards made in Lebanon, namely where:
- the award was made in the absence of an arbitration agreement or on the basis of an agreement that is null or void due to the expired time limit for rendering the award;
- the award was made by arbitrators not appointed in accordance with the law;
- the award was made ultra petita;
- the award was made without due regard to the rights of defence; and
- the award violated a rule of international public policy.98
The action for setting aside shall be filed before the Court of Appeals within 30 days from the notification of the award granted exequatur.99 The Court of Appeals’ decision is subject to cassation except if the award was rendered by amiable composition unless such award was set aside.100
The Lebanese courts have adopted a narrow approach regarding grounds for setting aside international arbitral awards. Courts even established self-governing principles to deal with these grounds in a way to prevent the award from being set aside. Some of these guiding principles will be briefly illustrated here below.
Only final awards are normally subject to setting aside
With the purpose of avoiding any obstacles to the arbitral procedure, the Lebanese courts limited the scope of the ‘setting aside’ action exclusively to final arbitral awards.101 In consequence, interim or partial awards including the award on the arbitral tribunal’s jurisdiction and any orders issued by the arbitral tribunal are not subject to setting aside unless they are immediately enforceable.102
The issues decided by the assisting judge are not subject to setting aside
The decisions rendered by the President of the First Instance Court, whether regarding the appointment or the challenge of an arbitrator, or the extension of the time limit to issue the award, are considered final and res judicata. Therefore, any application for setting aside the award based on grounds relating to the above issues shall be denied.
No setting aside in case of no damages
The Lebanese courts shall absolutely not set aside the arbitral award, on whatsoever ground, unless the requesting party adduces conclusive evidence of a damage resulting therefrom.103
The court shall not review the merits of the award
The Court ruling on an application for setting aside an award shall absolutely not review the merits of the award.104
To that end, the Lebanese courts have taken legal measures to thwart any party’s attempts to impel the court to delve into the merits of the dispute.
By way of example, it was held that a party is prevented from alleging misinterpretation of the applicable law based on the ground of public policy.105
Along the same vein, the court shall not examine whether the tribunal correctly evaluated the evidence and arguments and their impact on the decision.106
The courts have emphasised that each ground for setting aside the award shall be deemed as a separate one. For instance, a party shall not merge the ground that the arbitrators were not appointed in accordance with the law with the ground of violation of international public policy.107
The court shall not review the reasons on which the award was made
This is one of the most prevailing principles adopted by the Lebanese courts. Ruling on an action for setting aside the award excludes any control over the validity of the reasons on which it was made or their compliance with the applicable legal provisions.108
By the same token, a party is prevented from alleging, on the ground of ultra petita, that the tribunal misinterpreted the contractual provisions, thereby driving the court to review the reasons on which the award was based.109
In any event, any allegations that the reasoning is contradictory, distorted, defective or deficient110 shall not fall within the scope of review of the award on the grounds for setting aside.111
Violation of public policy should be limited to the award’s operative part
Lebanese courts shall perform a general examination of compliance with international public policy limited exclusively to the operative part of the award.112 Such control should not extend to the reasoning adopted by the arbitrators. Alternatively, it was held that even if the reasoning of the arbitral tribunal involves a violation of public policy, the court shall not review such reasoning.113
Due process is narrowly interpreted
The Code acknowledges a party’s ‘right to be heard’114 and the ‘rights of defence’,115 provided such rights are not abused or misused.116
The Lebanese courts have affirmed the arbitrators’ absolute duty to abide by the due process principles while demonstrating flexibility in interpreting said duty.117
For instance, the award was not deemed as contrary to due process in case:
- The arbitral tribunal failed to put forth the factual and legal grounds upon which the award was based under earlier discussion by the parties.118
- The arbitral tribunal based the award on the contractual provisions without inviting the parties to discuss said provisions, based on the fact that they are implicitly included in the case file.119
- The arbitral tribunal failed to treat the parties with equality unless such failure deprived a party from its right of defense or resulted in damages.120 In effect, the allegation of violation of due process requires the party to adduce sufficient and conclusive evidence that it was actually prevented from exercising its fundamental rights.121
- The arbitral tribunal failed to summon witnesses122 or to appoint an expert.123 Such failure has been neither deemed contrary to public policy nor to due process and the court shall not interfere in the arbitrator’s power to evaluate evidence.
Recognition of the estoppel doctrine
It is worth noting that the doctrine of ‘estoppel’ has been recognised by the Lebanese courts124 as a binding principle.125
In practice, the Lebanese courts have affirmed that a party’s failure to raise an objection to the non-compliance of a procedural or a substantive rule during the arbitral proceedings is deemed as a waiver of the right to do so. Such party is hence estopped from raising the objection during the proceedings for setting aside the award.126
As a consequence, a party is precluded from applying to set aside an arbitration award on the ground of the arbitral tribunal’s lack of jurisdiction if such jurisdictional challenge was not made before the issuance of the award.127
Conditions for granting exequatur under the LCCP
The award shall be deemed res judicata from the date of its issuance.128
International arbitral awards made in Lebanon and awards made abroad shall be recognised and granted exequatur if: (i) the requesting party adduces sufficient evidence of their existence and (ii) the award does not manifestly violate international public policy.129
Originals or certified copies of both the award and the arbitration agreement shall be produced.130 In the absence of a formal arbitration agreement, the courts have been lenient to an extent to accept any written document that would prove, even impliedly, the parties’ consent to arbitrate.
Appeal against an exequatur order
An action for setting aside the award entails ipso facto an appeal against its exequatur or preventing the judge from ruling on an application for exequatur.131
A decision dismissing the application on the recognition or exequatur of an award made abroad or in an international arbitration may be appealed.132
An appeal against the order granting exequatur to the above awards shall be based on the same grounds for setting aside an international arbitration award.133 Consequently, if a party’s appeal against the exequatur order was dismissed, the latter shall be prevented from applying for setting aside the same award, on the ground that the Court of Appeals’ decision has become res judicata.134
The notice of appeal against the exequatur decision shall be filed within 30 days from the date of notification of the first instance decision.135 The Court of Appeals’ decision is subject to cassation.
Lebanon is a New York Convention seat
Due to the complexity of enforcement measures between countries, it becomes imperative for arbitral forum shoppers to choose a New York Convention seat for international arbitration.
It is noteworthy that prior to joining the New York Convention, the Lebanese courts recognised and enforced foreign and international arbitral awards pursuant to the article 814 of the LCCP.136
Article VII(1) of the New York Convention provides that states parties to the Convention may apply their national laws where they are deemed more beneficial than the Convention. In point of fact, the Lebanese Court of Cassation considered the LCCP in some instances as broader and more advantageous than the New York Convention.137 In particular, article 814 excludes the recognition and enforcement of awards manifestly violating ‘international public policy’ while article V(2)(b) of the New York Convention precludes only awards violating ‘public policy’. In any case, the Lebanese courts usually refer to ‘international public policy’ in international arbitrations, which has a narrower scope than the ‘national public policy’ normally referred to in domestic arbitrations.138
An award set aside abroad may be enforced in Lebanon
As a consequence, and despite the provisions of article V(1)(e) of the New York Convention,139 an award set aside abroad may be granted exequatur by the Lebanese courts based on the provisions of national laws that are deemed more advantageous than the New York Convention.
Accordingly, the Lebanese courts still rule on the action for setting aside an award that was denied setting aside abroad,140even if such denial was based on the same grounds set forth in the LCCP.141
Lebanon has proven to be an excellent forum for international arbitration due to the characteristics of its liberal legal regime and jurisprudence, not to mention its regional location, accessibility and legal expertise. Lebanon has hence considerable advantages over other jurisdictions in the MENA region and among Arab countries and is capable of playing a key role in international arbitration.
In a nutshell, arbitrations seated in Lebanon will be conducted in an efficient, effective and contemporary arbitration-friendly environment that grants the parties freedom and flexibility throughout the process and above all, legal certainty that their arbitration agreement and award will be upheld and enforced, subject to internationally recognised minimum standards.
Furthermore, Lebanon’s modern arbitration regime has been largely influenced by the French laws and courts’ guiding principles, thus boasting analogous features. Since Paris is currently one of the leading choices of seats in institutional and ad hoc arbitrations worldwide,142 Lebanon should be, by analogy, granted greater consideration especially that parties have been recently looking beyond traditional ‘heavyweight’ arbitration hubs.143
So, those seeking less traditional arbitration forums would do well to consider Lebanon.
- C Helou, ‘Online Dispute Resolution / Online Arbitration’, a study presented at the ‘Forum on Legal & Legislative Structure of e-Transactions in the Arab Countries’, 24 - 26 February 2009, Beirut.
- N Darwazeh & AS El-Kosheri, ‘Arbitration in the Arab World: An Interview with Professor Ahmed Sadek El–Kosheri’ Vol.25(2008), JIA, issue 2, 203-210.
- The Lebanese Arbitration Law is not based on the UNCITRAL Model Law.
- The Lebanese Code of Civil Procedure was enacted by Decree No. 90 dated 16.09.1983. Articles 762 to 808 relate to domestic arbitration and articles 809 to 821 relate to international arbitration.
- French Decrees No. 80-354 of 14 May 1980 and No. 81-500 of 12 May 1981;See N Diab, ‘L’Arbitrage International en Droit Libanais’ (1994) Droit et Pratique du Commerce International, 181. For comparison, see the French Code of Civil Procedure( FCCP), articles1442–1527.
- The legislative Decree No. 20 of 23 March 1985 and Law No. 529 of 20 June 1996 made earlier amendments to the LCCP.
- One of the main amendments is the recognition of the right of the state and entities of public law to enter into arbitration in any contract of whatsoever nature, subject to authorisation( article 762 LCCP).
- The1952 Arab League Convention, the 1974 Convention Establishing the Inter-Arab Investment Guarantee Corporation, the Riyadh Convention on judicial cooperation between states of the Arab league, the 1987 Amman Arab Convention on Commercial Arbitration, and the 1988 Arab Convention on Commercial Arbitration.
- By virtue of Law No. 403 dated 5 June 2002.Lebanon ratified the Convention on 26 March 2003 which entered into force on 25 April 2003.
- By virtue of Law No.629 dated 23 April 1997 amended by Law No.189 dated 24 May 2000. Lebanon ratified the NYC on 11 August 1998 which entered into force on 9 November 1998.
- Article 810 of the LCCP (international arbitration) reads: ‘The arbitration agreement may appoint, directly or in reference to arbitration rules, the arbitrator or arbitrators or the procedure of their appointment.’
- Beirut First Instance Court, 3rd Chamber, Decision No. 152/36/99 dated 29/04/2003, LRAIA(2004), Vol.30, 61. See also Beirut Court of Appeals, 3rd Chamber, Decision No. 764/99 dated 3/06/99,LRAIA(2000), Vol.14/15, 95.
- LCCP, article 814(2).
- President of Beirut First Instance Court, Decision No. 48/83 dated 9/12/2015,JIA, (2016), Vol. 30, 379: In order to grant exequatur to the award, the decision was based on article II (2) of the New York Convention rather than on the requirements of the LCCP.
- LCCP, article 763( Domestic Arbitration)reads:’The arbitration clause shall only be valid if made in writing in the main contract or in a document that refers to such contract.’ Similarly, article1443 FCCP reads: ‘A peine de nullité, la convention d’arbitrage est écrite...’
- LCCP, article 766.
- Court of Cassation, 5th Chamber, decision No. 141/2001 dated 20/11/2001; See also Court of Cassation, 5th Chamber, decision No. 22/2002 dated 19/10/2002.
- Beirut Court of Appeals , 3rd civil chamber, Decision dated 4/04/2000.
- LCCP, article 809: a replica of article 1492 of the former FCCP and of article 1504 currently in force: ‘Est international l’arbitrage qui met en cause des intérêts du commerce international’.
- Beirut Court of Appeals, 3rd Chamber, Decision No. 767/2008 dated 20 /05/ 2008, JAA( 2009), Vol. 1, 385.
- As defined by the UNCITRAL Model Law, article 1(3).
- LCCP, article 762(1) (domestic arbitration).
- LCCP, article 762(2) (3)( domestic arbitration)and article 809(2)(international arbitration).See also article 77 which confirms the possibility to refer to arbitration disputes relating to concessions or BOTs, following the amendments made by Law 440/2002.
- LCCP, article 762.
- LCCP, article 767( domestic arbitration)and article 813( international arbitration).
- LCCP, article 795(4).
- Court of Cassation, 5th Chamber, Decision No. 4 dated 11/1/2005, LRAIA(2005), Vol. 33 , 62. Court of Cassation, 5th Chamber, Decision No. 31 dated 20/2/2003, Al Adl ( 2006),610.
- Lebanese Code of Obligations and Contracts (COC), article 1037. E Tyan, ‘Le droit de l’arbitrage’, Librairie Antoine 1972, para 22.
- COC, article 1040.
- LCCP, article 108. Lebanese Code of Commerce, article 490.
- Beirut Court of Appeals, 3rd Chamber, Decision No. 180 dated 31 January 2008, JAA (2009) Vol. 1, 351.
- Article 153 of the Customs Law; article 155 of the Code of Money and Credit.
- Article 5 of the Law No. 34 of 5 August 1967 amended by Law No. 9-639 of 6 February 1975. Beirut First Instance Court, 4th Chamber, Decision 221/2007 dated 16 October 2008, LRAIA (2008), Vol. 47,64.
- Court of Cassation, 5th Chamber, No. 31 dated 20/2/2003, Al Adl (2006), Vol. 2, 610 held: ‘The mandatory rules imposed on the contract do not necessarily involve the arbitral clause and jurisdiction at least in international arbitration where the principle of separability prevails....’ See also Court of Cassation, 5th Chamber, No. 4 dated 11/1/2005, LRAIA (2005), Vol. 33, 62.
- Beirut First Instance Court, 3rd Chamber,Decision No. 376/74/2013 dated 14/7/2015, LRAIA, Vol.71/72,65.
- Court of Cassation, 4th Chamber, 19/07/2001, Al Adl (2003), 65; ICC Arbitration Case 12193, June 2004, JAA( 2009), No. 2, 449.( On the ground that the international arbitrator is not bound by the rules of a single legal system but by ‘transnational rules’).
- Court of Cassation, 4th Chamber, Decision No. 3 dated 14 /04/ 2005, LRAIA ( 2005)Vol. 40, 83. Court of Cassation, 5th Chamber, No. 4/2005 dated 11 /01/ 2005, LRAIA (2006) Vol. 33, 62. See also H Slim, ‘Arbitration in Commercial Agency contracts and the principles of Hierarchy of rules of law’,LRAIA (2005), Vol. 40,57.
- Based on article 1037 COC and articles 762-765 LCCP.
- E Tyan, ‘Droit commercial’,Vol.2, 1970, No. 1314.
- Beirut First Instance Court, 3rd Chamber, Decision No. 376/74/2013 dated 14/7/2015, LRAIA, Vol. 71/72,65.
- This principle is, however, not expressly set forth in the LCCP. See Beirut Court of Appeals, 3rd Chamber, Decision No. 192 dated 5 February 2008, JAA (2009),Vol. 1, Commentaries by FH Chahine, M Soumrani and C Helou, 286-309. See also Beirut Court of Appeals, 3rd Chamber, Decision No. 1142/2015 dated 21/9/2015.
- Beirut Court of Appeals, 3rd Chamber, Decision dated 22/03/2001, LRAIA (2001) Vol. 18, 24.
- LCCP, article 785, similar to FCCP, article 1465: ‘Le tribunal arbitral est seul compétent pour statuer sur les contestations relatives à son pouvoir juridictionnel.’
- Beirut Court of Appeals, 3rd Chamber, Decision No. 1142/2015 dated 21 September 2015. President of Beirut First Instance Court, Decision No. 31/63 dated 10/9/2015.
- Beirut Court of Appeals, 3rd Chamber, Decision No. 51194/2014 dated 26 February 2015, LRAIA (2014) Vol. 69/70, 26. Court of Cassation, 5th Chamber, Decision No. 160/2003 dated 20 November 2003, LRAIA (2004), Vol. 30, 52.
- Court of Cassation, 5th Chamber , Decision dated 20 November 2001.
- Court of Cassation, 5th Chamber, No. 132 dated 29/10/2002.
- LCCP, article 763 similar to FCCP, article 1443.
- Beirut First Instance Court,3rd Chamber, Decision No. 152/36/99 dated 29 April 2003, LRIAA (2004), Vol. 30, 61. See also Beirut Court of Appeals, 3rd Chamber, Decision No. 764/99 dated 3/06/99, LRAIA (2000), Vol. 14/15 , 95.
- LCCP, article 813.
- COC, article 285. Beirut Court of Appeals, 3rd Chamber, Decision No. 763 dated 2 April 2004. Beirut Court of Appeals, 10th Chamber, Decision dated 28 December 2000.
- COC, articles 313 and 315.
- COC, article 225.
- Beirut Court of Appeals, 10th Chamber, Decision dated 7 January 2004. The same applies to merger of companies and banks .See Law 192 /1993 on Facilitating Bank Merger, article 4(1).Court of Appeals (North Lebanon), Decision No. 284 dated 22/03/2004, LRAIA ( 2004), Vol. 39, 57. See G Mahmassani,’The effect of the extension of the Arbitral Agreement to Third Parties,’ LRAIA ( 2008), Vol. 47,16.
- Beirut Court of Appeals, 3rd chamber, No. 529 dated 10 April 2003, JAA (2009), Vol. 1,260.
- President of Beirut First Instance Court, Decision No. 31/63 dated 10 September 2015 (this decision confirmed the recognition of the doctrine, however, did not apply it for lack of jurisdiction.)
- Beirut Court of Appeals, 3rd Chamber, Decision No. 192 dated 5 February 2008, JAA (2009),Vol. 1, Commentaries by FH Chahine, M Soumrani and C Helou, 286-309.
- Court of Cassation, 5th Chamber, Decision dated 27 April 2006, LRAIA ( 2006) 38, 33. The Court was inspired by the French case law. See Korsnas Marma v Durand-Auzias, Paris Court of Appeals, 1st Chamber(1988), Rev. arb. 1989, 691.
- LCCP, article 767. Similarly, article 1446 of the FCCP.
- LCCP, article 810 .However, in domestic arbitration, article 763 requires that the arbitration clause designates the arbitrator(s) or the method of their appointment under penalty of annulment.
- LCCP, article 810. Article 763 (domestic arbitration) is congruent with article 810 (international arbitration) except that it grants the judge the power to issue a decision declaring the nullity of the arbitration clause if deemed obviously void and insufficient to appoint the arbitrator(s).
- President of Beirut First Instance Court, Decision No. 31/63 dated 10/9/2015.
- Unlike the UAE laws (recent amendment dated 18 September 2016 of article 257 of the Federal Criminal Code ) whereby an arbitrator who acts contrary to the duty of fairness and impartiality shall be punished by temporary imprisonment.
- LCCP, article 811.
- LCCP, article 813. See Court of Cassation, 5th Chamber, Decision dated 27 April 2006, LRAIA (2006), Vol. 38, 33, where the Court based its decision on article 17 of the ICC Arbitration Rules that refers to Lex Mercatoria.
- LCCP, article 813.
- LCCP, article 813. See M Soumrani, ‘Le droit applicable au fond du litige’, LRAIA (2000),Vol. 14-15, 26.
- This provision on interim measures has been added to article 789 LCCP by virtue of Law 440/2002. However, prior to such amendment, the Lebanese courts regularly recognised such power conferred upon the arbitrator(s).
- LCCP, article 783
- UAE Code of Civil Procedure, article 211; Syria Arbitration Law (No. 4 of 2008), article 32(2); Qatar Code of Civil and Commercial Procedure, article 200; Jordan Arbitration Law( No. 31 of 2001), article 32(d).
- Article 41 of the UAE Law on Evidence:’The witness will take the following oath: ‘I swear by the Mighty God to say all the truth and nothing but the truth ‘.
- Dubai Court of Cassation, No. 503/2003, 15/04/2005: the award was denied enforcement due to failure of the arbitrator to put the witness under the specific oath formula.
- Beirut Court of Appeals, 3rd Chamber, decision No. 1014/2003 dated 9/10/2003.
- LCCP, article 784.
- Beirut Court of Appeals, 3rd Chamber, decision No. 1014 dated 3 /7/ 2008, JAA (2009), No. 1,195. See also Court of Cassation, 5th Chamber, No. 27 dated 2/2/2006.
- LCCP, article 773.
- Court of Cassation, 5th Chamber, Decision No. 98 dated 29/5/2003, LRAIA (2003), Vol. 27, 25.
- Court of Cassation , 5th Chamber, Decision No. 4/2016 dated 13/7/2016.;Court of Cassation , 5th Chamber, Decision dated 18/4/2004.
- UAE Code of Civil Procedure, article 212(4): ‘The award shall be issued within the United Arab Emirates.’
- Article 212(5) of the UAE Code of Civil Procedure. See Dubai Court of Cassation, Decision No. 319/2009 dated 17/11/2009: the Court held that failure to abide by these formalities would render the award invalid.
- Court of Cassation, 5th Chamber, Decision No. 60 dated 29/1/2002. Court of Cassation, 5th Chamber, No. 98 dated 27/4/2006 ,Al Adl (2006) Vol. 3,1022.
- Court of Cassation, 5th Chamber No. 98 dated 27/4/2006, Al Adl (2006) Vol. 3,1022.
- Beirut Court of Appeals, First Chamber, Decision No. 890/2014 dated 18/06/2014; Court of Cassation, 5th Chamber, Decision No. 27 dated 10/7/2007.
- LCCP, article 791.
- S Saleh, ‘The Recognition and Enforcement of Foreign Arbitral Awards in the States of the Arab Middle East’, in Contemporary Problems In International Arbitration 340, 348-49 (Julian D. M. Lew ed., 1987).
- LCCP, Arts. 772 and 810.
- Court of Cassation, 5th Chamber, Decision No. 147/2007 dated 13 November 2007 where the Court held that the institutional arbitration rules reflect the party autonomy.
- President of Beirut First Instance Court, Decision No. 31/63 dated 10/9/2015. LCCP, article 764. E Eid, ‘Encyclopedia of Civil Procedure, Proof and Enforcement,’ Vol.10, No. 45,202. See also J Robert, ‘L’arbitrage, Droit Interne, Droit International Privé’, 6th edition ,177.
- Article 771 LCCP requires an odd number of arbitrators. If the number is even, the president of the First Instance court shall be requested to bridge that gap by appointing one more arbitrator.
- Article 770 LCCP provides that the challenge shall be submitted to the First Instance Court within 15 days after being notified of the arbitrator’s appointment or becoming aware of the reasons giving rise to such challenge.
- The president of the First Instance court shall grant such extension under article 773 LCCP.
- LCCP, article 779.
- LCCP, article 810.
- T Clay, ‘L’appui du juge à l’arbitrage’, Cahiers de l’arbitrage, 1/4/2011, No. 2,331.
- Court of Cassation, 5th Chamber, Decision dated 20/11/2003, LRAIA(2004), Vol. 30, 52.
- LCCP, article 817.
- LCCP, article 819 which refers to article 817.
- LCCP, article 819.
- LCCP, article 804, referred to by article 821.
- Court of Cassation, 5th Chamber, Decision No. 17 dated 31/1/2007.
- Such reasoning is based on article 615 of the LCCP that addresses courts’ judgments. Court of Cassation, 5th Chamber, Decision No. 23 dated 2/2/2006. Court of Cassation, 5th Chamber, No. 19/2002 dated 19/2/2002, LRAIA (2002), Vol. 22, 64.
- Court of Appeals (North Lebanon), 5th Chamber, Decision No. 95/2010 dated 28/1/2010, JIA (2010), Vol. 2 ,No. 3,153. Beirut Court of Appeals, First Chamber, Decision No. 731 dated 19/5/2015, LRAIA (2014), Vol. 71/72,55. Court of Cassation, 5th Chamber, Decision No. 41 dated 11/3/2003.
- F Nammour, ‘Droit et pratique de l’arbitrage interne et international,’3rd edition, No. 597,283.
- Court of Cassation, 5th Chamber, Decision No. 136 dated 31/10/2002.
- Beirut Court of Appeals, First Chamber, Decision No. 184/2016 dated 10/2/2016, JIA(2016), Vol. 30, 350. Court of Appeals (North Lebanon), 5th Chamber, Decision No. 15/2015 dated 15/1/2015
- Court of Cassation, 5th Chamber, Decision No. 70 dated 24/3/2005.
- Beirut Court of Appeals, First Chamber, Decision No. 890/2014 dated 18/06/2014; Beirut Civil Court of Appeals, 3rd Chamber, Decision No. 454/2009 dated 26/03/2009, JAA (2009) No. 3 ,177 held that examining whether the arbitrator had relied on the expert report or upon contractual provisions does not fall within the scope of review for setting aside. See J Robert, ibid, fnte 85, No. 87, 72. Also F Nammour, ibid,fnte108, No. 600:’Le juge de l’annulation ne peut contrôler l’exactitude ou l’inexactitude de la solution adoptée par la sentence c.-à-d. son mal-fondé ou bien-fondé ou sa conformité à la loi.’
- Beirut Court of Appeals, First Chamber, Decision No. 1253/2010 dated 7/10/2010. Court of Cassation, 5th Chamber, Decision No. 4 dated 11/1/2005, LRAIA, Vol. 33,62.
- 110 Court of Appeals( North Lebanon),Decision No. 26/2011 dated 20/1/2011, JIA(2016), Vol. 30, 397. Court of Cassation, 5th Chamber, Decision dated 10/12/2002.
- Court of Cassation , 5th Chamber, Decision No. 112 dated 24/6/2003;
- Beirut Court of Appeals, First Chamber, Decision No. 744/2014 dated 21/5/2014
- Court of Cassation, 5th Chamber, Decision No. 144 dated 28/10/2004.
- LCCP, article 373 (the audi alterem partem rule or ‘principe du contradictoire’.)
- LCCP, article 7 (‘droit de la défense’).
- LCCP, articles 10, 11, 748.
- Beirut Court of Appeals, First Chamber, Decision No. 731 dated 19/5/2015, LRAIA(2014), Vol. 71/72,55. Also Court of Cassation, 5th Chamber, Decision No. 11 dated 21/1/2003, JAA (2009), No. 4,437: The arbitrator acting as amiable compositeur shall observe the requirements of due process and hence shall not base its decision on a rule or a fact not alleged by the parties. However, the consequences resulting from that failure cannot be corrected by recourse to set aside the award. See article 777, LCCP.
- Court of Cassation, 5th Chamber, Decision No. 25 dated 7/2/2006, JAA, No. 37, 39, held that the arbitrator is not bound to put under discussion by the parties the facts from which a party’s fault was deduced since they were evidenced in the case file.
- Court of Cassation, 5th Chamber, Decision No. 98/2006 dated 27/4/2006, Al Adl (2006) Vol. 3,1022. The French courts and doctrine adopted similar conclusions. See C Seraglini and J Ortscheidt, ‘Droit de l’arbitrage interne et international’,Ed. Montchrestien-Lextenso (2013), 342.
- Court of Cassation, 5th Chamber, Decision dated 11/3/2003, JAA(2009), No. 4,437.
- Court of Appeals (North Lebanon), 5th Chamber, Decision No. 95/2010 dated 28/1/2010, JIA (2010), Vol. 2, No. 3, 153. Court of Cassation, 5th Chamber, Decision No. 11 dated 21/1/2003.
- Beirut Court of Appeals, First Chamber,Decision No. 290/2016 dated 8/3/2016. See also Y Derains, ‘La pratique de l’administration de la preuve dans l’arbitrage commercial international’, Rev. Arb ( 2004), 781ets.
- Beirut Court of Appeals, First Chamber, Decision No. 201/2016 dated 16/2/2016, JIA (2016),No. 31/32,508.
- Based on article 100 of Al-Majallah which reads: ‘If any person seeks to disavow any act performed by itself, such attempt is entirely disregarded.’
- 1Beirut Court of Appeals, 3rd Chamber, Decision No. 1015 dated 3/7/2008, JAA ( 2009) Vol. 1,191. Court of Cassation, 5th Chamber, Decision No. 126 dated 26 /08/ 2004, LRAIA (2004), Vol. 32, 12. Beirut Court of Appeals, 9th Chamber, Decision No. 773 dated 28 /04/2013.
- Court of Appeals( Mount Lebanon), 1st Chamber, Decision No. 28/2010.5 dated 4/3/2010, JIA, (2011), Vol. 3, No. 1,80. Court of Appeals (North Lebanon), 5th Chamber, Decision No. 95/2010 dated 28/1/2010, JIA (2010), Vol. 2 ,No. 3, 153. Court of Cassation, 5th Chamber, No. 142 dated 20/11/2001, Baz (2001), 434; also Court of Cassation , 5th Chamber, Decision No. 4 dated 11/1/2005, LRAIA, Vol. 33,62. Beirut Court of Appeals, First Chamber, Decision dated 1/2/2010.
- Beirut Court of Appeals, First Chamber, Decision No. 890/2014 dated 18/06/2014; Court of Cassation, 5th Chamber, Decision No. 126, 26/08/2004, LRAIA ( 2004), Vol. 32, 12.
- LCCP, article 794, referred to by article 815.
- LCCP, article 814.
- Idem for awards made abroad. LCCP, article 793 for international awards made in Lebanon.
- LCCP, article 805(2) referred to by article 821.
- LCCP, article 816. There is no list of grounds for this Appeal.
- LCCP, articles 817 and 819.
- Court of Cassation, 5th Chamber, Decision No. 162 dated 27/12/2001. See also Court of Cassation, 5th chamber, Decision No. 143 dated 20/11/2001.
- LCCP, article 818.
- LCCP, article 814(1): ‘Arbitral awards shall be recognised and granted exequatur if the requesting party proves its existence and if the award does not manifestly violate international public policy.’ See also Lew, ‘The recognition and Enforcement of Arbitration Agreements and Awards in the Middle East,’ Arb Intl (1985), Vol. 1, No. 2, 169.
- Court of Cassation, 5th Chamber, Decision No. 141 dated 20 /11/ 2001, LRAIA (2002), No. 21/22, where the Court held that the New York Convention is only applicable if its provisions are more beneficial than the national laws.
- Beirut Court of Appeals, 3rd Chamber, Decision No. 301 dated 21/02/ 2008, JAA (2009), 310.
- NYC, article V(1):‘Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought ,proof that: (….)(e)The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
- Similarly to French courts. See French Court of Cassation, 1st Civ,, Rev. arb. 2007, 507. Note E Gaillard. Paris Court of Appeals,14 /1/1997, Rev. arb. 1997, Note Fouchard.
- LCCP, articles 817 and 819. See the Court of Cassation, 5th Chamber, No. 98 dated 27/4/2006 ,Al Adl (2006) Vol. 3,1022:reversing the decision of the Court of Appeals which refused to grant the exequatur. The Court of Cassation held: ‘While the New York Convention did not exclude the role of the judge in the enforcing country, the Lebanese judge has the power to review the request for exequatur of an arbitral award rendered outside Lebanon according to Lebanese legislation and has the discretion to exercise its judgment on the grounds of annulment referred to in Lebanese legislation, notwithstanding any decision rendered in the country where the award was issued to dismiss the request for annulment, despite those grounds for annulment being the same[…]’.
- See Paris advantages as a seat for arbitration: www.parisarbitration.com/paris-advantages/773-2/ (last accessed 23/02/2017).
- Is Legal Reform Enough to Succeed in the ‘Battle of the Seats’? http://kluwerarbitrationblog.com/2014/09/30/is-legal-reform-enough-to-succeed-in-the-battle-of-the-seats/ (last accessed 24/02/2017).