International Arbitration 2024 Comparisons

Over the years, Lebanon has established itself as a reliable seat for international arbitration, ranking high on the list of the most frequently considered seats in the Middle East and North Africa (MENA) region.

This is partly due to the fact that there are a number of skilled and experienced arbitration practitioners in Lebanon who have a deep understanding of different legal systems, including French civil law and English common law, which contributes to promoting Lebanon as an arbitration-friendly jurisdiction and a trustworthy seat.

In addition, Lebanon has a sophisticated and dependable legal framework. The current Lebanese Arbitration Law, codified in the new Civil Procedure Code (NCPC) (Articles 762 to 821), is largely inspired by the 1981 French arbitration law, which preceded the current French legislation of 2011, and is considered to be pro-arbitration. The NCPC ensures that arbitral proceedings are conducted in a flexible and timely manner and that arbitral awards are promptly recognised and enforced.

In addition, the Beirut Chamber of Commerce and Industry established the Lebanese Arbitration and Mediation Center (LAMC) in 1995, to provide administrative and supervisory services for arbitration in Lebanon. The LAMC have recently undertaken a comprehensive overhaul of their arbitration rules in order to align with the latest trends and best practices in the field of arbitration. Arbitrations initiated in Lebanon are also often referred to international and regional arbitration institutions, such as the International Chamber of Commerce (ICC) and the Dubai International Arbitration Centre (DIAC), the rules of which Lebanese courts are familiar with.

For all these reasons, Lebanon is considered one of the most arbitration-friendly jurisdictions in the Middle East, where arbitration is considered a standard method of settling disputes.

Trends in Arbitral Decisions in Lebanon

In recent years, there have been a number of pro-arbitration decisions confirming the liberal approach of the Lebanese courts to arbitration.

Arbitration arising from commercial representation agreements

The first issue that has received some attention concerns the arbitrability of disputes arising from commercial representation agreements. By way of background, Decree-Law 34/67 (DL 34/67) of 5 August 1967 governs commercial representation in Lebanon. Article 5 of DL 34/67 grants Lebanese courts jurisdiction to settle disputes arising from commercial representation agreements, which has traditionally been considered exclusive, with the aim of protecting the interests of Lebanese agents/commercial representatives against those of their foreign principals. Accordingly, disputes arising from commercial representation agreements have historically been considered non-arbitrable.

In a recent decision, the Court of First Instance of Beirut concluded that Article 5 of DL 34/67 granted exclusive jurisdiction to Lebanese courts at the expense of other state judicial bodies, as opposed to non-state bodies such as arbitral tribunals (Court of First Instance of Beirut, 14 July 2015, Decision 376/74/2013). According to the Court of First Instance of Beirut, the provisions of Article 5 of DL 34/67 thus aim to prevent parties from settling disputes arising from commercial representation agreements only before foreign state courts only, but not before arbitral tribunals. Such an exclusion is particularly relevant in the context of anti-suit injunctions. It follows that the jurisdiction conferred on Lebanese courts by Article 5 of DL 34/67 would not have the effect of rendering disputes arising out of commercial representation agreements non-arbitrable.

Interpretation of arbitration agreements

Another interesting development in the sphere of Lebanese arbitration law is the increasingly liberal interpretation of arbitration agreements and their validity by Lebanese courts.

A telling example is a decision rendered by the Court of First Instance of Beirut, which held that an invalid term contained in an arbitration agreement does not have the effect of nullifying the entire arbitration agreement (Court of First Instance of Beirut, 5 June 2013, Decision 24/63).

Similarly, the same Court of First Instance of Beirut held that insolvency proceedings do not lead to the nullity of arbitration agreements entered into by the insolvent debtor, and that the liquidator is obliged to enforce arbitration agreements in the same manner as any other act of disposition or agreement entered into by the debtor prior to the declaration of the debtor’s bankruptcy (Court of First Instance of Beirut, 13 February 2013, Decision 9/51).

In the same decision, the Beirut Court of First Instance held that the absence of an express reference to the number of arbitrators does not lead to the nullity of the arbitration agreement.

In addition, the Beirut Court of Appeal recently reaffirmed a well-established jurisprudential trend that qualifies an arbitration agreement as an administrative act that falls within the scope of the day-to-day management of a company and therefore does not require prior special approval by the company’s board of directors.

Extension of arbitration to non-signatories

Finally, with regard to the extension of arbitration agreements to non-signatories, the Court of First Instance of Beirut reaffirmed that a non-signatory is bound by an arbitration agreement if it has participated in the negotiation and/or implementation of the underlying agreement, so as to confirm its intention to be bound by it (Court of First Instance of Beirut, 14 January 2013, Decision 2/44).

The industries in which arbitration is the predominant method of dispute resolution are essentially construction, banking and finance, real estate, telecommunications and franchising.

In addition, following the signing of offshore oil and gas exploration and production agreements in Lebanon during 2018, and given that these agreements include an ICC arbitration clause, it is reasonable to expect that arbitration will be used as the prevailing dispute resolution method in the newly formed oil and gas industry.

The LAMC (see 1.1 Prevalence of Arbitration) is the main institution administering domestic arbitration in Lebanon. The Rules of Arbitration of the LAMC have been substantially revised and the new version entered into force on 1 July 2024. These new Rules reflect the latest trends and practices in the field of international arbitration and are inspired by the new rules adopted by regional arbitration centres such as the Cairo Regional Centre for International Commercial Arbitration (CRCICA) and the DIAC.

In addition, the Beirut Bar Association established the Lebanese and International Arbitration Centre of the Beirut Bar Association (LIAC-BBA) in 2014 to administer domestic and international arbitrations. The LIAC-BBA has issued its own arbitration rules, but has not yet published the number of cases currently registered.

In addition to the LAMC, the ICC is widely used to administer domestic arbitrations in Lebanon and is also the leading institution to administer international arbitrations seated in Lebanon.

Other regional arbitral institutions are also used in Lebanon, particularly when the parties to the dispute are based in Middle Eastern countries. These institutions include the DIAC, the CRCICA, the Abu Dhabi International Arbitration Centre (ADIAC) and the Bahrain Chamber for Dispute Resolution (BCDR-AAA).

No new arbitral institutions were established in Lebanon in 2023–24.

There are no specific courts in Lebanon that are designated to hear disputes relating to international arbitrations and/or domestic arbitration.

With respect to setting aside of arbitral awards, as discussed in 11.1 Grounds for Appeal, the application for setting aside should be filed with the court of appeal of the place where the arbitral award was rendered (Article 819(3) of the NCPC).

Regarding the enforcement of arbitral awards, as explained in 12.2 Enforcement Procedure, it is the President of the Court of First Instance of Beirut who issues the order granting exequatur to international arbitral awards.

As mentioned in 1.1 Prevalence of Arbitration, the Lebanese Arbitration Law is found in Articles 762 to 821 of the NCPC. The Lebanese Arbitration Law is not based on the UNCITRAL Model Law, but rather on the former French Arbitration Law of 1981, with some variations that mainly relate to domestic arbitration.

The Lebanese Arbitration Law distinguishes between domestic arbitration, which is governed by Articles 762 to 808 of the NCPC, and international arbitration, which is governed by Articles 809 to 821 of the NCPC. According to Article 809 of the NCPC, an arbitration is international in nature if it concerns international commercial interests. In light of the definition set forth in Article 809 of the NCPC, Lebanese case law considers that the criteria determining the nature of an arbitration are economic (Court of Appeal of Beirut, 21 March 2001, Decision 492/2001) and that an arbitration is international in nature if the underlying dispute involves a cross-border flow of goods or funds (Lebanese Court of Cassation, 27 April 2006, Decision 98/2006).

Compared to domestic arbitration, international arbitration is more flexible and liberal in that the parties are free to choose procedural rules other than those contained in the NCPC (Article 811 of the NCPC). However, where Lebanese law is applicable to an international arbitration, Articles 762 to 792 of the NCPC, which govern domestic arbitration, apply unless the parties expressly agree otherwise (Article 812 of the NCPC).

There have been no recent major reforms to the Lebanese Arbitration Law. However, the current Lebanese Arbitration Law has been amended on a few occasions since its promulgation in 1983.

In June 1996, paragraph 2 of Article 804 of the NCPC (applicable to international arbitration) was amended to allow for the challenge of decisions of the court of appeal in matters of annulment before the Court of Cassation.

In July 2002, further amendments to the Lebanese Arbitration Law were introduced, mainly concerning state participation in arbitral proceedings. The 2002 amendments clarified which administrative disputes are arbitrable and which disputes fall under the exclusive jurisdiction of the Lebanese administrative courts. It was also clarified that arbitration clauses and arbitration agreements (compromis d’arbitrage) entered into by the state, by state organs and/or by legal persons under public law are now subject to prior approval similar to that required for administrative contracts.

While the provisions of the NCPC governing domestic arbitration provide that arbitration agreements must be in writing and contain the appointment of arbitrators or a method for such appointment (Article 763 of the NCPC) in order to be valid, the section of the NCPC governing international arbitration contains no specific or formal requirements for the validity of arbitration agreements.

In addition, as mentioned in 2.1 Governing Law, parties to international arbitrations may agree, pursuant to Article 812 of the NCPC, to exclude the application of the provisions of the NCPC governing domestic arbitration.

In recent years, the Court of First Instance of Beirut has held that the rules of validity applicable to domestic arbitration are not applicable in the context of international arbitration (Court of First Instance of Beirut, 28 April 2010, Decision 12/42). This approach seems to be constantly reiterated by this court (Court of First Instance of Beirut, 30 December 2014).

The section of the NCPC dealing with international arbitration does not contain any provision defining the arbitrability ratione materiae of disputes, nor has there been any case law providing guidance on the criteria to be applied in identifying matters that cannot be submitted to arbitration.

In domestic arbitration, Articles 762 and 765 of the NCPC exclude arbitration in matters that cannot be the subject of a transaction.

Article 1037 of the Lebanese Civil Code – also known as the Code of Obligations and Contracts (COC) – defines matters that cannot be the subject of a transaction as follows:

• personal status matters, including marriage, divorce, custody of children and inheritance;
• matters of public policy; and
• personal rights that are not commercial.

Public Policy and Social Issues

With respect to public policy issues, Lebanese courts generally refrain from excluding the arbitrability of a matter solely on the basis that it involves a public policy issue (Court of Appeal of Beirut, 19 December 2000, Decision 1417/2000; Court of First Instance of Mount Lebanon, 25 June 2001, Decision 25/2001).

Other matters that may not be referred to arbitration in Lebanon include those that fall under the exclusive or mandatory jurisdiction of state courts, such as commercial representation agreements. However, as indicated in 1.1 Prevalence of Arbitration, Lebanese case law has in certain cases accepted the arbitrability of disputes arising from commercial representation agreements.

Similarly, maritime contracts may fall under the exclusive or mandatory jurisdiction of state courts. Pursuant to Article 212-1 of the Lebanese Code of Maritime Commerce, any clause which directly or indirectly seeks to derogate from the jurisdiction of the Lebanese courts in matters relating to bill of lading is null and void.

Article 79 of the Lebanese Code of Labour subjects all labour and social security disputes to the exclusive jurisdiction of the Labour Arbitration Boards, which are state courts composed of a presiding judge, an employers’ representative and an employees’ representative. Lebanese courts have interpreted the jurisdiction of the Labour Arbitration Boards as a matter of public policy, thereby ruling in favour of the exclusivity of this jurisdiction at the expense of the parties’ agreement to arbitrate (Lebanese Court of Cassation, 26 April 2012, Decision 79/2012). It should be noted that the non-arbitrability of labour disputes does not apply to collective labour agreements.

Bankruptcy

With respect to bankruptcy matters, according to Article 490 of the Lebanese Code of Commerce and Article 108 of the NCPC, the courts of first instance of the jurisdiction in which the bankrupt business/merchant is domiciled have exclusive jurisdiction to declare bankruptcy and to hear the disputes arising therefrom. However, as mentioned in 1.1 Prevalence of Arbitration, the liquidator is obliged to enforce arbitration agreements that were concluded prior to the bankruptcy and in respect of disputes not related to the bankruptcy.

Arbitrating Disputes

Regarding the arbitrability ratione personae of disputes, prior to the 2002 amendment to the NCPC (see 2.2 Changes to National Law), the principle of the arbitrability of public contracts in general – and administrative contracts in particular – was not generally observed. With the 2002 amendment, Article 762(2) of the NCPC explicitly recognised the arbitrability of domestic public contracts. Article 762(3) of the NCPC also required that arbitration agreements contained in administrative contracts be approved by the Council of Ministers. The principle of arbitrability of international public contracts was enshrined in Article 809 of the NCPC, as amended in 2002.

Lebanese courts tend to apply classic conflict-of-law rules to determine the law governing the arbitration agreement, regardless of the place of arbitration. In this context, the Court of Cassation held that “the proof of the arbitration agreement and its continuity over time, ie its extension, is governed in Lebanon either by the law applicable to the effects of this agreement or by the law of the place where the agreement was concluded, in accordance with Article 139 para. 1 of the NCPC”, which codifies the conflict-of-law rules (Lebanese Court of Cassation, 17 June 1999, Decision 77/99).

Regarding the approach of the national courts with respect to the enforcement of arbitration agreements, the NCPC does not contain any provision requiring state courts to decline their jurisdiction when a party invokes an arbitration agreement, whether in domestic or international arbitration.

Nevertheless, it is a well-established practice in Lebanese case law that state courts refer parties to arbitration if one of the parties objects to their jurisdiction (Court of First Instance of Mount Lebanon, 31 July 2003, Decision 20/2003; Court of First Instance of North Lebanon, 15 January 2004, Decision 28/2004; Court of First Instance of Beirut, 16 October 2008, Decision 10221/2007). This position is consistent with the provisions of Article II (3) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).

The principle of the separability of arbitration agreements is not expressly provided for in the NCPC, but Lebanese courts have consistently held that “in arbitration, the arbitration agreement is independent of the underlying contract in which it is contained [...]” (Court of Appeal of Beirut, 3 April 2003, Decision 464/2003). Consequently, the invalidity of a main contract does not entail the invalidity of the arbitration agreement contained therein (Court of Appeal of Beirut, 20 May 2008, Decision 767/2008).

Article 810 of the NCPC provides for a clear and unrestricted right to appoint arbitrators or to agree on the method of their appointment directly or by reference to specific arbitration rules. In this respect, Lebanese courts have consistently confirmed that parties may bring their disputes to the knowledge of a legal entity (Court of Appeal of Beirut, Decision 464/2003; Court of First Instance of Beirut, 25 January 1999, Decision 43/1999; and Court of First Instance of Beirut, 5 March 2007). In any event, arbitrators will always be natural persons, even if they sometimes settle disputes on behalf of the institution that administers and supervises the arbitration.

Moreover, the NCPC does not require arbitrators to have any special qualifications, so parties have complete freedom to choose whomever they wish. It is generally accepted in Lebanese case law that members of the judiciary may act as arbitrators without any restrictions (Lebanese Court of Cassation, 9 November 2004, Decision 150/2004).

While the NCPC provisions governing domestic arbitration require arbitral tribunals to be composed of an uneven number of arbitrators (Article 771 of the NCPC), this is not the case in international arbitration, as Article 810 of the NCPC allows for the appointment of arbitrators by reference to specific arbitration rules, which, in turn, may provide for the formation of an arbitral tribunal composed of an even number of arbitrators. This has been confirmed by the Lebanese courts, which have repeatedly granted exequatur to international arbitral awards rendered by tribunals composed of an even number of arbitrators (Court of First Instance of Beirut, 17 July 1991, Decision 197/3; Court of Appeal of Beirut, 16 May 2012, Decision 832/2012).

Pursuant to Articles 810 and 774 of the NCPC, if the parties fail to appoint arbitrators and the arbitral institution administering the arbitration does not intervene to appoint the arbitrator(s), or if there is no such institution and no alternative appointing authority (as is the case in ad hoc arbitrations), the President of the Court of First Instance acting in support of the arbitration, may intervene and appoint the arbitrator(s). The decision of the President of the Court of First Instance must be made in a timely manner and cannot be challenged. However, parties may lodge an appeal against the decision of the President of the Court of First Instance refusing to appoint arbitrator(s) on the grounds that the arbitration agreement is null and void or insufficient.

Moreover, the NCPC does not provide for a specific procedure applicable to multi-party arbitrations. However, in a decision issued on 19 October 2010, the Court of Appeal of Mount Lebanon held that, where different respondents have separate legal personalities and interests, they should not be forced to choose only one arbitrator, in accordance with the principle of the equality of parties in the appointment of arbitrators, which the court qualified as a principle of public policy.

State courts only intervene in the selection of arbitrators only when the method of appointment chosen by the parties fails (see 4.2 Default Procedures), or when arbitrators are challenged and removed in ad hoc arbitrations (see 4.4 Challenge and Removal of Arbitrators).

If an arbitrator is challenged in an institutional arbitration, the parties must follow the procedure set out in the institutional rules.

With respect to ad hoc arbitration, the NCPC section governing international arbitration does not provide a specific procedure for challenging and removing arbitrators. This has led Lebanese courts to follow the procedural rules set forth in the NCPC provisions governing domestic arbitration in matters of challenge of arbitrators (Court of Appeal of Beirut, 10 December 2001, Decision 1778/2001).

Pursuant to Article 770 of the NCPC, which governs the challenge and removal of arbitrators in domestic arbitration, arbitrators may only be removed with the unanimous consent of the parties.

Challenges to the arbitrator(s) must be based on grounds that have come to the parties’ attention after the appointment of the arbitrator(s). It should be noted that, pursuant to Article 769(2) of the NCPC, the arbitrators are obliged, upon their appointment, to disclose possible grounds for their challenge. It follows that the grounds for challenge may arise from facts that predate the appointment of the arbitrator(s).

Pursuant to Article 770(2) of the NCPC, the grounds for challenging an arbitrator are the same as those for challenging a judge. These grounds are set out in Articles 120 and 130 of the NCPC, and must be interpreted restrictively and pertain essentially relate to the personal ties of the arbitrator(s), including:

• kinship ties with a party or with another arbitrator;
• personal interest of the arbitrator(s) with one of the parties or in relation to the case;
• prior knowledge of the case in the capacity of authorised representative, legal counsel or arbitrator; and
• enmity or friendliness with one of the parties to an extent that is likely to affect their impartiality.

Pursuant to Article 770(3) of the NCPC, the parties may challenge against the arbitrator(s) before the competent court of first instance within 15 days from the discovery of the ground for challenge. However, pursuant to Article 787(2) of the NCPC, the parties may not challenge the arbitrator(s) after the closing of the proceedings. Moreover, if a party has grounds to challenge an arbitrator and fails to do so within the time limit set by the arbitral institution in the case of institutional arbitration or by the NCPC in the case of ad hoc arbitration, that party is deemed to have waived its right to challenge the arbitrator at a later stage of the proceedings, including in the annulment proceedings (Court of Appeal of Beirut, 21 February 1994).

If the competent court of first instance decides to recuse the challenged arbitrator(s), it is well established in Lebanese case law that such decision does not lead to the annulment of the arbitration agreement (Lebanese Court of Cassation, 28 February 2002, Decision 29/2002). However, such a decision to disqualify the arbitrator(s) would have the effect of retroactively revoking the arbitrator’s mandate and annulling any award that was rendered by the challenged arbitrator in a related case (Lebanese Court of Cassation, 1 April 2004, Decision 60/2004).

Finally, pursuant to Article 770(3) of the NCPC, there is no remedy (whether by way of appeal or otherwise) are available against the decision of the competent court of first instance regarding the challenge of arbitrators.

Arbitrators must be impartial and independent, or they may be challenged and removed (Court of Appeal of Beirut, 27 December 1993, Decision 766/93). As explained in 4.4 Challenge and Removal of Arbitrators, the standards developed by Lebanese case law to assess the independence and impartiality of an arbitrator are similar to those allowed for the challenge of judges, and are enacted on an exhaustive basis with no possibility of extension (Court of First Instance of Beirut, 5 April 2006, Decision 12/48).

It is in the light of these standards that Article 769(2) of the NCPC obliges arbitrators to disclose any information that might lead a party to doubt the impartiality or independence of the arbitral tribunal.

Disputes in Lebanon are generally arbitrable. However, certain subject matters are considered non-arbitrable, and are subject to the exclusive jurisdiction of state courts under the provisions of the NCPC governing domestic arbitration (see 3.2 Arbitrability). The criteria for determining the arbitrability of certain subject matters are set forth in the Lebanese Civil Code (Article 1037 of the COC). These provisions apply to international arbitration when the parties submit the arbitration to Lebanese law.

Article 785 of the NCPC expressly recognises the principle of competence-competence, which applies only to domestic arbitration but is generally extended to international arbitration in Lebanon. This has been increasingly confirmed by Lebanese courts (see, for example, Lebanese Court of Cassation, 25 January 2014, Decision 14/2014). It follows that arbitral tribunals have exclusive jurisdiction to hear challenges to their jurisdiction.

As mentioned in 5.2 Challenges to Jurisdiction, the Lebanese Arbitration Law recognises the principle of competence-competence. However, the NCPC does not specify the scope of competence-competence, nor does it contain any provisions regarding state courts dealing with jurisdictional issues before arbitral tribunals.

Domestic Arbitration

With regard to domestic arbitration, Article 764 of the NCPC limits the review of arbitration matters by state courts to the assessment of arbitration agreements that are manifestly null and void or incapable of authorising the appointment of the arbitrator(s).

International Arbitration

In matters of international arbitration, Lebanese courts almost always rule on the validity of arbitration agreements, regardless of any prior jurisdiction granted to arbitrators or limitations on the scope of review of state courts (Court of Appeal of Beirut, 2 February 1999; Court of First Instance of Beirut, 27 March 1997, Decision 117/97).

In light of the shortcomings of the Lebanese Arbitration Law, particularly in relation to international arbitration, it has been suggested that Lebanese courts refer to Article II(3) of the New York Convention (ratified by Lebanon in 1998), which requires state courts seised of matters governed by an arbitration agreement to decline their jurisdiction unless they find that the arbitration agreement is null and void, inoperative or incapable of being performed.

As a result, Lebanese courts have tended to apply Article II(3) of the New York Convention in order to extend the application of Article 764 of the NCPC to international arbitration, thereby limiting the state courts’ review to the mere verification of the manifest invalidity of arbitration agreements (Court of First Instance of Beirut, 26 February 2014, Decision 194/2014).

As for negative decisions on jurisdiction, there are no provisions in the NCPC or precedents in Lebanese case law that prohibit state courts from reviewing such decisions, but as far as is known, no such review has taken place.

The Lebanese Court of Cassation, in reviewing the admissibility of a challenge to arbitrators’ decision on jurisdiction, held that the provisions of Article 615 of the NCPC – which sets out the decisions that may be challenged during the course of proceedings – must be transposed to arbitration. This is due to the fact that Article 804 of the NCPC subjects appeal and applications to set aside arbitral awards to the procedural rules governing recourse to the court of appeal. Moreover, since Article 615 of the NCPC does not list the challenge to arbitrators’ decision on jurisdiction among the decisions that can be appealed during the proceedings, the Lebanese Court of Cassation considers that such recourse is inadmissible before the arbitral award is issued (Lebanese Court of Cassation, Decision 13/2007). This approach is followed by the lower courts (Court of Appeal of Mount Lebanon, 4 March 2010, Decision 28/2010).

Considering that Article 804 of the NCPC is also applicable to international arbitration by reference to Article 821 of the NCPC, challenges to arbitrators’ decisions on jurisdiction in international arbitration is also not admissible prior to the issuance of the arbitral award.

It follows from the above that parties have the right to challenge the jurisdiction of an arbitral tribunal before state courts only after an award has been rendered, at the enforcement or annulment stage (Articles 817 and 819 of the NCPC). It should be noted that the Lebanese case law is silent on the issue of recourse against partial arbitral awards.

Jurisdictional issues at the annulment or enforcement stage are reviewed de novo by the court of appeal.

However, parties who fail to raise jurisdictional objections during the course of arbitral proceedings on grounds of which they were aware at the time are deemed to have waived their right to challenge the award on those grounds (Lebanese Court of Cassation, Decision 142/2001).

As to questions of admissibility, as indicated in 5.3 Circumstances for Court Intervention, Lebanese courts almost always rule on the validity of arbitration agreements, notwithstanding any prior jurisdiction conferred on arbitrators or limitations on the scope of review by state courts. Lebanese courts have only recently begun to move towards a mere prima facie review of the validity of arbitration agreements.

As noted under 3.3 National Courts’ Approach, while the Lebanese Arbitration Law is silent on the principle that state courts must decline jurisdiction when a party invokes an arbitration agreement, but this principle is well established in Lebanese case law.

Neither the NCPC nor the case law allows state courts to raise their lack of jurisdiction ex officio, as the right of a party to object to jurisdiction of the court is not a matter of public policy (Lebanese Court of Cassation, 22 March 2006, Decision 61/2006).

Instead, Lebanese courts require that the arbitration agreement to be invoked in limine litis (Court of First Instance of Beirut, 18 February 2004), failing which the parties are deemed to have waived their right to bring the dispute before an arbitral tribunal (Court of Appeal of North Lebanon, 19 January 2006, Decision 24/2006).

The Lebanese Arbitration Law does not preclude the application of the principle of extension ratione personae of the scope of an arbitration agreement to persons (natural or legal) who have not signed it.

Thus, notwithstanding the requirement that arbitration agreements be made in writing (Articles 766 and 763 of the NCPC), the Lebanese Court of Cassation held that a non-signatory company was bound by an arbitration agreement by virtue of the economic unity that existed between that company and the signatories to the arbitration agreement. In this decision, the Lebanese Court of Cassation did not require the non-signatory’s participation in the drafting of the agreement or the execution of the contract, nor did it require the non-signatory’s knowledge of the existence of the arbitration agreement (Lebanese Court of Cassation, 25 January 2014, Decision 14/2014).

Similarly, the President of the Court of First Instance of Beirut upheld a request for the appointment of an arbitrator on behalf of recalcitrant sellers who had not signed the contract for the sale of a property that was the subject of arbitration proceedings. The judge reasoned that the arbitration agreement signed by some of the sellers could be extended to other sellers if they were involved in the conclusion and execution of the sale contract, which would result in an economic unity between all the sellers (Court of First Instance of Beirut, 27 June 2011).

In another case, the President of the Court of First Instance of Beirut ruled that the participation of a non-signatory in the negotiation or execution of a contract constituted sufficient evidence to consider that it wishes to be a party to the contract, with the effect of being bound by the arbitration agreement contained therein (Court of First Instance of Beirut, 19 June 2013, Decision 34/272).

Following the 2002 amendment of the NCPC (see 2.1 Governing Law), Article 789 expressly grants the arbitrator the same powers as a court judge to order interim or conservatory measures. These measures include sealing, inventory of assets, sequestration, forced sale of perishable goods, and description of the state of affairs (Article 589 of the NCPC).

In practice, interim or conservatory measures cannot be sought ex parte from arbitral tribunals without giving the opposing party an opportunity to be heard.

While the case law on the role of state courts in preliminary or interim relief appears to be inconsistent, Lebanese courts generally tend to consider that the arbitrator’s power to issue such measures is concurrent with the jurisdiction of the judge of expedited matters (Judge of expedited matters of Beirut, 7 September 1984, Decision 777/84).

However, with regard to interim payments, the concurrent jurisdiction of the judge of expedited matters has often been rejected on the grounds that interim payment decisions require an examination of the merits of the dispute and may even concern the entire claim, which, if transferred to state courts, would be tantamount to depriving the arbitration of its substance (Court of Appeal of Beirut, 30 July 2009, Decision 1100/2009; Judge of expedited matters of Beirut, 12 February 2002, Decision 554/2002).

In addition, it is established in Lebanese case law that, where arbitral tribunals are yet to be formed, state courts have jurisdiction to order preliminary or interim relief despite the existence of an arbitration agreement, unless the parties have agreed otherwise (Lebanese Court of Cassation, 19 January 1996, Decision 8/2006; Court of Appeal of Beirut, 30 July 2009, Decision 1100/2009).

In addition to the above, state courts also act in support of the enforcement of measures ordered by arbitral tribunals, particularly as the latter lack coercive powers.

The Lebanese Arbitration Law does not contain any provisions regarding the power of arbitral tribunals to order security for costs. Nevertheless, arbitral tribunals issue such orders in practice.

With respect to state courts, Article 866 of the NCPC provides that enforcement judges have the power to order protective measures for the purpose of seizing the debtors’ funds as security for the debt. It can be argued that such measures include orders for security for costs.

According to Article 811 of the NCPC, the choice of procedural rules is left to the agreement of the parties or, in the absence of any such agreement, to the arbitral tribunal.

The parties may choose their own procedural rules, either directly or by reference to the rules of an arbitral institution, although it should be noted that, pursuant to Article 812 of the NCPC, Articles 762 to 792 of the NCPC, which apply to domestic arbitrations, apply to international arbitrations, unless the parties expressly agree otherwise.

Pursuant to Article 813 of the NCPC, if the arbitration agreement is silent on the procedural rules governing the arbitration, the arbitral tribunal has the discretion to choose or formulate the rules as it deems appropriate, taking into account business practices and customs.

The Lebanese Arbitration Law does not provide for any mandatory procedural steps for arbitration proceedings.

As noted in 5.2 Challenges to Jurisdiction, 6.1 Types of Relief and 7.1 Governing Rules, arbitrators have broad powers under Lebanese law with respect to matters relating to their jurisdiction, the applicable procedural matters, and the interim measures and remedies that may be granted.

With respect to their duties, arbitrators must remain impartial and independent at all times, failing which they may be challenged and disqualified (see 4.5 Arbitrator Requirements). As a result, arbitrators have a duty to disclose to the parties any information that might cast doubt on their impartiality (see 4.4 Challenge and Removal of Arbitrators and 4.5 Arbitrator Requirements).

In addition, arbitrators are required to comply with the provisions of international public policy and the fundamental principles of civil procedure, in particular those related to due process, the reasoning of a judgment, and the applicable rules of the arbitral institution (Article 777 of the NCPC). Arbitrators are also expected to conduct the proceedings to their conclusion, unless there is a legitimate reason not to do so (Article 769(3) of the NCPC). They are also obliged to render a final award within the time allotted and in accordance with the terms of their mandate (Article 817 of the NCPC).

Finally, given the contractual nature of the relationship between the arbitrators and the parties, the arbitrators may be held liable for damages for non-performance or improper performance in application of the common law conditions set forth in the Lebanese Civil Code.

According to Article 378 of the NCPC, each party must be represented by a lawyer in cases where the value of the dispute exceeds LBP1 million, or in cases where there is no quantification of damages, or in all other cases where the law requires the assistance of a lawyer. Parties cannot waive their obligation to be represented by a lawyer.

While some commentators believe that the above provisions apply equally to domestic and international arbitration, a distinction should be made between the two categories of arbitration. As explained in 7.1 Governing Rules, unlike domestic arbitration, which is always governed by the provisions of the NCPC, the choice of procedural rules in international arbitration is left to the agreement of the parties. Accordingly, in international arbitration, parties often deviate from the NCPC and thus from the obligation to be represented by a lawyer. It follows that no particular qualification is required for legal representatives appearing in international arbitration in Lebanon.

As is generally the case in civil law countries, Lebanon has an inquisitorial system in which the court has the role of investigating rather than delegating the control of the adversarial process to the parties.

The NCPC provides a wide range of evidence that may be used, such as the production of documents, the use of testimony (whether oral or in writing) and the use of experts. In commercial disputes, evidence can be brought by any means.

However, Lebanese procedural rules are based on the principle that no one can produce evidence for themselves. As a result, documentary evidence prevails over witness testimonies, which, in any case is often produced by third parties unconnected to the party who collected it. Moreover, due to the inquisitorial nature of the Lebanese system, witnesses are usually questioned only by the judge and very rarely by the lawyers.

Furthermore, discovery procedures are not permitted under Lebanese law, as the parties’ request for discovery must be specific and subject to restrictive conditions, while the judge has wide discretion to grant or deny the request.

In the context of international arbitration, arbitration practitioners have generally embraced the balance between the procedural rules of the civil law tradition and those of common law systems. It is therefore not uncommon for parties to international arbitrations to refer to the IBA Guidelines on the Taking of Evidence in International Arbitration in the terms of reference.

Arbitrators can use a wide range of measures to gather evidence Lebanese seated arbitrations.

They can order the parties to disclose any evidence in their possession (Article 780 of the NCPC) and also have the power to hear witnesses without putting them under oath (Article 779(2) of the NCPC). Arbitrators also have the power to rule on allegations of the inauthenticity of signed (or handwritten) documents (Article 783(1) of the NCPC). More generally, arbitrators are expected to investigate the case (Article 779(1) of the NCPC), which includes taking all necessary steps, including the appointment of experts, unless their mandate does not allow for it.

Arbitrators in Lebanon do not have coercive powers and therefore have very limited powers of compulsion.

The NCPC is silent on the power of arbitrators to compel parties to produce documents. While Article 780 of the NCPC refers to the arbitrators’ power to order the production of documents, it does not mention the measures available to the arbitrators in the event that the requested evidence is not produced. This does not mean, however, that arbitrators cannot draw negative inferences from a party’s refusal to produce the requested evidence.

With respect to the attendance of witnesses, while arbitrators do not have the power to order a witness to attend a hearing, they may rely on the assistance of state courts to impose penalties on recalcitrant witnesses (Article 779(3) of the NCPC). Similarly, arbitrators may request the competent state courts to issue a letter rogatory for the purpose of hearing the case (Article 779(3) of the NCPC).

The Lebanese Arbitration Law does not expressly confirm the obligation of confidentiality in arbitral proceedings.

However, it is well established in Lebanese case law that Article 553 of the NCPC, which governs the issuance of awards, does not require arbitral awards to be made public, as is the case with state court judgments, given the private and inherently confidential nature of arbitration (Court of Appeal of Beirut, 9 October 2003, Decision 1404/2003).

Moreover, according to Article 788 of the NCPC, the deliberations of the arbitrators must remain secret. There is no corresponding provision in the section of the NCPC governing international arbitration.

Article 790 of the NCPC lists the formal information that an arbitral award must contain, including the following:

• the name of the arbitrator(s) who issued the award;
• the place and date of issuance of the award;
• the names of the parties, their capacities, and the names of their representatives;
• a summary of the facts, claims and evidence submitted by the parties; and
• the reasons for the award and its operative part.

According to Article 791 of the NCPC, the arbitral award must be signed by the arbitrator(s) or by the majority of the arbitrators who made the award.

While non-compliance with most of the above requirements may constitute grounds for challenging an award in domestic arbitration (Article 800(5) of the NCPC), this is not necessarily the case in international arbitration. Nevertheless, it is advisable to comply with these minimum formal requirements to ensure that the award is not vulnerable to annulment on other grounds, such as international public policy.

With regard to the time limits for the delivery of the award, Article 773 of the NCPC provides that if the arbitration agreement does not specify a time limit for the arbitral proceedings, the arbitrators shall complete their mandate within six months from the appointment of the last arbitrator, although this six-month period may be extended by the agreement of the parties or by a decision of the President of the Court of First Instance, upon the request of one of the parties or the arbitral tribunal.

The Lebanese Arbitration Law does not limit the powers of an arbitral tribunal in awarding remedies. Moreover, it is widely accepted in Lebanese jurisprudence that arbitral tribunals, in resolving contractual disputes, have the power to issue any decision regarding the specific performance of the underlying contract or regarding the consequences of non-performance of the contract (Lebanese Court of Cassation, Decision 132/2002). This means that arbitral tribunals have complete discretion in awarding any of the remedies available under Lebanese law. These generally include orders to pay damages, injunctive or declaratory reliefs, awards of interest (see 10.3 Recovering Interest and Legal Costs), and awards of moral damages.

The only type of remedy that arbitral tribunals may not award is punitive damages, as such remedies are not provided for under Lebanese law.

Lebanon does not prohibit the application of interest (Article 767 of the COC). Furthermore, and considering that Lebanese law does not set any limit on the calculation of interest in commercial matters, Lebanese courts held that the award of interest by arbitral tribunals is not subject to review in the context of annulment proceedings (Court of Appeal of Beirut, 29 November 2011, Decision 1725/2001). The Lebanese Court of Cassation also confirmed that interest awarded by arbitral tribunals may exceed the value of legal interest as determined by Lebanese law (Lebanese Court of Cassation, 27 April 2006, Decision 98/2006).

With respect to legal costs, the general rule set forth in the NCPC is that the losing party shall bear the legal costs incurred by both parties (Article 541(2) of the NCPC). In certain circumstances, the successful party may be ordered to pay all or part of the legal costs of the other party, in particular if that party’s procedural conduct has caused prejudice to the other party (Article 542 of the NCPC).

In the context of international arbitration, arbitral tribunals tend to refer mainly to the applicable rules of the arbitral institution, most of which provide guidance on the apportionment of costs.

International arbitral awards rendered in Lebanon may be challenged by way of an application for annulment (Article 819 of the NCPC), but, unlike awards rendered in domestic arbitrations, they cannot be appealed (Lebanese Court of Cassation, Decision 163/2001).

On the other hand, enforcement orders for international arbitral awards rendered outside Lebanon may be appealed (Article 817 of the NCPC).

The challenge of an international arbitral award rendered in Lebanon and the appeal against an enforcement order of an international arbitral award rendered outside Lebanon may be based on the same five grounds, namely:

• if 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 expiration of the time allotted for making the award;
• if the award was made by arbitrators who were not appointed in accordance with the law;
• if the arbitrators have failed to comply with the mandate given to them;
• if there has been a violation of due process; or
• if the award is contrary to Lebanese international public policy.

The application for annulment should be filed with the court of appeal of the place where the arbitral award was rendered (Article 819(3) of the NCPC). The application for annulment may be filed as soon as the award is made, but in any event no later than 30 days after the notification of the order recognising the award or granting it exequatur (Article 819(4) of the NCPC). Annulment proceedings generally lead to the suspension of the enforcement, unless the contested award contains summary judgments (Article 820 of the NCPC).

International arbitral awards are not subject to appeal in Lebanon; they may only be challenged by way of an application to set aside on the limited grounds set out in 11.1 Grounds for Appeal. The Parties may not modify or exclude any of these grounds, nor may they add new grounds.

For this reason, the Lebanese Court of Cassation has held that parties may not seek the annulment of an arbitral award on the ground of violation of public policy based on alleged misinterpretation of the applicable law (Lebanese Court of Cassation, 31 October 2002, Decision 136/2002). The Lebanese Court of Cassation also refused to annul an arbitral award where one of the parties claimed that evidence and arguments presented in the challenged award had been misinterpreted or that the principle of equality had been violated, without such violation amounting to a violation of due process (Lebanese Court of Cassation, Decision 141/2001).

It is well established in Lebanese case law that an action to set aside an arbitral award should not be confused with an appeal to review the legality of the challenged award (Lebanese Court of Cassation, 18 December 2007, Decision 159/2007).

Therefore, it is settled case law that Lebanese courts must refrain from reviewing the merits of international arbitral awards (Court of Appeal of Beirut, 21 December 2011, Decision 1786/2011). Similarly, it is widely accepted that the review of an action to set aside an arbitral award may not entail any review of the grounds on which the challenged award was made or of its compliance with the applicable law (Court of Appeal of Beirut, 18 June 2014, Decision 890/2014; Court of Appeal of Beirut, 26 March 2009, Decision 454/2009).

Nevertheless, on a few occasions, some Lebanese courts have failed to respect the above principle. For example, the Court of Appeal of Beirut examined an arbitrator’s application of the law agreed upon by the parties, on the basis of the court’s authority to review the arbitrator’s compliance with the terms of his mandate (Court of Appeal of Beirut, 3 March 2011, Decision 308/2011). However, such decisions remain the exception.

Lebanon ratified the New York Convention on 11 August 1998, declaring that it would apply the New York Convention to the recognition and enforcement of awards made only in the territory of another contracting state, on the basis of reciprocity.

In accordance with Article VII(1) of the New York Convention, Lebanese courts consider that the New York Convention is applicable only if its provisions are more favourable than national law (Lebanese Court of Cassation, 29 November 2001, Decision 146/2001). Accordingly, Lebanese courts tend to consider that the NCPC provides a more favourable regime than the New York Convention with respect to the recognition and enforcement of awards. In particular, Article 814 of the NCPC excludes the recognition and enforcement of awards that are manifestly contrary to international public policy, whereas Article V(2)(b) of the New York Convention excludes awards that are contrary to public policy of the country in which recognition and enforcement are sought, which is much broader than international public policy.

The enforcement of international arbitral awards is subject to the same rules that govern the enforcement of domestic arbitral awards following the express reference found in Article 815 of the NCPC to Articles 793 to 797 of the NCPC.

Pursuant to Article 795 of the NCPC, as clarified by the Lebanese courts, the President of the Court of First Instance of Beirut is responsible for issuing the order granting exequatur to international arbitral awards. If the dispute is of an administrative nature, the enforcement order must be issued by the President of the Lebanese State Council (Article 795(2) of the NCPC).

The party requesting an enforcement order has the sole burden of proving the existence of the arbitral award for which the order is requested (Article 814 of the NCPC). For this purpose, the party must submit originals or authenticated copies of the award and the arbitration agreement. There are no other formal requirements.

Enforcement orders are issued by Lebanese judges, unless the arbitral award for which the order is sought is manifestly contrary to international public policy (Article 814(1) of the NCPC).

Set-Aside Proceedings

With regard to the impact of the annulment procedure in the seat of arbitration on the enforcement of awards in Lebanon, although there is not yet a judicial decision similar to the French Hilmarton decision accepting that an arbitral award can be enforced notwithstanding its annulment in the seat of arbitration, the conditions for such a solution are said to be already present in Lebanese jurisprudence (M. Maamari, L’exécution des sentences arbitrales étrangères et des sentences rendues localement en droit libanais, page 19).

In view of the foregoing, it is reasonable to assume that Lebanese courts would not readily be prepared to stay enforcement proceedings pending resolution of the seat proceedings. However, the position may vary depending on the proximity of the award to the seat of the arbitration.

Moreover, since Article 796(2) expressly refers to Article 800 of the NCPC, it can be argued that in order to be granted exequatur, the arbitral award for which exequatur is sought must not violate any of the grounds for annulment mentioned under 11.1 Grounds for Appeal, and must contain all mandatory information, including the claims of the parties and the reasons and means in support thereof, the name(s) of the arbitrator(s), the reasoning and the operative part, the date, and the signature of the arbitrator(s). The reference to Article 800 of the NCPC may also justify that the arbitral award for which the order is sought must comply with the rules of public policy. However, this may conflict with Article 814(1) of the NCPC, which refers only to a manifest violation of international public policy as the sole test for justifying the grant or refusal of exequatur for an international arbitral award. As discussed in 12.3 Approach of the Courts, Lebanese case law has mitigated the inconsistency arising from the provisions of Article 796(2) of the NCPC.

Enforcement Orders

Once an enforcement order has been issued for an international arbitral award rendered outside Lebanon, the award debtor may appeal against the order before the court of appeal. International arbitral awards are subject only to annulment proceedings (see 11.1 Grounds for Appeal).

In any case, if the enforcement order has been refused, the applicant may appeal against the order before the court of appeal (Article 816 of the NCPC).

As indicated in 12.2 Enforcement Procedure, the reference made in Article 796(2) of the NCPC to Article 800 of the NCPC has the effect of making it possible to examine all the grounds that may be raised against a domestic award when considering the application for exequatur of an international arbitral award.

Fortunately, the Lebanese courts have remedied the deficiency found in Article 796(2) of the NCPC, with the Court of First Instance of Beirut ruling that the exequatur judge is not actually required to review the merits of the arbitral award (Court of First Instance of Beirut, 16 July 1991, Decision 197/3). Similarly, the Beirut Court of Appeal held that the exequatur judge’s review should be limited to verifying only the manifest conformity with international public policy (Court of Appeal of Beirut, 21 December 2011, Decision 1786/2011). A decision of the Court of First instance of Mount Lebanon held that the exequatur is a purely administrative act that requires a simple summary review (Court of First Instance of Mount Lebanon, 12 October 1995, Decision 123/95).

In light of the above, international arbitral awards (whether rendered locally or abroad) are generally granted recognition and exequatur in Lebanon, while there are very few cases in Lebanese case law of exequatur being denied.

Class actions are not available under Lebanese law.

However, pursuant to Article 811 of the NCPC, Lebanese law recognises that parties may agree to institutional international arbitration, whose rules provide for multi-party arbitration, as is the case with the arbitration rules of the ICC and the DIAC.

The code of ethics for lawyers conducting proceedings in Lebanon is found in Law No 42 of 1991 organising the legal profession in Lebanon.

There is no code of ethics or other professional standards specifically applicable to arbitrators. However, the NCPC contains a number of provisions that provide guidance as to the ethical standards expected of arbitrators. For example, Article 769 of the NCPC provides that once arbitrators have accepted their mandate, they may not resign without good cause, failing which the arbitrators shall be liable for damages. Article 770 of the NCPC further provides that the challenge of an arbitrator may only be based on the same grounds that justify the recusal of judges.

Lebanese law does not contain any provisions governing or restricting third-party funders.

Lebanese law does not address the consolidation of separate arbitral proceedings.

However, pursuant to Article 811 of the NCPC, Lebanese law accepts that parties may agree to institutional international arbitration, the rules of which may provide for the consolidation of different arbitral proceedings.

As indicated in 5.7 Jurisdiction Over Third Parties, it is well established in Lebanese jurisprudence that third parties who participate in the negotiation or execution of a contract are deemed to be bound by the arbitration agreement contained therein.

With respect to the binding effect of an arbitral award on third parties, it is generally accepted under Lebanese law that judicial decisions may be binding on third parties to the extent that the performance of such decisions may require the participation of the third parties, but without affecting their property. This is the case, for example, with the withholding of the award debtor’s funds held by a third party. The same applies to arbitral awards, as Lebanese law does not distinguish between judicial decisions and arbitral awards in this respect.