Lebanon has been experiencing an ongoing severe financial, economic and social crisis, which has been further exasperated by the COVID-19 pandemic and the Beirut Port explosion. This situation may give rise to arbitration claims which are subject to Lebanese law or seated in Beirut. As such, this article provides a brief overview of the legislative framework for arbitration in Lebanon.
In line with Lebanon's pro-alternative dispute resolution attitude, a further option in the form of judicial mediation was recently made available to parties through the implementation of Law 82. Judicial mediation offers an alternative mechanism for settling disputes in an efficient, fair, timely and confidential manner and should help to lessen the increasingly overwhelming workload faced by judges.
Due to its status as a commercial hub, Lebanon has its fair share of disputes arising from commercial representation agreements, particularly those concerning compensation for the termination of such agreements. However, while recourse to the court system is well established as the traditional method of settling this type of dispute, significant controversy remains regarding their submission to arbitration.
In 2013 Lebanon commenced and concluded the initial pre-qualification licensing round for offshore oil and gas exploration, which was based on a draft model exploration and production agreement (EPA). This update focuses on the dispute resolution mechanism provided in the draft model EPA and the issues that may arise in the face of divergent interests of the parties involved.
A series of recent decisions of the Beirut Court of First Instance has affirmed the Lebanese judiciary's liberal approach to arbitration. In each case, the court intervened in an arbitration proceeding to preserve the validity of an arbitration agreement when it had been called into question. Issues considered include invalid terms within arbitration agreements and formal insolvency proceedings involving parties to arbitration.