1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

Arbitration in Lebanon is governed by the Lebanese Code of Civil Procedure (LCCP) which was enacted on 16 September 1983 by Decree- Law 90 and amended on 29 July 2002 in relation to its arbitration provisions. The LCCP includes a chapter on arbitration (Book 2, Chapter 1).

The arbitration agreement must be in writing (Articles 763, 766 and 814 of the LCCP), which is a condition of the validity of the arbitration clause (Article 763 of the LCCP).

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

The LCCP distinguishes between domestic arbitration and international arbitration. The main differences are that:

  • domestic arbitration is considered more formal; and
  • the recourses to challenge or to set aside an award in domestic arbitration are broader than in international arbitration.

Most of the provisions governing domestic arbitration are applicable to international arbitrations governed by Lebanese law, unless the parties have excluded them (Article 812 LCCP).

An arbitration is deemed international "when it involves the interests of international trade" (Article 809 of the LCCP); thus, if the subject matter of the dispute is linked to the transfer of goods and services from one country to another, the arbitration is international. Therefore, the following elements cannot be relied upon to determine the international nature of arbitration:

  • the nationality of the parties or arbitrators;
  • the place of the arbitration;
  • the residence of the parties; or
  • the place where the contract was concluded.

Moreover, the application of a foreign law or procedure will have no effect on the qualification of an arbitration as international.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

No. The provisions on arbitration in the LCCP are based on the old French arbitration law (French Decrees 80-354 of 14 May 1980 and 81-500 of 12 May 1981), and not on the UNCITRAL Model Law on International Commercial Arbitration.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

In domestic arbitration, most of the provisions are mandatory, except where the law explicitly refers to the parties' agreement, such as the time limit for arbitration (Article 773 of the LCCP); whereas in international arbitration governed by Lebanese law, the provisions of the legislation are applicable only if the parties have not agreed on specific rules in this regard (Article 812 of the LCCP).

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

Some time ago, an initiative was launched to amend and modernise the arbitration law, but this is not currently under discussion.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Lebanon is a party to the New York Convention, which entered into force in Lebanon on 9 November 1998. Lebanon has made a reciprocity reservation under the convention, declaring that it will apply the convention on a reciprocal basis to the recognition and enforcement of awards made only in the territory of another contracting state.

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

Lebanon has signed the Arab Convention on Commercial Arbitration of 1992; and in April 2003 it ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Pursuant to Articles 762 and 765 of the Lebanese Code of Civil Procedure (LCCP), any commercial or civil dispute that can be settled between the parties is arbitrable. Disputes pertaining to administrative contracts have also been arbitrable since 2002, provided that the prior authorisation of the Council of Ministers is obtained.

The following disputes are not arbitrable:

  • disputes involving commercial representation (as per the current interpretation by the Lebanese courts of Article 5 of Decree-Law 34 of 5 August 1967);
  • labour disputes;
  • matters relating to bankruptcy and insolvency regarding the exclusive jurisdiction of the state courts;
  • all matters of personal status, personal rights and rights of succession;
  • property rights over real estate; and
  • questions of public policy and penal matters.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

There is no such express restriction on the parties' choice of seat.

In this context, Article 25 of the arbitration rules of the Lebanese and International Arbitration Centre of the Beirut Bar Association explicitly provides that when a city in Lebanon is selected as the seat of arbitration, it is permissible to conduct hearings and procedural meetings elsewhere.

Moreover, the arbitral tribunal may decide, in exceptional circumstances, to hold the hearings through videoconference without requiring the parties to be physically present.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

In domestic arbitration, in order to be valid, the arbitration agreement must be executed in writing and appoint the arbitrator(s) in person or by their title, or indicate the procedure for their appointment (Articles 763 and 766 of the Lebanese Code of Civil Procedure (LCCP)). If the arbitration agreement is entered into after the dispute has arisen, it should also mention the subject matter of the dispute as a prerequisite for validity (Article 766 LCCP).

There are no specific conditions or requirements for the validity of an international arbitration agreement other than the consent of the parties. However, the written form is required to enforce an award rendered in international arbitration.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

The principle of separability of the arbitration agreement from the main contract is well established in Lebanon and is recognised by the Lebanese courts. It has also been confirmed by the amendment of Article 762 of the LCCP in 2002, since it now explicitly provides that, by virtue of an arbitration clause, the arbitrators have jurisdiction to examine the validity of the agreement between the parties (ie, if the contract is null, this should not affect the validity of the arbitration clause).

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

There are no provisions on the seat and language of the arbitration if there is no agreement between the parties in this regard. In such case the arbitral tribunal will determine the seat and language of the arbitration; as regards the latter, it often selects the language used in the contract that is the subject of the dispute between the parties.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

There are no specific provisions in Lebanese law regarding the time limit and form of objections to the jurisdiction of an arbitral tribunal. Consequently, the general provisions of the Lebanese Code of Civil Procedure (LCCP) pertaining to jurisdictional objections will apply. An objection based on the validity of the arbitration agreement must therefore be invoked at the beginning of the proceedings before any substantive defence; whereas an objection based on mandatory jurisdiction – such as the jurisdiction of administrative courts or religious courts or a mandatory territorial jurisdiction – can be raised at any time during the proceedings.

4.2 Can a tribunal rule on its own jurisdiction?

Yes, the arbitral tribunal has the power to rule on its own jurisdiction pursuant to Article 785 of the LCCP.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

If a hurdle prevents the appointment of arbitrator(s), the parties can apply to the president of the first instance court for assistance and support. In this case, if the president of the court finds that the arbitration clause is obviously null and void, or insufficient to appoint the arbitrator(s), he or she will decide that there will be no arbitration (Article 764 of the LCCP).

Therefore, and unless the arbitration clause is obviously null and void or insufficient to appoint the arbitrator(s), the Lebanese courts should not rule on the jurisdiction of the arbitral tribunal.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

There are no specific restrictions on who can be a party to an arbitration agreement; the general provisions on consent and capacity to enter into agreements will thus apply.

The state and public entities can be a party to an arbitration agreement regardless of the administrative or civil nature of the contract, as explicitly stated in the amended Article 762 of the Lebanese Code of Civil Procedure (LCCP), if an authorisation by decree is issued by the Council of Ministers for administrative contracts and as a condition precedent for their implementation.

5.2 Are the parties under any duties in relation to the arbitration?

There are no specific duties on the parties in relation to arbitration under Lebanese law. The general provisions pertaining to the interpretation and implementation of the contract in good faith and in accordance with usages and customs will apply.

5.3 Are there any provisions of law which deal with multi-party disputes?

There are no provisions pertaining to multi-party arbitrations, except those relating to third-party intervention (see question 7).

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The parties can explicitly agree on the law of the arbitration agreement and the arbitrators will be bound by such agreement. However, the separability of the arbitration agreement from the agreement to which it applies is recognised pursuant to Article 762 of the Lebanese Code of Civil Procedure (LCCP) and Lebanese case law; therefore, the law governing the contract chosen by the parties is not automatically deemed to be that governing the arbitration agreement (eg, see Lebanese Court of Cassation, Decision 14/2014 dated 25 January 2014).

Much like the French courts in this context, the Lebanese courts try to construe the arbitration agreement in favour of its validity and to choose a law applicable to the arbitration agreement that will not annul such agreement, except where it violates mandatory provisions of Lebanese law or public order.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

Yes, the arbitral tribunal will uphold the parties' agreement on the substantive law of the dispute pursuant to Article 767 of the LCCP. Furthermore, in arbitrations ex aequo et bono, the arbitrators will be released from the requirement to apply a law, and instead will render their award solely in accordance with what they consider to be fair and equitable.

Where the substantive law is unclear, it is up to the arbitral tribunal to discretionally determine the appropriate substantive law, pursuant to Article 813 of the LCCP, applicable in international arbitration. This also explicitly allows the arbitrators, in all cases, to apply customary rules in commercial matters.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

The law is silent on the consolidation of arbitration proceedings and this matter is therefore left to the parties' agreement (whether explicit or by reference to institutional arbitration rules) in relation to consolidation.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

Pursuant to Article 786 of the Lebanese Code of Civil Procedure, a third party's intervention in a dispute before an arbitral tribunal is not permitted without the parties' consent.

7.3 Does an arbitration agreement bind assignees or other third parties?

The law does not address the binding effect of an arbitration agreement on assignees or other third parties, and the principle remains that of privity of contracts, which are only supposed to bind the contracting parties.

In practice, however, the Lebanese courts will extend the scope of the arbitration agreement to:

  • assignees (Court of Appeal of Beirut, Decision 763 dated 29 April 2004 (Lebanese Review of Arab and International Arbitration 2004, volume 30, p 39));
  • third parties involved in a group of contracts involving a single business transaction where there is an arbitration agreement in one of the contracts without the others (Lebanese Court of Cassation, Decision 14/2014 dated 25 January 2014); and
  • any third party that intervenes in the implementation of an agreement that includes an arbitration clause unless such third party had explicitly excluded the application of the arbitration agreement (Lebanese Court of Cassation, Decision 55/2018, dated 28 June 2018).

8 The tribunal

8.1 How is the tribunal appointed?

Pursuant to Articles 763, 766 and 810 of the Lebanese Code of Civil Procedure (LCCP), the contracting parties have the right to select the arbitrators, by their name or title, or by determining the method of their appointment, including by reference to institutional arbitration rules.

In case of a hurdle in the appointment of the arbitral tribunal, the parties may turn to the president of the first instance court for assistance.

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

Lebanese law requires that the arbitral tribunal comprise a sole arbitrator or an odd number of arbitrators in domestic arbitration (Article 771 of the LCCP), but this requirement is not mandatory in international arbitration. Where the odd number requirement applies and an even number of arbitrators is appointed, the parties should agree on the appointment of an additional arbitrator. If the parties fail to agree on such additional arbitrator, the appointed arbitrators will choose him or her by agreement between them; failing which he or she will be appointed by the president of the first instance court.

There are no specific qualifications for arbitrators under Lebanese law. Nevertheless, Article 768 LCCP provides that an arbitrator must:

  • be a natural person;
  • be of age, with full civil capacity; and
  • not be bankrupt.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

Article 770 of the LCCP provides for the possibility to challenge arbitrators in domestic arbitrations on the same grounds as those that can be invoked to challenge judges (Article 120 of the LCCP), as follows:

  • The arbitrator or his or her spouse (or fiancé) has an interest in the case;
  • The arbitrator is related to one of the parties or its counsel or representative, or to a board member or manager of a party which is a legal entity if such board member or manager has a personal interest in the case;
  • The arbitrator was one of the parties' counsel or legal representative, or one of the parties appointed him or her as an arbitrator in a previous case;
  • The arbitrator previously worked on the same case as a judge, expert or arbitrator, or has provided testimony or an opinion regarding the case; or
  • There is enmity or friendship between the arbitrator and one of the parties, or a party is the creditor, debtor or employee of the arbitrator or his or her close relatives.

Challenges against arbitrators must be brought before the first instance court within 15 days of the date on which the challenging party is notified of the arbitrator's appointment or the date on which the grounds for challenge is discovered. The court's decision on the challenge is not subject to any recourse. In international arbitration, there are no express provisions in relation to the challenge of arbitrators, but Article 770 of the LCCP will apply in the absence of the parties' agreement to the contrary.

8.4 If a challenge is successful, how is the arbitrator replaced?

If a challenge is successful, the arbitrator must be replaced in accordance with the same provisions that governed his or her appointment.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

Arbitrators should act fairly and impartially, and thus have a duty to disclose to the parties any information that may be invoked as grounds to challenge them (Article 769 LCCP).

Moreover, arbitrators should issue their award within the timeframe agreed upon by the parties explicitly or by reference to arbitration rules.

In addition to respecting the rules and scope of the arbitration agreed upon between the parties, arbitrators should comply with public policy and due process requirements, failing which their award may be subject to annulment (Articles 800 and 817 of the LCCP). They are likewise expected to complete their mission until they render an award, unless there is a genuine reason not to do so, failing which they must pay compensation to the party which has incurred damages as a result of their resignation (Article 769 of the LCCP).

The above-mentioned duties of arbitrators are imposed either explicitly or implicitly.

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

Arbitrators are empowered to investigate the case and conduct the proceedings as they deem appropriate, if there is no agreement between the parties on specific procedural rules.

For this purpose, the arbitrators may hear third parties without putting them under oath. They may also order the parties to produce any proof in their possession and verify the authenticity of handwriting, except in case of allegation of forgery of a document (Articles 779 and following of the LCCP).

(b) Interim relief?

Following the 2002 amendment of the LCCP, Article 789 explicitly empowered arbitrators to issue interim relief and conservatory measures.

The arbitrators' ability to issue such relief or measures does not prevent the court of urgent matters from doing the same, with the exception of granting interim payments, which may imply an assessment of the substance of the case and can thus be deemed to be within the scope of the arbitrators' jurisdiction.

(c) Parties which do not comply with its orders?

Arbitrators do not have coercive powers in Lebanon, but this does not prevent them from drawing negative inference from a party's refusal to comply with their orders.

Article 779 of the LCCP provides for two ways in which the arbitrators may seek the assistance of state courts to ensure compliance with their orders:

  • issuing rogatory letters; and
  • imposing a penalty on witnesses who fail to appear before the arbitral tribunal or refuse to answer its questions.

(d) Issuing partial final awards?

Following its amendment in 2002, Article 789 of the LCCP explicitly allows the issuance of partial final awards which finally resolve part, but not all, of the dispute before the arbitrators.

(e) The remedies it can grant in a final award?

There are no limitations in Lebanese law in relation to the powers of arbitrators to grant any kinds of remedies in their award. The scope of such remedies is wider in arbitrations ex aequo et bono.

(f) Interest?

Lebanon does not prohibit interest and the annual legal rate of interest is 9%, unless agreed otherwise by the parties.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

As long as the parties have been duly notified of the case and due process has been complied with, the arbitral tribunal will proceed even if a party does not participate in the arbitration.

8.8 Are arbitrators immune from liability?

Arbitrators are not afforded immunity from suit under Lebanese law.

They do not risk criminal liability, but may be held liable and pay damages if they breach their duties or resign without a genuine and serious reason. In institutional arbitration, the rules often protect arbitrators from liability (eg, see Article 17 of the rules of the Lebanese and International Arbitration Centre of the Beirut Bar Association, which excludes arbitrators' liability for any act or omission in connection with the arbitration).

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Yes, the courts should refrain from hearing a dispute if there is an arbitration agreement.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

The courts are often called upon to intervene in arbitral proceedings for support and in order to assist the arbitrators.

They will intervene in the following matters:

  • the appointment and challenge of an arbitrator (Articles 764 and 770 of the Lebanese Code of Civil Procedure (LCCP));
  • extension of the time limit stipulated in the arbitration agreement (Article 773 of the LCCP);
  • in case of forgery or if a non-arbitrable matter is raised before the arbitral tribunal (Article 784 of the LCCP);
  • the issue of rogatory letters and the sanctioning of witnesses who do not appear before the arbitral tribunal or refuse to answer its questions (Article 779 of the LCCP);
  • annulment of the award;
  • appeal and enforcement of the award; and
  • the issue of interim relief.

The same support is granted by the Lebanese courts to arbitrations seated outside Lebanon, particularly where the LCCP applies; and where necessary in international arbitration, the Beirut court will replace the foreign court of the arbitration's seat (Article 810 of the LCCP).

9.3 Can the parties exclude the court's powers by agreement?

The parties can agree to exclude the courts' powers and often do so when they refer to the arbitration rules applicable in institutional arbitration in relation to the appointment and challenge of arbitrators or time limit extensions, except for:

  • non-arbitrable matters;
  • the annulment of awards; and
  • all matters where coercive power is necessary (eg, enforcement, attachment, sanctioning non-cooperative witnesses).

10 Costs

10.1 How will the tribunal approach the issue of costs?

There are no legal requirements governing the issue of arbitration costs and the arbitral tribunal will respect the parties' agreement in relation to costs, if any, in addition to the provisions of applicable arbitration rules in the context of institutional arbitration.

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

There are no restrictions on the parties' agreement in terms of the costs in an arbitration seated in Lebanon.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

Third-party funding is not regulated in Lebanon. It should be permitted in the absence of any law that prohibits it.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

An award must be in writing and signed by the arbitrators or by a majority of the arbitrators. Furthermore, it should include:

  • the name of the arbitrator(s);
  • the place and date of its issuance;
  • the name and capacity of the parties and their legal counsel;
  • a summary of the parties' allegations, facts, requests and evidence;
  • the reasoning of the award; and
  • the decision.

12.2 Must the award be produced within a certain timeframe?

Yes, the timeframe for the issue of the award is usually agreed by the parties, often through their choice of the arbitration rules in institutional arbitration. In the absence of such agreement, the law specifies a time limit of six months from acceptance of the last-appointed arbitrator to issue the award (Article 773 of the Lebanese Code of Civil Procedure). This deadline can be extended either by agreement between the parties or by decision of the president of the first instance court upon the request of the parties or the arbitrators.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

Yes, awards are enforced in Lebanon through ex parte proceedings. In domestic arbitrations seated in Lebanon, an original copy of the award must be deposited by one of the parties or the arbitrators before the first instance court of the arbitration seat (or the first instance court of Beirut), along with a true copy of the arbitration agreement, in order to apply for its enforcement. As for awards issued outside Lebanon or in international arbitrations, a true copy of the award may be deposited instead of the original, provided that it is certified as a true copy by one of the arbitrators or any competent authority, along with a true copy of the arbitration agreement and a translation into Arabic of these two documents, if needs be.

The order to enforce the award will then be issued, upon review of the award, to ensure that it does not incur annulment (as per question 14), either by:

  • the president of the first instance court in civil and commercial matters; or
  • the president of the State Council in administrative matters (Articles 793 and 795 of the Lebanese Code of Civil Procedure (LCCP)).

For awards in arbitrations seated outside Lebanon or international arbitrations, the president of the first instance court (of the seat of arbitration or of Beirut) will verify the existence of the award and that it does not manifestly violate international public policy (Articles 814 and 815 of the LCCP).

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

There are three ways to challenge an award under the Lebanese Code of Civil Procedure (LCCP):

  • appeal;
  • third-party objection; or
  • action to set aside an award (annulment).

In contrast to the action to set aside, there are no specific grounds for an appeal; and an award may be appealed on any factual, evidentiary or legal grounds.

The grounds on which an award may be annulled where an appeal has been excluded are as follows (Article 800 of the LCCP):

  • issue of an award without an arbitration agreement or on the basis of a null or expired arbitration agreement;
  • issue of an award by arbitrators who were not appointed in compliance with the law;
  • issue of an award outside the scope of the arbitrators' mission;
  • issue of an award in violation of the litigants' right of defence;
  • failure to comply with the mandatory requirements as to the award's form (summing up the parties' claims, arguments and supporting evidence, the names of the arbitrators, the reasons and decision of an award, its date and the arbitrators' signatures). This ground for annulment is not applicable in international arbitration; and
  • violation of public policy.

The LCCP allows a third party which is affected by an award to make an objection.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

An appeal or an action to set aside can be brought from the issuance of the award until the expiry of a timeframe of 30 days from notification of the order to enforce the award (Article 802 of the LCCP).

14.3 Are parties permitted to exclude any rights of challenge or appeal?

Arbitral awards may be appealed unless the parties have excluded this in the arbitration agreement for ordinary arbitrations according to law; in arbitration ex aequo et bono, the award is subject to appeal only if the parties have explicitly reserved the right to appeal (Article 799 of the LCCP).

The annulment of arbitral awards is always possible where an appeal is excluded, notwithstanding the parties' agreement to the contrary.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

Arbitration seated in Lebanon is confidential by practice. However, there is no duty of confidentiality set out in law.

15.2 Are there any exceptions to confidentiality?

Even when confidentiality is agreed between the parties, it will not be applicable where the proceedings involve the state courts (eg, enforcement, challenge of arbitrators, challenge to the award).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.