Arbitration in Lebanon: Recognition and Enforcement of Arbitral Awards

This note focuses on the final stage of arbitration proceedings in Lebanon—the recognition and enforcement of arbitral awards, whether domestic, international, or foreign.

Lebanon regulates arbitration under its Code of Civil Procedure (CCP), codified by Legislative Decree No. 90/83, which includes key provisions on both domestic and international arbitration. Domestic arbitration tends to follow stricter requirements, while international arbitration allows for greater flexibility—particularly regarding the validity of the arbitration agreement and grounds for setting aside awards.

Lebanon is also a signatory to the New York Convention (1958), ratified on 9 November 1998, which governs the enforcement of foreign arbitral awards.

Legal Framework for Enforcement

An award is considered international if the subject matter of the dispute involves more than one country—regardless of whether the arbitration was seated in Lebanon (Article 809 CCP).

Recognition and Enforcement Procedures

Competent Authorities:

• Domestic Awards: First instance court in the region of the agreed seat, or in Beirut if no seat was agreed.
• International Awards: President of the first instance court at the place where the award was rendered.
• Foreign Awards: President of the first instance court in Beirut (civil/commercial matters); Council of State (administrative matters).

Filing Requirements:

• A party must submit:
  • The original award or a certified copy;
  • The original arbitration agreement or a certified copy;
  • Proof of legitimate interest.

Fees and Costs:

• Judicial fees range from 25,000 to 50,000 LBP.
• If execution targets assets in Lebanon, the Treasury is entitled to 2.5% of the award value.
• Additional stamp duties and legal contributions amount to approximately 1% of the recovered amount.

Proceedings: Recognition is granted through ex parte proceedings, and parties must be legally represented if the dispute exceeds 1 million LBP.

Grounds for Annulment or Appeal

Domestic and International Awards:

An award may be annulled on the following grounds:

• No valid arbitration agreement or expiration of time limit for rendering the award;
• Improper appointment of arbitrators;
• Tribunal exceeded its mandate;
• Breach of due process;
• Absence of required elements in the award (e.g., reasoning, arbitrators’ names, granted relief, signatures);
• Violation of Lebanese or international public policy.

Foreign Awards:

Recognition can only be challenged if:

• There was no valid arbitration agreement;
• The tribunal exceeded its authority;
• Due process was not observed;
• Arbitrators were improperly appointed;
• The award violates international public policy.

Remedies:

• No remedies exist against the decision granting recognition for domestic or international awards.
• If recognition is denied, the decision can be appealed within 30 days.
• The Court of Cassation may hear appeals of Court of Appeal decisions—but only on legal grounds.

Enforcement Timeline and Execution Against Assets

Enforcement becomes effective 30 days after notifying the opposing party.

During this time, the respondent may initiate annulment or appeal proceedings.

Execution is suspended if an appeal is lodged within the permitted timeframe.

Currency Devaluation and Enforcement Challenges

Lebanon’s severe economic crisis and the collapse of the Lebanese pound (LBP) have introduced major uncertainties for award enforcement.

• Official exchange rate: 1,507 LBP per 1 USD (set by the Central Bank).
• De facto exchange rate (black market): Over 35,000 LBP per 1 USD.

Despite the existence of multiple exchange rates, Lebanese courts generally apply the official rate—which disadvantages creditors seeking to enforce awards denominated in foreign currencies.

Mandatory Currency Rule

Under Lebanese law:

• Debts must be paid in Lebanese pounds, even if the underlying contract specifies a foreign currency.
• This rule is considered a matter of public policy, and courts are required to apply it.

For example, a 2020 decision by Judge Mariana Anani held that creditors could not demand payment in foreign currency, reaffirming that LBP is the only acceptable legal tender for enforcement proceedings in Lebanon.

Applicable Exchange Rate

Even if the award specifies payment in USD, courts often apply the official exchange rate of 1,507 LBP/USD, as mandated by Lebanon’s Code of Money and Credit. Although some recent rulings have applied alternative rates, there is no consistent approach yet.

Final Remarks

Lebanon has a well-established legal framework for recognizing and enforcing arbitral awards. However, the country’s ongoing financial crisis has created real obstacles for creditors, especially when enforcing awards involving foreign currency.

Until there is clarity—either through legislative reform or consistent case law—award creditors must anticipate enforcement in Lebanese pounds at the official exchange rate, regardless of what the award stipulates.