Arbitration is a legal institution for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound.
Arbitration advantages are:
- Flexibility : the parties and the arbitrator have much freedom in their choices as to the conduct of the arbitration process.
- Speed and economy : the flexibility of the arbitration process makes it faster than court litigation and therefore, taking into consideration that "time is money", ultimately less expensive.
- Confidentiality : particularly valued by the business community, which appreciates the discretion of the arbitration process, the fact that hearings are not public and that only the parties have access to the award.
- Neutrality : the flexibility and principle of free will of the parties governing the arbitration process make it possible for the parties to structure a neutral procedure, especially with regard to the applicable law, the place and the language of the arbitration as well as the nationality of the arbitrator(s).
- Specialized competence of the arbitrators : in arbitration, the parties have the unique opportunity to choose the arbitrator(s). This enables them to have their disputes resolved by persons with specialized competence and expertise in the relevant field.
In Lebanon , arbitration is accepted for most kinds of disputes arising out of civil, administrative or commercial contracts, whether internal or international.
Moreover, arbitration has even become permitted in administrative contracts since the Lebanese law N°440 dated 29 July 2002 expressly authorized the public legal entities (state-municipalities and public establishments) to include arbitration clauses in their administrative contracts (such as concessions, public works and BOT contracts).
Parties wishing to refer their disputes to arbitration have a choice between ad hoc arbitration in which the process will be administered by the arbitrators themselves and institutional arbitration in which the parties will designate an institution, such as the Lebanese Arbitration Center (LAC), to administer the arbitration process.
The Lebanese Arbitration Center
The Lebanese Arbitration Center is the sole institution that provides administration and monitoring services for arbitration proceedings in Lebanon , and it has been active in that field since its establishment in 1995.
The Lebanese Arbitration Center offers its different services to the business community, to all business enterprises whether or not they are members of the Chamber of Commerce, Industry and Agriculture, to all private and public institutions, and to the government.
Two different sets of rules apply in arbitration:
• The Optional Conciliation Rules, and
• The Arbitration Rules
The Lebanese Arbitration Center recommends that all parties wishing to make reference in their contracts to arbitration under the Center's Rules, use the following standard arbitration clause:
"All disputes arising in connection with the present contract shall be finally settled under the Rules of Conciliation and Arbitration at the Beirut Chamber of Commerce and Industry by one or more arbitrators appointed in accordance with the said rules. The contracting parties declare accepting the provisions of the said rules and undertake to abide by them".
It might also be useful for the parties to stipulate in the arbitration clause itself the number of arbitrators, the law governing the merits and the seat (or place) and language of the arbitration.
A party wishing to have recourse to arbitration under the Lebanese Arbitration Center 's Rules shall submit its Request for Arbitration to the Secretariat of t he Court of Arbitration.
The Request for Arbitration shall iter alia contain the following information:
a) names in full, description, and addresses of the parties,
b) a statement of the claimant's case,
c) the relevant agreements, and in particular the agreement to arbitrate, and such documentation or information as will serve clearly to establish the circumstances of the case,
d) all relevant particulars concerning the number of arbitrators and their choice
The Secretariat General sends a copy of the request and the documents annexed thereto to the respondent who has to submit his answer, and if he so wishes his counterclaim, within 30 days to the Secretariat General.
It is important to note that if one of the parties refuses or fails to take part in the arbitration process, the arbitration will proceed notwithstanding such refusal or failure, provided that the Court of Arbitration is satisfied of the prima facie existence of an agreement to arbitrate between the parties.
The Center oversees the arbitration process and, among other things, is responsible for:
- Appointing arbitrators or confirming, as the case may be, arbitrators nominated by the parties;
- Deciding upon challenges of arbitrators;
- Fixing and extending time limits;
- Scrutinizing and approving all arbitral awards;
- Fixing the arbitrators' fees taking into consideration the amount in dispute and on the basis of a published scale attached to the LAC Rules.
No award shall be signed until it has been approved by the Court as to its form. Before signing an award, whether partial or definitive, the arbitrator shall submit it in draft form to the Court of Arbitration for scrutiny. The Court may lay down modifications as to the form of the award and, without affecting the arbitrator's liberty of decision, may also draw his attention to points of substance.
Scrutiny is a fundamental characteristic of institutional arbitration ensuring that arbitral awards are of the highest possible standards and thus less susceptible to annulment in the national courts than they might otherwise be.
In fact, in the eleven years in which the LAC has been monitoring arbitrations and scrutinizing arbitral awards, there is not one arbitral award rendered under the LAC Rules which has eventually been annulled.
The award is considered as a final and binding decision; it can receive immediately the exequatur of the judicial authorities.
It should be noted that by submitting the dispute to arbitration by the LAC, the parties shall be deemed to have undertaken to carry out the resulting award without delay and to have waived their right to any form of appeal insofar as such waiver can validly be made.
Furthermore, although arbitral awards may be challenged before the Court of Appeal by way of "recourse in annulment" (in conformity with article 800 of the Lebanese Code of Civil Procedure), the grounds of challenge available against arbitral awards are limited.
The role played by the Lebanese Arbitration Center is very important in ensuring that the arbitration process progresses rapidly and efficiently until a binding final award is rendered and without the need for recourse to local courts.
Other activities of the Lebanese Arbitration Center
In addition to providing high quality administration and monitoring services for arbitration proceedings, the LAC has been very active in organizing seminars and conferences targeting lawyers, judges, jurists as well as heads of companies, business executives and chartered accountants to familiarize them with arbitration (and alternative dispute resolution methods in general) so that they may appreciate its numerous advantages and thus more readily have recourse to arbitration as a means of resolving their disputes.
The LAC is also considering new approaches in order to further promote the practice of arbitration, such as organizing training workshops for people interested in becoming arbitrators, establishing practical guidelines dealing with the arbitration process. starting a newsletter etc.
The success of the LAC is primarily due to the efforts of the Chamber of Commerce, Industry and Agriculture of Beirut and Mount Lebanon with the cooperation of the Chambers of Commerce, Industry and Agriculture of Tripoli, Sidon and Zahle as well as other associations such as the Bankers Association, the Beirut Traders Association, the Insurance Companies Association and the Syndicate of Construction and Public Works Contractors.
The Lebanese Arbitration Center is composed as follows:
1 - The Board of Trustees, composed of the heads of all of the abovementioned entities (Chambers of Commerce, associations and syndicates).
Members of the Board of Trustees are:
- Mohamad CHOUCAIR - President
- Edmond JREISSATI- Vice President
- Toufic DABOUSSI - Treasurer
- Mouhammed ZAATARI - member
- Nicolas CHAMMAS - member
- Maroun CHAMMAS - member
- Wajih BIZRI – member
- Abraham MATOSSIAN – member
- Joseph TARABAY – member
- Nehmat IFRAM – member
- Charles ARBID - member
- Dr. Muhieddine EL KAISSI– Secretary General
2 - The Higher Council of Arbitration which role is to organize events aiming to develop, promote and spread the knowledge and the practice of arbitration.
Members of the Higher Council of Arbitration are:
- Professor Fayez HAJJ CHAHINE
- Dr. Abed el hamid AHDAB
- Dr. Issam NOUMAN
- Samir ABI LAMEH
- Dr. Michel SAMERANI
- Me. Abed el halim ZEIN
- Samir JISR
- Dr. Hassan AWADA
- Dr. Abed el salam SHEAIB
- Me. Ramzi JREIJ
- Professor Ibrahim NAJJAR
- Dr. Nadim MOUKHAYBER
3 - The Legal Consultative Committee composed by distinguished Lebanese Lawyers and ex-judges active in the field of arbitration.
4 - The Court of Arbitration which role is to administer the arbitration process. ensuring the proper application of the LAC Rules. The Court is assisted by the Secretariat General which closely follows all arbitration cases conducted under the LAC Rules.
Members of the Court of Arbitration are:
- President Chebib MOUKALLED
- Me. Samir ABILAMAA
- Me. Tared NAHAS
The Secretary General Dr. Muhieddine Kaïssi is always at your disposal and available to provide further information and assistance.
Contact details: