The good news for contractors seeking projects in Lebanon is that, unlike Dubai, Lebanon has been relatively unaffected by the credit crunch.
Lebanese law is very close to French law and therefore will be familiar to those who usually contract under civil law systems.
The Lebanese Code of Obligations and Contracts of 1934 is inspired by the French Civil Code. In fact, it was originally drafted in French and subsequently translated to Arabic, which is today the official language of the Lebanese Courts. Significantly, unlike other Arab Civil Codes, Shari’a law is not a source and therefore plays no part in considering contract obligations. Instead, Lebanese lawyers look to French cases and jurisprudence to fill any gaps in the Civil Code. FIDIC contracts are widely used for projects in Lebanon.
Lebanese Courts have a good reputation but they are not commonly confronted with large and complex disputes that construction projects can produce. Lebanon does not have a widely recognised Arbitration Centre and arbitrations tend to be referred to international bodies, particularly the ICC. A major improvement for foreign contractors entering into contracts with the Lebanese state took place in 2002 when a new law was passed which allowed public bodies to enter into contracts which provided for international arbitration.
Lebanon is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and has entered into 49 bilateral investment treaties with various countries providing for the protection of foreign investments made in Lebanon. Lebanon is also a signatory to the 1965 International Convention on the Settlement of Investment Disputes.
This article first appeared in a slightly different form in Construction News, 9 July 2009.