Al Habtoor Group is taking legal measures to protect its rights in Lebanon

The Al Habtoor Group revealed that the worsening political, economic, financial and social crises that Lebanon witnessed led to the group incurring significant and ongoing financial losses and damages exceeding 1.7 billion US dollars.

The group confirmed in a statement that it was a committed foreign investor in the Lebanese Republic, pointing out that its investments had been subjected to serious and prolonged damage, and that it had exhausted all efforts to settle this dispute amicably, and therefore the group had no alternative but to move forward and take all necessary legal measures to protect and enforce its rights.

In detail, the group said in the statement: “(The Al Habtoor Group) has always been a committed foreign investor in the Lebanese Republic, as its investments, extending over decades, have contributed to supporting job opportunities, enhancing the tourism sector, developing infrastructure, and stimulating the general economic movement,” noting that these investments included the sectors of hospitality, luxury hotels, retail, entertainment, and real estate, in addition to banking activities related to the group’s business, and all of them formed an essential part of its long-term productive presence in Lebanon.

The group confirmed that these investments were made in good faith, and based on the Lebanese laws in force, and the Lebanese state’s obligations and pledges under the bilateral investment agreement concluded between the UAE and the Lebanese Republic, which entered into force in 1999, and obliges both parties to protect foreign investments and ensure a safe and stable operating environment for them.

The Al Habtoor Group continued: “Over the past years, these investments have been subjected to serious and prolonged damage, as a direct result of measures and restrictions imposed by the Lebanese authorities and the Bank of Lebanon, which prevented the group from being able to freely access and transfer its funds legally deposited in Lebanese banks. These measures were accompanied by the state’s failure to provide a stable and safe environment for the group’s business and investments, in light of the worsening political, economic, financial and social crises that Lebanon witnessed. Together, these factors led to Al Habtoor Group incurring significant and ongoing financial losses and damages exceeding $1.7 billion, which are not limited to the illegal deprivation of access to its funds, but also extend to the broad impact of the collapse of institutional stability, and the state’s failure to take the necessary and timely measures to protect foreign investments and private property.

The group stressed that “the responsibility of the Lebanese state to protect these investments, and to compensate (the Al Habtoor Group) for the damages and losses they suffered, is not a matter of discretion or linked to good faith, but rather is an explicit legal obligation arising from binding bilateral agreements and international investment protection treaties concluded by the Lebanese Republic with the UAE, and imposes on Lebanon clear duties that guarantee protection, fair and equitable treatment, and the provision of effective remedies for investors.”

The group continued: “In early January 2024, (Al Habtoor Group), through a leading international law firm with extensive experience in sovereign disputes and treaty-based investment disputes, sent an official notification to the Lebanese government of the existence of an investment dispute. This notification came to activate the six-month period stipulated in the bilateral agreement as a negotiating deadline, with the express aim of reaching an amicable settlement and ending the dispute through available legal means.

She pointed out that, despite the tireless efforts made by the group in good faith, and the intense institutional communication with the concerned authorities, these efforts did not result in any tangible progress, or in taking actual corrective measures, or in providing effective means of redress on the part of the competent Lebanese authorities to restore matters to normal, or to address the breaches raised, or to fulfill the guarantees guaranteed by the law and international agreements.

The group said in its statement: “Protecting investment is not an option or a matter of discretion, but rather a fundamental obligation under international law and a basic condition for economic credibility and stability. Al Habtoor Group confirms that it is still open to legal and constructive solutions that restore its full rights and respect the obligations of all parties, but at the same time it cannot and will not accept to continue to bear additional losses resulting from prolonged inaction, negligence, and institutional failure.

The Al Habtoor Group indicated that it has exhausted all reasonable and sincere efforts to settle this dispute amicably, including official notification, communication with the competent authorities, and granting sufficient time to take corrective measures, without receiving any meaningful response or achieving any effective treatment. Accordingly, the group has no alternative but to move forward and take all necessary legal measures to protect and enforce its rights under international agreements and relevant legal frameworks.