LEBANON Law and Practice Contributed by: Mohamed Alem, Mazen Ghosn and Rana Kahwagi, Alem & Associates
tration agreements that were concluded prior to the bankruptcy and in respect of disputes not related to the bankruptcy. Arbitrating Disputes Regarding the arbitrability ratione personae of dis - putes, prior to the 2002 amendment to the NCPC (see 2.2 Changes to National Law ), the principle of the arbitrability of public contracts in general – and administrative contracts in particular – was not gener - ally observed. With the 2002 amendment, Article 762 (2) of the NCPC explicitly recognised the arbitrability of domestic public contracts. Article 762 (3) of the NCPC also required that arbitration agreements con - tained in administrative contracts be approved by the Council of Ministers. The principle of arbitrability of international public contracts was enshrined in Article 809 of the NCPC, as amended in 2002. 3.3 National Courts’ Approach Lebanese courts tend to apply classic conflict-of-law rules to determine the law governing the arbitration agreement, regardless of the place of arbitration. In this context, the Court of Cassation held that “the proof of the arbitration agreement and its continu - ity over time, ie its extension, is governed in Leba - non either by the law applicable to the effects of this agreement or by the law of the place where the agree - ment was concluded, in accordance with Article 139 para. 1 of the NCPC”, which codifies the conflict-of- law rules (Lebanese Court of Cassation, 17 June 1999, Decision 77/99). Regarding the approach of the national courts with respect to the enforcement of arbitration agreements, the NCPC does not contain any provision requiring state courts to decline their jurisdiction when a party invokes an arbitration agreement, whether in domestic or international arbitration. Nevertheless, it is a well-established practice in Leba - nese case law that state courts refer parties to arbitra - tion if one of the parties objects to their jurisdiction (Court of First Instance of Mount Lebanon, 31 July 2003, Decision 20/2003; Court of First Instance of North Lebanon, 15 January 2004, Decision 28/2004; Court of First Instance of Beirut, 16 October 2008, Decision 10221/2007). This position is consistent with
the provisions of Article II (3) of the New York Conven - tion on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 3.4 Validity The principle of the separability of arbitration agree - ments is not expressly provided for in the NCPC, but Lebanese courts have consistently held that “in arbitration, the arbitration agreement is independ - ent of the underlying contract in which it is contained […]” (Court of Appeal of Beirut, 3 April 2003, Deci - sion 464/2003). Consequently, the invalidity of a main contract does not entail the invalidity of the arbitra - tion agreement contained therein (Court of Appeal of Beirut, 20 May 2008, Decision 767/2008). Article 810 of the NCPC provides for a clear and unre - stricted right to appoint arbitrators or to agree on the method of their appointment directly or by reference to specific arbitration rules. In this respect, Lebanese courts have consistently confirmed that parties may bring their disputes to the knowledge of a legal entity (Court of Appeal of Beirut, Decision 464/2003; Court of First Instance of Beirut, 25 January 1999, Decision 43/1999; and Court of First Instance of Beirut, 5 March 2007). In any event, arbitrators will always be natural persons, even if they sometimes settle disputes on behalf of the institution that administers and super - vises the arbitration. 4. The Arbitral Tribunal 4.1 Limits on Selection Moreover, the NCPC does not require arbitrators to have any special qualifications, so parties have com - plete freedom to choose whomever they wish. It is generally accepted in Lebanese case law that mem - bers of the judiciary may act as arbitrators without any restrictions (Lebanese Court of Cassation, 9 Novem - ber 2004, Decision 150/2004). While the NCPC provisions governing domestic arbi - tration require arbitral tribunals to be composed of an uneven number of arbitrators (Article 771 of the NCPC), this is not the case in international arbitration, as Article 810 of the NCPC allows for the appoint - ment of arbitrators by reference to specific arbitration
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