Khaberni - The Habtoor Group, one of the largest UAE companies, revealed that the exacerbated political, economic, financial, and social crises in Lebanon have led to the group incurring significant and ongoing financial losses and damages, exceeding $1.7 billion.
The group confirmed in a statement that it had been a committed foreign investor in the Lebanese Republic, noting that its investments had suffered serious and prolonged damage, and pointed out that it had exhausted all efforts to amicably settle this dispute. Therefore, the group had no alternative but to proceed and take all necessary legal actions to protect and enforce its rights.
In detail, the group in the statement said: «The Habtoor Group has always been a committed foreign investor in the Lebanese Republic, where its investments over decades have supported employment opportunities, boosted the tourism sector, improved infrastructure, and stimulated the overall economic activity», noting that these investments included hospitality, luxury hotels, retail, entertainment, and real estate sectors, as well as banking activities related to the group's operations, all of which formed an essential part of its long-term productive presence in Lebanon.
The group affirmed that these investments were made in good faith, based on the existing Lebanese laws, and on the commitments and obligations of the Lebanese state under the bilateral investment treaty between the UAE and the Lebanese Republic, which came into effect in 1999. It obliges both parties to protect foreign investments and ensure a safe and stable operating environment for them.
The Habtoor Group continued: «Over the past years, these investments have suffered serious and prolonged damage, directly resulting from measures and restrictions imposed by the Lebanese authorities and the Central Bank of Lebanon, which prevented the group from having free access to its legally-deposited funds in Lebanese banks and from transferring them. These actions, coupled with the state's failure to provide a stable and secure environment for the group's operations and investments amid Lebanon's escalating political, economic, financial, and social crises, led to the Habtoor Group incurring significant and ongoing financial losses and damages, exceeding $1.7 billion American dollars, not limited to the unlawful deprivation of access to its funds, but also extending to cover the broad impact of the institutional instability, and the state’s failure to take necessary and timely measures to protect foreign investments and private ownership.»
The group emphasized that «the Lebanese state's responsibility to protect these investments and to compensate the Habtoor Group for the damages and losses incurred is not a matter of discretion or linked to good faith, but is a clear legal obligation arising from binding bilateral agreements and international treaties on investment protection that the Lebanese Republic has entered into with the UAE, which impose clear duties on Lebanon to ensure protection, fair and equitable treatment, and to provide effective remedies for investors.»
The group continued: «In early January 2024, the Habtoor Group, through a leading international law firm experienced in sovereign and treaty-based investment disputes, issued a formal notification to the Lebanese government of an investment dispute. This notification was intended to activate the six-month negotiation period stipulated in the bilateral agreement, with a clear aim to reach an amicable settlement and resolve the dispute through available legal means.»
The group pointed out that despite the diligent efforts it made in good faith, and intensive institutional communication with concerned entities, these endeavors did not lead to any significant progress, nor did they result in corrective actions being taken, or in providing effective remedies by the competent Lebanese authorities to rectify the situation, address the raised breaches, or uphold the guarantees provided by law and international agreements.
The group stated in its statement: «Protecting the investment is not an option or a discretionary matter, but an essential obligation under international law and a fundamental requirement for economic credibility and stability, and the Habtoor Group confirmed that it remains open to constructive legal solutions that restore its full rights and respect the obligations of all parties, but at the same time, it cannot and will not accept continuing to bear additional losses due to prolonged failure, negligence, and institutional failure.»
The Habtoor Group also noted that it had exhausted all reasonable and sincere efforts to settle this dispute amicably, including the formal notification, institutional communication, and providing sufficient time for corrective actions, without receiving any meaningful response or achieving any effective resolution. Thus, the group no longer had any alternative but to proceed and take all necessary legal actions to protect and enforce its rights under relevant international agreements and legal frameworks.
