The UAE's Al Habtoor Group has said it will pursue legal measures for its investment dispute in Lebanon, after exhausting all good-faith efforts to resolve it.
The Dubai-headquartered conglomerate, which made investments across hospitality, retail, leisure, real estate and banking-related activities in Lebanon, said it has suffered losses exceeding $1.7 billion.
Investments have "suffered severe and sustained harm as a direct result of measures and restrictions imposed by Lebanese authorities and the Banque du Liban", the company said on Monday.
Authorities have prevented it from freely accessing and transferring lawfully deposited funds held in Lebanese banks, Al Habtoor said.
These measures, compounded by the "prolonged political, economic, financial and social crises" Lebanon has faced as well as the country's “failure to ensure a stable and secure environment for operations and investments”, have caused damages and losses to the group’s assets in Lebanon, it added.
Al Habtoor Group said it remains open to “lawful and constructive solutions” with authorities, but that it “cannot and will not continue to absorb additional losses arising from prolonged inaction, negligence and systemic failure”.
The company has said it has “exhausted all reasonable and good-faith efforts to resolve this dispute amicably”.
“The group has no other alternative but to advance this matter further and proceed to take all legal measures necessary to protect and enforce its rights under applicable international agreements and legal frameworks,” it added.
Scale of investment
As of January 2024, the Habtoor Group's investments in Lebanon amounted to about $1 billion.
These investments include funds placed within the Lebanese banking system, luxury hotels affiliated with Hilton Hotels and Resorts, a shopping mall, a 100,000-square-metre leisure destination called Habtoor Land and other property ventures.
In January last year, the group's chairman Khalaf Al Habtoor cancelled all planned investments in Lebanon, a few days after he announced his intention to invest in a large-scale project there.
He said the decision was made due to the “lack of security and stability and the lack of a horizon for improvement in the near future” in the country.
Mr Al Habtoor also said at the time that he would sell all his properties and investments in Lebanon and would refrain from travelling there.
The UAE-based conglomerate in January 2024 had also formally notified the Lebanese government about an investment dispute. Under the UAE-Lebanon treaty effective since 1999, Lebanon is committed to protect investments made by Emirati entities within its borders.
“The responsibility of the Lebanese government to safeguard these investments and to compensate Al Habtoor Group for the losses sustained is not a matter of discretion or goodwill, but rather a legal obligation,” the company said on Monday.
The notice was issued “with the express objective of reaching an amicable resolution and concluding a settlement”, it said.
However, despite “sustained good-faith efforts and extensive institutional engagement, these discussions have not resulted in any meaningful progress, corrective measures, or effective remedies by the relevant Lebanese authorities”, the group claimed.
Lebanon has been mired in an economic crisis since 2019, which got exacerbated by the recent war between Hezbollah and Israel. The World Bank estimates reconstruction and recovery efforts will cost $11 billion.
The Lebanese government has been taking measures to change the situation. It recently submitted a draft budget and a package of financial reform laws to parliament, including measures aimed at restoring confidence in the banking system and rebuilding public institutions.
