Al Habtoor Group warns of legal action against Lebanon over $1.7 billion losses

Dubai-based Al Habtoor Group said on Monday it would pursue legal action against the Lebanese government and the country’s central bank after suffering losses exceeding $1.7 billion, citing restrictions that blocked access to funds held in Lebanese banks and breaches of international investment protections.

In an official statement, the conglomerate said measures imposed by Lebanese authorities and the Banque du Liban had prevented it from freely accessing and transferring lawfully deposited funds, causing “severe and sustained harm” to its investments across hospitality, real estate, retail, leisure and banking-related activities.

“These measures, compounded by the prolonged political, economic, financial and social crises facing the Lebanese Republic, have caused substantial and ongoing damages and losses to the Group’s assets and properties in Lebanon, exceeding $1.7 billion,” the statement said.

Al Habtoor Group said its investments were made in good faith under Lebanese law and in reliance on protections guaranteed by a bilateral investment treaty between the United Arab Emirates and Lebanon that has been in force since 1999. It said those obligations required Lebanon to ensure fair treatment, investor protection and effective remedies.

Long-running investment dispute

The group formally notified the Lebanese government of an investment dispute in early January 2024, triggering a six-month cooling-off period under the treaty aimed at reaching an amicable settlement. However, it said prolonged engagement had failed to produce any meaningful progress or corrective action.

“Al Habtoor Group has exhausted all reasonable and good-faith efforts to resolve this dispute amicably,” the statement said, adding that it now had “no other alternative” but to proceed with legal measures under applicable international agreements.

The group said it remained open to constructive solutions that would restore its rights but warned it could not continue to absorb losses arising from what it described as prolonged inaction and systemic failure.

The warning follows a decision announced last year by Khalaf Ahmad Al Habtoor, founder and chairman of the group, to cancel all planned investments in Lebanon and sell existing assets, citing security concerns and a lack of stability.

Lebanon has been grappling with a deep financial crisis since 2019, which has paralysed its banking system, restricted withdrawals and transfers, and prompted a wave of legal claims by foreign investors seeking to recover trapped funds.