UAE conglomerate plans legal action against Lebanon over $1.7B investment losses

UAE Conglomerate Seeks Legal Action Against Lebanon Over $1.7 Billion in Losses

The Al Habtoor Group, a major Dubai-based conglomerate, announced Monday it will pursue legal action against Lebanese authorities over significant financial losses stemming from the country’s ongoing economic crisis. The company claims to have suffered approximately $1.7 billion in investment losses due to restrictions that have prevented access to its funds held in Lebanese banks.

The dispute highlights the devastating impact of Lebanon’s economic collapse, which began in late 2019 and ranks among the world’s worst financial crises in modern history. The situation was further exacerbated by the recent 14-month conflict between Israel and Hezbollah, which the World Bank estimates will require $11 billion for reconstruction and recovery efforts.

Al Habtoor Group maintains several high-profile investments in Lebanon, including the Metropolitan Palace Hotel in a Beirut suburb and Habtoor Land, a major theme park located east of the capital. Despite previous considerations to dismantle some of its assets in the country, the group had recently reversed those plans.

In its statement, the conglomerate detailed how its investments “have suffered severe and sustained harm” directly resulting from measures imposed by Lebanese authorities and the central bank. These restrictions have prevented the group from “freely accessing and transferring lawfully deposited funds held in Lebanese banks,” a common complaint among foreign investors caught in Lebanon’s financial meltdown.

The company further noted that Lebanon’s compounded political, economic, and social crises, along with the government’s failure to maintain a stable environment for operations and investments, have contributed significantly to their financial losses.

While the Al Habtoor Group indicated it remains open to “lawful and constructive solutions” that would restore its rights completely, it emphasized that it had “exhausted all reasonable and good-faith efforts” to resolve the dispute amicably. The statement did not specify which legal venue would hear the case, leaving questions about whether it might be pursued in international arbitration or through other mechanisms.

Lebanese government officials were not immediately available to comment on the announcement. The Prime Minister’s office has not yet issued a formal response to the conglomerate’s claims.

The dispute occurs at a particularly sensitive time for Lebanon’s international relations. The country has been working to improve its standing with wealthy Gulf states, including the UAE, following years of tension over the influence of Hezbollah within Lebanon. These Gulf nations have historically been important sources of investment and financial support for Lebanon’s economy.

Lebanon’s economic crisis has its roots in decades of corruption and financial mismanagement by the country’s political elite. When the crisis erupted in 2019, it led to the collapse of the Lebanese pound, hyperinflation, and a banking crisis that has frozen deposits and savings for countless individuals and businesses. Many Lebanese citizens and foreign investors have been unable to access their funds due to informal capital controls imposed by banks.

The country’s new leadership, including recently appointed president and prime minister, have pledged to combat corruption and implement reforms necessary to stabilize the economy. However, meaningful progress has been slow, and Lebanon continues to struggle without a comprehensive economic recovery plan.

This legal challenge from Al Habtoor Group could signal a new wave of international claims against Lebanon from foreign investors who have seen their assets trapped or devalued during the ongoing crisis, potentially complicating the country’s already difficult path to economic recovery.