In line with Lebanon's pro-alternative dispute resolution attitude, a further option in the form of judicial mediation was recently made available to parties through the implementation of Law 82. Judicial mediation offers an alternative mechanism for settling disputes in an efficient, fair, timely and confidential manner and should help to lessen the increasingly overwhelming workload faced by judges.
Due to its status as a commercial hub, Lebanon has its fair share of disputes arising from commercial representation agreements, particularly those concerning compensation for the termination of such agreements. However, while recourse to the court system is well established as the traditional method of settling this type of dispute, significant controversy remains regarding their submission to arbitration.
In 2013 Lebanon commenced and concluded the initial pre-qualification licensing round for offshore oil and gas exploration, which was based on a draft model exploration and production agreement (EPA). This update focuses on the dispute resolution mechanism provided in the draft model EPA and the issues that may arise in the face of divergent interests of the parties involved.
A series of recent decisions of the Beirut Court of First Instance has affirmed the Lebanese judiciary's liberal approach to arbitration. In each case, the court intervened in an arbitration proceeding to preserve the validity of an arbitration agreement when it had been called into question. Issues considered include invalid terms within arbitration agreements and formal insolvency proceedings involving parties to arbitration.
In Lebanon, the debate surrounding the immunity from execution of arbitral awards granted to international organisations and state bodies recently gained further prominence following a landmark decision of the Lebanese Execution Bureau. The bureau's decision is welcome, as it reflects the arbitration-friendly stance of Lebanese courts and legal doctrine.
Preventing corruption is a key challenge faced by the oil and gas sector worldwide. This is particularly true in developing countries, as the high level of financial resources generated by recent discoveries can create a breeding ground for corruption and abuse. Lebanon recently took a major step towards achieving transparency and accountability in this regard when it adopted Law 84 on Transparency in the Oil and Gas Sector.
Disputes are a significant risk in any energy project. As such, the Cabinet recently issued a model exploration and production agreement for petroleum activities. However, production-sharing contracts such as the agreement have frequently been the subject of international commercial and state investment disputes. It is therefore questionable whether the dispute resolution mechanism provided in the agreement allows for the efficient management of any potential disputes that may arise.
The new government recently approved two draft application decrees which are part of the final package of legislation necessary to resume the long-awaited tendering process for oil and gas exploration and production in Lebanon. The tendering process commenced in 2012 with a call for interested companies to pre-qualify. Although the first tendering round was launched in April and May 2013, the process came to a halt pending the approval of the draft decrees.
There has been an ongoing debate in Lebanon recently over whether it should establish a national oil company (NOC). While some emerging countries have benefited from NOCs, in other countries they have been the victims of corruption. As such, before establishing an NOC, Lebanon should thoroughly study the benefits of its establishment, as well as its role and allocated budget.
Recent discoveries in the eastern Mediterranean Sea may constitute the world's largest natural gas find. The Lebanese government has accordingly committed to resuming oil and gas exploration as soon as possible, by ratifying two decrees concerning the delineation of blocks to be opened for bidding and the model exploration and production agreement.
In a drawn-out dispute between the Kataeb Political Party and The Modern Media Company (MMC), the Beirut Supreme Court has confirmed that ownership of a trademark or trade name is acquired through use and not through registration with the relevant authorities. However, the MMC believes that the court made a serious error in its decision and has thus appealed to the country's highest court.