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A Real Estate Empire Turns to ICSID

  • Writer: Aişe Gül Akkoyun
    Aişe Gül Akkoyun
  • Apr 24
  • 3 min read

Al Habtoor Group's $1.7 billion claim against Lebanon, and what it says about arbitrating a banking crisis.


Background

Dubai-based Al Habtoor Group, one of the United Arab Emirates' larger diversified conglomerates with interests spanning hospitality, automotive, real estate and education, has formally filed a Request for Arbitration with ICSID against the Lebanese Republic. The claim proceeds under the UAE–Lebanon bilateral investment treaty, in force since 1999, and follows a notice of dispute issued earlier. Al Habtoor engaged White & Case in February 2026 to pursue the matter, and reports put the conglomerate's claimed losses at over USD 1.7 billion.

What the claim actually alleges

The core allegation is narrower than the headline figure suggests, at least at the outset: Al Habtoor says Lebanon and its central bank have imposed restrictions preventing the group from freely transferring more than USD 44 million held in Lebanese banks, and that Lebanon failed to maintain a safe and sound environment for the group's businesses and investments more broadly. The gap between the roughly USD 44 million in specifically frozen transfers and the USD 1.7 billion headline loss figure is itself worth noting — the larger number appears to capture the claimant's estimate of broader business impairment across its Lebanese operations, not simply the funds currently unable to leave the banking system.

Why this is a banking-crisis dispute wearing a treaty-claim shape

Lebanon's currency and banking crisis, running since 2019, has involved informal capital controls that Lebanese banks have applied to depositors — including, evidently, corporate depositors with substantial balances — without a comprehensive legislative capital-control framework ever having been enacted. Framing restricted access to bank deposits as a breach of the free-transfer and fair-and-equitable-treatment guarantees in a bilateral investment treaty is a familiar move in banking-crisis-adjacent ISDS claims elsewhere, but it puts a tribunal in the position of assessing a systemic financial crisis through the comparatively narrow lens of one investor's transfer rights.

What would be worth measuring

  • How many other foreign investors with Lebanese banking exposure have filed, or signalled, comparable BIT claims over restricted transfers since the crisis began in 2019

  • Whether tribunals asked to assess free-transfer breaches during sovereign banking crises have historically distinguished between formal, legislated capital controls and informal, bank-level restrictions applied without a clear legal basis

  • How the ratio between "specifically frozen funds" and "total claimed loss" compares across similar banking-crisis ISDS claims, as a way of testing how much of these claims rests on hard transfer restrictions versus broader business-impairment estimates

  • Whether Lebanon's absence of a comprehensive capital-control law strengthens or weakens the state's defence, relative to states that legislated formal, temporary capital controls during their own crises

The open question

Banking-crisis ISDS claims sit awkwardly between ordinary expropriation cases and pure sovereign-debt disputes: the state has not seized any asset, but investors cannot access funds that are nominally still theirs. Whether treaty standards built around expropriation and fair and equitable treatment are well suited to adjudicating that kind of systemic, banking-sector-wide restriction — as opposed to a targeted act against one investor — is the harder doctrinal question sitting underneath this claim's headline figure.

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