دستور نيوز
Francois Daher
Wednesday 8 April 2026 – 09:33
Source: Voice of Lebanon
In the jurisprudence that decides on the claim for a bank deposit in foreign currency prior to 10/17/2019:
The issue of dismissal on the claim of demanding payment of the bank deposit in foreign currency raises confusion in light of the methodology adopted by the judiciary to decide on it, which necessitated stopping at it and approaching it according to the following:
A- In the facts:
1- The date of the bank deposit in foreign currency dates back to before 10/17/2019.
2- This deposit is originally subject to the general legal system. That is, the law of contracting parties, the law of obligations and contracts, the law of land trade, and the law of money and credit.
3- On 10/17/2019, the banking crisis broke out at the level of the entire banking sector in Lebanon.
4- As a result of the outbreak of this crisis, the banking sector appeared in a state of scarcity of liquidity.
5- Stopping the payment of deposits and transferring them abroad.
6- The Bank of Lebanon intervened to regulate the payment of deposits according to ceilings that it successively determined in the circulars it issued. He asked the banks in Lebanon to adhere to them, under penalty of prosecution before the Supreme Banking Authority. Which is a judicial body that looks into banks’ violations of the provisions of the Money and Credit Law and issues administrative penalties against them. It does not accept any method of ordinary or extraordinary administrative or judicial review.
7- The banks proceeded to present these circulars to their depositors and subjected whomever they wanted to to their terms. It also froze deposits whose owners did not want to be subject to these circulars.
8- As a result of these circulars, a new legal system was created, to which bank deposits in Lebanon became subject, which is different from the general legal system.
9- As for the state, which is the largest debtor to the Bank of Lebanon and the banks, it announced in March 2020 that it had stopped paying its debts (default), that is, its refusal to pay them to their owners.
10- Which put the banks in a state of sustainable liquidity scarcity. It required arranging the distribution of its remaining liquidity, in its funds and in its accounts with correspondent banks and the Bank of Lebanon, to its depositors.
11- So that the Bank of Lebanon was forced to continue issuing circulars regulating the distribution of its remaining liquidity to operating banks, so that they in turn distribute it equally and fairly to their depositors.
12- As a result of the above, bank deposits have become de facto subject to a transitional legal system established by the Bank of Lebanon through the circulars it issued, and imposed on banks to apply them in their dealings with their customers, in the event that these customers want to benefit from their deposits, that is, liquidate as much of their nominal value as possible.
13- Recently, the state took the initiative to draft a financial regulation law that subjects bank deposits formed before 10/17/2019 to an updated legal system (sui generis). So that it removes it from the general legal system to which it was originally subject, as well as from the transitional legal system that the Bank of Lebanon created following the outbreak of the banking crisis.
B- In law:
The question posed to the judiciary: How can the judiciary decide on the depositor’s lawsuit, according to which his bank demands payment of his bank deposit in foreign currency?
B/1 – The judiciary, which was stable in its approach, at this stage, decided to oblige the bank to pay its depositor the entirety of his bank deposit in cash or to transfer it to him abroad, in accordance with its subjection to the provisions of the general legal system to which it is essentially subject. That is, to the provisions of: • Contracting parties’ law • The law of obligations and contracts • The law of commerce • And the law of money and credit.
He considered it necessary:
– Refund of the undisputed and due deposit.
It is not permissible to return it by bank check because it no longer constitutes an actual means of payment with complete components.
– It does not have to be returned in cash.
So, based on the above, he decided to return the deposit in cash.
B/2- In order to reach this result, he relied on the following legal reasons:
– The circulars issued by the Bank of Lebanon were dropped on the pretext that they were not binding on it. Because it is in the category of administrative decisions (sic), which has a rank lower than that of positive legal rules. Or he considered it, at best, as a sub-agreement contract binding on the depositor who agreed to it, to the extent of the ceiling of the funds it included.
Note that when the depositor agrees to subject his bank deposit to the system of circulars issued by the Bank of Lebanon, even in an initial part of them, he has unapologetically agreed to remove it in its entirety from the general legal system. This is because it is not valid to subject the same bank deposit to two different payment systems. Considering that the alternative transitional tax system established by the Bank of Lebanon is for the purpose of replacing the general tax system, and to block the possibility of pairing between them.
He also considered that the transitional legal system for bank deposits established by the Bank of Lebanon with these circulars is not binding on it. From the perspective that the Bank of Lebanon is a public institution whose decisions do not restrict judicial work.
The element of force majeure was also dropped (243 and 341 to 343 AD), which allows banks to make an amendment to their obligations to pay their depositors’ deposits (307 QAT and 123 QAT). Under the pretext that banks are professional and must anticipate the scarcity of their liquidity. However, it made an administrative mistake in investing its funds and violated the provisions of the Money and Credit Law, which makes it responsible for the state of liquidity scarcity in which it fell.
Note that deciding this issue falls within the absolute functional jurisdiction of the Supreme Banking Authority and is definitely outside the jurisdiction of the judicial judiciary.
The clearing power of the bank check issued by the depository bank in favor of its client deposited on his account with the Bank of Lebanon was also dropped. Under the pretext that it no longer constitutes an immediate and complete means of cash payment for the bank deposit.
However, this matter is not due to the lack of supplies that are available in book or name when the drawee bank issues a bank check on its account with the Bank of Lebanon, but rather to the scarcity of liquidity at the Bank of Lebanon itself, which is due to those supplies. This scarcity was created by the authority (fait du prince) due to its refusal to pay its sovereign debt to its creditors, the Bank of Lebanon and the banks.
B/3- So the bank deposit was treated as if it were a special case (cas particulier) between the depositor and his bank, so the provisions of the general law were applied to it to decide it. While it (i.e. the bank deposit) is a comprehensive and systematic situation (situation généralisée et
systémique) dealt with the relationship of the banking sector with its depositors throughout the Lebanese territories. So, it is no longer permissible to extract solutions from the provisions of the general law designed to take care of special cases and implement them in light of the comprehensive and systemic situation or situation that deals with the entire banking sector and its depositors.
C- However, this methodology is taken into account in the ruling:
A/1 – The state of scarcity in banks’ liquidity, which prevents the return of the deposit (in cash) according to the contract, is due to the action of the authority (fait du prince), which refrained from paying its sovereign debt (dettes souveraines) to the Bank of Lebanon and the banks (a fact fixed by default in the month of March 2020 within the meaning of Article 141 A.M.C.). This act of authority, which is unforeseen, unexpected, and impossible to overcome (imprévisible et insurmontable), constitutes an element of force majeure that changes the manner of returning the deposit and not its economic entity, that is, its nominal or book value.
A/2- Amending the method of returning the deposit by force of authority/force majeure requires its return in accordance with the circulars of the Bank of Lebanon, which constitute the legal system alternative to the general legal system.
Especially since these circulars have been described by the administrative judiciary as being of the category of administrative decisions (actes administratifs) (sic), which makes them legally enforceable by force of law and binding by nature according to their administrative character. So that it is up to the judicial judiciary to adhere to its content until the State Shura Council, which is functionally competent to consider its legitimacy, issues a decision to suspend its implementation or invalidate it. As happened with Circular No. 151 dated 4/21/2020, where the State Shura Council took a decision to suspend its implementation under No. 213/2021 on 2/21/2021.
A/3 – The alternative/transitional system based on the circulars of the Bank of Lebanon is consistent with the statutory rules that regulate how the insolvent debtor (the depositary bank) deals with its creditors (depositors). These are the rules stipulated in the Trade Law (Article 594), and also stipulated in the Lebanese Penal Code (Articles 690 and 699).
So that this alternative system provides justice and equality between depositors, there is no privilege or comparison between them. On the basis that
The remaining mass of banks’ liquidity at the Bank of Lebanon (bankruptcy assets Actifs de la faillite c.com.531 or bankruptcy funds Actifs de la faillite c.com.594) is distributed equally and fairly (au marc le franc) to all depositors.
C/4- The state of scarcity in banks’ liquidity constitutes an established material fact for the general public (in the sense of 141 A.M.C.). The amount of liquidity remaining for banks at the Bank of Lebanon is also a material fact fixed for the general public (in the sense of 141 A.M.C.).
These two facts must be taken into account by the judiciary, as they determine the amount of liquidity (bank assets) that can be distributed to depositors throughout the Lebanese territories. This is to achieve equality between litigating and non-litigating depositors.
A/5 – If the authority had not repudiated its sovereign debt, as we mentioned above, the banks would not have fallen into a state of scarcity of liquidity, would not have been unable to return the deposits of their depositors, and would not have been subjected to restructuring by the law recently approved by the Parliament under No. 23/2025 dated 7/31/2025 and published in the Official Gazette in Appendix No. 36 dated 8/21/2025 entitled “Banking Reform and Reorganization Law.”
Evidenced by the fact that the aforementioned law did not attribute any error to the banks in their management, but rather instructed them to rebuild their capital so that they could return to practicing their banking activities normally, after they lost that liquidity due to the authority that placed them in this state of scarcity, as was refuted above.
X/6 – The judiciary approach followed by the judiciary has exceeded all the (narrative) data to which the bank deposit was subjected after 10/17/2019. valley :
To distinguish and favor the depositor who sues his bank and is awarded a judgment for his entire deposit in cash at the expense of the other depositor who has no ability to pursue that claim. It also violated the rule of equality between depositors, which was prohibited by the Penal Code (690 and 699 BC) as well as the Lebanese Trade Law (594 BC). And to ignore the state of force majeure in which the banks were placed, as a result of the authority’s sudden, unexpected and unexpected decision to refrain from paying its debt to the Bank of Lebanon and the banks. This placed it in a state of sustainable liquidity scarcity, making it unable to return the deposits of its depositors.
Until it concludes, in the end, by causing the bankruptcy of the banks as a result of the exhaustion of their remaining liquidity to cover the rulings issued in the interest of a small and powerful group of litigating depositors out of hundreds of thousands of whom are mostly unable to litigate, and who have nothing left but to enter the bankruptcy floor of these banks, which are often empty of assets, in light of the meager guarantee provided by the National Deposit Insurance Corporation for their deposits (75 One million Lebanese pounds to the depositor for all his bank accounts.
D- In conclusion:
D/1- The judiciary must not ignore the transitional legal system that is an alternative to the general legal system to which the bank deposit was subjected after 10/17/2019, and must rule that it be subject to its provisions. Because it provides the distribution of the banks’ remaining liquidity at the Bank of Lebanon to their depositors, fairly and equally among them, without any discrimination or comparison between one depositor and another. This is in accordance with the provisions of the Lebanese Penal Code and the Lebanese Trade Law, which prevent an insolvent debtor (depositary bank) or a bankrupt person from preferring one of his creditors to others or disposing of his money in a way that harms the rights of all his creditors. It also prevents the judiciary, to the same extent, from enshrining in its rulings that distinction or that differentiation.
D/2 – Otherwise, he may, by digression and as a precaution, suspend the trial until the new legislation (Financial Regulation Law) is issued, which aims to subject the bank deposits formed before 10/17/2019 to a new legal system of its own. It revolves around distributing the remaining cash liquidity of banks at the Bank of Lebanon equally among its depositors, up to a financial ceiling of 100,000 one hundred thousand US dollars for each depositor for all of his bank accounts over a period of four years. Which constitutes a suggestion to the judiciary about how the legislator should separate the issue of paying bank deposits in foreign currency in cash dating back to before 10/17/2019.
Published articles represent the opinion of their authors
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In the jurisprudence that decides on the claim for a bank deposit in foreign currency before 10/17/2019 – Voice of Lebanon – Voice of Lebanon
– الدستور نيوز
اراء و اقلام الدستور – In the jurisprudence that decides on the claim for a bank deposit in foreign currency before 10/17/2019 – Voice of Lebanon – Voice of Lebanon
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