The Path of Regulating Arbitration in Administrative Contracts under Libyan Legislation

Abstract

This research reviewed the legal debate between the traditional approach, which rejects administrative arbitration based on sovereignty, public funds protection, and public order, and the modern approach, which supports it as an economic necessity to encourage investment, characterized by speed, flexibility, and specialization. The study concluded that the position of the Libyan legislator has gone through successive developments. It started with permissibility based on general rules, moved to a complete legislative ban, and then to a restriction conditional on executive authority approval. However, recent legislation, namely Law No. 10 of 2023, the Administrative Contracts Regulation No. 600 of 2024, and the Partnership Contracts Regulation No. 507 of 2025, has established a fundamental shift. It explicitly recognizes domestic and international arbitration in administrative contracts, while including strict controls to balance the flexibility of arbitration with the protection of public interest and national sovereignty. For example, it requires submitting domestic arbitration cases to the Council of Opinion, and obtaining Council of Ministers approval for administrative contracts of an international nature. The study concluded by offering several recommendations to improve the effectiveness of the administrative arbitration system in Libya. The most notable recommendations are: enhancing legislative clarity by creating a unified law to regulate arbitration in administrative contracts, establishing specialized national arbitration centers, and training legal and administrative staff in public entities to ensure the proper drafting of arbitration clauses and the protection of state interests.