The Court of Audit imposed a financial penalty of just $18 on former Beirut Governor Judge Ziad Chebib and members of the municipal council over the sale of a property worth $15 million to Medawar 1216, according to a ruling issued in February 2026 and reviewed by Daraj. The Court found that the property had been sold through a direct agreement rather than a competitive process, which warranted the fine.
Opposite the Port of Beirut stands a four-storey white building frequented by citizens seeking to complete customs procedures and other port-related transactions. On the ground floor is a branch of Bank of Beirut, whose board is chaired by Salim Sfeir, the head of the Association of Banks in Lebanon.
Between this property, numbered 1216, and the adjacent plot, numbered 247, lies a 1,091-square-meter parcel of land owned by the Railway Authority, which falls under the Ministry of Public Works, according to its chairman, Ziad Chia. The land had been used as a parking lot.
In 2016, Bank of Beirut submitted a request to Beirut Municipality and the Ministry of Interior, then headed by Nohad Machnouk, seeking to purchase the land and have it reclassified as surplus property, meaning it was no longer considered usable for public purposes, so it could be merged with the two adjacent plots. This was confirmed by Bank of Beirut’s lawyer, Shadi Makhzoum, in his response to Daraj.
What followed was a lengthy legal battle between the Railway Authority and the Beirut Municipality, which ultimately culminated in a State Council ruling that the property could be transferred from the public domain to the municipality’s private domain. However, the current chairman of the Railway Authority, Ziad Chia, questioned the decision and voiced his opposition.
A judicial source also told Daraj that no party has the legal right to encroach on railway property in Lebanon. Any such violation, the source said, should be removed and accompanied by a formal citation against the offending party.
During a site visit, the Daraj team found a large tract of land with clearly visible railway infrastructure belonging to the Railway Authority, as shown in the photographs below. (Add Pictures here)
The dispute, however, extends beyond the question of ownership. According to lawyer Wassef Harakeh, who has been following the case, the real issue is that the Lebanese state may have lost nearly $10 million due to legal circumvention and the property’s sale through a direct agreement rather than a competitive process.
Reclassifying the Property as “Surplus Land”
After the property was transferred from the public domain to the private domain of Beirut Municipality, the municipality, with the approval of its council members, sold it to Medawar 1216 and Medawar 247, two companies owned by Bank of Beirut, according to documents reviewed by Daraj. This was not disputed by Makhzoum in his response to Daraj.
According to lawyer Wassef Harakeh, there were two legal avenues available to the Beirut Municipality for selling the property.
The first was to treat it as public property belonging to the Lebanese state. Under Article 77 of Law No. 275, this would have required a public auction and a decree issued by the Council of Ministers. Had this route been followed, the property’s value could have reached approximately $25 million.
The second option was to classify the property as “surplus land,” meaning land deemed unusable. This allowed it to be sold through a direct agreement without the need for a Cabinet decree. Under this mechanism, negotiations could take place directly between the seller, Beirut Municipality, and the buyer, Bank of Beirut, through Medawar 1216, pursuant to Article 80 of the same law.
Then, Beirut Governor Judge Ziad Chebib classified the property as “surplus land”, a disused public right-of-way deemed no longer usable, and submitted a legal opinion to then-Interior Minister Nohad Machnouk, who approved it. This classification paved the way for the property to be sold through a direct agreement for approximately LBP 24 billion, equivalent at the time to around $16 million at the official exchange rate, to Medawar 1216 through its lawyer, Youssef Atieh, according to documents reviewed by Daraj.
Bank of Beirut’s lawyer, Shadi Makhzoum, confirmed this in his response to Daraj, noting that the valuation committee at the Ministry of Finance had set the price at LBP 22 million per square meter, equivalent to roughly $16,000 at the time.
According to the documents, the purpose of the purchase was to merge the property with Plot No. 247, which houses Bank of Beirut’s headquarters. Chebib did not refer the file to the municipal council for review until Jamal Itani became mayor. The referral included an opinion from the Engineering Department stating that “the public properties in question, covering an area of 1,091 square meters, were originally separated from Plot No. 247 in Medawar and incorporated into the public domain. They contain no structures and are not paved.”
In response, lawyer Wassef Harakeh filed a complaint with then-Financial Prosecutor Judge Ali Ibrahim. According to Harakeh, however, the case was put on hold pending the outcome of the Court of Audit’s review of the matter under the presidency of Judge Ahmad Hamdan.
Once again, despite the Court of Audit’s ruling that the property should have been sold through a public auction rather than a direct agreement, both Chebib and Bank of Beirut relied on the State Council’s decision and dismissed the significance of the Court of Audit’s earlier 2017 ruling.
In his response to Daraj, Chebib argued that “the Court of Audit is not the competent judicial authority to rule on the legality of administrative decisions. That authority rests with the State Council, which issued a final decision on 19 February 2026 directly addressing the legal grounds on which Beirut Municipality relied when transferring the property from the municipal public domain to the municipal private domain.”
Itani did not respond to Daraj’s questions.
The Sale Between the Municipality and the Bank
The disputed property covers an area of 1,091 square meters. Since banks are not permitted to acquire land directly, Bank of Beirut established two companies, Medawar 1216 and Medawar 247, to complete the transaction, according to documents reviewed by Daraj. The bank’s lawyer confirmed that both companies are owned by Bank of Beirut.
On 12 January 2017, then-Minister of Interior and Municipalities Nohad Machnouk approved the transfer of the property from the public domain and its classification as private property belonging to Beirut Municipality, following a request submitted by then-Beirut Governor Judge Ziad Chebib, according to a document obtained by Daraj.
Under the decision, ownership of the property was transferred from the Railway Authority to the Beirut Municipality. This prompted the then-chairman of the Railway Authority, Ziad Nasser, to file a lawsuit arguing that the property was not “surplus land” but rather part of the public domain and an extension of Beirut’s railway line, as he told Daraj.
Nasser added: “The property is subject to a 1940 decree confirming that it forms part of the Port of Beirut railway line.” For that reason, he argued, it cannot be encroached upon or classified as unusable railway land.
As for the claim that the property was surplus land, Nasser said the site had been used as a parking lot with the knowledge and approval of Beirut Municipality and its then-mayor, Jamal Itani. In his view, this contradicts any assertion that the land was unused or unsuitable for investment.
In response to Daraj, Machnouk said he did not recall the specific procedure, describing it as a routine administrative matter. “It was a transaction like any other, and I relied on Governor Chebib’s assessment given that he is a judge,” he said.
Regarding the sale itself, Machnouk said he was unaware of the transaction between Beirut Municipality and Bank of Beirut and did not recall receiving any objection from the Railway Authority.
A judicial source told Daraj that it would be difficult for a minister to take such a step without knowing its details, particularly given the property’s size and strategic location. The source dismissed the possibility that the minister’s signature was merely a formality.
In his response to Daraj, Chebib cited the State Council’s decision of 19 February 2026, which concluded that the property did not belong to the Railway Authority and constituted a discontinued right-of-way. Current Railway Authority chairman Ziad Chia told Daraj that he rejected and questioned that conclusion.
Chebib’s full response can be found here.
In its response to Daraj, Bank of Beirut likewise maintained that the State Council’s ruling was the correct one, stating:
“The transaction could not have been completed without obtaining full legal approval from the various competent and independent authorities, including prior approval from the Court of Audit. The legal procedures that led to the transfer of ownership from Beirut Municipality to the company were detailed in the submissions presented before the State Council and in the Council’s ruling.”
Bank of Beirut’s full response can be found here.
Court of Audit Ruling: Municipality Fined
After nearly a decade of legal and administrative disputes, the Court of Audit, under its new composition, issued a ruling on 13 July 2026, finding that the sale of the property on the basis that it was “surplus land” and unfit for use had been carried out in violation of the law. In doing so, the court reversed its earlier position, which had found no wrongdoing in the transaction.
According to the ruling obtained by Daraj, Beirut Municipality’s approval of the sale, represented by former mayor Jamal Itani and members of the municipal council, involved a legal violation. The court stressed that “its transfer from municipal public property to municipal private property in preparation for its sale (…) is wholly inconsistent with classifying it as unfit for use, since a space of this nature remains capable of being invested and utilized in more than one way.”
The Court of Audit therefore concluded that the property should have been sold through a public auction and pursuant to a decree issued by the Council of Ministers, rather than through a direct agreement.
The Court of Audit ultimately imposed a fine of just LBP 1.5 million on Chebib and members of the municipal council, equivalent to roughly $18.
A legal source explained to Daraj that the Court of Audit has no authority to nullify the sale or compel the relevant authorities to reverse it, as such powers fall outside its legal mandate. Its role is limited to imposing financial penalties.
This also undermines Chebib’s argument that “the Court of Audit’s ruling did not conclude that any of the procedures relating to the property should be invalidated,” since the court lacks the authority to invalidate administrative decisions in the first place.
Instead, it merely imposed fines on several members of Beirut’s municipal council as part of its judicial oversight of public officials.
The ruling also highlights the striking disparity between the property’s value and the penalty imposed.
Lawyer Wassef Harakeh believes the decision warrants action by the current Financial Prosecutor, Maher Cheaito, to reopen the case.
Legally, however, because Chebib is a judge, the file is automatically referred to the Public Prosecutor at the Court of Cassation, placing it outside the jurisdiction of the Financial Prosecutor’s Office.
Meanwhile, Railway Authority Director General Ziad Chia told Daraj that there is no justification for selling such public assets, given their strategic importance at a time when transportation costs continue to rise. He argued that public transport services, particularly railways, could be revived at any moment to help ease traffic congestion and reduce transportation costs, especially amid rising global oil prices linked to the conflict between Iran and the United States and the closure of the Strait of Hormuz.
