Monday 2 October 2023

Egypt bars 3rd party challenge to contracts

Cairo, February 24, 2014

Egypt's draft new investment law will contain provisions to prevent third parties from challenging contracts made between the government and an investor, a cabinet source said on Monday.

The clause is intended to reassure investors unnerved by previous legal challenges to such deals, some of which have left companies in a legal limbo after being sold by the government.

Since the uprising that toppled Hosni Mubarak in 2011, Egyptian courts have issued at least 11 rulings ordering the state to reverse deals signed by the former president's administration.

The lawsuits have been brought by activists and lawyers who alleged that companies were sold off too cheaply in deals that were representative of corrupt business practices during the Mubarak era.

Many Gulf companies were exposed to the risk of renationalisation. Private Arab Gulf businessmen have repeatedly cited a lack of guarantees that their money will be safe in Egypt as a reason for holding back investment.

The draft must be approved by Egypt's president before it becomes law.

Egypt's economy has been battered by three years of political turmoil which left the biggest Arab nation in dire need of foreign investment. - Reuters

Tags: Egypt | investment | law | contracts |

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