ISFIN has teamed up with Ibrachy & Dermarkar as its exclusive partner in Egypt. Ibrachy & Dermarkar is one of the leading law firms across Egypt.
ISFIN partners with Ibrachy & Dermarkar in Egypt.
I&D Team for Complex Litigation and Dispute Resolution Achieved Great Success in Privatization Case
I&D team for Complex Litigation and Dispute Resolution led by Dr. Bahieldin Elibrachy and Dr. Fatma Salah and including Mostafa Mohamed, Sameh Abdel Samad, Hadi Basha, Lamiaa Abdel Razik and Heba El-Kady, scored a great success for a leading international producer of building materials at the trial level in the privatization case of one of its Egyptian subsidiaries.
The Egyptian subsidiary was established in 1993 and then privatized in 1999 for the leading international company. The 7th Circuit of the Administrative Court issued its decision upholding the privatization of the Egyptian subsidiary and denying the Claimants’ requests to annul the privatization deal and the associated share sale agreement and to return the company to the Egyptian government.
The decision is considered a leap forward for protecting the investment climate and reinforcing the confidence of the local and foreign investors. It came after a thread of systematic court judgements against privatization of state-owned business sector companies At least 12 judgements were issued by the administrative courts since 2011 reversing privatization deals signed by the administration of the former President Mubarak and ordering the return of the companies to the government. Three of these judgements were confirmed by the Supreme Administrative Court when appealed. The lawsuit against the privatization of the Egyptian subsidiary was initiated by activists and former employees alleged that company was sold off cheaply and the transaction was tainted with corruption during the Mubarak era in addition to violating the Egyptian law.
In their defence, I&D Dispute Resolution team highlighted the negative impact of such systematic judgements on the Egyptian economy. They expose the state to the risk of costly investment arbitration, eject much-needed foreign investment and add to an already difficult investment climate. Egypt is currently facing 11 pending arbitration cases before the ICSID, and they have been all filed after the 2011 Revolution. This is already a large number and it is expected to increase since a substantial number of investors, whose investment contracts were nullified, will seek remedies against the Egyptian government. It was explained to the court that corruption allegations by the state is subject to high standards of proof in investment arbitration. Mere allegations of corruption without introducing irrefutable proof are not enough to nullify a deal; they rather may be an indication of prejudice which is the very foundation of ICSID jurisdiction.
The Court held, inter alia, that privatization in itself is not an absolute harm that should be routinely resisted. It rather should be evaluated in a case by case basis in accordance with objective criteria. The court concluded that the sale of the Egyptian subsidiary was in full conformity of all applicable rules and procedures, in particular, Law no. 203/ 1991 regulating Public Business Sector. The court confirmed that the General Assembly of the holding company of the Egyptian subsidiary did not err in approving the price offered by Financier Lafarge. The judgement also stressed that the foreign investors honored all their obligations under the share sale agreements and met all conditions and restrictions set in the privatization decision, in particular, the expansion and development of the company and its productions lines.
Dr. Mohamed Ramadan joins I&D
I&D announced that Dr. Mohamed Ramadan has joined the firm as a partner effective 1st April 2013. Dr. Ramadan is a qualified New York Lawyer and is admitted to practice at the Egyptian Bar of Association and has more than 7 years of work experience in Egypt and the United States. Dr. Ramadan read law at Cairo University and the George Washington University Law School. Dr. Ramadan brings capacity to the firm’s banking, finance and labor Department and Corporate Department.
On another note, Tamima Yehia a partner has left I&D in March 2013.