• Home
• Real Estate
• News Article

Damac rejects Egyptian court verdict

By Issac John DUBAI -- The UAE's leading independent property developer Damac Properties on Wednesday rejected an Egyptian court ruling on its Red Sea resort land deal "as a gross miscarriage of justice", and said it would file an arbitration claim at the International Centre for Settlement of Investment Disputes, or ICSID.

Damac Chairman Hussain Sajwani said he had instructed his international counsel to file the arbitration claim against Egypt.

Damac , which halted a $16.3 billion luxury residential and tourism development on the Red Sea coast site following the litigation, alleged that Egypt "is responsible for a series of blatant violations" of the 1997 bilateral investment treat with the UAE.

"There has been a gross miscarriage of justice according to international principles, and Damac has every confidence that an ICSID Tribunal will ultimately determine that Egypt has violated a treaty and international law with respect to its treatment of Sajwani and the investments of Damac in Egypt," the company alleged in a statement sent to Khaleej Times.

"The international arbitration is the result of the judgement of the recent Egyptian court case that centred on the 2006 purchase by Damac Properties of 30 million square metres of land along the Red Sea coast. Because the 2006 agreement for the sale of land at Gamsha Bay was executed under the direction of former Minister Garranah, Mr. Sajwani and Damac Properties were implicated by association in Egypt's on-going efforts to criminally prosecute and convict former members of Mubarak's Government," the statement alleged.

The developer said it "unreservedly rejects the Egyptian court's judgement regarding the company's purchase of lands in the Red Sea resort area," claiming that there was no evidence of wrongdoing on the part of Sajwani. "The Egyptian judgement was politically motivated, the result of a political "campaign of persecution" against any businessman who conducted business with the former Mubarak Government," the developer said.

"Since the Egyptian revolution of January 25, 2011, the Egyptian authorities have conducted a political vendetta against investors who entered into land sale agreements with the State under the former government, accusing such investors of crimes exclusively on the basis that they transacted business with the former government," the Damac statement said.

Damac said the prosecutor initiated proceedings against Sajwani in a classic case of "guilt by association" on the basis of the Public Prosecutor's allegation against former Minister Garranah.

"The Egyptian public prosecutor filed spurious charges against Mr Sajwani despite there being no evidence whatsoever that Mr. Sajwani or Damac Properties engaged in any criminal wrongdoing,' the statement argued.

Damac said charges against it stemmed from the fact that Sajwani executed the 2006 land sale agreement with the Ministry of Tourism during the former regime.

"As the prosecution and conviction of Sajwani were totally improper, the sentence, fine, order to return the Gamsha Bay land to the State and Interpol arrest request constitute a breach of the bilateral investment treaty between Egypt and the UAE, whose purpose is to protect investments of UAE investors in Egypt," the statement said.

© Khaleej Times 2011