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DAMAC Properties rejects Egyptian courts judgement

Case to be filed with the International Centre for Settlement of Investment Disputes

Following the politically motivated trial in Egypt, DAMAC Properties ' Chairman Hussain Sajwani has instructed international counsel to file an arbitration claim against Egypt at the International Centre for Settlement of Investment Disputes. *

DAMAC Properties alleges that the Arab Republic of Egypt is responsible for a series of blatant violations of the 1997 bilateral investment treaty between the UAE and Egypt.

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 meters of land along Egypt's 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 Mubaraks Government.

DAMAC Properties unreservedly rejects the Egyptian court's judgement regarding the company's purchase of lands in the Red Sea resort area of Gamsha stating there was no evidence of wrongdoing on the part of Mr. Sajwani. According to DAMAC Properties , 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.

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.

On the basis of the Public Prosecutors allegation against former Minister Garranah, the Prosecutor initiated proceedings against Mr. Sajwani, Chairman of the Damac Group, in a classic case of "guilt by association."

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 charges stemmed exclusively from the fact that Mr. Sajwani executed the 2006 land sale Agreement with the Ministry of Tourism during the former regime.

As the prosecution and conviction of Mr. 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 United Arab Emirates, whose purpose is to protect investments of UAE investors in Egypt.

DAMAC will make appropriate statements as the case develops. 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 the Treaty and international law with respect to its treatment of Mr. Sajwani and the investments of Damac in Egypt.

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* ICSID is an autonomous international institution established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States with over one hundred and forty member States. The Convention sets forth ICSID's mandate, organization and core functions. The primary purpose of ICSID is to provide facilities for conciliation and arbitration of international investment disputes.

© Press Release 2011