Tuesday, June 2, 2015

Egypt Corporate Lawyers: Egypt's new investment law awaits Supreme Constitu...

Egypt Corporate Lawyers: Egypt's new investment law awaits Supreme Constitu...: Naeem   Analysis     Egypt's New Investment Law           Egypt   Ÿ   2 June 2015   Egypt's new investment law awaits Supreme Consti...

Egypt's new investment law awaits Supreme Constitutional Court ruling

Naeem Analysis

Egypt's New Investment Law


   Egypt Ÿ 2 June 2015


Egypt's new investment law awaits Supreme Constitutional Court ruling

The new investment law was ratified by the President and the cabinet back in March 2015. The law consists of a bundle of legislative amendments to stimulate investments in Egypt; including protection of state contracts from 3rd party law suits. However, we await implications of an impending ruling by the Supreme Constitutional Court (SCC) on challenges filed  against the new law itself.

Our take –

      An SCC ruling approving of the law should send positive signals to the investor community, in our opinion

      Latest indications seem to suggest that final rulings on ongoing court cases lying at the Administrative court are being adjourned, awaiting the SCC ruling on the approval of the law no. 32. In addition, Egypt's State Commissioner's Authority recently recommended suspending the Sahl Hasheesh court case (related to Egyptian for Tourism Resorts), till a final verdict is announced in the appeal against the new investment law barring 3rd party law suits

      However, we are yet to confirm the exact implications on ongoing court cases pertaining to some of the companies under our coverage universe

      Based on previous indications, the new law should be applicable on cases filed before the issuance of this law, unless there is a final judgment issued by court. We infer that the latest draft that was approved by the cabinet, includes the same clause, indirectly stating that the law would not apply for cases wherein there has been a judgment passed by the concerned court (implying applicability of the law otherwise)

      Companies under our coverage that could be impacted positively if the law gets finally approved by the SCC – positive on Talaat Moustafa Group Holding (TMGH)'s Madinaty case, Egyptian for Tourism Resorts (EGTS)'s Sahl Hasheesh case, Centamin (CEY)'s Sukari mine court case and Arab Cotton Ginning (ACGC) privatisation annulment case

Highlights of what we had inferred from the previous statements pertaining to the law; specific to implications on contracts signed between the government and investors  –

      Grievance committee to be set up for considering grievances against administrative decisions and, appeal law suits are not accepted before grievance procedures are undertaken by this committee

      With respect to the effectiveness of the contracts made between the state and the investor – the investor has the right to establish, manage, finance and liquidate an asset,  without any restriction

      The state is committed to the contracts concluded with investors. Investments based on cheat, fraud or corruption would not enjoy incentives and privileges granted by virtue of the investment law, and this cheat, fraud or corruption has to be proven by a judicial ruling from a concerned court

      A ministerial committee for investment dispute resolution to be established to consider petitions, complaints or disputes with administrative bodies

      Another ministerial committee to be set up for settlement of disputes related to investment contracts in which the state or any public entity is a party




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