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Monday, 29 June 2020

Administrative Court hands down landmark ruling in real estate M&A case

REGULATION WATCH- Administrative Court hands down landmark ruling in real estate M&A case: The Administrative Court has issued a ruling that any mergers or acquisitions between real estate joint stock companies have no legal bearing on these companies’ legal status. The ruling — which accepted a case filed by Shahid Law Firm — sets a new legal precedent that exempts these companies from a 2010 ministerial decision that imposed fees on real estate companies that cede land plots to other developers, which only apply to sole proprietorships.

The ruling overturns a EGP 1.38 bn fine the New Urban Communities Authority (NUCA) had slapped on EastGate Developments. The dispute arose after NUCA awarded a land plot to Barwa Egypt for Real Estate Development in 2007, before Barwa New Cairo Development bought up the company and later changed its name to East Gate Developments. NUCA had claimed that this acquisition qualifies as a cessation of land, which would entail paying the cessation fees.

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