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Monday, 4 January 2021

Zombie arbitration back from the dead

UK construction firm Malicorp is reportedly preparing to file a fresh international arbitration case against the Civil Aviation Ministry for terminating a contract for the Ras Sudr airport, Al Mal reports, citing unnamed sources with knowledge of the matter. The company is said to be seeking USD 100 mn, along with an unspecified amount in overdue interest payments dating back to 2004, to compensate it for the losses it claims to have incurred after the ministry cancelled a contract to build, operate, and manage the airport. Malicorp has reportedly tapped a local law firm to file the arbitration case with the Cairo Regional Center for International Commercial Arbitration (CRCICA).

Background: The Transport Ministry had issued the tender for the airport back in 2000 and had awarded Malicorp the contract under a build-operate-transfer framework. The Civil Aviation Ministry, which took over the project, scrapped it a year later because of security concerns; the project was awarded in 2019 some 7k feddans of state land on which to build. Malicorp had previously taken the case to the International Center for Settlement of Investment Disputes, seeking USD 500 mn in damages.

Malicorp has lost before: When the international tribunal dismissed the compensation claim and Malicorp tried but failed to reverse ICSID’s decision, it took the case to CRCICA, which ordered Egypt to reimburse the UK company for expenses totalling USD 14.8 mn. The Court of Cassation then refused to implement the ruling on the grounds that the case had separately been taken through the French court system.

The revival of the case comes as the Public Enterprises Ministry said it has cleared its own backlog of international arbitration cases filed between 2018 and 2020, including settling Emaar Misr’s long-standing dispute with state-owned El Nasr Housing over Emaar’s Uptown Cairo development, and the spat between state-owned El Nasr for Steam Boilers’ and Al Kholoud for Touristic and Real Estate.

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