Damac Properties files international claim against Egypt

Dubai: A Dubai developer Tuesday lodged an international claim against the Egyptian government over a $40 million fine and five-year jail term handed down to its chairman in Cairo.

Damac Properties has filed a claim with an international arbitration and settlement court after the Egypt overturned a 30 million square metre land deal inked with former tourism minister Mohammad Garranah, who was last month jailed for five years for corruption.

At Garannah's trial, Hussain Sajwani, a UAE national and multi-millionaire founder of Damac, was also fined and jailed in absentia over the deal for property sold to the developer on the Red Sea coast in 2006.

"The criminal prosecution and conviction of Mr Sajwani were a classic case of guilt by association. No crime was committed by simply conducting business with the former regime," said Sajwani's counsel, Ken Fleuriet.

"While the Egyptian court held that the price paid for the Gamsha Bay property was too low, the transaction was entirely proper, and Damac was entitled to rely upon the price charged by the Government at the time. It was an arms' length transaction that was fully vetted by the appropriate Egyptian officials at the time of purchase."

Damac has brought the ICSID claim against Egypt under the bilateral investment treaty between the United Arab Emirates and Egypt, which protects investments made by UAE nationals in Egypt.

Sajwani argues that Egypt's recent criminal prosecution and conviction in absentia violate the treaty on investment protection and have caused significant damage to his investments in Egypt and the wider Gulf area