Thursday 24 April 2014
 
»
 
»
DJEZZY STAKE ROW

Sawiris launches $5bn claim against Algeria

Luxembourg, November 19, 2012

 

Weather Investments (WI), a company headed by Egyptain businessman Naguib Sawiris, has launched a $5 billion claim against Algeria for damage to the company's stake in Orascom Telecom Algérie (known as Djezzy). 
 
The claim has been registered by the International Centre for the Settlement of Investment Disputes (ICSID), the dispute resolution branch of the World Bank, which is headquartered in Washington DC, said a WI statement. 
 
The company claims that Algeria has repeatedly breached its international legal obligations to Weather Investments under an investment treaty between Algeria and the Belgo-Luxembourg Economic Union, it said.
 
Weather Investments chairman Naguib Sawiris said:
 “In 2001 OTH (Orascom Telecom Holdings) won the competitive bid to build Algeria’s telecommunications infrastructure, investing $3 billion, creating 4,000 jobs and increasing telephone usage by 52 per cent in just seven years.  The Algerian government committed to a number of protections, including a promise to refrain from arbitrary interference in our operations, but has since 2008 pursued a campaign of interference and harassment which has cost Weather Investments over $5 billion in damages." 
 
He said: "This is a bad development not just for us, but for all foreign investors in Algeria.  The Algerian regime stands as a stark exception to a region which, on the whole, is beginning to engage global investors, pursue economic development and implement reforms attractive to the international business community.” 
 
The breaches of the treaty form part of a campaign of harassment and improper interference by the Algerian government against Djezzy and its owners, which has culminated most recently in the attempted “forced sale” of all or part of Djezzy to the Algerian state, the statement said. 
 
According to WI, other Treaty breaches by Algeria include, but are not limited to:
• The imposition of more than $950 million in unjustified tax reassessments and penalties on Djezzy for the years 2004 through 2009
• The blocking of Djezzy’s payments of dividends to its foreign shareholders, including Weather Investments
• The failure to protect Djezzy during football riots and violence against Djezzy’s premises in November 2009
• An injunction imposed by the Bank of Algeria on 15 April 2010 (which remains in effect today), restraining all Algerian banks from engaging in any foreign banking transactions on behalf of Djezzy
• A customs blockade imposed on Djezzy, preventing it from importing goods and network equipment essential to the maintenance and stability of its telecommunications network
• The shutdown of the Medcable and VSAT networks on alleged national security grounds
• The interference in, and thwarting of, the sale of OTH to the MTN Group in 20100
• The recent imposition of a $1.3 billion fine on Djezzy by Algerian courts, as a result of groundless allegations that it breached Algerian foreign exchange regulations, together with the threat of further massive fines to be imposed on Djezzy in the future
• The initiation of a number of unfounded criminal investigations into Djezzy and OTH employees, and the improper and unlawful criminal sentence of imprisonment of an OTA senior executive (later overturned by an Algerian court of appeal).
 
Algeria’s Treaty breaches, separately and together, have caused significant damage to Weather Investments’ stake in Djezzy, along with other losses, Weathr Investments said. "Algeria is responsible for these Treaty breaches and for Weather Investments’ losses, under the Treaty and under international law," it said.
 
"Weather Investments notified Algeria of the existence of this dispute more than six months ago and it has attempted, unsuccessfully, to engage Algeria in meaningful, amicable negotiations during the intervening period.  Weather Investments regrets that, in the absence of settlement, Weather Investments no longer has any option but to commence arbitral proceedings in order to enforce its rights under the Treaty and under international law," the statement added.
 
Weather Investments has instructed international law firm Freshfields Bruckhaus Deringer LLP in London, England, as its legal advisor on the matter, it added. - TradeArabia News Service



Tags: Algeria | Orascom Telecom | Sawiris | Djezzy | Weather Investments |

More IT & Telecommunications Stories

calendarCalendar of Events

Ads

Buy high quality China wholesale Health & Beauty , Electronics, Sports & Outdoors , Computers, Video Games, Toys & Hobbies Cell Phones, Automobiles and other wholesale products directly from reliable Chinese wholesalers or Factories on DHgate.com