Shahid Law Firm co-counsels in a ground breaking ICSID Decision against Egypt

Shahid Law Firm’s Arbitration team, together with Freshfields Bruckhaus Deringer LLP, Firon & Co Advocates, successfully represented the claimants in a case before the International Centre for Settlement of Investment Disputes (ICSID), which recently rendered a decision on Liability and Heads of Loss, on February 21, 2017 (Decision). The Decision found the Arab Republic of Egypt in breach of the United States-Egypt bilateral investment treaty, in connection with claimants’ stake in the Egyptian company Eastern Mediterranean Gas S.A.E. (EMG) and its politically-sensitive gas pipeline project.

The tribunal’s Decision, inter alia, held that:

  1. The conduct and omissions of the Egyptian General Petroleum Company (EGPC) and the Egyptian Natural Gas Holding Company (EGAS) were attributable to Egypt satisfying various tests for attribution under the ILC Articles of State Responsibility;
  2. Egypt’s revocation of EMG’s Free Zone license was tantamount to expropriation;
  3. Egypt failed to prevent pipeline attacks in violation of the requirements under the full protection and security standard. The Decision rejected a force majeure defense, largely based on the broad application of res judicata doctrine and relying on the previous decision issued by an ICC tribunal on December 4, 2015; and
  4. Egypt had unlawfully and disproportionately expropriated claimants’ investment through EGPC’s contractual termination of the GSPA on May 9, 2012.

The Tribunal will now proceed to determine the quantum of damages due for the breaches found.

This decision is the second (although quantum is yet to be determined) in the quadrilogy of the EMG saga after the ICC’s decision of December 4, 2015, while an ad hoc UNCITRAL tribunal under the Permanent Court of Arbitration and a CRCICA tribunal are yet to issue their respective awards in their respective portions.

Notably for Egypt, the ICSID award marks an important decision particularly with respect to the decision on the revocation of the Free Zone license.

For further information on Shahid Law Firm’s experience in litigation, arbitration and investor/state disputes, please visit our Arbitration, Litigation and Dispute Resolution practice page.

Recent Posts