Egyptian telecommunications giant, Naguib Sawiris, has lost the arbitration proceedings against the Algerian state in which he claimed $5 billion in damages, according to a verdict issued by the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank.
“For the foregoing reasons, the Tribunal decides as follows: the claims raised in this arbitration are inadmissible and the Tribunal will not be able to exercise jurisdiction over this dispute,” the body said.
According to the verdict, “the plaintiff must reimburse the defendant the amounts he had filed with ICSID for the costs of the arbitration.”
The Sawiris Company, Orascom TMT Investment, is also required to pay $2.84 million to the Algerian State to compensate it for legal expenses and expenses incurred during the arbitration proceedings.
“All other motions are dismissed,” the ICSID verdict said.
Sawiris claimed $5 billion in damages and interest from the Algerian State after complaining the refusal of the Algerian government to let him sell his Algerian mobile phone subsidiary by asserting his right of pre-emption.
Sawiris continued its arbitration action in 2014 despite an agreement announced on 18 April 2014 between Vimpelcom, the acquirer of its subsidiary, and the National Investment Fund for the out-of-court settlement of disputes.
The second arbitration began in November 2012 by the Russian subsidiaries of Vimpelcom under the auspice of ICSID.
Pinned for tax evasion, the first mobile phone operator in Algeria was also condemned by the Algerian court for the illegal transfer of capital.
Optimum Telecom Algeria was taxed to the tune of $950 million by Algeria representing tax adjustments between 2004 and 2009 and was charged to pay $1.3 billion for non-compliance with Algerian foreign currency regulations.
