Egypt, DAMAC Sign Final Settlement Accord Today

Egypt’s Prime Minister Hisham Kandil will be signing today the final settlement agreement among the Dubai-based developer DAMAC, the Egyptian New Urban Communities Authority (NUCA) and Tourism Development Authority (TDA) as regards to the Group’s projects in Egypt; Hyde Park, Park Avenue and Gamsha Bay near the Red Sea

On May 15th, Egypt authorities announced that it had settled disputes with DAMAC involving projects dating back to the Mubarak era – an agreement the government hopes will reassure prospective investors.

The government said the settlement covered three disputes: two involving housing projects near Cairo and the third involving a piece of land on the Red Sea. It said the deal meant DAMAC would withdraw a suit against Egypt filed with the International Center for Settlement of Investment Disputes in Washington.

The government said the settlement would spare Egypt the risks of international arbitration, safeguard its image abroad and reassure investors scared off by continuing political uncertainty.

DAMAC filed its international arbitration case against Egypt in 2011 over the conviction of its chairman and owner, Hussain Sajwani, in connection with a 2006 land deal in Gamsha Bay on the Red Sea.

Several cases alleging that president Hosni Mubarak’s government sold off land too cheaply have gained momentum since his overthrow in February 2011.

Sajwani was convicted in 2011 in absentia and handed a five-year prison sentence. The case also resulted in a five-year sentence for Zoheir Garranah, a former tourism minister, who was found guilty of squandering public funds by selling the land too cheaply. Damac described it at the time as a case of guilt by association.

Under the settlement announced on Wednesday, ownership of the land will be restored to the state.

Founded in 2002, DAMAC has completed 37 buildings and has another 66 buildings under construction across the Middle East and North Africa.