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Orascom Challenges ICSID Ruling in €5BN Dispute with Algeria

Naguib Sawiris of Orascom, Egypt’s largest private sector employer, is seeking to annul the latest ICSID ruling in its long running dispute with the Algerian government.

Sawiris claims unlawful and arbitrary actions were taken by the Algerian Government against Orascom’s operating company in Algeria, Djezzy, over a number of years. This resulted, it is claimed, in the sale of much of the Orascom Group, including Djezzy, at a drastic undervalue to a third party (VimpelCom – now known as Veon) more closely aligned with the Algerian State in 2011.

Earlier this year, the International Centre for the Settlement of Investment Disputes (ICSID) arbitration tribunal dismissed the claims as inadmissible under the investment treaty. However, Orascom is now challenging that decision by way of filing for annulment, which it submitted on 28 September 2017.

Orascom entered Algeria in 2001, winning a competitive bid. The Group claims it invested over €5 billion in seven years, creating over 4,000 jobs and dramatically increasing phone usage in Algeria. However, things increasingly turned sour after 2008 according to Orascom, as the Algerian government turned its back on foreign ownership and investment.

Numerous disputes occurred between operator and government, most notably the imposition of a US$1.3 billion fine on Djezzy based on allegations that it breached Algerian foreign exchange regulations. In total, the Orascom Group claims to have suffered losses amounting to €5 billion from the actions taken by the Algerian Government.

VimpleCom/Veon appears to have fared little better than Orascom in its dealings in Algeria, eventually selling its 51% stake in Djezzy to the Algerian government, as reported on Developing Telecoms: https://www.developingtelecoms.com/business/operator-news/5249-vimpelcom-sells-51-of-djezzy-algeria.html.

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