CAIRO: The Court of Administrative Judiciary approved Monday a request to appeal the presidential decree immunizing government contracts with investors against third party litigation filed by the Egyptian Center for Economic and Social Rights (ECESR) challenge.
Interim President Adly Mansour issued the decree on April 22 and received widespread criticism on grounds that only an elected parliament may issue such a decision and that it “protects investors at the expense of citizens.”
“We see this law as a legalization of corruption, waste of public funds and a gift for businessmen of the Mubarak era,” Director of the Arab Center for Integrity and Transparency (ACIT) Shehata Mohamed told The Cairo Post April 29.
The government, however, said the decision is intended to spur investors and ease their concerns over legal challenges which may hinder their businesses in Egypt.
The Supreme Administrative Court previously nullified several government contracts, such as exporting natural gas at a price lower than the market’s in 2012 and selling the Sukkari gold mine in the Southern Eastern desert in 2013.
Youm7 reported head of ECESR Khaled Ali said the new investment law deprives the State Council, to which the Supreme Administrative Court belongs among other prestigious courts, from combating corruption during his pleading before the State Council against the privatization of Nubaseed for seed production Saturday.
“There is a fierce attack from businessmen in the media, threatening to destroy investment for the sake of some beneficiaries,” Ali said.
“A state of law protects investment by fighting corruption and not immunizing it,” Bassant Fahmy told Anadolu on April 28.
“The investors we are trying to attract are those who cannot work under corruption, and they await a law that protects investors, not contracts. Other investors can only work under corruption,” Fahmy said.
Minister of Trade Mounir Fakhry Abdel Nour said in an interview aired on Mehwar Channel Monday, that “appealing state administrative contracts has devastating effects on Egypt’s economy and investment environment.”
“Egypt will face a dramatic budget deficit if international arbitration accepted the claims of investors’ suing the state for compensation,” added Abdel Nour, who said that the new law could save hundreds of billions of Egyptian pounds and would protect Arab and international investors.
Under the new law, the state loses around $71 billion owed to it per contracts with the Egyptian-Kuwaiti Company, Centamin mining company, Nile Cotton Ginning and others because no final rulings have been issued in lawsuits against their contracts, lawyer and former parliamentarian Hamdy al-Fakharani told Anadolu.
“Meanwhile, the law would not attract over the $20 billion investment that the state anticipates in the upcoming period,” Fakharani said.
ECESR will challenge the decree before the Supreme Constitutional Court for being “unconstitutional,” because it violates citizens’ constitutional right to litigation as well as the authority of the State Council to observe administrative decisions, ECESR said in a Saturday statement.
Further, the ECESR’s memorandum to the Court of Administrative Judiciary mentioned previous rulings by the courts of the State Council that deny the government the right to issue laws that “lack transparency” and perpetuate “legalized corruption.”
Additional reporting by Yasmine Samra.