But, though Mubarak was gone, he had left behind a gift for investors like Sajwani: one of the world’s largest networks of investment treaties — twice the size of the United States’ — that allowed foreign businesses to file ISDS claims against Egypt. Within a week of Sajwani’s conviction over the Red Sea deal, Damac invoked one of these treaties and sued Egypt before the international arbitration arm of the World Bank.
The company announced the case with a defiant statement from one member of the powerhouse legal team it had assembled — an American who’d started his career as the youngest Republican state legislator in Texas.
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By filing an ISDS claim, Sajwani took his case out of the Egyptian court system and placed it in the hands of three private lawyers convening in Paris. For the arbitrator he was entitled to choose, Sajwani appointed a prominent American lawyer who had often represented businesses in ISDS cases. And to press his case, Sajwani hired some of the world’s best ISDS attorneys.
For Egypt, the potential losses were big and would come as the country struggled to revive its floundering economy.
The man who had been convicted of collaborating on a deal that would bilk the Egyptian people out of millions of dollars was now free and clear.
It decided to settle.
The terms of the settlement are confidential, but three lawyers who represented the company at the time described the key provisions. Damac paid some money to the government; Sajwani’s lawyers refused to say how much, though one called it a “savvy business deal.”
But the key benefit for Sajwani, according to all three: In exchange for dropping his ISDS case, Egypt would wipe away his five-year prison sentence and close out the probes of the other deals. The man who had been convicted of collaborating on a deal that would bilk the Egyptian people out of millions of dollars was now free and clear.