SOURCE: King & Spalding

King & Spalding

June 03, 2009 12:27 ET

King & Spalding Obtains $133 Million Arbitration Award Against Government of Egypt

Largest Amount Ever Awarded to Individual Claimants

WASHINGTON, DC--(Marketwire - June 3, 2009) - King & Spalding, a leading international law firm, announced today that a transatlantic team of lawyers from its international arbitration practice has secured a $133 million award against the Egyptian government in a high-profile, long-running dispute involving the expropriation of a 161-acre resort property on the Gulf of Aqaba on the Red Sea. The award is the largest ever granted to individual claimants by the International Centre for Settlement of Investment Disputes (ICSID), an organization of the World Bank specializing in disputes between foreign investors and governments. It is also the seventh-largest ICSID award ever rendered.

King & Spalding's clients, Italian citizens Waguih Siag and Clorinda Vecchi, were the owners and principal investors in a project to develop a resort on the Egyptian side of the Egypt-Israel border on the Gulf of Aqaba. The Egyptian government seized the development in mid-1996 on the basis that Siag had arranged for partial financing of the project from Israeli sources. The armed seizure was carried out in violation of an Egyptian court order, and Egypt failed to return the project to Siag and Vecchi despite Egypt's highest court repeatedly ruling in their favor between 1996 and 2003. The property was ultimately transferred by the Egyptian government to a private party.

An ICSID tribunal determined that Egypt had violated an investment treaty between Italy and Egypt that protected investments by Italians in Egypt. The tribunal held that Egypt had illegally seized the property from Siag and Vecchi, repeatedly failed to respect the rulings of its own judiciary and failed to offer the pair any measure of protection or security in relation to their investments. The tribunal awarded Siag and Vecchi approximately $127 million in damages and interest and an additional $6 million in legal expenses.

"We are very pleased the tribunal recognized that the conduct of the Egyptian government violated virtually every protection made available to our clients as foreign investors under the bilateral investment treaty between Italy and Egypt," said Reginald R. Smith, a King & Spalding partner involved in the case. "It is our expectation that Egypt will respect its treaty obligations to our clients based on this award."

The King & Spalding legal team representing Siag and Vecchi in the matter was led by partners Smith (Houston), Craig S. Miles (Houston) and Kenneth R. Fleuriet (London), and assisted by associates Heloise Herve (London), Sarah Zagata Vasani (Washington) and Amin M. Husain (New York).

King & Spalding has one of the leading international arbitration practices in the world, specializing in foreign investment disputes against governments, oil and gas and energy disputes, and disputes involving large infrastructure and development projects. American Lawyer's Focus Europe survey in June 2007 ranked King & Spalding first in the world in investment treaty arbitrations and second in the overall number of high-stakes international arbitrations. King & Spalding has also successfully represented claimants in three other ICSID decisions that are among the largest ICSID awards ever granted.

About King & Spalding

King & Spalding is an international law firm with more than 880 lawyers in Abu Dhabi, Atlanta, Austin, Charlotte, Dubai, Frankfurt, Houston, London, New York, Riyadh (affiliated office), San Francisco, Silicon Valley and Washington, D.C. The firm represents half of the Fortune 100 and in Corporate Counsel surveys consistently has been among the top firms representing Fortune 250 companies. For additional information, visit www.kslaw.com.

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    King & Spalding
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