Summary

I. INTRODUCTION

A. THE PARTIES

1. The claimant in the present arbitration is Mr Mohamed Abdel Raouf Bahgat ("Claimant"), a businessman born in Egypt and who later acquired Finnish nationality. His address is Aleksis Kiven Katu 11 Ab36, 00510 Helsinki, Finland.

2. Claimant is represented by Mr Stephen Fietta QC, Mr Jiries Saadeh, Ms Laura Rees-Evans, Ms Oonagh Sands, and Ms Fanny Sarnel of Fietta LLP, London; Professor Andrew Newcombe of the University of Victoria; and Mr Samuel Wordsworth QC and Mr Peter Webster of Essex Court Chambers. Previously, Claimant was also represented by Mr Subir Karmakar of Saunders Law Ltd.

3. The respondent in the present arbitration is the Arab Republic of Egypt, a sovereign state ("Egypt" or "Respondent", and together with Claimant, the "Parties"). Respondent's address is Egyptian State Lawsuits Authority, 42 Gameat El Dowal El Arabiya St., Mohandeseen, Giza, Egypt.

4. Respondent is represented by H.E. Counselor Abou Baker El-Sedik Ameer, Counselor Abdel Hamid Nagashy, Counselor Fatma Khalifa, Counselor Razan Abou Zaid, Counselor Lela Kassem, Counselor Ahmed Sayed, Counselor Nada El-Kashef, Counselor Yasmine Shamekh, and Counselor Yousra Mohamed of the Egyptian State Lawsuits Authority; and Mr Louis Christophe Delanoy, Mr Tim Portwood, Mr Raed Fathallah, Mr Suhaib Al Ali, Ms Laura Fadlallah, and Ms Khrystyna Kostiushko of Bredin Prat.

B. THE DISPUTE

5. The present dispute is an arbitration initiated by Claimant against Respondent under the Agreement between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Mutual Protection of Investments, dated 5 May 1980 ("1980 BIT") and the Agreement Between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Promotion and Protection of Investments dated 3 March 2004 ("2004 BIT", collectively with the 1980 BIT referred to as the "BITs"), and the Arbitration Rules of the United Nations Commission on International Trade Law 1976 ("UNCITRAL Rules").

6. Claimant is the founder of and investor in the Aswan Development and Mining Company ("ADEMCO") and the Aswan Iron & Steel Company ("AISCO", and together with ADEMCO, the "Companies"). He founded the Companies after he was selected by Respondent to develop the iron ore resources located near Aswan, Egypt (the "Project") and to build a facility to develop the Project. ADEMCO was granted a 30-year mining concession and AISCO was created in order to run the steel operations.

7. Developments in the Project were underway when, on 5 February 2000, the police arrested Claimant. Claimant's personal assets as well as the assets of the Companies were frozen pursuant to an order of the Public Prosecutor that was confirmed by the Cairo Criminal Court on 20 February 2000 (the "Freezing Order"). The police raided the offices of Claimant and the Companies, and shut down and took over the Project site. Claimant was incarcerated for over three years. The Freezing Order over the Companies' assets was lifted by a court in October 2006. Claimant argues that the Project site has been destroyed and he still had not been provided access to the Companies' bank accounts.

8. Claimant contends that the actions taken by Respondent with respect to the Project are in violation of the investor protections contained in the BITs; specifically, that Respondent's actions amounted to an unlawful expropriation, unfair and inequitable treatment, and a failure to accord full and constant protection and security.

9. Respondent initially argued that the Tribunal lacked jurisdiction ratione personae and ratione temporis over the present claim. Respondent's jurisdictional objections were dismissed in the Tribunal's Decision on Jurisdiction of 30 November 2017 (the "Jurisdiction Decision"). In its Jurisdiction Decision, the Tribunal decided that it has jurisdiction over the dispute, and reserved all questions concerning the merits, costs, fees, and expenses for subsequent determination. In the present phase of the proceedings, Respondent describes Claimant's investment as one that was doomed to failure due to the poor quality of the iron ore, and that lack of profit was not caused by any `political vendetta' or conduct of the Egyptian Government. Respondent maintains that it has not breached the BITs and submits that Claimant has failed to plead or prove causation or actual damages. Accordingly, Respondent seeks dismissal of the claim and the reimbursement of its costs.

10. This Final Award recalls the procedural history of the merits phase of this arbitration (Part II) and the relief sought by the Parties (Part III). It sets out the relevant factual background of the claim (Part IV). The Tribunal deals with the Parties' jurisdictional and merits arguments relating to breach of the 1980 BIT (Part V), the 2004 BIT (Part VI) and the Egyptian Law No. 8 of 1997, Law of Investment Guarantees and Incentives (the "Egyptian Investment Law") (Part VII). Issues of quantum are covered in Part VIII, followed by consideration of interest (Part IX) and both Parties' contentions with respect to Costs (Part X). The Tribunal's decisions are set out in Part XI.

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C. INTEREST ON COSTS

Claimant's Position

615. The Tribunal recalls that Claimant seeks interest on costs in the amount of LIBOR + 4%.

Respondent's Position

616. Respondent has not contested Claimant's position set out above in Paragraph 615.

Tribunal's Analysis

617. The Tribunal, in considering the circumstances of the case, decides that the interest to be paid on the payment of the Arbitration Costs and Legal Costs is USD LIBOR + 4% compounded annually. The Tribunal notes that USD LIBOR + 4% is the interest on costs requested by Claimant and that this figure has not been contested by Respondent in the context of the costs claim.

XI. DECISION

618. Based on the foregoing considerations, the Tribunal:

A. Dismisses Respondent's request for a declaration that Claimant's claims are not covered by the 1980 BIT and the 2004 BIT and confirms its jurisdiction;

B. Declares that Respondent has breached Articles 2(1) and 3(1) of the 1980 BIT;

C. Dismisses Claimant's request for a declaration that Respondent has breached Article 2(2) of the 1980 BIT;

D. Declares that Respondent has breached Article 2(2) of the 2004 BIT;

E. Dismisses Claimant's request for a declaration that Respondent has breached Articles 3, 5, and 12 of the 2004 BIT;

F. Dismisses Claimant's request for a declaration that Respondent has breached Articles 8, 9, and 12 of the Egyptian Investment Law;

G. Orders Respondent to pay Claimant damages in the sum of USD 43.77 million as compensation for the losses caused by Respondent's breaches of the 1980 BIT and 2004 BIT;

H. Dismisses Claimant's request for moral damages;

I. Orders Respondent to pay interest on the amount of USD 43.77 million at the rate of USD 12 month LIBOR + 2% compounded annually from the date of expropriation (19 February 2000) until the date upon which payment is made;

J. Orders Respondent to pay Claimant the amount of EUR 650,584.85, GBP 6,160,320.48 and USD 900,000 representing 90% of the reasonable costs fixed by the Tribunal;

K. Orders Respondent to pay interest on the amounts in Paragraph J above at the rate of USD 12 month LIBOR + 4% compounded annually from the date of this Award until the date upon which payment is made; and

L. Save as aforesaid, dismisses all other claims made by the Parties.

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