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Egyptian approves draft law barring challenges to contracts

Source: Reuters - Thu, 10 Apr 2014 16:50 GMT
Author: Reuters
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CAIRO, April 10 (Reuters) - Egypt's cabinet approved a draft investment law on Thursday that prevents third parties from challenging contracts made between the government and an investor, two government officials said, a move that could boost the struggling economy.

Hobbled by political turmoil since a popular uprising toppled autocratic president Hosni Mubarak in 2011, Egypt badly needs foreign investors, who have been unnerved by legal challenges to deals.

"The cabinet approved today a draft law that limits appeals on contracts between the government and investors to the parties involved only," one of the government officials told reuters.

Since the 2011 revolt, Egyptian courts have issued at least 11 rulings ordering the state to reverse deals signed by the former president's administration.

The lawsuits have been brought by activists and lawyers who allege that companies were sold off too cheaply in deals that were representative of corrupt business practices during the Mubarak era.

Gulf Arab businessmen, for instance, have repeatedly cited a lack of guarantees that their money will be safe in Egypt as a reason for holding back investment.

A number of foreign firms, including Mexican cement giant CEMEX, are locked in protracted court cases.

Although the new law may remove legal hurdles, investors also want to see political stability before they pour sizable amounts of cash into the biggest Arab state.

Islamist militants have stepped up attacks against security forces since the army overthrew elected President Mohamed Mursi of the Muslim Brotherhood last July after mass protests against his increasingly arbitrary rule.

An Islamist insurgency has spread from the remote Sinai Peninsula to the capital Cairo and other cities. On Thursday, an explosive device wounded a police officer in October 6 City near Cairo, a security source said. (Writing by Michael Georgy; Editing by Mark Heinrich)

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