Weather seeks $5 billion in damages from Algeria
19 November 2012 | Kavit Majithia
Investment company Weather, chaired by Egyptian telecoms entrepreneur Naguib Sawiris, is seeking $5 billion in damages from the Algerian government.
Weather Investments is claiming harassment and interference from the government against the country’s largest operator, Orascom Telecom Algerie, the group that operates as Djezzy, of which Weather owned a stake.
Based in Luxembourg, Weather has filed a complaint with the International Centre for the Settlement of Investment Dispute (ICSID), and it stands as one of the largest claims to be brought to the tribunal, which is part of the World Bank.
Algeria has repeatedly breached its international legal obligations under an investment treaty between the country and Belgo-Luxembourg Economic Union, according to Weather.
The Financial Times cites Sawiris as stating: “In 2001 we won the competitive bid to build Algeria’s telecommunications infrastructure, investing $3 billion, creating 4000 jobs and increasing by 52% in seven years.”
Sawiris claims, that although the Algerian government committed to numerous protections, including a promise to refrain from arbitrary interference, it has “since 2008 pursued a campaign of interference and harassment which has cost Weather Investments over $5 billion in damages”, he added.
According to the FT, a firm representing the Algerian government in its defence, says Weather Investments has no case.
Weather says the Algerian government prevented the payment of dividends to overseas investors, and also that the government interfered with talks when it tried to sell the business.
Sawiris claims he was forced to sell the company to Russian operator Vimpelcom last year to mitigate losses. He added that the situation was a “bad development not just for us, but for all foreign investors in Algeria”.
Weather Investments first made the claim in April 2012, but the companies did not reached a settlement.
The latest filing was acknowledged on Friday the by ICSID.