April 6, 2014 / 2:15 PM / in 4 years

Egyptian law shielding state deals set to go to cabinet: minister

CAIRO (Reuters) - A law banning third-party challenges to contracts signed by the Egyptian government will be sent to the cabinet by next week, trade and investment minister Mounir Fakhry Abdel Nour said on Sunday.

The law is intended to reassure and attract investors unnerved by a host of legal challenges made in particular to sales of property and companies by the Mubarak government, some of which have left those firms in legal limbo.

Egypt’s economy has been battered by three years of political turmoil and wants to attract foreign investment to replenish its depleted foreign reserves and spur growth.

“There won’t be a third-party appeal. The appeal will be left to parties to the contract,” Abdel Nour told reporters at a news conference. He said there would be exceptions, but declined to give details.

Since the uprising that toppled president Hosni Mubarak in 2011, Egyptian courts have issued more than 10 rulings ordering the state to reverse deals signed by his administration.

The suits 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.

The challenges mean many companies bought by Gulf Arab investors are at risk of renationalization. Gulf Arab businessmen have repeatedly cited a lack of guarantees that their money will be safe in Egypt as a reason for holding back investment.

“The first part (of the new law) is going to be presented tomorrow to the economic committee ... If it’s approved, it will be... presented to the cabinet for approval as soon as it is ready, whether this Thursday or next Thursday,” Abdel Nour said.

In the absence of a parliament, laws approved by the cabinet need approval from the president. Parliamentary elections are due to take place within months.

The new law is likely to be separate from the investment law which is also currently under review, Abdel Nour said, to apply to “contracts in general, not necessarily limited to investments”. He did not give further details.

Amendments to ban third-party appeals to contracts between investors and the government were first drafted by the last government, which resigned in February.

The draft was subsequently resent to the new cabinet for revision and is currently with Abdel Nour’s ministry.

Reporting By Shadia Nasralla;Editing by Kevin Liffey

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