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Egyptian government sets up committee for land sales disputes

One of the companies involved, Dubai property developer Damac, has filed an international arbitration case against Egypt over a land row and the conviction of its chairman and owner, Hussain Sajwani.

That case is one of several disputes over the price state land was sold to developers under former President Hosni Mubarak. Many Egyptians accuse Mubarak's government of doing deals that benefitted the rich elite and top officials at the expense of the rest of the country's 80 million people.

Several cases claiming land was sold to too cheaply by Mubarak's government were raised in the courts before the president of 30 years was ousted in February but disputes have gathered momentum. Investor confidence has been shaken.

Al Ahram daily said the cabinet could reach a resolution over Damac and other cases in days, but a senior official on the committee set up to negotiate settlements told Reuters it could take longer.
‘We have around 17 to 20 cases now. So what we are trying to do now is instead of going to arbitration we are trying to reach a fair settlement between the two parties,’ said the official.

The official did not list all the firms but confirmed that they include Damac, another Dubai based conglomerate Al-Futtaim Group and Omar Effendi, an Egyptian retail chain owned by Saudi firm Anwal.

Courts have scrapped land contracts for Egypt's two largest property developers, Talaat Moustafa Group and Palm Hills and two former government ministers have been sentenced to jail over graft in state land sales.

The committee official said most disputes involved rows over the price of land sales or over the price gas would be supplied to industries. ‘Some contracts signed before were harmful for the Egyptian government. The price of land was very low. We are trying to reach a fair settlement by which investment will be safe and the contract respected and at the same time give the government and country their rights,’ the official added.

Meanwhile, a row has broken out in Dubai between a Sharjah based engineering firm and developer Nakheel over the status of a piece of land which can’t be used for the intended purpose because it is holy.

Greenfield Trading has issued an AED200 million lawsuit against Nakheel, claiming that the master developer failed to tell it about the existence of a mosque on the land, which prohibited it from building a hotel and leisure resort on the plot.
‘Our client feels that it has exhausted all avenues to try to resolve this issue amicably and, as a last resort, has been compelled to take recourse through the Dubai World Tribunal,’ Jonathon Davidson, managing partner of Davidson & Co, who is acting for Greenfield, told Arabian Business.

Greenfield Trading paid just over AED200 million for the plot of land in Nakheel’s Dubai Waterfront development in 2008, the firm said. The company said it was given no prior warning that the land it had purchased included the existence of a mosque, which it said makes the building of a leisure resort impossible.

The Dubai Waterfront project, which added a further 70 kilometers to Dubai’s coastline, was billed as the largest waterfront development in the world. The multibillion dollar development was expected to house up to 1.5 million people but stalled in the wake of the economic downturn.