Arabtec Egypt Files International Arbitration Claim Against Emaar, Seeking EGP 1 Billion
Arabtec Egypt has initiated an international arbitration case against Emaar Misr for Development before the International Chamber of Commerce (ICC) in Paris, seeking compensation of approximately EGP 1 billion, according to two sources familiar with the matter who spoke to Asharq Bloomberg.
The claim targets Emaar Misr, the Egyptian subsidiary of UAE-based real estate developer Emaar Properties, and is based on what Arabtec Egypt describes as price differentials resulting from a disruption in the economic balance of certain construction contracts. These imbalances, the sources said, stem from sharp exchange rate fluctuations and a significant increase in building material costs following the devaluation of the Egyptian pound.
In March 2024, the Central Bank of Egypt decided to liberalize the exchange rate, triggering a sharp depreciation of the pound. The local currency lost approximately 62 percent of its value against the US dollar, falling from EGP 30.94 to nearly EGP 50 per dollar, before recovering part of its losses and stabilizing at below EGP 48 per dollar in recent trading.
Amicable Negotiations Fail
One of the sources familiar with the case told Asharq that the decision to resort to international arbitration came after the failure of amicable negotiations between the two companies. According to the source, Arabtec Egypt believes that the original contract values no longer reflect the actual cost of execution following the pound’s depreciation and the subsequent inflationary pressures, resulting in a financial dispute estimated at around EGP 1 billion.
The dispute relates to five real estate projects executed by Arabtec Egypt for Emaar Misr in Egypt, with a total contract value exceeding EGP 5 billion. These projects include the Uptown Cairo development, spanning approximately 4.5 million square meters in East Cairo, and the Marassi project, which extends over more than 1,500 feddans in the Sidi Abdel Rahman area along Egypt’s Mediterranean coast.
Neither Arabtec Egypt nor Emaar Misr has issued an official public comment on the arbitration proceedings at the time of publication.