Weather Investments, controlled by Egyptian telecoms tycoon Naguib Sawiris, has filed a $5 billion claim against the government of Algeria for harassing and interfering with Djezzy, its former telecoms subsidiary in the country.
It has filed the claim with the International Centre for the Settlement of Investment Disputes, an arbitration tribunal that is a part of the World Bank.
Weather (Luxembourg) is seeking damages for what is says has been deliberate campaign of interference in Djezzy (Algiers, Algeria) by Algerian authorities, contravening an investment treaty between Algeria and the Belgo-Luxembourg Economic Union.
“The Algerian government committed to a number of protections, including a promise to refrain from arbitrary interference in our operations, but has since 2008 pursued a campaign of interference and harassment which has cost Weather Investments over $5 billion in damages,” said Sawiris in a statement.
Sawiris says that Weather has invested more than $3 billion in Algeria since 2001, when it won a competitive bid to operate there, creating 4,000 jobs and increasing telephone usage by 52% in just seven years.
He also insists that losses arising from government interference forced Weather to sell its interest in Djezzy to Russia’s VimpelCom (Amsterdam, Netherlands) last year, shattering his ambition of creating “the first global pan-Arab telco company”.
Algeria’s government stopped the payment of dividends to foreign owners, according to Weather, and disrupted talks regarding the sale of Djezzy.
According to the Financial Times newspaper, Shearman & Sterling, the law firm representing Algeria’s government, has issued a statement saying that Weather has no case and cannot pursue the claim because it has only an indirect minority shareholding in Djezzy.
Weather lodged a notice of dispute in April 2012, warning Algeria’s government it would pursue the claim if the matter was not otherwise settled within a six-month period.