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Lawyers and other representatives

Award

I. The Parties

THE CLAIMANT

1.
HELNAN INTERNATIONAL HOTELS A/S (hereinafter "HELNAN" or the "Claimant") is a hotel management and development company incorporated and registered in the Kingdom of Denmark, with its offices at Vesterbro 77, DK 9000 Aalborg, Denmark. Claimant is represented by Mr Michael P. Lennon, Jr, Ms Ania Farren and Mr Devashish Krishan of the law firm Baker Botts (UK) LLP, 41 Lothbury, London, EC2R 7HF and Mr Peter Griffin, formerly Baker Botts (UK) LLP, now Conyngham Advisors, 31 Minister Road, London, NW2 3SH.

THE RESPONDENT

2.
The ARAB REPUBLIC OF EGYPT (hereinafter "EGYPT" or "Respondent") is represented by its legal representative, Counselor Milad Sidhom, President States Lawsuits Authority, Mogamaa El Tahrir, Tahrir Square, Cairo, Egypt; and its counsel Dr Ahmed El Kosheri, of the law firm Kosheri, Rashed & Riad, 16A Maamal El Sokkar Street, Garden City 11451, Cairo, Egypt; Prof. Jan Paulsson, of the law firm Freshfields Bruckhaus Deringer, 2 rue Paul Cézanne, 75008 Paris, France; Dr Karim Hafez, of the law firm Hafez, 5 Ibrhaim Naguib Street, Garden City, Cairo 11451 Egypt; Dr Mohamed Abdel Raouf, of the Abdel Raouf Law Firm, 17, Mohamed Mahmoud Street, Bab El-Louk, Cairo 11461, Egypt.

II. Factual Background

3.
HELNAN (formerly Scandinavian Management Co. A/S) and the Egyptian Organization for Tourism and Hotels (hereinafter "EGOTH", formerly Egyptian Hotels Company) entered into a Management Contract (hereinafter the "Contract") on 8 September 1986 by which HELNAN would manage the Shepheard Hotel (hereinafter the "Shepheard" or the "Hotel") located in Cairo, Egypt, which is owned by EGOTH. The Contract had an expected duration of 26 years, with the possibility of extensions. On 15 October 2002, an amendment (hereinafter the "Amendment") was concluded between the Parties in regard to the Contract, by which EGOTH was permitted to sell the Shepheard, inter alia ; in case of a sale, the HELNAN's management of the Shepheard could either continue or, HELNAN would give up its rights and be adequately compensated.
4.
On 24 June 1999 a Bilateral Investment Treaty (hereinafter "the Treaty") was concluded between the Government of the Arab Republic of Egypt and the Kingdom of Denmark for the promotion and reciprocal protection of investments.
5.
On 7 September 2003, following several inspections by the Ministry of Tourism, the Shepheard was downgraded (hereinafter the "Downgrade") from a five-star hotel status to a four-star status by the Ministry of Tourism.
6.
Arbitration proceedings were commenced by EGOTH in 2003, after the Downgrade (hereinafter the "Cairo Arbitration"), in accordance with the arbitration agreement found in the Contract, demanding the termination of the Contract due to the Downgrade. An award in amiable composition was rendered on 30 December 2004 in Cairo (hereinafter the "Cairo Award"). The Tribunal considered that the Contract had become "impossible to execute" and therefore declared the Contract terminated. The claims filed by both Parties were dismissed. HELNAN was awarded 12.5 Million EGP under the concept of settlement of debts in performing its management obligations. This amount was paid by EGOTH to HELNAN. HELNAN's further request to set aside this Award was dismissed by the Cairo Court of Appeal on 7 June 2005 and confirmed by the Cour de Cassation on 12 July 2005. Finally, the Court of Appeal granted exequatur on 19 July 2005. The juge des référés subsequently dismissed two objections to enforcement brought by HELNAN.
7.
The amount of 12.5 Million EGP awarded to HELNAN was paid by EGOTH.
8.
On 23 March 2006, the Cairo Award was enforced and, HELNAN was evicted from the Shepheard and EGOTH now took over the Hotel's management.

III. Procedural History

A) Procedure Leading up to the Decision on the Objection to Jurisdiction

9.
On 8 March 2005, HELNAN filed a request for arbitration against EGYPT before the Secretary-General of the International Centre for Settlement of Investment Disputes (hereinafter the "Centre" or "ICSID"), pursuant to Rule 4 of the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (the "Institution Rules") of the Centre. Within this Claim, HELNAN filed a request for Provisional Measures.
10.
After having reached an agreement on the manner the Arbitral Tribunal would be constituted, Claimant appointed Mr Michael Lee as co-arbitrator on 9 November 2005 and Respondent appointed Prof. Rudolf Dolzer on 22 December 2005. Both Parties agreed to permit the co-arbitrators the appointment of the Chairman of the Tribunal. On 1 February 2006, Mr Yves Derains was appointed Chairman of the Arbitral Tribunal by common agreement between the co-arbitrators.
11.
On 17 February 2006, the Centre transmitted, on behalf of the Tribunal, a draft Agenda being prepared for the Tribunal's first session.

By letter dated 22 February 2006, HELNAN reiterated its request for Provisional Measures. It contended that its rights needed to be preserved to the extent they were put in danger by the threat of its eviction from the Shepheard Hotel by EGYPT. EGYPT responded by letter dated 6 March 2006, indicating that it would file an objection to the Tribunal's jurisdiction at the First Session. Further, after the taking over of the Shepheard Hotel, HELNAN filed an amended Request for Provisional Measures on 4 April 2006, requesting, inter alia, to be reinstated as manager and operator of the Shepheard Hotel. After hearing the two parties' positions at the session of 14 April 2006, the Arbitral Tribunal decided on 17 May 2006 that (i) on the basis of Article 47 of the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the "ICSID Convention") and Article 39 (1) of the Rules of Procedure for Arbitration Proceedings ("Arbitration Rules"), it had the power to recommend provisional measures even though the parties had not yet expressed their views as to its jurisdiction, but (ii) dismissed HELNAN's request for Provisional Measures.

12.
On 31 May 2006, Respondent filed its Memorial on its Objections to Jurisdiction by which it presented its objections to the Arbitral Tribunal's jurisdiction in regard to the dispute.
13.
On 14 July 2006, Claimant filed its Counter-Memorial on Jurisdiction.
14.
On 17 August 2006, a hearing on the jurisdictional issues took place in the World Bank offices in Paris, France.
15.
On 17 October 2006, the Arbitral Tribunal rendered its Decision on the Objection to Jurisdiction which stated:

" THE ARBITRAL TRIBUNAL DECIDES AS FOLLOWS:

1. The Arbitral Tribunal has jurisdiction over the dispute submitted to it in this arbitration.

2. The Arbitral Tribunal will, accordingly, make the necessary order for the continuation of the proceedings on the merits.

3. The Arbitral Tribunal will take a decision regarding the costs in connection to this part of the proceedings in its Award."

16.
The procedure predating the Tribunal's Decision on the Objection to Jurisdiction (hereinafter the "Decision") rendered on 17 October 2006, is set out in detail in the Decision. A copy of the Decision is attached to this Award and is to be considered an integral part of it.

B) Procedure Leading up to the Award

17.
Having decided on the objections to jurisdiction, the Tribunal proceeded to establish the calendar for the remainder of the proceedings.
18.
On 24 October 2006, the Centre informed the Parties of the schedule that has been set up after the conference call that took place on 19 October 2006 between the Tribunal and the Parties. The schedule agreed upon stated as follows:

" The Claimant shall file a Memorial on the Merits by January 31, 2007, accompanied with all documentary evidence, witness declarations and expert reports and any other evidence it may wish to rely upon.

The Respondent shall file a Counter-Memorial on the Merits by April 30, 2007, accompanied with all documentary evidence, witness declarations and expert reports and any other evidence it may wish to rely upon.

The Claimant shall file its Reply by June 29, 2007, the evidence provided with the Reply must be restricted to points or evidence submitted along with the Respondent's Counter-Memorial.

The Respondent shall file it Rejoinder by September 17, 2007, the evidence provided with the Rejoinder must be restricted to points or evidence submitted along with the Claimant's Reply.

The Hearing on the Merits will be held from October 8, 2007 until October 13, 2007 (inclusive). The parties and the Arbitral Tribunal will also keep as a fall back option October 15, 16 and 17, 2007 available.

Further, it has been agreed by he (sic) Arbitral Tribunal and the parties that issues relating to the disclosure of documents pertaining to the Wena case will be settled between the parties prior to the Claimant's submission of its Memorial on the Merits. However, if any difficulty arises, the parties should address the Arbitral Tribunal accordingly. "

19.
On 30 November 2006, the Centre transmitted a letter submitted by Claimant, which it had received from Wena Hotels Ltd., by which Wena Hotels Ltd. gave its consent to ICSID for the disclosure of documents as had been ordered in Procedural Order No. 1 dated 23 June 2006 and referred to on page 7 of the Decision on the Objection to Jurisdiction.
20.
By email sent on 8 December 2006, the Centre requested Respondent's confirmation regarding the production of the Wena documents.
21.
By email sent on 15 December 2006, Respondent stated that in light of the documents having been requested for the matter of jurisdiction and because by that time the Decision on jurisdiction had already been rendered, the document production request was no longer relevant.
22.
On 19 December 2006, Claimant addressed the Centre on the matter of the production of the Wena documents. Claimant stated that the matter had already been settled by the Tribunal, which had been contingent upon Wena Hotels Ltd. agreement to the production, and that therefore it was entitled to receive the documents.
23.
On 27 December 2006, Claimant requested the Tribunal to order the production of the Wena documents.
24.
On 28 December 2006, Respondent responded in regard to the production of the Wena documents. It reiterated that the Wena documents had been ordered for purposes relevant to the issues of jurisdiction, and because the Tribunal had already rendered its Decision on jurisdiction, the production of said documents had become moot. Respondent also emphasized that the issues concerning document production were to be settled between the parties primarily and that it had received no such request from Claimant.
25.
On 4 January 2007, the Centre transmitted the Tribunal's request to the Parties regarding the production of the Wena documents. The Tribunal requested Claimant to confirm whether the presently requested documents were the same ones as those cited in Procedural Order No. 1 and to indicate their relevancy to the merits of the case. It also requested Claimant's confirmation that it was prepared to undertake a confidentiality agreement as the model found in Procedural Order No. 1.
26.
On 8 January 2007, Claimant responded to the Tribunal's request of 4 January 2007, stating that the documents were the same and that they were relevant to Claimants case regarding the quality of the hotels and their management held by HELNAN.
27.
On 9 January 2007, the Tribunal rendered Procedural Order No. 2 regarding the issues of the Wena documents, which stated:

" THE ARBITRAL TRIBUNAL HAS DECIDED THE FOLLOWING:

1) the following documents:

-Transcript of Tribunal's session held on 25 May 1999;

-Transcript of Tribunal's session held on 25-29 April 2000;

-Transcript of Tribunal's session held on 22-23 October 2001;

-Transcript of Tribunal's session held on 14 June 2005;

-All expert reports/opinions (in relation to the Egyptian Tourism industry) and any accompanying document thereof,

in the ICSID Case No. ARB/98/4 Wena Hotels Ltd shall be produced by Respondent by January 16, 2007 subject to the execution by Claimant of the text of an understanding of confidentiality worded on the basis of the model attached to Procedural Order n°1. "

28.
On 11 January 2007, Claimant transmitted a signed copy of the Confidentiality Agreement that would cover the Wena documents.
29.
On 31 January 2007, Claimant filed its Memorial on the Merits.
30.
On 2 February 2007, the Centre informed the Tribunal by email, of Claimant's confirmation of its reception of the documents referred to in Procedural Order No. 2 from Respondent.
31.
On 23 April 2007, the Centre transmitted Respondent's letter, dated 21 April 2007, by which it requested a 90-day extension to file its CounterMemorial on the Merits (i.e. by 29 June 2007). On 24 April 2007, the Centre transmitted the Tribunal's request for Claimant to provide its comments on Respondent's request.
32.
On 25 April 2007, Claimant stated its agreement to a maximum one-month extension to be allowed to Respondent.
33.
On 27 April 2007, the Centre transmitted the Tribunal's decision regarding the request for an extension made by Respondent. The Tribunal decided that in light of the Respondent's difficulties and Claimant's agreement to a one-month extension, the Tribunal would grant said extension. Respondent was to file its Counter-Memorial by 31 May 2007.
34.
On 9 June 2007, Respondent filed its Objection to Jurisdiction and Counter-Memorial on the Merits. Respondent stated that the delay was caused by computer problems and that it was in contact with Claimant regarding the delay. On 12 June 2007, the Centre transmitted the Tribunal's request that it be informed of the situation regarding the delay.
35.
On 21 June 2007, Claimant submitted its comments regarding the Respondent's delayed filing. It proposed a new calendar, as had been agreed to by the Parties, by which Claimant's Reply would be submitted by 10 August 2007, Respondent's Rejoinder - by 17 September 2007, and the Hearings would take place on 8-12 October 2007. Claimant stated that it could not accept any more delays due to the already tight procedural schedule. Claimant also submitted its comments regarding Respondent's Objection to Jurisdiction filed along with its Counter-Memorial. Claimant stated that the objection was without merit, that the issue had already been decided and that Respondent had not submitted it in time. Claimant requested the Tribunal to accept the new procedural calendar and reject Respondent's objection to jurisdiction.
36.
On 28 June 2007, the Centre transmitted the following instructions on behalf of the Tribunal:

" The Tribunal has taken note of the new schedule agreed by the parties. With respect to the length of the hearing the Arbitral Tribunal would appreciate receiving confirmation by the parties that October 15, 16 and 17, 2007 will be necessary.

The Respondent's objection to jurisdiction, as submitted with it Counter-Memorial of 10 June 2007, is hereby joined to the merits. Accordingly, the calendar for pleadings will be as follows:

- Reply on the Merits and Response to Objection to Jurisdiction: 10 August 2007

- Rejoinder on the Merits: 17 September 2007

Finally, the Tribunal does not consider necessary to have a second written exchange on the objection to jurisdiction. "

37.
On 10 August 2007, Claimant filed its Response to the Objection on Jurisdiction and Reply on the Merits.
38.
On 17 September 2007, Respondent filed its Rejoinder on the Merits.
39.
On 27 September 2007, Claimant requested the Tribunal to strike Mr Mounir Doss's [Respondent's expert witness] expert witness statement from the record and preclude him from testifying. Claimant claimed that Mr Mounir Doss was a former employee of HELNAN who was working for the Respondent's legal team making him unqualified to testify as an independent expert witness.
40.
On 28 September 2007, the Centre, on behalf of the Tribunal, requested Respondent to provide its comments in regard to Claimant's request relative to its expert witness.
41.
On 2 October 2007, the Centre communicated the Respondent's reply. Respondent stated that Mr Mounir Doss had left HELNAN employment under favourable circumstances and contested the allegation that he now worked for Respondent.
42.
On 3 October 2007, the Tribunal stated that it would accept Mr Mounir Doss witness statement while taking into consideration the Parties' observations.
43.
On 3 October 2007, Claimant requested permission to submit further documents for the record.
44.
On 5 October 2007, the Arbitral Tribunal rejected Claimant's request due to the lateness of the request.
45.
On 8 to 12 October 2007, the Hearing was held in Paris, France.
46.
On 26 November 2007, both Claimant and Respondent filed their PostHearing Briefs.
47.
On 3 December 2007, Claimant submitted its Application for Costs, which was amended on 14 December 2007.
48.
On 3 December 2007, Respondent submitted its Application for Costs.
49.
On 15 December 2007, Respondent filed its Comments on Claimant's Application for Costs.
ICSID Arbitration Rule 38 (1) requires that when the presentation of the case by the Parties is complete, the proceeding shall be declared closed. Having reviewed all of the presentations by the parties, the Tribunal came to the conclusion that there is no request by a Party or any reason to reopen the proceeding, as is possible under ICSID Arbitration Rule 38 (2). Accordingly, by letter dated 16 May 2008, the Secretariat of the Tribunal declared the proceedings closed.

IV. The Parties' Positions

A) HELNAN's Position

50.
HELNAN contends that it and its investments in the Shepheard Hotel were subject to unfair, discriminatory and inequitable treatment by EGYPT, which therefore committed multiple breaches of the Treaty.
51.
In particular, HELNAN contends that EGYPT has breached its obligations under the Treaty and should be held liable for the following:

- Not providing HELNAN and its investments fair and equitable treatment, as provided by Article 3 of the Treaty;

- Not providing HELNAN and its investments full protection and security at all times and impairing HELNAN's use of its investments by unreasonable or discriminatory measures, as provided by Article 2 (2);

- Expropriating HELNAN's investments without satisfying the conditions provided by the Treaty in Article 5.

52.
It is Claimant's position that EGYPT considered the Management Contract an obstacle for the Shepheard's sale and therefore proceeded to orchestrate a series of events which lead to the downgrading of the Hotel, the Cairo Arbitration and finally to HELNAN's eviction from the Hotel. Claimant submits that the Amendment signed in 2002 did not change EGYPT's perception of the Management Contract as an obstacle and its consequences for the possibility to sell the Shepheard.
53.
HELNAN contends that EGYPT used the Ministry of Tourism and EGOTH to achieve its objective of expelling HELNAN from the Hotel.

HELNAN WAS SUBMITTED TO UNFAIR, DISCRIMINATORY AND INEQUITABLE TREATMENT

54.
HELNAN refers to Egypt's obligation to treat HELNAN and its investments in a fair and equitable manner. Claimant states that it submitted numerous renovation and upgrade plans for the Shepheard, which were rejected by EGYPT. It states that these rejections lacked transparency and were arbitrary; Claimant contends that EGYPT's lack of proper communication with HELNAN in regards to the rejections constitutes a breach of fair and equitable treatment.
55.
HELNAN contends that EGYPT's conduct was discriminatory when it continued to invest in other similar projects and hotels while at the same time rejecting its [HELNAN's] own proposals. HELNAN submits that EGYPT has an obligation to make its investment decisions in an evenhanded and non-discriminatory way.

THE 2003 MINISTRY INSPECTIONS AND DOWNGRADE

56.
Claimant submits that the manner in which the 2003 inspections and the later Downgrade were carried out constitute a breach of EGYPT's obligation of fair and equitable treatment of HELNAN's investments.
57.
Claimant contends that the inspections did not conform to accepted policy and practice. Claimant alleges that the inspection carried out on 14 June 2003 was hostile; it states that the number of persons composing the inspection teams was larger than usual, that it was conducted on Saturday (the Ministries' day-off) and was not drawn up in advance. HELNAN further contends that the inspection report which followed was also out of norm because it was neither issued nor delivered in a timely manner, was unjustifiably harsh and did not provide HELNAN with a grace period to cure any alleged violations.
58.
Claimant states that the Hotel was re-inspected on 4 September 2003 and a second inspection report was filed unprecedently fast on that same day. HELNAN contends that both reports were made with the aim of downgrading the Hotel. HELNAN states that the Downgrade came only three days after the inspection and submits that normally such a downgrade would take six to seven weeks to take place.
59.
HELNAN states that it was standard procedure to allow a hotel discuss or cooperate with the Ministry over such matter. HELNAN contends that it was entitled to at least three inspections and several warnings before the Ministry would downgrade the Hotel. Claimant states that the second inspection report was never delivered to it.
60.
Claimant contends that the downgrade was unjustified and only took place because of EGYPT's improper motives to downgrade the Hotel. HELNAN states that the Hotel was operating at a five-star standard and that EGYPT's attacks on the quality of the Shepheard were not credible. HELNAN also submitted that the previous negative assessments based on inspections carried in 2000 were not the reason for the 2003 downgrade.
61.
The downgrade was orchestrated because EGYPT wanted to get rid of the Management Contract and thus to quietly privatize the Shepheard Hotel.
62.
HELNAN contends that EGYPT acted in bad faith by deliberately abusing its sovereign powers to ensure HELNAN's eviction from the Shepheard. HELNAN submits that EGYPT used its authority over the Holding Company (hereinafter "HOTAC") and EGOTH (both wholly-owned by EGYPT) to influence the Ministry of Tourism. This conduct amounted to an improper use of this State's administrative power.
63.
HELNAN submits that the Downgrade caused a prejudice against it and that there is a direct causal link between the way the Ministry carried out the inspections, the Downgrade and the loss suffered by HELNAN.

THE CAIRO ARBITRATION WAS UNFAIR AND INEQUITABLE

64.
Claimant submits that even if the Ministry of Tourism had sufficient grounds for the Downgrade, the initiation of the arbitration proceedings with the express purpose of terminating the Contract constituted a breach of EGYPT's obligation to provide fair and equitable treatment to its investors.
65.
HELNAN states that EGOTH initiated arbitration proceedings just 25 days after the Downgrade on 2 October 2003 and disregarded Article 12 of the Contract which provided for a 60-day cure period. HELNAN also contends that EGYPT had planned to initiate proceedings even before the Downgrade had taken place. HELNAN submits that a fair and equitable approach to the situation created by the Downgrade would have been for EGOTH to cooperate with HELNAN on the renovation plans and to address any alleged shortcomings in the Shepheard. HELNAN contends this would have been the reasonable expectation of a long standing manager in the Egyptian hotel industry.
66.
HELNAN presents authorities to support its claim that there existed an obligation to renegotiate between the Parties under the fair and equitable standard. HELNAN contends that EGYPT could have assisted HELNAN with its appeals before the Ministry of Tourism but chose not to do so.

THE CAIRO AWARD

67.
HELNAN submits that EGYPT acted in an unfair manner when it decided to pursue the enforcement of the Cairo Award. HELNAN contends that, in light of the Cairo Tribunal finding that the Parties had outperformed their respective obligations, to seek the termination of the Contract was unfair and the proper approach would have been to renegotiate the Contract.

EGYPT'S UNREASONABLE MEASURES AND DISCRIMINATORY TREATMENT

68.
HELNAN claims that EGYPT breached its obligation under Article 2(2) of the Treaty to provide protection for investors from unreasonable and discriminatory measures. HELNAN states a series of measures by Egyptian authorities which it deems to have been unreasonable:

- The Shepheard's removal from the list of historical hotels;

- Not consulting with HELNAN on EGYPT's plans to sell the Shepheard;

- The obstruction of renovation works for the Shepheard;

- Downgrading the Shepheard after only two inspections, not granting HELNAN grace periods to cure the alleged violations, and not providing HELNAN with an opportunity to present its case;

- Initiating the Cairo Arbitration with the intent to terminate the Management Contract;

- Enforcing the Cairo Award without renegotiating with HELNAN.

69.
HELNAN further submitted a series of events which it claims were discriminatory:

- EGYPT's refusal of HELNAN's renovation plans while accepting renovation requests from other hotels;

- Granting grace periods to other hotel managers to cure the violations in their hotels;

- Treating HELNAN in a harsher manner than other operators that have underperformed.

EGYPT IMPAIRED HELNAN'S MANAGEMENT OF THE SHEPHEARD

70.
HELNAN contends that EGYPT's unreasonable and discriminatory measures did not allow it to manage and enjoy its investment. It states that its operations were disrupted because:

- Before March 2006, Claimant had not been able to exercise its right to autonomy over the operation and management of the Shepheard Hotel;

- In March 2006, Claimant was evicted from the Shepheard Hotel;

- After March 2006, Claimant's business operations in EGYPT and abroad continued to suffer.

71.
HELNAN contends that EGYPT's discriminatory measures and conduct entitle it to remedies, even if the Downgrade and the subsequent arbitration could not be find wrongful, due to the trigger that the chains of events created by EGYPT's failure to treat HELNAN in an even-handed manner and in good faith with respect to improvement and renovation plans HELNAN had presented over the years.

HELNAN'S INVESTMENT WAS EXPROPRIATED

72.
Claimant submits that its investment in the Shepheard was expropriated by EGYPT in breach of Article 5 of the BIT because it was not in the public interest, it was discriminatory, it was not carried out under due process and it was not accompanied by prompt, adequate and effective compensation.
73.
HELNAN contends that its rights, as embodied in the Management Contract, were indirectly expropriated on 7 September 2003 due to the Downgrade and later directly expropriated on 23 March 2006 when its eviction from the Shepheard took place. Claimant submits that contractual rights are susceptible of expropriation and the fact that the Cairo Tribunal terminated the Management Contract does not excuse EGYPT's liability because of its manipulation of the events to produce the Downgrade and the subsequent arbitration. In addition to the Management Contract, HELNAN submits that its operating systems, know-how, staff and marketing opportunities were also expropriated.

HELNAN WAS DENIED FULL PROTECTION AND SECURITY

74.
Claimant submits that it was denied full protection and security for its investments and therefore EGYPT breached its obligations under Article 2 (2) of the BIT. Claimant submits that Article 2(2) imposes a positive obligation of due diligence on EGYPT to exercise reasonable care to protect investments.
75.
HELNAN contends that EGYPT subjected it to abusive actions by government officials who orchestrated and used the Downgrade and inspections to ensure HELNAN's eviction from the Shepheard. It also contends that it was subject to negative and abusive press reports from which it was not protected by EGYPT or EGOTH. Furthermore, Claimant contends that EGYPT interfered with its attempts to stay the execution of the Cairo Award as well as employing intimidation tactics against it during the course of the present proceedings.

HELNAN IS ENTITLED TO FULL COMPENSATION

76.
Claimant submits that it is entitled to receive full compensation for its losses. HELNAN requests the Tribunal to reinstate it as manager and operator of the Shepheard and award it compensation for losses not covered by such a reinstatement. Alternatively, HELNAN requests full compensation for all its losses should it not be reinstated in the Shepheard.
77.
Claimant presents case law and authorities to establish its right to nonpecuniary and/or pecuniary reparation when a State has breached its obligations under an international instrument. Claimant contends that there exist only two limitations to the Tribunal's power to award nonpecuniary compensation. This is so where restitution is impossible and where restitution does involve a disproportional burden.
78.
HELNAN submits that the Tribunal is empowered to order EGYPT to return the Shepheard and reverse any government edicts which might impair HELNAN's management and operation of the Shepheard. In addition to the request to be reinstated under competitive terms, HELNAN submits that it suffered damages for loss of daily profits, costs of the present arbitration, reputational and moral loss, costs of the Cairo Arbitration, debts which were written off by HELNAN and costs of replacing marketing materials.
79.
HELNAN submits that should the Tribunal award monetary damages only, it is entitled to full reparation. HELNAN contends that to provide full monetary reparation, it must be compensated for the following elements:

- Lost profits for early termination of the Management Contract,

- Value of the employees and know-how;

- Reputational loss;

- Moral loss;

- Advertising damages;

- Out of pocket costs, including the costs of the present arbitration.

THE TRIBUNAL HAS JURISDICTION

80.
HELNAN contends that EGYPT's objection to the Tribunal jurisdiction (as presented in its Objection to Jurisdiction and Counter-Memorial on the Merits) is without merit. HELNAN submits that Article 25 of the ICSID Convention requires the dispute to arise from an investment and therefore does not require the investment to be owned by the investor at the date of filing the Request for Arbitration.
81.
Claimant submits that the requirements of consent to ICSID arbitration and that of a qualifying investment have been established. It submits that consent was given by EGYPT in Article 9 of the Treaty and that HELNAN accepted this offer in its Request for Arbitration. Claimant further submits that the Tribunal has already decided on the issue of a qualifying investment in its Decision on Jurisdiction by which it stated that in the present case the requirement of Article 1 was satisfied. Claimant submits that the case law used by EGYPT to support its objection is not relevant and not applicable to the present dispute.

HELNAN'S CLAIMS ARE ADMISSIBLE

82.
HELNAN submits that its claims are fully admissible despite EGYPT's claims that they should be barred, on the one hand, by res judicata, and on the other hand, by non exhaustion of local remedies. HELNAN contends that the question of whether EGYPT breached its obligation under the Treaty by its actions is one that could not have been decided in the Cairo Arbitration.
83.
HELNAN also contends that EGYPT bears the burden of proving why res judicata applies and that it has failed to do so. HELNAN submits case law and authorities to support its position that international tribunals are not bound by local court decisions. Given the fact that the Cairo Tribunal and the present ICSID Tribunal stem from different legal orders, the present Tribunal is not bound by the Cairo Award.

THE R ES J UDICATA TRIPLE IDENTITY REQUIREMENT

84.
Claimant submits that in any case, the triple identity test for res judicata to apply is not satisfied in the present case. Also HELNAN contends that its position does not bring about a supposed conflict between the ICSID and the New York Convention as EGYPT claims.
85.
Claimant submits that the Parties to the Cairo Arbitration, being EGOTH and HELNAN, are not the same as in the present arbitration, HELNAN and EGYPT. Furthermore Claimant submits that the claims and causes of action are not the same; in the Cairo Arbitration the claims were filed for breach of the Management Contract, while in the present case they were filed for the breach of the Treaty.
86.
HELNAN submits that no other theories relating to res judicata apply to the Cairo Award and that there exists no possibility of procedural unfairness or abuse of process, a standard used by some jurisdictions and presented by EGYPT, in the present procedure. In addition, HELNAN contends that there were several issues brought forth in the present case which were not addressed in the Cairo Arbitration.

EXHAUSTION OF DEFENCE TO DOWNGRADE

87.
HELNAN submits that EGYPT's argument that HELNAN should be precluded, as a matter of substance rather than procedure, from seeking remedies before the ICSID jurisdiction because it did not seek judicial review of the Downgrade, was not made in a timely manner and fails on the law and facts as well.
88.
HELNAN submits that it was under no obligation to exhaust local remedies before bringing its claims before the present Tribunal. Claimant also submits that failure to seek judicial review cannot amount to acquiescence on its part of the Downgrade, since there exists no rule for it to seek review of a wrongful act to prove the existence of a treaty violation. Finally, HELNAN contends, even if it were argued that it did have an obligation to seek local remedies, this requirement was also met. HELNAN states that it sought administrative review of the Downgrade before the Ministry of Tourism on three occasions.
89.
The relief sought by HELNAN, as expressed in its Post-Hearing brief of 26 November 2007, is as follows:

"(i) declaring that the Respondent has breached its obligations under the Denmark/Egypt BIT; and

(ii) ordering the Respondent to :

Reinstate Helnan as Manager and Operator of the Shepheard Hotel;

Enable Helnan to manage and operate the Shepheard Hotel (without let or hindrance) until at least 2017;

Approve renovation plans in an amount of not less that EPG39 million (appropriately adjusted for the time elapsed since this figure was presented to EGOTH);

Either pay Helnan damages not less than €1,967 per day (daily rate based on Ms. Farr's no renovation and no extension scenario) to indemnify Helnan for loss of its share in the total operating profits of the Shepheard Hotel up until the date of restatement or extend the period of reinstatement to include the number of days of Helnan's wrongful eviction from the Shepheard;

Pay Helnan a penalty per day for every day that respondent fails to so reinstate after the award; and

Pay to Helnan €10.8 million in other damages; or in the alternative

(iii) ordering the Respondent to pay

Damages in an amount up to €16,473,000, to indemnify Helnan for loss operating profits of the Shepheard Hotel;

Damages in the amount of €4,739,822, to indemnify Helnan for loss of its "management business in Cairo";

Damages in the amount of €8,716,266 in compensation for reputational damages;

Damages in the amount of €10,000,000 in compensation for moral damages;

Damages in the amount of €1,068,000 in compensation for lost advertising assets;

€560,358 representing the debt written off by Helnan on 15 October 2002; and

All of Helnan's costs associated with the defence of the arbitration proceedings taken against it by EGOTH in Egypt, in the amount of approximately €228,960; and

Ordering the Respondent to pay all of Helnan's costs associated with the arbitration, including the arbitrator's fees and administrative costs fixed by ICSID, the expenses of the arbitration, and the legal costs (including attorney's fees) incurred by the parties, in an amount to be quantified;

Ordering the Respondent to pay compound interest at a rate of 9% on the amounts awarded in (ii) to (iv) above; and

granting Helnan any other relief that the Tribunal sees fit. "

B) EGYPT's Position

90.
It is EGYPT's position that HELNAN had no right, under the BIT, to demand it to disregard the Cairo Award and reinstate HELNAN in its role as manager and operator of the Shepheard. EGYPT submits that all claims relating to the Parties' contractual obligations under the Management Contract were definitely resolved in the Cairo Arbitration. Furthermore, it states that the only remaining question to determine is whether EGYPT breached its obligations under the Treaty by allegedly abusing its powers vis-à-vis HELNAN in connection to its privatisation program. EGYPT contends that the only specific instance of such an alleged abuse is the Downgrade and which, it contends, HELNAN has not proved.
91.
EGYPT submits that HELNAN already had alleged in the Cairo Arbitration that EGOTH and EGYPT colluded to ensure the Shepheard's downgrade. It contends that since the arbitrators in the Cairo Arbitration found that there had been no breach of the Management Contract, this claim has already been dealt with and rejected. In light of this, EGYPT contends, the present Tribunal cannot find that there was collusion between EGYPT and EGOTH without directly contradicting the res judicata of the Cairo Award.
92.
Respondent submits that HELNAN was not entitled to bring claims before an international jurisdiction, without previously allowing it [EGYPT] a reasonable opportunity to address the alleged violations. EGYPT submits that this is not a matter of exhaustion of local remedies [which it claims is Claimant's position], but a matter of the material substantiation of the alleged international delict. Respondent submits that it is the merits of the case which are at the heart of the matter, i.e. the alleged international delict cannot be substantiated if Claimant has failed to make reasonable efforts to allow Respondent to address the complaints. EGYPT also stresses the fact that several years after the downgrade took place, the Shepheard has still not been upgraded or sold, quite contrary to Claimant's theory of collusion.
93.
EGYPT submits that there are two salient conclusions to be reached in respect of the present proceedings.
94.
As regards the first, EGYPT submits that the legal consequences of the Cairo Award, which terminated the Management Contract for impossibility of performance, cannot be escaped. EGYPT submits that these legal consequences will operate on three different levels.
95.
Firstly, on the jurisdictional level, EGYPT contends that following the termination of the Management Contract, HELNAN no longer had a legal interest [i.e. the Management Contract or an investment] which could form the subject matter of an agreement to arbitrate pursuant to Article 25 of the ICSID Convention or Article 1 of the Treaty. Therefore, Claimant had no investment to protect under the Treaty and thus no access to ICSID jurisdiction.
96.
Secondly, on the admissibility level, EGYPT contends that due to HELNAN having filed its Request when it did not have an investment, the admission of the claim submitted would constitute a breach of the international rule which provides that the protected investment must be existent at the date of initiation of the proceedings.
97.
Thirdly, on the merits, EGYPT contends that most of the issues raised by HELNAN related to the contractual obligations found in the Management Contract. Therefore the whole dispute was to be decided by the Cairo Award which addressed the relevant issues. Since the Cairo Award is res judicata in regard to these issues, to contravene the Cairo Award would amount to a breach of Egyptian and international law.
98.
As regards the second submission, EGYPT submits that the Cairo Award benefits from the New York Convention; to review, revise or not recognize it would constitute a contradiction between one treaty system and another. Even if res judicata can only be applied to the contractual claims arising from the Management Contract, then these findings must be considered by the present Tribunal as established juridical facts not susceptible of being set aside or contradicted. EGYPT contends that these contractual issues fall outside the jurisdictional scope of both the ICSID Convention and the Treaty. EGYPT therefore submits that most of the claims and/or issues addressed by HELNAN in the present proceedings cannot be considered by the Tribunal.

HELNAN'S FAILURE TO SUSTAIN ITS ALLEGATIONS

99.
Respondent contends that Claimant's remaining strategy to support its view that its claims fall under the Treaty is to prove that EGYPT abused its powers in the Downgrade. EGYPT submits that HELNAN's only "proof" is Mr Bahi Nasr's testimony. EGYPT contends that the testimony provided by Mr Nasr is baseless and lacking substance since he did not name which Undersecretary of Tourism had informed him [Mr Nasr] that the Downgrade had been ordered to provide a reason for terminating the Management Contract. EGYPT states that Mr Nasr did not provide details or context for the conversation. EGYPT further submits that Mr Nasr has a low opinion of Mr Mostafa Eid (his successor in HOTAC). Respondent submits that HELNAN has not satisfied its burden of proof in regard to the allegations made by Mr Nasr.

V. The Tribunal's position

100.
Under Art. 42 (1) sentence 1 of the ICSID Convention, the Tribunal has to apply the law as agreed between the parties. The BIT between Denmark and Egypt is applicable.
101.
Under the ICSID Convention and the BIT, the existence of the contract between HELNAN and Egypt raises the question of the possible distinction between the contractual rights of HELNAN under the laws of Egypt and the alleged treaty rights of HELNAN under the Agreement.
In addition to this differentiation, the Tribunal will have to determine the effect of the local Cairo Award upon the rights of the Parties before the present Tribunal. Also, and related to this question, the matters to be determined by this Tribunal will have to be delineated from those aspects, if any, which the Cairo Tribunal has ruled upon and which this Tribunal has to accept without a review of its own. This subject matter will be considered in the light of the principle res judicata as it operates under the circumstances of the present case of a local award preceding an international proceeding.

The Tribunal will deal with these matters as appropriate for an international Tribunal, taking into account relevant jurisprudence pertaining to these matters.

102.

As regards the distinction between a contractual claim of an investor and a treaty claim subject to the jurisdiction of a competent international tribunal, this Tribunal accepts the approach adopted by a number of investment tribunals1 and summarized in paragraphs 93 and 94 of the AES v. Argentina, Decision on Jurisdiction, 26 April 2005, as follows:

"... the Entities concerned have consented to a forum selection clause electing Administrative Argentine law and exclusive jurisdiction of Argentine administrative tribunals in the concession contracts and related documents. But this exclusivity only plays within the Argentinean legal order, for matters in relation with the execution of these concession contracts. They do not preclude AES from exercising its rights as resulting, within the international legal order from two international treaties, namely the US-Argentina BIT and the ICSID Convention.

In other terms, the present Tribunal has jurisdiction over any alleged breach by Argentina of its obligations under the US-Argentina BIT."

103.
In other words, the analysis of the Claimant's rights under the BIT must on the one hand take into account the existence, or non-existence of contractual rights of the Claimant as they exist on the level of Egyptian law. On the other hand, an exclusive focus on contractual rights will not be sufficient to determine whether or not the rights of the Claimant laid down in the Treaty have been respected. Even in the absence of a valid contract, it is possible that a certain kind of conduct of the host state is inconsistent with its obligations under a BIT.
104.
As regards jurisdiction, the facts as pleaded by a claimant will have to be accepted in principle without further examination on the part of the Tribunal, as long as they appear plausible in light of the Parties' pleadings. If the facts so considered may give rise to a valid claim, the Tribunal will accept its jurisdiction2.
108.
When in the present case a Tribunal would adopt the wider approach of protection and a domestic award exists dealing solely with contractual matters, the Tribunal would have to ask whether under such circumstances it would be necessary to disregard the rule res judicata and to review the facts de novo in the light of the requirements of fair and equitable treatment. In this respect, each case will have to be reviewed in the light of the circumstances. When it is found by an international tribunal that the holding of the local award was determined strictly by considerations pertaining to contractual issues, it will not be appropriate for an international tribunal to replace the decision of the local court on a contractual issue subject to local law. Instead, res judicata will apply, and the outcome in this respect will be the same as that which a tribunal will reach which assumes that strictly contractual matters generally are not protected under the standard of fair and equitable treatment.
109.
Before discussing the merits of HELNAN's claims (below part C), the Arbitral Tribunal must deal with the new objection raised by EGYPT concerning its jurisdiction (below part A) and EGYPT's objections relating to the admissibility of HELNAN's claims (below part B). At the end, the Arbitral Tribunal will deal with the costs of these proceedings (below part D).

A) EGYPT's New Objection to Jurisdiction

110.
According to EGYPT, since as of December 30, 2004, the Management Contract was terminated by the Cairo Award, there was no legal interest that could form the subject matter of an " agreement to arbitrate " under Article 25 of the ICSID Convention or under Article 1 of the Treaty, which both required the existence of a protected "investment" falling thereunder. HELNAN's interest in the Management Contract was legally dissolved when it filed its Request for ICSID arbitration and it had no investment susceptible of protection under the Treaty. Thus there can be no ICSID jurisdiction. The only possibility left to HELNAN would be to argue that the post-Award judicial review process in Egypt constituted a denial of justice, but HELNAN failed to do so.
111.
This line of arguments was not part of EGYPT's objections to jurisdiction dismissed by the Arbitral Tribunal in its Decision of 17 October 2006. As a consequence, HELNAN contends that it was raised untimely and was waived in the light of ICSID Arbitration Rule 41(1) which requires that any objection to jurisdiction be raised " as early as possible ".
113.
Thus, the Arbitral Tribunal decides to review Respondent's new objection to its jurisdiction.
114.
However, this objection is ill-founded. EGYPT had made clear that it does not have " the slightest intention to question what was decided " by the Arbitral Tribunal in its 17 October 2006 decision on jurisdiction7. In this Decision, the Arbitral Tribunal reached the following conclusion: " ... the Arbitral Tribunal concludes that the dispute arises out of an investment. There was no contention by the Respondent that the relation between the Claimant's claims and the Contract would not be direct. Thus the Arbitral Tribunal is satisfied that the dispute directly arises out of an investment8."

It is not disputable that this investment embodied in the Management Contract was terminated by the Cairo Award and that this award is now final. Yet, HELNAN was not expulsed from the Shepheard hotel before March 2006, about one year after it filed its Request for Arbitration on 8 March 2005 and, at this time, the recourse by HELNAN against the Cairo Award was still pending at the Cairo Court of Appeals. Thus, it is factually incorrect to affirm that HELNAN's interest in the Management Contract was legally dissolved when the Request for Arbitration was filed.

115.
But, in the instant case, the very essence of HELNAN's claim is that it has been wrongfully deprived by EGYPT of its investment in the Shepheard Hotel by actions it contends constitute breaches of the Treaty because they were unfair, inequitable, discriminatory and ultimately expropriatory. Should HELNAN be correct in its factual argumentation, the termination of the Management Contract and HELNAN's subsequent expulsion from the Shepheard Hotel would be a violation of the Treaty and HELNAN would be entitled to compensation by EGYPT. As regards the expropriation claims, basically these involve an investor who has no longer an investment as a result of an action by the State.
116.
The argument that the investment had ceased to legally exist under Egyptian law when HELNAN filed its request for ICSID arbitration has no relevance to the jurisdiction of the Arbitral Tribunal since HELNAN's claim is precisely that this legal situation is the result of alleged actions by EGYPT in breach of the Treaty. The reference by Respondent to previous ICSID awards to support its new jurisdictional objection are of no avail.
117.
In Fraport v. Philippines,9 the Arbitral Tribunal declined jurisdiction because the applicable BIT required an investment " in accordance with the host state's law " while the investment at stake had been made through an arrangement which breached provisions of Philippines law. Thus the investment did not qualify for protection under that specific BIT. Since the legality of HELNAN's investment has never been disputed, the situation is undoubtedly distinguishable.
118.
Likewise, the Salini v. Jordan case10 does not support EGYPT's objection to jurisdiction: the Tribunal said very explicitly that it had no jurisdiction to entertain contractual disputes. However, in the instant case, HELNAN does not ask this Arbitral Tribunal to find that its investment was dissolved as a result of the breach of contractual provisions but as the result of a pattern of actions by EGYPT allegedly in breach of the Treaty.
119.
Last, EGYPT's position on jurisdiction finds no support either in the Award rendered in the AAPL v. Sri Lanka case11 on 27 June 1990. In this award the Tribunal retained jurisdiction because it came to the conclusion that the claimant's investment had been destructed and had disappeared as a result of actions of the Sri Lanka military forces which were in violation of the State's obligations under the applicable BIT. A similar issue is in front of the Tribunal in the instant case: it must decide whether the Management Contract ceased to exist as a result of actions of the Egyptian State which were in violation of EGYPT's obligations under the Treaty.
120.
However, even if the Tribunal were to reach the conclusion that EGYPT was not responsible for the termination of the Management Contract and the resulting disappearance of HELNAN's investment, it would not decline jurisdiction: it would dismiss HELNAN's claim. Indeed, whatever be the date the termination of the Management Contract became effective, and independently of EGYPT's alleged liability for the disappearance of HELNAN's investment, Article 25 of the ICSID Convention contains no requirement that an investment must continue to exist at the time of filing of a request for ICSID arbitration: it only requires that a legal dispute arises directly out of an investment "...which the parties to the dispute consent in writing to submit to the Centre." The consent to submit the dispute to the Centre was given by EGYPT when it ratified the Treaty. HELNAN gave its consent by starting this arbitration. Consequently, the Arbitral Tribunal has jurisdiction to decide HELNAN's claims and EGYPT's new objection to its jurisdiction will be dismissed. The Tribunal has decided earlier that its rights in HELNAN constituted an investment (see Decision on Jurisdiction).

B) EGYPT's Objections Concerning the Admissibility of HELNAN's Claims

121.
EGYPT's objections to the admissibility of Helnan's claims are twofold. On the one hand, EGYPT explains that HELNAN's claims in this ICSID arbitration almost duplicate its counterclaims in the Cairo Arbitration and that they are contractual claims subject to the arbitration clause included in the Management Contract. As such, the entire debate belonged to the contractual forum. EGYPT also contends that the Cairo Award is res judicata with regard to all the matters sub judice and that to disregard such res judicata would be a violation of both Egyptian law and international law. It points out that HELNAN is asking the Arbitral Tribunal to ignore the res judicata effect of the Cairo Award, in particular in so far as such award terminated the Management Contract on 4 December 2004 on account of conduct having occurred prior to that date.
122.
Under its first presentation, EGYPT's objection to the admissibility of HELNAN's claims is nothing else than a further objection to the Arbitral Tribunal jurisdiction: if HELNAN's claims are just contractual claims, the arbitration agreement in the Management Agreement was applicable to them and this ICSID Arbitral Tribunal has no jurisdiction to deal with them. But it is also one aspect of its res judicata argument. Indeed, although the CME v. Czech Republic Final Award of 14 March 2003 pointed out that the fact that one tribunal is competent to resolve a dispute does not necessarily affect the authority of another tribunal to resolve the same dispute;12res judicata always requires a previous decision by a competent authority13. That the two components of EGYPT's objection to the admissibility of HELNAN's claims are two aspects of a res judicata objection was clearly implied by its counsel who pointed out at the Hearing: " There is a dual effect of res judicata : one effect is jurisdictional and the other one goes to the merits "14. Consequently, the Arbitral Tribunal will deal with those two components jointly.
126.
Moreover, even if the Cairo Award and this ICSID arbitral tribunal were addressing the same legal order, the Cairo Award could not be opposed as res judicata to the admissibility of HELNAN's claims. For an earlier final decision, issued by a competent court or arbitral tribunal, to be conclusive in subsequent proceedings, three cumulative basic conditions must be met: identity of parties, identity of subject matter or relief sought and identity of legal grounds or causes of actions. This is largely accepted19.Those three cumulative conditions are not met in the instant case.
128.
However, this issue need not be further explored since, in any case, the relief sought in each of the two proceedings is not fully identical and there is no identity at all of the legal grounds or causes of actions invoked by HELNAN.
129.
In the instant ICSID arbitration, HELNAN is asking the following relief:

"(i) declaring that the Respondent has breached its obligations under the Denmark/Egypt BIT; and

(ii) ordering the Respondent to :

Reinstate Helnan as Manager and Operator of the Shepheard Hotel;

Enable Helnan to manage and operate the Shepheard Hotel (without let or hindrance) until at least 2017;

Approve renovation plans in an amount of not less that EPG39 million (appropriately adjusted for the time elapsed since this figure was presented to EGOTH);

Either pay Helnan damages not less than €1,967 per day (daily rate based on Ms. Farr's no renovation and no extension scenario) to indemnify Helnan for loss of its share in the total operating profits of the Shepheard Hotel up until the date of restatement or extend the period of reinstatement to include the number of days of Helnan's wrongful eviction from the Shepheard;

Pay Helnan a penalty per day for every day that respondent fails to so reinstate after the award; and

Pay to Helnan €10.8 million in other damages; or in the alternative

(iii) ordering the Respondent to pay

Damages in an amount up to €16,473,000, to indemnify Helnan for loss operating profits of the Shepheard Hotel;

Damages in the amount of €4,739,822, to indemnify Helnan for loss of its "management business in Cairo";

Damages in the amount of €8,716,266 in compensation for reputational damages;

Damages in the amount of €10,000,000 in compensation for moral damages;

Damages in the amount of €1,068,000 in compensation for lost advertising assets;

€560,358 representing the debt written off by Helnan on 15 October 2002; and

All of Helnan's costs associated with the defence of the arbitration proceedings taken against it by EGOTH in Egypt, in the amount of approximately €228,960; and

Ordering the Respondent to pay all of Helnan's costs associated with the arbitration, including the arbitrator's fees and administrative costs fixed by ICSID, the expenses of the arbitration, and the legal costs (including attorney's fees) incurred by the parties, in an amount to be quantified;

Ordering the Respondent to pay compound interest at a rate of 9% on the amounts awarded in (ii) to (iv) above; and

granting Helnan any other relief that the Tribunal sees fit. ".

HELNAN's prayers for relief in the Cairo Arbitration were as follows20:

"First: An award rejecting the requests of [EGOTH] in the original arbitration application originally, and compelling it with the original arbitration application expenses and counsel's fees.

Second: An award compelling [EGOTH] to proceed immediately with developing and renovating the hotel pursuant to the development and renovation plans submitted by [HELNAN] from the private funds of [EGOTH], together with imposing a delay fine amounting to ten thousand dollars for each month in which [EGOTH] delays in executing its obligation to develop and renovate the hotel.

Third: An award compelling [EGOTH] to pay to [HELNAN] a sum of EGP 31,197,427.00 (thirty one million, one hundred ninety seven thousand, four hundred and twenty seven Egyptian pounds) representing the value lost by [HELNAN] from its share in the profit of operating Shepheard Hotel as a result of the failure of [EGOTH] to execute its obligation to develop and renovate the hotel.

Fourth: An award compelling [EGOTH] to pay to [HELNAN] a sum of EGP 20,000,000.00 (twenty million Egyptian pounds) as indemnity for the moral damage sustained by the latter as a result of the former harming the reputation of the latter by alleging -untruly - that it neglected and ignored executing its obligations arising from the management contract.

Fifth: By way of precaution if the request of [HELNAN] number "Third" is unaccepted an award to extend the period of the management contract for a period of eleven years commencing at the end of the current period of the management contract, which is a period equivalent to the period from Jan. 1st, 1993 till Dec. 31, 2003 during which [HELNAN] abstained from developing and renovating the hotel, and for another period equivalent to the period during which the subsidiary Arbitration Respondent abstains from executing its obligation to develop and renovate the hotel since Jan. 1 st, 2004 till the day preceding the commencement of [EGOTH] to execute this obligation.

Sixth: By way of precaution in case the Panel accepts the request of [EGOTH] to dissolve the management contract and its addendums:

1. An award compelling [EGOTH] to pay to [HELNAN] the sum indicated in the Third original request of [HELNAN] for the same reasons expressed in it.

2. An award compelling [EGOTH] to pay to [HELNAN] a sum of EGP 60,000,000.00 (sixty million pounds) indemnity for the latter for the gain it will miss, namely its share in the total operating profit of the hotel during the years remaining from the current period of the management contract, the years from 2005 till 2012 at the rate of 20% of the total operating profit, 5% burden of financing the Manager for development and the expenses of the head office and 3% international advertisement provision. The total missed gain was calculated assuming that [EGOTH] has fulfilled its obligation to develop and renovate the hotel since Jan. 1 st, 1992.

3. An award compelling [EGOTH] to pay to [HELNAN] a sum of EGP 20,000,000.00 (twenty million pounds) as indemnity for the moral damage sustained by [HELNAN] as a result of defaming its reputation.

4. An award compelling [EGOTH] to pay to [HELNAN] a sum of EGP 21,772,241.00 (twenty one million, seven hundred seventy two thousand, two hundred and forty one Egyptian pounds) which is the debit balance in the accounts of the hotel for the provision of the burden of financing the Manager for development and the expenses of the head office during the period from Jan. 1st, 1987 till Oct. 31, 1997 and a sum of 16,105,265.00 (sixteen million, one hundred and five thousand, two hundred and sixty five Egyptian pounds) which is the debit balance in the accounts of the hotel for the said provision during the period from Nov. 1st., 1997 till June 30, 2002 pursuant to the report of the accounts controller of the hotel, due to the fact that the dissolution of the management contract and its addendums includes the addendum of Oct. 15, 2002 by which [HELNAN] relinquished the two mentioned sums, and its dissolution necessitates restoring the status to what it was prior to concluding this addendum.

Seventh: An award compelling [EGOTH] with expenses and counsel's fees for the subsidiary case.

Eighth: A summary award pursuant to Article 42 of the Law of Arbitration in Civil and Commercial Matters, and urgently compelling [EGOTH] to cease immediately after the issuance of the summary award all procedures of selling Helnan Cairo Shepheard Hotel as well as the procedures of establishing or transferring any right thereon to third party that would likely permit this third party to directly or indirectly interfere in the management and operation of the said hotel or affect in any way the rights of [HELNAN] established in the addendum concluded on Oct. 10, 2002 or which would likely introduce any change to the capacity of the Egyptian Organization for Tourism and Hotels (EGOTH) as an original Arbitration Petitioner and an original Arbitration Petitioner in the current arbitration until the award which will be issued resolving the subject matter of all requests expressed in the original case and the subsidiary case in the current arbitration are fully executed."

131.
On the basis of the above, the Arbitral Tribunal concludes that EGYPT's objections concerning the admissibility of HELNAN's claims must be dismissed. The res judicata effect of the Cairo Award is limited to the Egyptian legal order and cannot be opposed to the admissibility of HELNAN's claims grounded on the alleged breach of the Treaty. The consequences of the res judicata effect of the Cairo Award within the Egyptian legal order will be dealt with when discussing the merits of the case.

C) The Merits of HELNAN's Claims

132.
The core of HELNAN's position is that EGYPT wanted to terminate the contractual relationship because it considered the Management Contract an obstacle for the privatization of the Shepheard given that in the case of a sale of the hotel, the 15 October 2002 Amendment allowed the sale of the hotel, but also gave HELNAN the right either to remain as the manager or to be adequately compensated. For this reason, making an improper use of its authority over the holding company HOTAC, EGOTH and the Ministry of Tourism, EGYPT proceeded to orchestrate a series of events which ultimately lead to HELNAN's eviction from the Hotel.
133.
In HELNAN's submission, the downgrading of the Shepheard hotel by the Ministry of Tourism on 7 September 2003 from a five-star hotel to a four-star hotel was the pivotal point in EGYPT's strategy aimed at the termination of the Management Contract and HELNAN's loss of its investment. Indeed, the Management Contract obliged HELNAN " to manage and operate the hotel as a 5 star"21. Consequently, the downgrading of the hotel led to a situation which was not in conformity with HELNAN's contractual obligations and under Egyptian law gave EGOTH the formal legal opportunity to terminate the Management Contract and to obtain, through arbitration proceedings, the eviction of HELNAN from the hotel.
134.
HELNAN alleges that in order to allow and implement such a strategy, EGYPT, through EGOTH, rejected the numerous renovation and upgrade plans for the Shepheard prepared and submitted by HELNAN. For the same reason the Ministry of Tourism carried out the 2003 inspections in a way which did not conform to accepted policy and practice. After an inspection was conducted in a hostile fashion on 14 June 2003, an unjustifiably harsh report was issued which did not even provide HELNAN with a grace period to cure any alleged violations. A further inspection took place on 4 September 2003, followed by a second inspection report filed on that same day. The decision to downgrade the hotel was issued three days later, on 7 September 2003.
135.
The Cairo arbitration proceedings were initiated 25 days after the downgrading, a move which HELNAN believes to have been actually planned even before the decision to downgrade the hotel was made. After the Cairo Award terminated the Management Contract, EGYPT pursued its enforcement in a way that HELNAN considers to be unfair.
136.
According to HELNAN, this series of actions amounts to abusive actions by Egyptian government officials who used the inspections and the downgrade to ensure HELNAN's eviction from the Shepheard. As a result, its rights under the Management Contract were indirectly expropriated on 7 September 2003 due to the downgrade and later directly expropriated on 23 March 2006 when its eviction from the Shepheard took place and this without fully satisfying the conditions provided by Article 5 of the Treaty. Consequently, HELNAN requests the Tribunal to reinstate it as manager and operator of the Shepheard and award it compensation for losses not covered by such a reinstatement or, alternatively full compensation for all its losses should it not be reinstated in the Shepheard.
137.
Moreover, although it does not ask for specific compensation in this respect, HELNAN contends that in implementing its alleged plan aimed at its expulsion from the hotel, EGYPT breached further articles of the Treaty. The manner in which the 2003 inspections and the later downgrade were carried out would constitute a breach of EGYPT's obligation of fair and equitable treatment of HELNAN's investments pursuant to Article 3 of the Treaty. The initiation of the Cairo Arbitration proceedings and the enforcement of the resulting award would be unfair as well. EGYPT's behaviour would be also unreasonable and discriminatory as well, since EGYPT's treatment of HELNAN, under many aspects, was allegedly less favourable than the treatment granted to other hotel managers, in breach of Article 2 (2) of the Treaty.

a) The individual breaches of the Treaty alleged by HELNAN

138.
HELNAN points out that the 14 June 2003 inspection did not follow the customary practice. This is confirmed by the record: on a Saturday, a Ministries' day-off in Egypt, with no previous warning, contrary to the usual policy as described in the Joint WTO & IH&RA Study on Hotel Classification of 16 April 2004, the inspection was carried out by an exceptionally large team. Moreover, contrary to the prevailing practice evidenced by the 10 inspection reports submitted by EGYPT in its Exhibit 18, the inspection report was not sent directly to HELNAN by the Ministry of Tourism but to EGOTH on 28 June 2003. This was done two weeks after the inspection took place whilst with the exception of an inspection of August 1991, the average time between the inspection and the establishment of the report is between 3 and 4 days. EGOTH kept the report one month before forwarding it to HELNAN on 29 July 2003.
139.
The letter of 28 June 2003 of the Ministry of Tourism to EGOTH (Claimant's Exhibit 80) complained about the general decline of the hotel as to furniture, services, utilities and rooms and also about its pricing policy. It underscored that the hotel deserved to be downgraded from five to four stars. Attached to that letter was a "statement of the most observations revealed to the inspection committee" which mirrored the content of a Memorandum submitted to the Minister of Tourism (Respondent's Exhibit 18 K). The failures pointed out were of such a magnitude that they were not likely to be addressed within a short period. The English translation provided by the Claimant mentions inter alia " [c]hanging the entire furnishing, curtains and carpets" of the rooms and corridors, " [u]pgrading the level of the bathrooms of the rooms, accessories of the bathrooms, its requirements, napkins, and towels", "[r]enewing the pathways as to the wall, floors, ceilings, carpets, air conditions and lighting", "[c]omplete upgrading kitchens (Main -Parties- Specialized) should be made as to the walls, ceilings, floors and the electrical links", inadequacy of the staff, etc .
140.
HELNAN did not seriously challenge most the observations of the inspection committee. As shown in its letter of 10 August 2003 to the Chairman of EGOTH (Claimant's Exhibit 87), it puts the blame for the situation on EGOTH for not having made the necessary investments.
141.
As a matter of fact, this situation was not unprecedented. A letter of the Ministry of Tourism to the Chairman of EGOTH, of 24 August 2000, had a very similar content (Respondent's Exhibit 19). In that letter, the Ministry, referring to an inspection conducted by a joint committee from the Supervision of Hotels and Veterinary Sector, complained about "the degradation of the quality of certain facilities and the rooms of the Hotel" and recalled " repeated warnings to enhance the quality of the hotel and to set a development plan which has not been presented so far, as the plan presented to the Directorate was unscheduled financial plan ". The letter added that a development should be presented within one month and that: "If the plan is not presented, the grade of the hotel shall be down graded (sic) from Five Stars to Four Stars. Such grace shall be considered as a final grace..." The 24 August 2000 letter contained a long list of requirements for renovation, of less magnitude than those listed with the letter to the Chairman of EGOTH of 28 June 2003, but implying as well the need for a long term action. As in 2003, HELNAN did not deny in 2000 that the renovation required by the Ministry was necessary. On the contrary, its letter of 25 September 2000 to the Ministry of Tourism (Respondent's Exhibit 20) refers to a program for renovation agreed upon with EGOTH and to HELNAN's " total commitment to achieve the desired results in due time."
142.
The reference to the 24 August 2000 letter of the Ministry of Tourism to EGOTH is necessary to understand the background to the 14 June 2003 inspection and the fact that it did not follow the customary practice of routine inspections. It is evidenced by the resulting reports (Respondent's Exhibit 18) that routine inspections addressed relatively discrete issues but not the standing of the hotel Shepheard as a whole and the need for a long term investment. It is interesting to note that after the downgrading of the hotel, routine inspections of the hotel were continued, the reports being sent to HELNAN as usual (Respondent's Exhibit 21). The different nature of the inspection which triggered the 24 August 2000 and 28 June 2003 letters of the Ministry of Tourism may explain that those letters and the result of the inspections were sent to EGOTH and not to HELNAN. This explanation is clearly indicated in the Memorandum submitted to the Minister of Tourism after the 28 June 2003 inspection (Respondent's Exhibit 18 K). Obviously, however, it does not explain why EGOTH waited one month before transmitting the results of the inspection and the Ministry's concern to HELNAN.
144.
The 4 September 2003 inspection raises a different issue. As the one performed in June, it was carried out without any warning, about one month after HELNAN had received the report following the June inspection. The report following the 4 September 2003 inspection does not specifically address the requests for improvement and renovation made in the June report, to which no express reference is made: the focus is more on the prices and occupancy rates of the hotel, the cleaning and the adequacy of the staff (Claimant's Exhibit 91). This is surprising as such. But what is even more surprising is that the inspection took place. The Memorandum submitted to the Minister of Tourism after the 14 June 2003 inspection (Respondent's Exhibit 18 K) indicated after noting that " The management level does not suit a Five Stars hotel", that " The management of the hotel previously received a notice and it was notified several times with remarks in order to act accordingly. However, the management of the hotel does not respond and does not observe such remarks. Consequently the hotel will be downgraded to Four Stars and will be notified of the need to observe the health, Civil and security defense remarks". Thus, within the logic of the Memorandum, all the conditions were met to decide on the downgrading without a new inspection which could not bring results very different from those in June, since the requirements for renovation observed at the time could not have been met within two months due to their magnitude. This makes that second inspection very suspicious.
145.
The fact that the resulting report was sent out and dated on the very day of the inspection, 4 September 2003, coupled with the sending of this report on the same day to the Minister of Tourism with the recommendation that the Shepeard hotel be downgraded from five stars to four stars adds to that feeling. The same is true for the preparation for the Minister, on that same day as well, of a Memorandum by his Legal Counsellor with the same recommendation, attaching a draft Decree ordering the downgrade of the hotel to four stars. The Decree was issued just three days after, on 7 September 2003.
146.
In view of those circumstances, the Arbitral Tribunal comes to the conclusion that the 4 September 2003 inspection was a semblance, carried out as a mere formality deprived of any substance and part of the implementation of an already taken decision to immediately downgrade the Shepheard Hotel.
147.
However, this does not necessarily lead to the conclusion that because of this suspicious inspection and the following downgrade, EGYPT is responsible for breaches of the Treaty provisions. It must be recognised that the decision to downgrade the hotel could as well have been taken after the 14 June 2003 inspection, as suggested by the subsequent Memorandum submitted to the Minister of Tourism (Respondent's Exhibit 18 K). This was not done and, instead, the Egyptian administration decided that it had to organise a semblance of inspection to produce a report which reached the same result as the June report. The Tribunal cannot ignore that after the 28 June 2003 letter of the Ministry of Tourism, HELNAN never seriously challenged the conclusions in favour of the downgrading of the hotel. Its main line of argument was to put the responsibility on EGOTH. As already pointed out, the allocation of responsibility for the downgrading was of a contractual nature outside the scope of jurisdiction of this Arbitral Tribunal. Under these circumstances, the downgrading as such cannot amount to a breach of EGYPT's obligations under the Treaty, even if the procedure followed was rather suspicious.
149.
EGOTH's recourse to arbitration pursuant to the relevant clause in the Management Contract was the exercise of a contractual right which, as such, cannot amount to a breach of the Treaty by EGYPT. HELNAN underscores that this recourse was filed in a hurry after the downgrading of the hotel, but this could be significant only for the assessment of the existence of a coordinated plan to evict HELNAN from the Hotel, an issue that the Arbitral Tribunal will consider later on.
150.
Neither the conduct of the Cairo Arbitral proceedings nor the arbitrators' decision is presented by HELNAN as a breach of the Treaty by EGYPT, although the Cairo Award terminated the Management Contract. However, HELNAN contends that the enforcement of that award was a breach of the Treaty. HELNAN explains that " the Cairo tribunal found that Helnan had outperformed its contractual obligations. This constituted a complete rejection of the basis upon which EGOTH initiated the arbitration. Clearly it was unfair to pursue termination once it was confirmed that HELNAN had not breached the Management Contract"24. The Arbitral Tribunal cannot accept such a position which is selfcontradictory. Although the Cairo Award actually found that none of the parties had breached the Management Contract, it decided to terminate it because it was impossible to be performed. In view of this decision, HELNAN could not expect EGOTH - which had requested the termination of the Management Contract in the arbitration - to accept that part of the award which absolved HELNAN for any contractual fault but to ignore that other part which granted it the relief it had sought. Moreover, HELNAN assumes that EGOTH's actions should be attributed to EGYPT, which presupposes again the hypothesis of a coordinated plan to evict HELNAN from the Hotel, an issue that the Arbitral Tribunal will consider later on. As such, the enforcement of an arbitration award cannot be a breach of the Treaty.
151.
HELNAN further alleges that EGYPT interfered with HELNAN's attempts to stay the enforcement of the Cairo Award by improper influence on the judge. This serious allegation is mainly based on Mr Diaa Adbel Ghany Ahmed's testimony, who was present at the hearing of 19 February 2006 of the Abdien Court for Urgent Matters dealing with an application by HELNAN for suspension of the enforcement of the Cairo Award. Mr Diaa Adbel Ghany Ahmed is Administration, Legal and Security Manager in the HELNAN's Cairo Regional Office and attended the hearing as part of a larger HELNAN's team. However, his testimony is based on his personal impressions and is highly speculative. His testimony was directly contradicted by Ms Dorreya Refaat's witness statement. HELNAN's counsel chose not to cross-examine her on this issue, although he did it most efficiently on other issues. Therefore the Arbitral Tribunal concludes that HELNAN did not bring any convincing evidence in this respect.
152.
On the basis of the above, the Arbitral Tribunal is satisfied that, individually taken into consideration, none of the elements in the chain of alleged actions and/or omissions by Egyptian parties or authorities which led to the downgrading of the Shepheard hotel and HELNAN's eviction from it, would constitute breaches of the Treaty. It is quite possible that, in similar circumstances, HELNAN was treated less favourably than other hotel managers but this could be a breach of Article 2 (2) of the Treaty only if it was established that EGOTH's actions and/or omissions are attributable to EGYPT and not to EGOTH as HELNAN's contractual partner. If not, the fact that the quality of the relations between contracting partners varies from case to case has nothing to do with a discriminatory treatment in the sense of the Treaty, even if one of the partners is always the same, EGOTH, and is controlled by the State. As pointed out in the Decision on Jurisdiction, this control is not sufficient for EGOTH's acts and/or omissions to be attributed to EGYPT. They would have to fit within the pattern of a coordinated plan engineered by EGYPT as HELNAN alleged to be the case. Conduct by a government relating to contractual matters which is not shown to be governmental in nature will not fall under the guarantees of the Treaty even if it is alleged that third parties receive different treatment. To hold otherwise would mean that in effect all contractual breaches would be covered by the Treaty simply by reference to treatment of third parties. Such a result would find no support in state or arbitral practice and would contravene the accepted difference between contractual rights and treaty rights.

b) The hypothesis of a coordinated plan by EGYPT to evict HELNAN :

153.
As will be recalled, HELNAN's contractual thesis is that EGYPT considered the Management Contract an obstacle for the privatization of the Shepheard hotel and that, making an improper use of its authority over the holding company HOTAC, EGOTH and the Ministry of Tourism, it orchestrated a series of events which ultimately led to HELNAN's expropriation of its investment in breach of Article 5 of the Treaty.
154.
The Arbitral Tribunal has already found that the 4 September 2003 inspection of the hotel was a semblance, conceived as a mere formality deprived of any substance, and part of the implementation of an already taken decision to immediately downgrade the Shepheard Hotel. The following filing of the arbitration request within the short period of 25 days in order to obtain the termination of the Management Contract appears to have been part of the same plan. This was impliedly confirmed by Mrs Dorreya Refaat of EGOTH's Legal Affairs Department at the Hearing when she indicated, under cross-examination, that the downgrading was known within EGOTH approximately 60 days before the filing of the request for arbitration. The following exchanges with Claimant's counsel were instructing:

Q. " When did you first learn of the downgrade of the Shepheard Hotel?

A . Before initiating the procedures for the arbitration by a very, very short time. Approximately 60 days before.

Q. I'm sorry, you learnt of the downgrade 60 days before initiating the arbitration?

A. Approximately, yes "25.

Q. " Who told you about the downgrade?

A. The sector concerned within the organisation told me. There is a sector that is concerned with the survey and monitoring of the hotels, and from that I knew about this"26.

155.
The indication by Mrs Dorreya Refaat in re-examination that she was mistaken in her answers to Claimant's counsel was far from being convincing, since the way the question was put by EGYPT's counsel, if not leading, allowed the witness to understand the consequences of her first, candid, answer. Moreover, a period of 60 days to prepare a request for arbitration seems to be more realistic than the period of 25 days.
156.
Thus, the Arbitral Tribunal is satisfied that EGOTH and various Egyptian authorities, including the Ministry of Tourism, played a significant role in the implementation of a plan aiming at terminating the Management Contract. There is no doubt that the 4 September 2003 inspection, the report of the same date containing the recommendation that the Shepheard hotel be downgraded, the preparation for the Minister of Tourism, on that same day as well, of a Memorandum by his Legal Counsellor with the same recommendation, attaching a draft Decree ordering the downgrade of the hotel to four stars, were part of such an overall plan.
157.
Together, these manoeuvres evidence a plan aiming at terminating the Management Contract, with the active participation of the Ministry of Tourism in the implementation of the plan. The decisive question is whether this plan was adopted by EGYPT to get rid of HELNAN to be able to privatize the Shepheard hotel more easily. The only evidence of intervention of the administration to obtain, directly or indirectly, the termination of the Contract is based on hearsay, with no further corroborating evidence.
158.
Indeed, HELNAN has in this context filed a witness statement by Mr Bahi Nasr, a former Chairman of the Egyptian Hotels Company (EHC), the predecessor of EGOTH, from 1985 to 1989. In this witness statement, Mr Nasr declared that " the first undersecretary to the ministry of Tourism " told him that " Mr Moustafa Eid the then President of the Holding Company for Housing, Tourism and Cinemas had specifically ordered that the Shepeard Hotel be downgraded by one star to provide EGOTH with an excuse to cancel the management contract with Helnan ". At the hearing, Mr Nasr was far from being convincing. He did not remember precisely the conversation he reported, but explained that he suspected that Mr Moustafa Eid wanted to get rid of the Management Contract so that EGOTH might sell the Shepheard hotel to a Libyan company of which he also happened to be the Chairman. Mr Moustafa Eid testified and denied having ordered the downgrade of the Shepheard Hotel. He was not cross-examined on this point. Another reason to doubt the accuracy of Mr Nasr's testimony is that he indicated to have informed at the time Mr El Galaly, HELNAN's President and a close friend, of the reported conversation with the undersecretary to the Ministry of Tourism. If such has been the case, it is even less understandable that HELNAN abstained from challenging in the administrative courts the downgrade decision.
159.
Moreover, even if the conversation referred to by Mr Nasr did actually take place, it would not necessarily prove that EGYPT had engineered a plan to get rid of HELNAN in order to be able to privatize the Shepheard hotel more easily. Mr Nasr's suspicions that Mr Eid was acting in his own interest, if confirmed, would indicate a completely different scenario, in particular, since HELNAN, informed by Mr Nasr, chose not to challenge the downgrading Decree in the competent administrative jurisdiction. In any event, Mr Nasr's version of Mr Eid's plan has not been proven to be correct in the proceedings.
160.
As already mentioned, the Arbitral Tribunal is convinced that the 4 September 2003 inspection and the following downgrade made in a hurry was part of a plan to terminate the Management Contract. But in the light of the record of this arbitration, the probability that this plan was engineered by EGOTH to put an end to its commercial dispute about the burden of the investment in the hotels seems as least as high as HELNAN's suggestion that the plan was engineered by EGYPT to facilitate the privatization of the hotel. The undisputed facts that the Shepheard hotel was not privatized, and that it has not recovered its five-star status so far, are at odds with HELNAN's explanation. In any case, and whatever be the real explanation, the Arbitral Tribunal is bound to conclude as a result of all these observations, that HELNAN did not discharge its burden to prove that EGYPT had engineered a plan to get rid of HELNAN in order to be able to privatize the Shepheard hotel more easily.
161.
The participation of individuals of the Ministry of Tourism in a plan aiming at the termination of the Management Contract is not sufficient to conclude that not only EGOTH but also those individuals wanted that termination or that a breach of the Treaty is established. The downgrade of the hotel and the termination of the Management Contract are two different issues, as evidenced by the Cairo Award.
162.
After all, the Ministry of Tourism had the right to downgrade the hotel after the June 2003 inspection. It did not do it for reasons which remain unclear. Then, the downgrade was done in a hurry in September 2003, for reasons which were not elucidated either. The background and the details of these actions by the Ministry could have been established and reviewed in proceedings before local courts, but HELNAN did not consider it useful to challenge the decision with the competent administrative court where the legality of the downgrading could have been discussed. HELNAN preferred to keep the dispute at the contractual level. In the Cairo arbitration, HELNAN did not insist so much on the illegality of the Decree downgrading the hotel but on the contractual liability of EGOTH in refusing to make the necessary investments in the hotel to maintain its five-star status. HELNAN's own behaviour and its failure to take the legal steps to challenge the downgrade of the hotel disqualify its claim before this Tribunal that such downgrading was made in breach of the Treaty. Furthermore, and most significantly, whatever motivations were behind the sudden decision to downgrade the Shepheard hotel and the suspicious procedure followed to do it, this was not the cause of the Management Contract termination by the Cairo Tribunal.
164.
The Tribunal has already pointed out that neither the conduct of the Cairo Arbitral proceedings nor the arbitrators' decision was presented by HELNAN as a breach of the Treaty or of international law by EGYPT. HELNAN was able to freely appoint an arbitrator and it appointed somebody it trusted, Dr Abdel Wahab, who it had previously appointed in another arbitration against EGOTH. Dr Abdel Wahab cannot be suspected of bias towards EGOTH. Indeed, it was EGOTH which seemed to fear the contrary as it indicated during the Cairo Arbitration that Dr Abdel Wahab had been appointed before in several others arbitration proceedings by EGOTH's opponents and invited the arbitrators to consider whether these various appointments would not justify Dr Abdel Wahab's withdrawal. The Cairo arbitral tribunal decided to disregard this information provided by EGOTH27. Yet, the award declaring the termination of the Management Contract was unanimous.
165.
The Tribunal has also found supra that the enforcement of the Cairo Award was not a breach of the Treaty.
166.
The Cairo arbitral tribunal had to decide inter alia a claim by EGOTH that the Management Contract " and its addendums (sic) was automatically dissolved " for breach of contract and that HELNAN should consecutively be expelled from the Hotel28. EGOTH considered that HELNAN had " lowered the standards of the hotel to four stars " and, thus, had breached Article 3 of the Management Contract which required HELNAN " to manage and operate the hotel as a five star hotel29". HELNAN underscored that it was not responsible for the downgrading of the hotel, but that EGOTH was, for breaching its contractual obligation to develop and renovate the hotel30. HELNAN requested inter alia the Cairo arbitral tribunal to order that EGOTH should " proceed immediately with developing and renovating the hotel pursuant to the development plans submitted by (HELNAN) from the private funds of EGOTH31.
167.
Deciding as amiable compositeur, the Cairo arbitral tribunal refused to share the position of any of the parties. It found that none of the parties was in breach of the Management Contract but that:

" The inability of both parties to achieve their target in the contract in spite of their sacrifices which exceeded their obligations by virtue of the contract was attributable to the fact that the structural status of the hotel's building based on the reports which were prepared by experts did not permit that they would be burdened by services of a five star hotel, unless a finance would be appropriated for its development and renovation which way exceed that (sic) was appropriated and planned for by both parties. The acceptance of both parties to fulfill their target through the obligations which were determined by the contract to achieve the said target was characterized by unreality and short of accurate assessment, due to the fact that is was impossible, by the performance of both parties to their obligations, for the target which they have determined in the contract as regards developing and renovating the hotel and as regards the level of its services, to be achieved. Accordingly, the non-execution of the contract due to the drop in the standard of the hotel and the drop in the prices of its services, as well as the deterioration which afflicted its utilities and services must be based in the first degree on the lack of both parties to an agreed upon accurate assessment and a realistic plan to finance the renovation and development of the hotel and raise its level of services, as it is not possible for the condition reached by the hotel to be based on the breach of any party to its obligations which were arranged in connection with a building some concrete parts of which were damaged, some units of which were out of service and the capabilities and services of which deteriorated "32.

(...)

And whereas the conditions of the automatic dissolution of the contract pursuant to Article 12.2 were not realized pursuant to the provision of the law, and whereas it was revealed from explaining the facts of the case and that was gathered by the Panel from its papers and documents that it has become impossible to execute the contract together with achieving the target laid down by both parties - without a finance that way exceeds the obligations of both parties by virtue of the contract and also exceeds what they have presented voluntarily without obligation from the contract "33.

168.
Thus, the Cairo arbitral tribunal terminated the Management Contract because it found that it could not be performed. It stressed that . the law permits the dissolution of the contract in this case which is not attributed to a foreign reason pursuant to the provision of Article 159 of the Civil Code which stipulatesin contracts that are binding to both sides, if an obligation expires as a result of the impossibility of its execution, the obligations corresponding thereto expire and the contract automatically dissolves'."34 This shows beyond doubt that the downgrading of the Shepheard hotel was not the cause of the termination of the Management Contract by the Cairo Award. Thus, even if the present Arbitral Tribunal had found that the downgrading was part of a plan engineered by EGYPT in order to evict HELNAN from the hotel - and no finding of that sort was made by this Arbitral Tribunal - such plan would have failed since the termination of the Management Contract and the subsequent eviction of HELNAN was not caused by the downgrading of the hotel. The Management Contract was terminated on the basis of a completely different legal ground, as explained by the Cairo arbitral tribunal. The facts on which the Cairo decision is based fall within the realm of the parties' commercial and contractual relations and EGYPT has no role whatsoever therein. HELNAN insists that the downgrading gave EGOTH a pretext to start the arbitration. This may be true in itself, even though it has been found above that the Hotel exhibited deficiencies not appropriate for a five-star hotel and even though HELNAN decided not to challenge the downgrade before the local courts. But under the circumstances it cannot be said that a relation of legal causality existed between the downgrade and the termination of the contract. Should EGOTH have started the arbitration before the downgrading decision, for instance after the report following the June 2003 inspection, the Cairo Arbitral would have been able to render exactly the same decision on the basis of the existing dispute among EGOTH and HELNAN regarding the deterioration of the hotel and the responsibility for investments.
169.
In view of the foregoing considerations, the Arbitral Tribunal is of the view that HELNAN has failed to prove that any breach of the Treaty by EGYPT had caused the termination of the Management Contract and its eviction from the Shepheard hotel.
170.
Since all the relief sought by HELNAN in this arbitration is grounded on the assumption that its eviction from the Shepheard hotel was the result of the breach of the Treaty by EGYPT, all HELNAN's claims will be dismissed, apart for its claim for costs which is dealt with hereinafter. In view of the Arbitral Tribunal's determination with regard to a lack of liability on the part of Egypt, the question of damages of Claimant and the numerous issues that would need to be addressed in connection with their quantification do not arise.

D) The Costs of the Proceedings

171.
The Claimant, by its submission of 3 December 2007, corrected on 14 December 2007, requested that it be awarded a total of £ 2,503,867 for costs.
172.
The Respondent, by its submissions of 3 December 2007, requested that it be awarded US$ 742,556, € 116,133 and EGP 668,610.32 for costs. It confirmed those amounts in its submission of 15 December 2007.
On the basis of the foregoing reasons and those presented in its Decision on Jurisdiction of 17 October 2006, attached
THE ARBITRAL TRIBUNAL DECIDES AS FOLLOWS:

1. The Arbitral Tribunal has jurisdiction over the dispute submitted to it in this arbitration.

2. The claims raised by the Claimant are admissible.

3. The claims raised by the Claimant are dismissed.

4. Each party shall bear the expenses incurred by it in connection with the present arbitration.

5. The arbitration costs, including the fees of the members of the Tribunal, shall be borne by the parties in equal shares.

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