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Avocats, autres représentants, expert(s), secrétaire du tribunal

Final Award

TABLE OF ABBREVIATIONS

1 September 1997 Meeting Meeting between the Egyptian Minister of Industry and Claimant on 1 September 1997, after which Claimant submitted an application to PENA to regain his Egyptian nationality
1980 BIT Agreement Between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Mutual Protection of Investments, dated 5 May 1980 and entered into force on 22 January 1982
2004 BIT Agreement Between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Promotion and Protection of Investments, dated 3 March 2004 and entered into force on 5 February 2005
2018 Merits Hearing Merits hearing held at the Peace Palace, The Hague on 12-14 December 2018
2019 Merits Hearing Merits hearing held at the Peace Palace, The Hague on 24-27 April 2019
ADEMCO Aswan Development and Mining Company
ADEMCO-Arbed Contract Sale and purchase contract between ADEMCO and ProfilArbed for the second hand iron ore preparation plant, dated 29 January 1998
ADEMCO Shareholder Agreement Shareholder Agreement entered into between Claimant and the Project Partners, dated 9 July 1998
AISCO Aswan Iron and Steel Company
April 1998 MD Report Information memorandum between Mannesmann Demag and Tradecon regarding iron ore deposits in the Aswan region, dated April 1998
Arbitration Costs The costs of the arbitration under Article 38(a), (b), (c), (d), and (f) of the UNCITRAL Rules
Awad WS 1 Mr Younes Awad's First Witness Statement, dated 16 July 2012
Bahgat WS 1 Mr Bahgat's First Witness Statement, dated 19 September 2012
Bahgat WS 2 Mr Bahgat's Second Witness Statement, dated 9 November 2012
Bahgat WS 3 Mr Bahgat's Third Witness Statement, dated 27 August 2013
Bahgat WS 5 Mr Bahgat's Fifth Witness Statement, dated 9 October 2018
BITs The 1980 BIT and the 2004 BIT
Buttonwood Buttonwood Legal Capital Limited, Hong Kong
Claimant Mr Mohamed Abdel Raouf Bahgat
Claimant's Counter-Memorial on Jurisdiction Claimant's Counter-Memorial on Jurisdiction, dated 30 August 2013
Claimant's Costs Reply Claimant's Costs Reply, dated 9 July 2019
Claimant's Rejoinder on Jurisdiction Claimant's Rejoinder on Jurisdiction, dated 25 May 2017
Claimant's Reply Claimant's Reply, dated 9 October 2018
Claimant's Statement of Claim Claimant's Statement of Claim, dated 10 November 2012
Claimant's Statement of Costs Claimant's Statement of Costs, dated 9 June 2019
Claimant's Supplementary Counter-Memorial on Jurisdiction Claimant's Supplementary Counter-Memorial on Jurisdiction, dated 14 December 2016
CMA Egyptian Capital Market Authority
CMRDI Central Metallurgical Research and Development Institute
Commitment Agreement Commitment Agreement that accompanied Law No. 166 on 14 June 1998, which was enacted by the Egyptian Parliament and signed by then President Hosni Mubarak, and which granted ADEMCO its mining license
Committee A committee formed by GAFI and chaired by Mr Salah El-deen Mandour
Companies AISCO and ADEMCO
Concession ADEMCO's 30-year mining license was confirmed by Law No. 166 on 14 June 1998, which was enacted by the Egyptian Parliament and signed by then President Hosni Mubarak
CRM Centre de Recherche minérale
DCF Discounted Cash Flow
DEM German marks
EGP Egyptian pound
EGSMA Egyptian Geological Survey and Mining Authority
Egypt The Arab Republic of Egypt
Egyptian Investment Law Egyptian Law No. 8 of 1997, Law of Investment Guarantees and Incentives
El Ashri WS 1 Mr Mokhtar Ali Mohamed El Ashri's First Witness Statement, dated 31 October 2011
FET Fair and equitable treatment
First ADEMCO-MD Contract Contract between ADEMCO and Mannesmann Demag A.G. for the dismantlement, transport, and re-erection of the used steel factory and installation of new secondary equipment, dated 6 February 1998
First BDO Report Expert Report submitted by Mr Gervase MacGregor, submitted with Respondent's Statement of Defense, dated 6 July 2018
First SRK Report Expert Report of Dr Mike Armitage and Mr Nick Fox, submitted with Respondent's Statement of Defense, dated 6 July 2018
Freezing Order Order passed on 20 February 2000 freezing the assets of the Companies and Claimant
GAFI General Authority for Investment and Free Zones in Egypt
GBP Pound Sterling
HSBC HSBC Investment Bank PLC
Inglis Report Expert Report of Mr William Inglis submitted with Claimant's Statement of Claim, dated 7 November 2012
Investment Objection Respondent's argument that the 1980 BIT does not apply beyond Claimant's shares and capital contributions to the Companies
Jurisdiction Decision Tribunal's Decision on Jurisdiction, dated 30 November 2017
Jurisdiction Hearing Hearing on jurisdiction held at the Peace Palace, The Hague, on 19-20 June 2017
Korea-Egypt BIT Agreement on the Promotion and Protection of Investments between the Government of the Republic of Korea and the Government of the Arab Republic of Egypt, dated 19 August 1997 and entered into force on 12 January 2000
Law No. 166 Law No. 166 on 14 June 1998
LE Egyptian pound
Legal Costs Costs of legal representation and assistance of the successful party under Article 38(e) of the UNCITRAL Rules
LIBOR The London Inter-bank Offered Rate
LIBR Lux International Business Relations
LOI Letter of intent for the purchase of a used steel factory in Luxembourg between Tradecon and ProfilArbed, dated 19 November 1997
Matthews Report Expert Report of Mr Noel Matthews submitted with Claimant's Reply, dated 9 October 2018
Merits Hearing Hearing on the merits in this arbitration
Met-Chem Report Report published by Met-Chem regarding iron ore deposits at Project site, dated November 1999
MD Mannesmann Demag A.G.
MFN Most-favoured nation treatment
Netherlands-Egypt BIT Agreement on Encouragement and Reciprocal Protection of Investments between the Arab Republic of Egypt and the Kingdom of the Netherlands, dated 17 January 1996 and entered into force on 1 March 1998
Notice of Arbitration Claimant's Notice of Arbitration, dated 3 November 2011
Parties Claimant and Respondent
PCA Permanent Court of Arbitration
Personal Injury Objection Respondent's claim that the 1980 BIT does not apply to any acts directed against Claimant
Procedural Order No. 1 Procedural Order No. 1, dated 19 September 2012
Procedural Order No. 2 Procedural Order No. 2, dated 21 December 2012
Procedural Order No. 3 Procedural Order No. 3, dated 25 September 2013
Procedural Order No. 4 Procedural Order No. 4, dated 8 March 2017
Procedural Order No. 5 Procedural Order No. 5, dated 17 May 2017
Procedural Order No. 6 Procedural Order No. 6, dated 2 February 2018
Procedural Order No. 7 Procedural Order No. 7, dated 12 March 2018
Procedural Order No. 8 Procedural Order No. 8, dated 10 May 2018
Procedural Order No. 9 Procedural Order No. 9, dated 17 July 2018
Procedural Order No. 10 Procedural Order No. 10, dated 20 August 2018
Procedural Order No. 11 Procedural Order No. 11, dated 18 November 2018
Procedural Order No. 12 Procedural Order No. 12, dated 8 December 2018
Procedural Order No. 13 Procedural Order No. 13, dated 14 January 2019
Procedural Order No. 14 Procedural Order No. 14, dated 4 March 2019
Procedural Order No. 15 Procedural Order No. 15, dated 29 March 2019
Procedural Order No. 16 Procedural Order No. 16, dated 3 April 2019
Project Project involving the mining and exploitation of iron ore in a designated sector in Aswan, and manufacturing of steel from these resources
Project Partners MD, Cegelec, US Steel and Pomini
Respondent The Arab Republic of Egypt
Respondent's Costs Reply Respondent's Costs Reply, dated 9 July 2019
Respondent's Memorial on Jurisdiction Respondent's Memorial on Jurisdiction, dated 15 July 2013
Respondent's Request for Bifurcation Respondent's Request for Bifurcation, dated 26 January 2013
Respondent's Reply Memorial on Jurisdiction Respondent's Reply Memorial on Jurisdiction, dated 23 March 2017
Respondent's Rejoinder Respondent's Rejoinder on the Merits, dated 6 December 2018
Respondent's Statement of Defense Respondent's Rejoinder on the Merits, dated 6 July 2018
Respondent's Statement of Costs Respondent's Statement of Costs, dated 25 June 2019
SAC Judgment Decision of the Finnish Supreme Administrative Court on the question of Claimant's Finnish Nationality, dated 15 November 2016
Second ADEMCO-MD Contract Contract between ADEMCO and MD for USD 585 million, dated 6 February 1998
Second BDO Report Second Expert Report submitted by Mr Gervase MacGregor, submitted with Respondent's Rejoinder, dated 28 November 2018
Second SRK Report Second Expert Report of Dr Mike Armitage and Mr Nick Fox, submitted with Respondent's Rejoinder, dated 28 November 2018
SGA Studiengesellschaft für Eisenerzaufbereitung
Share Consolidation Report Claimants' share consolidation report, dated 24 July 2005
UEC Study Feasibility Study Integrated Steel Producing Facilities Aswan Iron and Ore Steel Company by UEC USX Engineers and Consultants, Inc., dated January 1999
UNCITRAL Rules Arbitration Rules of the United Nations Commission on International Trade Law, dated 15 December 1976
Vannin Vannin Capital PCC, Claimant's third-party funder
Verdier WS 1 Mr Richard Verdier First Witness Statement, dated 2 November 2012

 

I. INTRODUCTION

A. THE PARTIES

1.
The claimant in the present arbitration is Mr Mohamed Abdel Raouf Bahgat ("Claimant"), a businessman born in Egypt and who later acquired Finnish nationality. His address is Aleksis Kiven Katu 11 Ab36, 00510 Helsinki, Finland.
2.
Claimant is represented by Mr Stephen Fietta QC, Mr Jiries Saadeh, Ms Laura Rees-Evans, Ms Oonagh Sands, and Ms Fanny Sarnel of Fietta LLP, London; Professor Andrew Newcombe of the University of Victoria; and Mr Samuel Wordsworth QC and Mr Peter Webster of Essex Court Chambers. Previously, Claimant was also represented by Mr Subir Karmakar of Saunders Law Ltd.
3.
The respondent in the present arbitration is the Arab Republic of Egypt, a sovereign state ("Egypt" or "Respondent", and together with Claimant, the "Parties"). Respondent's address is Egyptian State Lawsuits Authority, 42 Gameat El Dowal El Arabiya St., Mohandeseen, Giza, Egypt.
4.
Respondent is represented by H.E. Counselor Abou Baker El-Sedik Ameer, Counselor Abdel Hamid Nagashy, Counselor Fatma Khalifa, Counselor Razan Abou Zaid, Counselor Lela Kassem, Counselor Ahmed Sayed, Counselor Nada El-Kashef, Counselor Yasmine Shamekh, and Counselor Yousra Mohamed of the Egyptian State Lawsuits Authority; and Mr Louis Christophe Delanoy, Mr Tim Portwood, Mr Raed Fathallah, Mr Suhaib Al Ali, Ms Laura Fadlallah, and Ms Khrystyna Kostiushko of Bredin Prat.

B. THE DISPUTE

5.
The present dispute is an arbitration initiated by Claimant against Respondent under the Agreement between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Mutual Protection of Investments, dated 5 May 1980 ("1980 BIT") and the Agreement Between the Government of the Republic of Finland and the Government of the Arab Republic of Egypt on the Promotion and Protection of Investments dated 3 March 2004 ("2004 BIT", collectively with the 1980 BIT referred to as the "BITs"), and the Arbitration Rules of the United Nations Commission on International Trade Law 1976 ("UNCITRAL Rules").
6.
Claimant is the founder of and investor in the Aswan Development and Mining Company ("ADEMCO") and the Aswan Iron & Steel Company ("AISCO", and together with ADEMCO, the "Companies"). He founded the Companies after he was selected by Respondent to develop the iron ore resources located near Aswan, Egypt (the "Project") and to build a facility to develop the Project. ADEMCO was granted a 30-year mining concession and AISCO was created in order to run the steel operations.
7.
Developments in the Project were underway when, on 5 February 2000, the police arrested Claimant. Claimant's personal assets as well as the assets of the Companies were frozen pursuant to an order of the Public Prosecutor that was confirmed by the Cairo Criminal Court on 20 February 2000 (the "Freezing Order"). The police raided the offices of Claimant and the Companies, and shut down and took over the Project site. Claimant was incarcerated for over three years. The Freezing Order over the Companies' assets was lifted by a court in October 2006. Claimant argues that the Project site has been destroyed and he still had not been provided access to the Companies' bank accounts.
8.
Claimant contends that the actions taken by Respondent with respect to the Project are in violation of the investor protections contained in the BITs; specifically, that Respondent's actions amounted to an unlawful expropriation, unfair and inequitable treatment, and a failure to accord full and constant protection and security.
9.
Respondent initially argued that the Tribunal lacked jurisdiction ratione personae and ratione temporis over the present claim. Respondent's jurisdictional objections were dismissed in the Tribunal's Decision on Jurisdiction of 30 November 2017 (the "Jurisdiction Decision"). In its Jurisdiction Decision, the Tribunal decided that it has jurisdiction over the dispute, and reserved all questions concerning the merits, costs, fees, and expenses for subsequent determination. In the present phase of the proceedings, Respondent describes Claimant's investment as one that was doomed to failure due to the poor quality of the iron ore, and that lack of profit was not caused by any 'political vendetta' or conduct of the Egyptian Government. Respondent maintains that it has not breached the BITs and submits that Claimant has failed to plead or prove causation or actual damages. Accordingly, Respondent seeks dismissal of the claim and the reimbursement of its costs.
10.
This Final Award recalls the procedural history of the merits phase of this arbitration (Part II) and the relief sought by the Parties (Part III). It sets out the relevant factual background of the claim (Part IV). The Tribunal deals with the Parties' jurisdictional and merits arguments relating to breach of the 1980 BIT (Part V), the 2004 BIT (Part VI) and the Egyptian Law No. 8 of 1997, Law of Investment Guarantees and Incentives (the "EgyptianInvestment Law") (Part VII). Issues of quantum are covered in Part VIII, followed by consideration of interest (Part IX) and both Parties' contentions with respect to Costs (Part X). The Tribunal's decisions are set out in Part XI.

II. PROCEDURAL HISTORY

11.
In Part II of its Jurisdiction Decision, the Tribunal set out in detail the procedural steps starting from the initiation of the arbitration on 3 November 2011, through the suspension of the arbitration pending resolution of issues relating to Claimant's nationality in the Finnish court system, the resumption of proceedings, the issuance of five procedural orders, the hearing on jurisdiction, and the issuance of the Tribunal's Jurisdiction Decision on 30 November 2017.
12.
In this section of the Final Award, the Tribunal recalls only key procedural developments from the first phase of the case and details the procedural steps taken since the Jurisdiction Decision.

A. COMMENCEMENT OF THE ARBITRATION

13.
On 3 November 2011, Claimant initiated arbitration proceedings against Respondent for breach of the BITs, through a Notice of Arbitration pursuant to Article 9(2)(d) of the 2004 BIT (the "Notice of Arbitration"). In addition, and/or in the alternative, Claimant brought claims against Respondent for violations of the 1980 BIT, under Article 7(2) of that treaty.1

B. CONSTITUTION OF THE TRIBUNAL

14.
The Tribunal is composed of (i) Professor W. Michael Reisman, a national of the United States of America, who was appointed by Claimant, and whose address is Yale Law School, P.O. Box 208215, New Haven, CT 06520-8215, United States of America, (ii) Mr Laurent Lévy, a national of Switzerland and Brazil, whose address is Lévy Kaufmann-Kohler, 3-5 rue du Conseil-Général, P.O. Box 552, CH-1211 Geneva 4, Switzerland, who was appointed by Respondent on 30 October 2018 following the death on 2 October 2018 of Respondent's original appointee, Professor Francisco Orrego Vicuña, and (iii) Professor Rüdiger Wolfrum, a German national appointed by the two original co-arbitrators as the Presiding Arbitrator, and whose address is Max Planck Institute for Comparative Public Law and International Law, Im Neuenheimer Feld 535, 69120 Heidelberg, Germany.

C. THE JURISDICTIONAL PHASE

15.
On 27 June 2012, the Tribunal and the Parties signed the Terms of Appointment, thereby agreeing that the Permanent Court of Arbitration ("PCA") will act as registry in the proceedings.
16.
On 8 March 2013, following agreement of the Parties, the Tribunal confirmed that the proceedings would be bifurcated into a jurisdictional phase and a subsequent phase to deal with the merits.
17.
Throughout the course of the jurisdictional phase, the Tribunal issued the following procedural orders:

• Procedural Order No. 1 on 19 September 2012, setting a timetable, and noting the Tribunal may use, as additional guidelines, the IBA Rules on the Taking of Evidence in International Arbitration (2010) ("Procedural Order No. 1");

• Procedural Order No. 2 on 21 December 2012, addressing an application by Claimant for Interim Measures ("Procedural Order No. 2");

• Procedural Order No. 3 on 25 September 2013, suspending the proceedings pending resolution of Claimant's challenge before the Finnish administrative courts ("Procedural Order No. 3");

• Procedural Order No. 4 on 8 March 2017, noting the obligation on both Parties to pay their shares of the supplementary deposit, and inviting updated information from Claimant on his third-party funding arrangements ("Procedural Order No. 4"); and

• Procedural Order No. 5 on 17 May 2017, dismissing with reasons three objections of Respondent that Claimant had identified as being raised out of time ("Procedural Order No. 5").

18.
On 10 November 2012, Claimant filed his Statement of Claim together with accompanying materials ("Claimant's Statement of Claim"). The accompanying materials included seven witness statements, six expert reports, exhibits C-0001 to C-0043, and legal authorities CLA-1 to CLA-44.
19.
During the jurisdictional phase, the Parties exchanged the following written submissions:

• Respondent's Memorial on Jurisdiction dated 15 July 2013 (Respondent's Memorial on Jurisdiction);

• Claimant's Counter-Memorial on Jurisdiction dated 30 August 2013 ("Claimant'sCounter-Memorial on Jurisdiction");

• Claimant's Supplementary Counter-Memorial on Jurisdiction dated 14 December 2016 ("Claimant's Supplementary Counter-Memorial on Jurisdiction") (which included an English translation of the Finnish Supreme Administrative Court Judgment of 15 November 2016, in which Claimant had prevailed);

• Respondent's Reply Memorial on Jurisdiction dated 23 March 2017 ("Respondent's Reply Memorial on Jurisdiction"); and

• Claimant's Rejoinder on Jurisdiction dated 25 May 2017 ("Claimant's Rejoinder on Jurisdiction").

20.
A hearing on jurisdiction was held on 19 and 20 June 2017 ("Jurisdiction Hearing") and the Parties agreed that no post-hearing briefs were necessary and that costs submissions would be deferred until after the Jurisdiction Decision.
21.
The Tribunal issued its Jurisdiction Decision on 30 November 2017, which contained the following decisions at Paragraph 319:

Based on the foregoing considerations, the Tribunal:

A. Dismisses the jurisdiction ratione personae objections advanced by Respondent.

B. Dismisses the jurisdiction ratione temporis objections advanced by Respondent.

C. Decides that it has jurisdiction over the dispute.

D. Reserves all questions concerning the merits, costs, fees and expenses for subsequent determination; and

E. Invites the Parties to confer regarding the procedural calendar for the merits phase of the arbitration, and to report to the Tribunal in this respect within six (6) weeks of receipt of this Decision.

22.
All three arbitrators signed the Jurisdiction Decision and Professor Orrego Vicuña additionally appended a separate opinion.

D. PROCEDURAL HISTORY OF THE MERITS PHASE

23.
By letter dated 11 December 2017, Claimant renewed its request that the Tribunal make an order, with the same legal effect as an interim award, promptly directing Respondent to comply with its legal obligation to pay its share of the deposit by (a) repaying Claimant the three deposits he had already paid in lieu of Respondent and (b) paying forthwith its share of any future deposits that may from time to time be requested by the Tribunal.
24.
On 13 December 2017, the Tribunal invited Respondent to comment on Claimant's request, and also invited both Parties to advise if they consented to publish the Jurisdiction Decision. On 3 January 2018, Claimant did provide consent to publish, but Respondent indicated that it did not consent. The Tribunal noted on 5 January 2018 that "[i]n the absence of consent to publication of both the Parties, as required by Article 32(5) of the UNCITRAL Rules 1976, the [Jurisdiction] Decision and the Separate Opinion of Professor Orrego Vicuña will remain confidential."
25.
By letters dated 10 and 12 January 2018, the Parties shared their proposals on the procedural timetable for the merits phase of the case pursuant to Paragraph 319.E of the Jurisdiction Decision.
26.
On 11 January 2018, Respondent informed the Tribunal that it was "willing to pay its share of any future deposits that may from time to time be requested" however stated that it was "not prepared to restitute to Claimant any deposits that he has already paid in lieu of Respondent, unless ordered to do so by the Tribunal in its Final Award, if at all." Respondent reiterated its position that "the Tribunal does not have the authority under the UNCITRAL Rules to issue an interim award ordering a party to pay its share of the deposits." Both Parties filed further comments on these issues. Among other things, on 23 January 2018, Claimant corrected Respondent's assertion that there was "certain instability" to Claimant's funding and confirmed that he had in place a third party non-recourse funding agreement with Vannin Capital PCC ("Vannin").
27.
The Tribunal issued Procedural Order No. 6 on 2 February 2018, dealing with the procedural calendar for the merits phase and payment of the deposit ("Procedural Order No. 6"). With respect to the deposit, the Tribunal recalled the history of payment of the deposits in the arbitration to date. It further recalled that in Procedural Order No. 4, the Tribunal had (i) determined that "Respondent remains under a legal obligation to pay its share of the deposit and to continuously monitor its own financial and political situation"; (ii) directed Respondent to "report to the Tribunal immediately when it is in a position to pay its share of the deposit and to arrange as soon as practicably possible for restitution to Claimant of the share of the deposit that he paid in lieu of Respondent"; and (iii) deferred making an order on costs "until the final award, or in any event, until after the jurisdiction of the Tribunal has been determined." In Procedural Order No. 6, the Tribunal noted that Respondent had confirmed its ability to satisfy all future requests for deposit payments and was therefore in a position to pay its share of the deposit. Without prejudice to the final allocation by the Tribunal of costs, and any interest thereon, at a later stage in this arbitration, the Tribunal directed Respondent "to make payment of EUR 275,000, representing the deposit payments that Claimant has made in lieu of Respondent in this arbitration thus far, to Claimant within 45 days of receipt of this Order."
28.
On 7 February 2018, the Tribunal requested a supplementary deposit from both Parties.
29.
Claimant paid its portion of the supplementary deposit on 23 February 2018.
30.
Following a further exchange of correspondence among the Parties and the Tribunal regarding hearing dates, the Tribunal issued Procedural Order No. 7 on 12 March 2018 ("Procedural Order No. 7"), containing an adjusted schedule, with the week of 10 December 2018 set for the hearing on the merits (the "Merits Hearing").
31.
On 22 March 2018, Respondent confirmed that it had initiated processes to pay its portion of the supplementary deposit. It also reiterated that "while it is willing to pay its share of future advances on costs, it cannot make any payment to Claimant as reimbursement of past payments." In response to that communication, Claimant expressed the view that Respondent's position was inexplicable, and ignored Procedural Order No. 6. Claimant "appreciate[d] that there is little that the Tribunal can do at this stage to address Respondent's disregard of its procedural orders", but "nevertheless request[ed] that the Tribunal note Respondent's conduct" and "reserve[d] his rights in that regard, including as to costs and his right to claim interest on the unpaid amount as from 19 March 2018." The Tribunal noted the contents of both Parties' communications on 26 March 2018.
32.
The Tribunal issued Procedural Order No. 8 on 10 May 2018, which set out a revised procedural calendar agreed by the Parties, but retained the dates for the Merits Hearing in the week of 10 December 2018 ("Procedural Order No. 8"). The Tribunal confirmed on 29 May 2018 that the Merits Hearing would be held in The Hague.
33.
Respondent's portion of the supplementary deposit was received on 15 June 2018.
34.
On 3 July 2018, following an extension request and explanation from Respondent, the Tribunal granted Respondent until 6 July 2018 to file its Statement of Defense, noting Respondent's undertaking to file even if missing elements had not then been received by counsel. The Tribunal indicated that it would issue a further revised procedural calendar, which was done in the form of Procedural Order No. 9, issued on 17 July 2018 ("Procedural Order No. 9").
35.
Respondent filed its Statement of Defense, with accompanying materials, on 6 July 2018 (the "Respondent's Statement of Defense"). The accompanying materials included two expert reports, exhibits R-0033 to R-0063, and legal authorities RLA-0086 to RLA-0117.
36.
In July and August 2018, in accordance with Procedural Order No. 9, the Parties exchanged document production requests, replies and objections to such requests, and on 10 August 2018, both Parties applied to the Tribunal for document production orders. On 20 August 2018, the Tribunal issued Procedural Order No. 10 on document production ("Procedural Order No. 10").
37.
On 30 September 2018, the PCA advised the Parties that it had been informed by Professor Orrego Vicuña's family that for health reasons he was no longer able to serve as arbitrator. Respondent was invited to appoint a replacement. On 3 October 2018, the PCA conveyed to the Parties the news that Professor Orrego Vicuña had passed away.
38.
On 9 October 2018, Claimant filed its Reply (the "Claimant's Reply"), accompanied by 3 witness statements, 5 expert reports, exhibits C-0086 to C-0158, and legal authorities CLA-77 to CLA-130.
39.
On 30 October 2018, Respondent appointed Mr Laurent Lévy to replace Professor Orrego Vicuña. In the same correspondence, Respondent requested that the Merits Hearing be postponed to the week of 18 February 2019 to allow Mr Lévy sufficient time to prepare.
40.
On 30 October 2018, the PCA circulated to the Parties a list of case documents that it proposed to send to Mr Lévy. Claimant provided its comments on this list on 31 October 2018, to which Respondent agreed on 1 November 2018.
41.
On 1 November 2018, the PCA circulated to the Parties Mr Lévy's Statement of Acceptance and Independence under the UNCITRAL Rules, his curriculum vitae, and Mr Lévy's disclosures pursuant to Article 9 of the UNCITRAL Rules. The PCA informed the Parties that the only period in which the Tribunal would be available for the Merits Hearing in the first half of 2019 would be 22 to 26 April 2019.
42.
On 3 November 2018, Claimant requested the Tribunal to maintain the 10 December 2018 Merits Hearing dates. By letter dated 5 November 2018, Respondent maintained its request to postpone the Merits Hearing.
43.
On 5 November 2018, the PCA asked Claimant to indicate his availability for the Merits Hearing the week of 22 April 2018. On 6 November 2018, Claimant indicated that he was not available to attend the Merits Hearing the week of 22 April 2018 due to commitments of Claimant's lead counsel in another matter for the three weeks prior. Claimant reiterated his request that the original hearing dates be maintained.
44.
On 7 November 2018, Respondent informed the PCA and the Tribunal that it would be unable to file its Rejoinder by 15 November 2018 because some of its experts were unable to finalise their reports in time, with one expert being unavailable between the end of November and 15 December 2018. This was followed by Respondent's formal request for an extension until 6 December 2018 for the filing of its Rejoinder.
45.
On 8 November 2018, Claimant objected to any postponement of the Merits Hearing due to the unavailability of Respondent's experts, inter alia citing Paragraph 6.2 of Procedural Order No. 1 that makes each Party responsible for the attendance of its experts at a hearing. Claimant noted, referring to Paragraph 6.7 of Procedural Order No. 1, that the Tribunal may refuse to admit the expert report or draw any other appropriate inferences, should Respondent fail to produce an expert that Claimant has called for cross-examination.
46.
On 8 November 2018, Claimant requested Mr Lévy to supplement his disclosures pursuant to Article 9 of the UNCITRAL Rules with respect to any relationship he may have had with Claimant's third-party funder Vannin. On 12 November 2018, Mr Lévy confirmed that, to the best of his knowledge, Vannin was not funding a party appearing before him. Claimant supplemented its submission by letter dated 12 November 2018, in which it inter alia agreed to a one-week extension until 22 November 2018 for the filing of the Rejoinder, subject to preservation of the 10 December 2018 Merits Hearing dates.
47.
On 12 November 2018, the Tribunal proposed that a hearing limited to opening statements and fact witness testimony take place in December 2018, followed by a hearing on the expert witness testimony and closing submissions in late April 2019. The Tribunal noted that this structure would accommodate Claimant's concern to preserve the December hearing dates at the same time as Respondent's concerns as to the preparation of its experts and Mr Lévy's capacity to prepare for the hearing. Such a split in the hearing would (i) reduce both the length of the December hearing and the material covered, (ii) allow Claimant to provide testimony this year, addressing points as to his advanced age and the time it has taken to have his claims heard, (iii) allow Respondent to complete expert reports of the new expert who was unavailable in December, and (iv) allow time for Party-appointed experts to confer and produce potentially constructive joint expert reports. The later start date of 24 April 2019 for the second part of the hearing, along with the reduced scope of that portion of the hearing and five months lead time, would adjust the availability of Claimant's lead counsel. The Tribunal noted that "in the circumstances there is no perfect solution" but considered the proposal "to be consistent with its general duties under the UNCITRAL Rules to conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality and that at any stage of the proceedings each party is given a full opportunity of presenting his case."
48.
On 14 November 2018, the Parties provided their comments on the Tribunal's proposal. Respondent reiterated its preference to organise a hearing over a single week in 2019 but stated that if the Tribunal were to reject that option, Respondent "will follow the Tribunal's suggestion and make itself available in December 2018 for the opening statements and the cross-examination of the factual witnesses and in April 2019 for the cross-examination of the experts and the closing statements." Claimant however reiterated concerns as to his advanced age, the time he has already spent in the case, and explained that the arrangement with his new funder will increase the costs entailed for him if the dispute is not resolved by 31 December 2019. Claimant also stated that splitting the hearing would provide a procedural advantage to Respondent as it would have four months to work on further responses to the fact evidence and is not presenting any fact witnesses. Claimant repeated its preference to maintain the hearing commencing 10 December 2018 and stated it would be "amenable to the Respondent receiving a one-week extension for filing its Rejoinder (but not otherwise)." Claimant also stated that, although sub-optimal, "if one of the Respondent's technical experts is in fact unavailable to attend at any point during the December hearing, there may be scope of holding the evidence of that expert over to be heard at the earliest convenient date after the December hearing, whether in person or by video conference."
49.
On 18 November 2018, the Tribunal issued Procedural Order No. 11 addressing the scheduling of the merits phase ("Procedural Order No. 11"). In line with Article 15 of the UNCITRAL Rules, the Tribunal reiterated its concerns to conduct the proceedings in such a manner so as to ensure equality of treatment amongst the parties while providing them a full opportunity to present their respective cases. The Tribunal took note of the fact that Claimant commenced proceedings over seven years earlier and that circumstances beyond his control caused delays in having his claims on the merits heard. It recalled that at the request of Respondent, Claimant on several occasions agreed to postpone steps within the procedural calendar. Notwithstanding the difficulty in finding a convenient hearing date for both Parties and Tribunal members, the Tribunal noted that the case was almost fully briefed and it did not wish to lose the momentum of proceedings. The Tribunal factored in the availability of Mr Lévy and the size of the files to be reviewed for this portion of the proceedings. Acknowledging some overlap between factual and expert witness testimony to be presented, the Tribunal nevertheless considered it feasible to split the hearings, beginning with opening statements and examination of fact witnesses December 2018 and the expert witnesses and closing statements in April 2019.
50.
The Tribunal noted Claimant's concerns as to its funding arrangements, and stated it would "use every best effort to issue a final award in the eight months between the close of the merits hearing and 31 December 2019, assuming the Parties likewise adhere to scheduled dates." As to whether fact and expert evidence may be cleanly split, the Tribunal found that save for the testimony of Mr Richard Hills Verdier, Claimant's witness statements do not touch on issues of a technical nature and can effectively be treated separately in December. Regarding Mr Verdier's testimony, the Tribunal decided to hear his testimony as to his first statement of 2 November 2012 in the December phase of the hearing, as it discusses facts not of a technical nature. Mr Verdier may then be recalled in the April phase of the hearing to testify as to his second statement of 7 October 2018 which addresses technical details. As such, the Tribunal decided that the hearing on the merits will take place at the Peace Palace in The Hague from 12-13 December 2018 and, if necessary, the morning of 14 December 2018 ("2018 Merits Hearing"). Expert testimony and Mr Verdier's examination on his second statement, and closing submissions, would then be in The Hague from 24-26 April 2019 ("2019 Merits Hearing").
51.
Also in Procedural Order No. 11, the Tribunal granted Respondent until 23 November 2018 to file its Rejoinder. The Tribunal noted that Respondent has "had ample notice of the date for the filing of its Rejoinder" and that despite the need to find a replacement arbitrator, the Tribunal was not convinced that Claimant's Reply necessitates extra time for filing given the extensions already proffered to Respondent. Respondent was extended an invitation until 6 December 2018 to apply for leave if it needed to supplement its Rejoinder with an additional expert report that it is not able to finalise until a later date. The Tribunal also reminded Respondent that as per Procedural Order No. 6, it was directed to make payment of EUR 275,000 by 19 March 2018 to Claimant as reimbursement for payments Claimant made in lieu of Respondent.
52.
A further and final extension request for the Rejoinder was granted by the Tribunal on 23 November 2018, and on 28 November 2018, Respondent filed its Rejoinder, together with three expert reports, exhibits R-0064 to R-0086, and legal authorities RLA-0118 to RLA-0160.
53.
On 6 December 2018, Respondent filed an updated rejoinder, accompanied by the expert report of Dr Jürgen Cappel.

E. THE 2018 MERITS HEARING

54.
On 29 November 2018, Respondent notified that it wished to cross-examine Mr Bahgat and Mr Verdier at the December hearing, and reserved its right to recall Mr Verdier at the 2019 Merits Hearing. Claimant observed that, as Respondent had proffered no fact witnesses, there were no fact witnesses for it to cross-examine in December, and reserved its right to cross-examine the expert witnesses at the 2019 Merits Hearing.
55.
On 3 December 2018, the Parties submitted chronological lists of exhibits.
56.
On 4 December 2018, the Parties, Presiding Arbitrator, and Registry participated in a pre-hearing teleconference to deal with administrative and procedural aspects of the 2018 Merits Hearing. This was followed by the issuance of Procedural Order No. 12 on 8 December 2018, which set out arrangements for the 2018 Merits Hearing ("Procedural Order No. 12").
57.
From 12-14 December 2018, the 2018 Merits Hearing was held at the Peace Palace in The Hague. In attendance were the following:

Tribunal
Professor Rüdiger Wolfrum
Professor W. Michael Reisman
Mr Laurent Lévy

Claimant
Mr Stephen Fietta
Mr Jiries Saadeh
Ms Oonagh Sands
Ms Zsófia Young
Ms Fanny Sarnel
Ms Jane Byrne
(Fietta LLP)

Mr Samuel Wordsworth QC
Mr Peter Webster
(Essex Court Chambers)

Mr Mohamed Abdel Raouf Bahgat
(Claimant, fact witness)

Mr Richard Verdier
(fact witness)

Respondent
Mr Louis Christophe Delanoy
Mr Tim Portwood
Ms Laura Fadlallah
Ms Khrystyna Kostiushko
(Bredin Prat)

Counselor Amr Arafa Hasaan
Counselor Ahmed Sayed Abdelrahman
Counselor Yasmin Shamekh
(Egyptian State Lawsuits Authority)

PCA
Ms Judith Levine
Ms Ashwita Ambast
Ms Mariam Chauhan

Court reporter
Trevor McGowan

58.
Oral submissions were presented by Mr Fietta and Mr Wordsworth for Claimant and Mr Delanoy, Mr Portwood, and Ms Fadlallah for Respondent. Fact testimony was heard from Mr Bahgat, who was cross-examined on his five witness statements by Respondent, and Mr Verdier, former technical director of ADEMCO and AISCO, who was cross-examined by Respondent on his first witness statement of 2 November 2012 relating to the events leading to the closure of the Project.
59.
At the close of the hearing, the Parties and Tribunal discussed next steps for the 2019 Merits Hearing and a possible schedule for joint expert reports.
60.
By letter dated 18 December 2018, the Tribunal confirmed the dates of the 2019 Merits Hearing to be Wednesday, 24 April 2019, Thursday 25 April 2019, and Friday, 26 April 2019 with Saturday, 27 April 2019 held in reserve should extra time be needed. The Tribunal also stated that in accordance with Paragraphs 2.32 and 7.2 of Procedural Order No. 1 and subsequent Procedural Orders, the Parties are requested to confer with one another and their respective experts to set a schedule for filing joint expert reports by 10 January 2019. The Tribunal also invited the parties to confirm by 10 January 2019 any corrections to the transcripts of the 2018 Merits Hearing, and the dates for when witnesses/experts would be called for examination, when a pre-hearing teleconference with the Presiding Arbitration would be held, and when the core bundle would be delivered to the Tribunal and Registry.
61.
On 14 January 2019, the Tribunal issued Procedural Order No. 13, which confirmed the dates for the 2019 Merits Hearing ("Procedural Order No. 13"). The Tribunal also requested notification of which witnesses/experts would be called for examination by 31 January 2019, submission of joint expert reports by 1 March 2019, a pre-hearing teleconference with the Presiding Arbitrator on 28 March 2019, and delivery of an index and electronic version of a core bundle by 8 April 2019.
62.
On 31 January 2019, Claimant notified the Tribunal that he wished to call for cross-examination Respondent's experts Dr Mike Armitage, Dr John Willis, Dr Jürgen Cappel, and Mr Gervase MacGregor. Respondent notified the Tribunal that in addition to Mr Richard Verdier, it would call Claimant's experts Mr Noel Matthews, Dr Kadri Dagdelen, Dr Erik Spiller, and Dr Joseph Poveromo.
63.
On 4 March 2019, the Tribunal issued Procedural Order No. 14, approving the Parties' agreement to amend the "schedule for the submission of joint expert reports" ("Procedural Order No. 14").
64.
On 28 March 2019, Respondent consented to Claimant's request to introduce into the record two publicly-available reports from Egypt's Department of Industry and Mineral Resources, as well as an updated version of Annex 1 to the First ADEMCO-MD Contract, which Mr Verdier had recently found in his possession. Respondent also requested leave to introduce to the record the decision of the Supreme Security Council of 15 January 2001, and informed the Tribunal that it had requested Claimant to produce a full version of the November 1999 Met-Chem Report (Exhibit C-0049).
65.
On 28 March 2019, following exchanges amongst the Parties and Tribunal on procedural questions, the Presiding Arbitrator, the Parties, and the PCA participated in the pre-hearing conference call in which they discussed outstanding logistical arrangements for the 2019 Merits Hearing.
66.
On 29 March 2019, the Tribunal issued Procedural Order No. 15 in which it inter alia, extended the deadline for the submission of the Parties' joint expert reports on beneficiation, mining, and steel, confirmed the hearing schedule and other arrangements for the hearing, and requested a written update from Respondent on the payment of EUR 275,000 to Claimant (representing the deposit payments made by Claimant in lieu of Respondent) ("Procedural Order No. 15").
67.
On 29 March 2019, Claimant, with the consent of Respondent, submitted copies of: (i) National Council for Production and Economic Affairs of the Presidency of the Republic, Department of Industry and Mineral Resources, "Egypt's Mineral Resources and their role in supporting the national economy", April 2009 (Exhibit C-0164); (ii) National Council for Production and Economic Affairs of the Presidency of the Republic, Department of Industry and Mineral Resources, "Iron Ores in Egypt – The Current Situation and the Outlook for the Future", November 2012 (Exhibit C-0165); and (iii) Annex 1 to the Mannesmann Contract and partially negotiated Annexes 2, 3, and 4 (Exhibit C-0166).
68.
On 1 April 2019, Claimant objected to Respondent's request to introduce into the record the decision of the Supreme Security Council of 15 January 2001. He further noted that he was not in possession of the full version of the November 1999 Met-Chem Report and that he also wished to produce the decision of the Court of Cassation of 18 October 2001 quashing the decision of the Supreme Security Council.
69.
On 3 April 2019, the Tribunal issued Procedural Order No. 16 in which it inter alia granted Respondent leave to introduce into the record the decision of the Supreme Security Council of 15 January 2001 and directed Respondent to produce the decision of the Court of Cassation of 18 October 2001 quashing that decision ("Procedural Order No. 16"). Respondent produced both documents on 4 April 2019 (Exhibit R-0088 and Exhibit R-0089).
70.
On 5 April 2019, the Parties submitted their joint expert reports on beneficiation along with two new exhibits, (i) Bo Arvidson, "Continuous High Gradient Magnetic Separation, Pilot Plant: Machine Description and Mineral Processing Results", 1976 (Exhibit ES-5), and (ii) L. Paul Staples, Jan E. Nesset, "An Evaluation of a High Gradient Magnetic Separation Pilot Plant at Brunswick Mining and Smelting", Canadian Institute of Mining, Metallurgy and Petroleum, 1 January 1996 (Exhibit ES-6).
71.
On 5 April 2019, pursuant to the direction contained in Procedural Order No. 15, Respondent provided the Tribunal with an update regarding the payment of EUR 275,000 to Claimant.
72.
On 7 April 2019, the Parties submitted their joint expert report on steel.
73.
On 15 April 2019, Respondent submitted an updated version of Exhibit R-0089.
74.
On 20 April 2019, the PCA acknowledged receipt of EUR 275,000 from Respondent, representing the amount to be reimbursed to Claimant for the three substitute deposit payments he had made in lieu of Respondent.

F. THE 2019 MERITS HEARING

75.
The 2019 Merits Hearing was held from 24-27 April 2019 at the Peace Palace in The Hague. In attendance were the following:

Tribunal
Professor Rüdiger Wolfrum
Professor W. Michael Reisman
Mr Laurent Lévy

Claimant
Mr Stephen Fietta QC
Mr Jiries Saadeh
Ms Oonagh Sands
Ms Zsófia Young
Ms Fanny Sarnel
Ms Jane Byrne
Ms Sylvia Yanzu
(Fietta LLP)

Mr Samuel Wordsworth QC Peter Webster
(Essex Court Chambers)

Mr Mohamed Abdel Raouf Bahgat
(Claimant)

Mr Richard Verdier
(Witness)

Dr Kadri Dagdelen
(OptiTech Engineering Solutions, Technical Expert)

Professor Erik Spiller
(Spiller Consultants, Beneficiation Expert)

Dr Joseph J. Poveromo
(Metal Strategies, Steelmaking Expert)

Mr Noel Matthews
Ms Leona Josifidis
(FTI Consulting, Quantum Experts)

Respondent
Mr Louis Christophe Delanoy
Mr Tim Portwood
Ms Laura Fadlallah
Ms Khrystyna Kostiushko
(Bredin Prat)

Counselor Mohamed Mahmoud Khalaf
Counselor Ahmed Sayed Abdelrahman
Counselor Nada Mohamed Magdy Youssef Mohamed Elkashef
(Egyptian State Lawsuits Authority)

Mr Mike Armitage
(Technical Expert)
Mr Nick Fox
(Technical Expert)
Mr John Willis
(Beneficiation Expert)
(SRK Consulting)

Mr Jürgen Cappel
(Cappel Stahl Consulting, Steelmaking Expert)

Mr Gervase MacGregor
Mr Andrew Maclay
Mr Andrew Fingerett
(BDO, Quantum Experts)

PCA
Ms Judith Levine
Ms Ashwita Ambast
Ms Mariam Chauhan

Court Reporter
Mr Trevor McGowan

76.
Oral submissions were presented by Mr Fietta, Mr Saadeh, and Mr Wordsworth for Claimant and Mr Delanoy, Mr Portwood, and Ms Fadlallah for Respondent. Expert testimony was heard from Mr Verdier, Dr Kadri Dagdelen, Dr Mike Armitrage, Dr Erik Spiller, Dr John Willis, Dr Joseph J Poveromo, Dr Jürgen Cappel, Mr Noel Matthews, and Mr Gervase MacGregor.
77.
On 26 April 2019, Claimant submitted six new legal authorities, Exhibits CLA-0144 to 0149.

G. POST-HEARING PROCEEDINGS

78.
By letter dated 29 April 2019, the Tribunal noted inter alia that each Party had confirmed at the close of the 2019 Merits Hearing that they have had a full opportunity to present their case and that there were no additional matters to raise.
79.
On 22 May 2019, the Parties shared their agreed corrections to the transcript of the 2019 Merits Hearing.
80.
On 5 June 2019, as anticipated by the Presiding Arbitrator at the end of the hearing, the Tribunal requested the Parties to pay a supplementary deposit.
81.
On 7 June 2019, Claimant submitted his Statement of Costs. On the same day, Respondent requested an extension until 10 June 2019, to submit its Statement of Costs, which extension the Tribunal granted on 9 June 2019.
82.
On 9 June 2019, Claimant filed a corrected version of his Statement of Costs ("Claimant'sStatement of Costs").
83.
On 10 June 2019, Respondent requested a further extension to file its Statement of Costs to finalise its figures and requested the opportunity to file comments on Claimant's Statement of Costs one week after the filing of Respondent's Statement of Costs. Claimant objected to these requests.
84.
On 11 June 2019, the Tribunal directed Respondent to file its Statement of Costs by no later than 25 June 2019 and noted that this submission should not contain any consideration of Claimant's Statement of Costs. The Tribunal noted that each Party would be invited to comment on the other Party's Statement of Costs within two weeks from the date on which Respondent's Statement of Costs would be submitted. The Tribunal invited Respondent, by 12 June 2019, to explain the delay in the submission of its Statement of Costs and to send to the Tribunal Secretary a copy of its submission as it stood.
85.
On 12 June 2019, Respondent provided an explanation for its delay in submitting its Statement of Costs. On the same day, the Tribunal Secretary acknowledged receipt from Respondent of its Statement of Costs as it then stood.
86.
On 25 June 2019, Respondent submitted its Statement of Costs ("Respondent's Statement ofCosts").
87.
On 9 July 2019, each Party submitted its comments on the other Party's Statement of Costs ("Claimant's Costs Reply" and "Respondent's Costs Reply").

III. RELIEF REQUESTED BY THE PARTIES

88.
Claimant requests that the Tribunal render an award:

a. rejecting the Respondent's new objections to jurisdiction as untimely or, alternatively, without merit;

b. declaring that the Respondent has breached Articles 2 and 3 of the 1980 BIT;

c. declaring that the Respondent has breached Articles 2, 3, 5 and 12 of the 2004 BIT;

d. declaring that the Respondent has breached Articles 8, 9 and 12 of the Respondent's Investment Law;

e. ordering that the Respondent pay damages to the Claimant in the amount of not less than USD 103.5 million;

f. ordering that the Respondent pay USD 5 million to the Claimant by way of moral damages;

g. ordering the Respondent to pay compound interest of LIBOR + 4 percent compounded annually on any amount awarded to the Claimant, such compound interest to run from the date of the expropriation until the date upon which payment is made;

h. ordering the Respondent to pay all the costs of the arbitration, including all the fees and expenses of the PCA and the Tribunal, all the legal costs, funding costs and expenses incurred by the Claimant, with interest calculated in accordance with paragraph (g) above; and

i. ordering such other and further relief as the Tribunal deems appropriate.2

89.
In his Statement of Costs, Claimant claims his total costs and expenses in relation to the arbitration in the sum of EUR 787,316.50, USD 1,000,000, and GBP 6,844,800.53, plus funding costs (in excess of USD 25 million) and post-award interest on such costs.
90.
Respondent requests the Tribunal:

DECLARE that Claimant's claims relating to the alleged treatment by Egypt of Mr Bahgat's and the Project Companies are not covered by the 1980 and 2004 BITs between Finland and Egypt or by the Egyptian Investment Law;

Therefore,

DISMISS all of Claimant's claims;

In the alternative,

DECLARE that Egypt has not breached the 1980 and 2004 BITs between Finland and Egypt and the Egyptian Investment Law;

Therefore,

DISMISS all of Claimant's claims;

In the further alternative,

DECLARE that Claimant has not pleaded or proven causation between the alleged breaches and the alleged damages;

Therefore,

DISMISS all of Claimant's claims;

In the further alternative,

DECLARE that Claimant has not pleaded or proven his actual damages;

Therefore,

DISMISS all of Claimant's claims;

In the ultimate alternative,

DECLARE that Claimant's damages are nil;

In any case,

ORDER that Claimant reimburse all of Egypt's costs in this arbitration, including its expert and attorney fees.3

91.
In its Statement of Costs, Respondent claims its total costs and expenses in relation to the arbitration in the sum of EUR 1,742,803.42 and EGP 168,400.54.

IV. RELEVANT BACKGROUND

A. INTRODUCTION

92.
Claimant argues that Respondent has not contested the main facts underlying Claimant's case,4 including the grant of the mining concession to Claimant, the initiation of criminal proceedings against Claimant, the search of Claimant's and Mr Mohamed Ali Shimi's offices, and the arrest and imposition of sanctions against Claimant and the Companies.5
93.
Respondent argues that this case is an attempt by Claimant to "recoup […] an investment that was doomed to failure" because the quality of the iron ore was too poor to manufacture steel.6 Respondent denies the existence of any political vendetta against Claimant and submits that there were no issues with the working of the Egyptian court system.7

1. The development of the Project

94.
Claimant is a businessman who established several business ventures across the world in the 1970s and 1980s.8 Around 1976, Claimant felt that the Egyptian Government had become more democratic and liberal, and so he expanded his export business to Egypt.9 Claimant was born an Egyptian national,10 but became a Finnish national by Presidential Decree on 12 February 1971.11 On 6 November 1980, the Egyptian Minister of the Interior by Decision Number 1896/1980 authorised Claimant to acquire Finnish nationality while not retaining Egyptian nationality.12
95.
In 1997, Claimant learned about an iron ore reserve in the south east of the Aswan region of Egypt.13 Claimant highlights that Respondent's geological and mining authority, the Egyptian Geological Survey and Mining Authority ("EGSMA") discovered the iron ore deposits in this region, publicised these deposits in the state-controlled press, and invited private investors to participate in the development of this region.14 EGSMA published a very positive report in 1997 on the future of iron ore mining in Egypt which "engaged the Claimant's interest."15 Claimant states that then President Mubarak first visited the Aswan region in 1997 and lauded the prospective investment, "expressing hope that a large investment project would be established in the Aswan area, which is a relatively undeveloped and poor area of Egypt."16 These statements prompted Claimant to meet with the Egyptian Minister of Industry, Mr Soliman Reda.17
96.
Respondent maintains that in the 1990s, the Egyptian government discovered "potentially promising" iron ore deposits in south east Aswan, although the Aswan area was generally "less attractive due to (i) its location and (ii) the limited quantity and quality of its ore."18 Respondent notes that Egyptian Steel, which initially received its iron ore directly from the Aswan region in the 1970s, switched to receiving resources from the Bahariya Oasis region in the 1980s because the latter had "larger and better quality reserves."19 Respondent states that Mr Ganzouri, the then Prime Minister of Egypt "strongly encouraged Claimant and his investment."20
97.
According to Claimant, Mr Reda suggested in a letter dated 31 July 1997 that Claimant collaborate with Arbed SA, a company based in Luxembourg and that owned a used steel facility.21 Claimant argues that after visiting Arbed SA, he wrote a letter to Mr Reda confirming that Claimant planned to build a steel plant in Aswan using an old steel plant that he would purchase from Arbed SA.22
98.
In July 1997, Lux International Business Relations ("LIBR"), a Luxembourg based company, began to establish an integrated steel production facility in Aswan by purchasing an old steel factory in Luxembourg from ProfilArbed (a 100% subsidiary of Arbed SA) and repurposing this.23 LIBR acted as an intermediary for the sale of the used factory between ProfilArbed and Tradecon (an Egyptian company represented by Claimant).24 Respondent notes that the repurposing of an old factory was approved by its authorities even though "the details of the project were unclear."25
99.
Claimant states that Mr Reda confirmed in the second half of August 1997 that Claimant had been awarded the contract to mine iron ore in the Aswan region.26 Claimant states that after being awarded the contract, he began work on its implementation.27
100.
Claimant alleges that on 1 September 1997, Mr Reda invited Claimant to his office (the "1 September 1997 Meeting"). This meeting was also said to have been attended by Mr Mokhtar Ali Mohamed El Ashri, a potential investor in the Project, who has submitted four witness statements in this arbitration dated 31 October 2011, 15 January 2013, 7 February 2013, and 27 August 2013.28 According to Claimant, at the 1 September 1997 Meeting, Mr Reda confirmed that Claimant would be the chairman of the company that would run the Project subject to certain conditions.29 First, Claimant was told he would need to re-acquire his Egyptian nationality. Claimant states that Mr Reda made it clear that if Claimant did not take on Egyptian nationality, the government would look for someone else to run the Project and the money and time invested by Claimant in the Project would be lost.30 Claimant states that Mr Reda indicated that Claimant would be "out of this project and from any other project in Egypt."31 Second, Claimant would have to allocate 5% of the shares in that company each to the Bank Misr and to the Al Sharq Insurance Company.32 Third, Claimant would have to assign to each of Bank Misr and the Al Sharq Insurance Company the right to appoint one board member of Claimant's company.33
101.
Claimant describes that he accepted Mr Reda's demands, seeing no other method of preserving his investment in the Project and fearing the possibility of being put in jail if he refused the demands.34 Claimant alleges that Mr Reda handed him an application to regain Egyptian nationality, which Claimant completed immediately.35 On 28 September 1997, the Egyptian Ministry of the Interior issued Decision Number 10815/1997, which restored Claimant's Egyptian nationality pursuant to Article 18 of the Nationality Law No. 26 of 1975.36
102.
On 19 November 1997, Tradecon and ProfilArbed signed a letter of intent (the "LOI") for the purchase of a used steel factory in Luxembourg.37
103.
On 22 December 1997, USD 5 million was transferred to ProfilArbed, pursuant to the LOI, as "[a]dvance payment for second hand equipment."38 It is contested whether Claimant was the source of these funds.
104.
On 24 December 1997, Claimant established ADEMCO with the authorization of the Chairman of the General Authority for Investment and Free Zones in Egypt ("GAFI"), to carry out the exploitation and mining of iron ore.39 On its establishment, Claimant held 7% of ADEMCO's shares.40 According to Claimant, there was no need for a written agreement of a loan between himself and ADEMCO because he was the chairman and main shareholder of ADEMCO.41 He preferred to keep his shareholding "as low as possible" because of Egyptian inheritance laws that would require his shares to be passed on to his stepfamily whom he does not wish to have control over his assets.42
105.
On 3 January 1998, ADEMCO was registered as a corporate entity under Egyptian law.43
106.
On 29 January 1998, ADEMCO signed a sale and purchase contract with ProfilArbed for the second hand iron ore preparation plant (the "ADEMCO-Arbed Contract") for USD 21,621,000, 51% of which was to be paid within 60 days of the signing of the contract.44 On 29 January 1998, ProfilArbed and ADEMCO also entered into a side letter to the ADEMCO-Arbed Contract, in which ADEMCO confirmed its knowledge that the used factory had been in operation for over 20 years and had "suffered a wear and tear corresponding to these number of years."45
107.
On 6 February 1998, ADEMCO and Mannesmann Demag A.G. ("MD"), a German company, entered into a contract (the "First ADEMCO-MD Contract") for USD 450 million for the dismantlement, transport, and re-erection of the used steel factory and the installation of the new secondary equipment.46 The First ADEMCO-MD Contract reflects that the Project would utilise a used steel plant from ProfilArbed.47 7.2% of the total price of the First ADEMCO-MD Contract was to be paid to MD between the beginning of February 1998 and early March 1998.48
108.
Respondent notes that the ADEMCO-Arbed Contract and the First ADEMCO-MD Contract were signed before Claimant had been granted any concession and before the existence of minable resources had been confirmed in south east Aswan.49 Claimant denies that the signature of the ADEMCO-Arbed Contract and the First ADEMCO-MD Contract were premature.50 Claimant argues that at the time, Egypt had granted Claimant the concessions, there was proof of minable resources and that the Project, given its scale, required Claimant to evaluate development possibilities at an early stage.51 Claimant further argues that Respondent, at the time, promoted the viability of the Project and despite being aware of Claimant's business dealings, did not object to Claimant's actions.52 Claimant notes that Respondent encouraged Claimant to negotiate with Arbed.53
109.
On 10 March 1998, the Egyptian General Organization for Industrialization "referring to the study which was carried out by Tradecon Company in co-operation with Mannesmann – Demag Co concerning the exploitation of the Aswan Iron Ores, certif[ied] that "the technical information in this study has been carefully prepared and on local assumptions."54
110.
On 12 April 1998, GAFI authorised the increase in ADEMCO's share capital from EGP 10 million to EGP 100 million.55 Respondent argues that Claimant's shareholding in ADEMCO remained at 7%.56 Claimant contends that upon Mr Shimi's contribution of EGP 42 million to ADEMCO, Mr Shimi's shareholding in ADEMCO increased to 42.03% and Claimant's shareholding in ADEMCO was 54.3%.57 Claimant maintains that he invested EGP 2.5 million at the time ADEMCO was incorporated, then at a later stage, this was increased to EGP 7.5 million by way of a credit balance through the MD payment, to reach EGP 10 million, and then further increased to reach EGP 100 million.58
111.
In April 1998, a decision was made to purchase new equipment for the Project rather than utilise the used factory: the weight of the assets of the used factory were greater than expected (which resulted in increased prices for dismantlement, transport, and re-erection) and the capacity of the old factory was more limited than expected.59 On 12 April 1998, a meeting was held between representatives of ADEMCO and MD.60 At this meeting, MD suggested "[substituting] the second hand equipment by brand new ones…" and that "ADEMCO should … consider new equipment instead of a mix between used and new."61
112.
ADEMCO and MD entered into a new contract to reflect the use of a new steel plant for USD 585 million (which was antedated to keep the date of 6 February 1998) (the "Second ADEMCO-MD Contract").62 In April 1998, MD and Tradecon prepared an information memorandum about the iron ore deposits in the Aswan region (the "April 1998 MD Report").63 Claimant notes that the April 1998 MD Report contemplated a new steel plant and that the Minister of Industry had no objection to this change.64
113.
In June 1998, the following shareholders were added to ADEMCO: MD (10%), Cegelec (5%), and Orascom (5%).65 Claimant argues that his shareholding in ADEMCO was increased to 12% and Respondent contends that Claimant's shareholding in ADEMCO remained at 12% from this date onwards.66
114.
ADEMCO's 30-year mining license was confirmed by Law No. 166 on 14 June 1998, which was enacted by the Egyptian Parliament and signed by then President Hosni Mubarak ("Law No. 166" or the "Concession").67 Law No. 166 was accompanied by a commitment agreement between ADEMCO and the Ministry of Industry (the "Commitment Agreement").68 Under the Commitment Agreement, ADEMCO undertook to "commence the search operations" within three months and to submit, within a year, a "conclusive economic feasibility study."69
115.
Claimant argues that the conditions of the Commitment Agreement were satisfied, given that the Ministry of Industry had approved the feasibility study in the April 1998 MD Report and the changes to the contract between ADEMCO and MD.70 Claimant contends that he was in constant contact with Respondent's authorities at the time and that they did not terminate the Commitment Agreement.71 Claimant highlights that Respondent continued to support the Project, up until the Project's inauguration on 22 May 1999.72 Respondent maintains that the iron ore at Aswan was not suitable for exploitation and argues that Claimant studied the feasibility of the Project only after the conclusion of Commitment Agreement.73 Respondent notes that the press was sceptical about the Project's potential.74
116.
In July 1998, Mr Shimi's shareholding in ADEMCO dropped to 14.5% after he sold a majority of his shares in ADEMCO to Claimant.75
117.
Between July and December 1998, Claimant explains that MD, Cegelec, US Steel, and Pomini (the "Project Partners") each agreed to take equity in ADEMCO, but allowed Claimant to retain legal control over the shares until the companies paid for them.76
118.
On 9 July 1998, Claimant and the Project Partners entered into an agreement (the "ADEMCO Shareholder Agreement").77 According to the ADEMCO Shareholder Agreement, the Project Partners would pay Claimant the nominal value of ADEMCO's shares (EGP 10/share) and 20 piasters per share and contribute further capital as set out in the Annex to that agreement.78
119.
Claimant contends that in July 1998, Claimant controlled 80.2% of ADEMCO's share capital (including the 60% share capital that Claimant had agreed to transfer to the Project Partners).79
120.
On 21 July 1998, AISCO was established by a decision of ADEMCO's shareholders, in order to concentrate on the business of manufacturing iron steel in mills and plants constructed for that purpose.80 With the authorization of GAFI,81 AISCO was incorporated in September 1998 and was registered as a corporate entity on 10 September 1998.82 Claimant submits that ADEMCO had an 87.5% shareholding in AISCO and Claimant had a 0.2% shareholding in AISCO.83 Accordingly, Claimant states that he had a 34.7% interest in AISCO and, correspondingly, an equivalent interest in the Project as a whole.84
121.
On 2 August 1998, the Minister of Industries signed the Commitment Agreement.85 On 25 August 1998, the land covered by the Concession was delivered to ADEMCO.86 Claimant argues that in the second half of 1998 and in 1999, there was significant progress on the Project.87
122.
In October 1998, the Central Metallurgical Research and Development Institute (the "CMRDI"), an Egyptian state-owned entity, published a progress report containing an evaluation and beneficiation study of the deposits at the Project.88 Respondent notes that this report identified low iron levels and high levels of impurity (particularly, phosphorus).89
123.
In October 1998, EGSMA, another Egyptian governmental entity produced a report on the iron ore at the Project site.90
124.
In late 1998, ADEMCO contracted Met-Chem, a private Canadian company and subsidiary of US Steel, to investigate the iron ore at the Project site and to provide a mining plan.91
125.
A December 1998 GAFI decision notes that the Project Partners held shares in ADEMCO in the following percentages: MD (10%), Cegelac (5%), US Steel (10%), and Pomoni (5%).92 Claimant explains that the Egyptian Company for Investment and Undertaking returned its shareholding in ADEMCO to Claimant in 1999, and that Arab Contractors and Orascom did the same in 2000.93
126.
On 22 January 1999, a feasibility study entitled "Integrated Steel Producing Facilities Aswan Iron and Steel Company, Aswan, Egypt" was prepared by UEC USX Engineers (the "UEC Study") pursuant to Law No. 166 and the Commitment Agreement, which granted ADEMCO mining rights subject to acceptance by the Ministry of Industries of a project feasibility study report.94 Claimant notes that the UEC Study was positive and therefore Claimant began preparatory work on the Project including various construction works for the installation of the steel equipment.95 Claimant notes that he arranged private funding for the Project from HSBC Investment Bank PLC ("HSBC") (which financing arrangement Claimant alleges he was moments away from signing when he was arrested).96 Claimant also notes that the UEC Study contemplated the use of a new steel plant.97 Respondent contends that the report by UEC cannot be considered a "feasibility study" due to the absence of key technical and economic considerations and any beneficiation solutions, explained by Respondent as the technical and economical process by which iron content is increased and phosphorus content is decreased.98 Respondent explains that the UEC Study ignored the low iron content and high phosphorous content of the iron ore at the Project site.99
127.
The inauguration ceremony of the Project was held on 22 May 1999 and was attended by President Mubarak, the then Prime Minister, the Minister of Industry, and Governor of Aswan and other government officials.100
128.
On 8 September 1999, ADEMCO requested of CMRDI an updated beneficiation assessment.101 Respondent, citing the CMRDI's reports from January 1999 to December 1999, contends that the CMRDI's solutions were not satisfactory.102
129.
In November 1999, Met-Chem published its report for ADEMCO regarding the iron ore deposits at the Project site (the "Met-Chem Report").103

2. Claimant's incarceration and state scrutiny of the Project

130.
Claimant contends that following the change in government in October 1999, the newly instated Prime Minister Dr Atef Ebied allegedly took measures to reverse the legacy of former Prime Minister Dr Ganzouri.104 Claimant exhibits newspaper reports suggesting that the new government had a negative approach to the Project and to Claimant.105 Claimant points out that his foreign partners, such as MD, continued to support the Project even though it had lost favour with the State-controlled press.106
131.
In September 1998, the Egyptian Capital Market Authority (the "CMA") suspended approval of the establishment of AISCO until it received a bank notice evidencing a transfer of DEM 54 million, equivalent to USD 30 million, to MD.107 Claimant submits that this was resolved quickly after AISCO representatives met with the CMA.108
132.
On 13 December 1999, Claimant received a letter from the CMA requesting evidence of the payment of USD 30 million to MD.109
133.
On 4 January 2000, the Minister of Industry Technology Development invited only the State-owned shareholders of the Companies and the presidents of GAFI and the CMA to an urgent meeting on the same day to discuss issues relating to the Companies.110 The next day, the Minister of Industry Technology Development wrote a letter to the President of Egypt, forwarded to the Prime Minister and Minister of Justice, in which he noted that the capital of AISCO included a payment of USD 30 million to MD, which had not been proven.111 He noted that he had contacted GAFI to initiate an investigation.112
134.
The legal advisor of the Companies provided the CMA evidence from the auditors of ADEMCO regarding the transfer of USD 30 million to MD.113
135.
In January 2000, the accounting books of ADEMCO and AISCO were scrutinised by a committee formed by GAFI and chaired by Mr Salah El-deen Mandour (the "Committee").114
136.
On 30 January 2000, the CMA requested Claimant to provide evidence of the payment to MD by 10 February 2000.115 Claimant, citing Respondent's exhibit, claims that the cheques for USD 15 million each, paid to MD and signed by Claimant, were faxed to Respondent on 15 January 2000 and that "the prosecutor and other parts of the Respondent saw those cheques almost immediately, and they provided the information that the Respondent had been asking for."116
137.
On 5 February 2000 – one day before the Committee report was submitted to GAFI and five days before the deadline imposed by the CMA to provide evidence of the payment to MD – Claimant was arrested by the Egyptian police in connection with ADEMCO's alleged failure to make payment of USD 30 million to MD.117
138.
Claimant alleges that he was banned from travelling outside of Egypt from around the time of his arrest on 5 February 2000 until late June 2005.118 Claimant notes that once he became aware that Egypt had imposed a travel ban on him, he transferred the shares that his wife and daughters held in ADEMCO to himself.119 Claimant notes that this transfer was only recorded on 24 July 2005, once Claimant was released from prison.120
139.
A 6 February 2000 report by the Committee prompted criminal charges against Claimant and the Companies for the misappropriation of funds.121 Claimant argues that the GAFI Report dated 6 February 2000 notes that as at January 2000, Claimant owned and controlled 70.22% of ADEMCO (pending payment to Claimant by four Project Partners of 30% of those shares).122
140.
On 7 February 2000, AISCO received a letter from MD confirming receipt of USD 30 million from Claimant, referring to the two cheques that had been used to make the payment.123
141.
On 10 February 2000, Mr Shimi informed the Egyptian Prime Minister that the AISCO board had sought new shareholders to purchase the public shares of the Project and that Claimant's participation was necessary in order to execute these documents.124

3. Criminal proceedings against Claimant

142.
On 17 February 2000, the Administrative Control Authority published reports on the search of Claimant's private office and the headquarters of Mr Shimi's company, and on 19 February 2000 on the search of the Companies' headquarters.125
143.
By order of the Egyptian Public Prosecutor, confirmed by the Cairo Criminal Court on 20 February 2000, Claimant's assets as well as the assets of ADEMCO and AISCO, Claimant's family and his deputy, Mr Shimi, were made subject to the Freezing Order.126
144.
In March 2000, the Project was suspended.127
145.
On 15 February 2001, the Egyptian Supreme State Security Court found Claimant guilty and sentenced him to 15 years of hard labour.128 The ruling of the Supreme State Security Court was overturned by the Egyptian Court of Cassation on 18 October 2001, which ordered a new trial before a panel of judges of the Egyptian Supreme State Security Court.129
146.
On 11 June 2002, the Egyptian Supreme State Security Court acquitted Claimant of all charges.130 The Supreme State Security Court found in the prosecution's case "disorientation, imbalance, backwardness, failure, and absence of applying the scientific approach in taking decisions instrumental to the future of Egypt's economic progress."131 The court found that the testimony in favour of the prosecution's case was "replete with overtones of uncertainties, lack of acquaintance, lack of confidence, doubt and suspicion" and that the record before the court did not support the charges against Claimant.132 The court found that the documentary evidence in fact confirmed that the payment to MD was made and that Claimant had not inter alia misappropriated public funds, profiteering, or forgery.133
147.
On 12 December 2002, the Administrative Court lifted the travel ban on Claimant.134
148.
Claimant was released from prison in March 2003.135
149.
On 29 April 2003, the Administrative Court granted Claimant's application to enforce its decision to lift the travel ban on Claimant.136
150.
In 2003 and 2004, Claimant made requests to the Attorney General and Public Prosecutor to lift the travel ban against him137 and to terminate the Freezing Order.138
151.
On 19 June 2005, the Public Prosecutor lifted the travel ban on Claimant.139 On 23 June 2005, Claimant returned to Finland.140
152.
Claimant contends that the shares of Messrs Khabir, El-Bardissy, and Badr in ADEMCO were transferred to Claimant in 2005, as per Claimant's request in a share consolidation report (the "Share Consolidation Report").141 Claimant maintains that the Share Consolidation Report confirms the understanding between Mr Bahgat on the one hand, and his wife, daughters, and friends on the other, that the latter held shares in ADEMCO on Claimant's behalf.142
153.
On 16 May 2006, the Court of Cassation dismissed the Public Prosecutor's appeal against Claimant's acquittal by the Egyptian Supreme State Security Court.143
154.
On 11 October 2006, the Public Prosecutor lifted the Freezing Order against Claimant.144
155.
In March 2011, a newspaper Al-Shari Weekly reported that "a decision was taken to wreck the [Project] … so that [Mr Ahmed Ezz's] monopoly would not be affected. This was with the personal blessing of the former President and his Prime Minister Atef Obeid who took it upon himself to wreck this major project …".145

4. Finnish proceedings regarding Claimant's nationality

156.
On 23 April 2013, during the pendency of this arbitration, the Finnish Immigration Service issued a decision in which it decided that Claimant had lost his Finnish nationality when he obtained Egyptian nationality on 28 September 1997.146 On 26 January 2015, the Helsinki Administrative Court upheld the determination of the Finnish Immigration Service.147
157.
On 15 November 2016, Claimant informed the Tribunal that he had prevailed on appeal before the Supreme Administrative Court and that the decisions of the Helsinki Administrative Court and Finnish Immigration Service had been revoked. Claimant provided the Tribunal with a copy of the judgment of the Supreme Administrative Court dated 15 November 2016 (the "SAC Judgment") in Finnish.148
158.
In its Jurisdiction Decision, the Tribunal dismissed the jurisdiction ratione personae and ratione temporis objections advanced by Respondent and also found that it had jurisdiction to hear claims arising out of alleged breaches of the Egyptian Investment Law.149 Professor Orrego Vicuña provided a separate opinion expressing concerns about the holding on jurisdiction ratione personae, inter alia, including his view that only exceptional circumstances may justify departing from the international law rule prohibiting claims by a dual national against the State whose nationality it also holds.150

B. LEGAL FRAMEWORK

1. The 1980 BIT

159.
Article 1(1) of the 1980 BIT, contains the definition of the term "investment":

For the purposes of this Agreement:

1. The term "investment" means every kind of asset and more particularly, though not exclusively:

a) Movable and immovable property as well as other rights, such as mortgage, lien, pledge, usufruct and similar rights;

b) Shares or other kinds of interest in companies;

c) Title to money or pecuniary claim or right to any performance having an economic value;

d) Copyrights, industrial property rights, technical processes, trade names and goodwill; and

e) Such business concessions under public law, including concessions regarding the prospecting for or the extraction or winning of natural resources, which entitle the holder to a legal position of some duration;

160.
According to Article 2 of the 1980 BIT, investors are afforded fair and equitable treatment ("FET"), national treatment, and most-favoured nation ("MFN") protections:

1. Each Contracting State shall, subject to its laws and regulations, at all times ensure fair and equitable treatment to the investments of nationals and companies of the other Contracting State.

2. Investments by nationals of either Contracting State in the territory of the other Contracting State shall not be subjected to a treatment less favourable than that accorded to investments by nationals or companies of third States.

3. Notwithstanding the provisions of paragraph 2 of this Article, a Contracting State which has concluded with one or more other States an agreement regarding the formation of a customs union or a free-trade area shall be free to grant a more favourable treatment to investments by nationals and companies of the State or States which are also parties to such an agreement, or by nationals and companies of these States. A Contracting State shall also be free to grant a more favourable treatment to investments by nationals and companies of other States, if this is stipulated under bilateral agreements concluded with such States before the date of signature of this Agreement.

161.
Article 3(1) of the 1980 BIT contains provisions relating to expropriation, nationalization or any other dispossession:

1. Neither Contracting State shall take any measure of expropriation, nationalization or any other dispossession directly or indirectly against the investment of a national or a company of the other Contracting State except under the following conditions:

a) The measures are taken in the public interest and under due process of law;

b) The measures are not discriminatory; and

c) The measures are accompanied by provisions for the payment of prompt, adequate and effective compensation, which shall be freely transferable in convertible currencies from the Contracting State, and the transfer is made within such a period as normally required for the completion of transfer formalities.

162.

Article 7 of the 1980 BIT provides for dispute resolution:

1. Any dispute which may arise between a national or a company of one Contracting State and the other Contracting State in connection with an investment on the territory of that other Contracting State or between the Contracting States with respect to the interpretation or application of this Agreement shall be subject to negotiation between the parties in dispute.

2. If the dispute cannot be resolved in accordance with the provisions of the preceding paragraph, any of the parties concerned may demand that the dispute be submitted to arbitration in accordance with the following procedure:

a) An arbitration panel consisting of three arbitrators shall be established. Each disputing party shall designate one arbitrator and the two thus designated arbitrators shall appoint the third arbitrator, who shall be chairman. The chairman shall not be a national of a Contracting State.

b) Each party shall designate its arbitrator within two months after notice has been given by one disputing party to the other that it wishes to submit the dispute to arbitration. The Chairman is to be agreed upon within three months after such notice. If the time limits have not been adhered to, and the parties to the dispute have not agreed on another designation procedure, any disputing party may request the International Centre for Settlement of Investment Disputes, established under the Washington Convention on the Settlement of Investment Disputes between States and Nationals of other States, dated 18 March 1965, to effect the necessary designations.

c) The arbitration panel shall take its decision by simple majority. The decision of the arbitration panel shall be binding on the parties to the dispute.

d) The arbitration panel may decide on its place of assembly. It shall adopt its own rules of procedure. The costs of the arbitration shall be shared equally between the parties to the dispute. The arbitration is conducted in the English language.

2. The 2004 BIT

163.
Article 2 of the 2004 BIT provides for the promotion and protection of investments:

1. Each Contracting Party shall promote in its territory investments by investors of the other Contracting Party and shall, in accordance with its laws and regulations, admit such investments.

2. Each Contracting Party shall in its territory accord to investments and returns of investments of investors of the other Contracting Party fair and equitable treatment and full and constant protection and security.

3. Neither Contracting Party shall in its territory impair by unreasonable or arbitrary measures the acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments of investors of the other Contracting Party.

164.
Article 3(1) of the 2004 BIT on the treatment of investments provides that:

Each Contracting Party shall accord to investors of the other Contracting Party and to their investments, a treatment no less favourable than the treatment it accords to its own investors and their investments with respect to the acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments.

165.
Article 5(1) of the 2004 BIT on expropriation provides:

Investments by investors of a Contracting Party in the territory of the other Contracting Party shall not be expropriated, nationalized or subjected to any other measures, direct or indirect, having an effect equivalent to expropriation or nationalization (hereinafter referred to as "expropriation"), except for a purpose which is in the public interest, on a non-discriminatory basis, in accordance with due process of law, and against prompt, adequate and effective compensation.

166.
Article 9 of the 2004 BIT on dispute resolution provides in part:

1. Any dispute arising directly from an investment between one Contracting Party and an investor of the other Contracting Party should be settled amicably between the two parties concerned.

2. If the dispute has not been settled within three (3) months from the date on which it was raised in writing, the dispute may, at the choice of the investor, be submitted:

(d) to any ad hoc arbitration tribunal which unless otherwise agreed on by the parties to the dispute, is to be established under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL)

3. An investor who has submitted the dispute to a national court may nevertheless have recourse to one of the arbitral tribunals mentioned in paragraphs 2(b) to (d) of this Article if, before a judgement has been delivered on the subject matter by a national court, the investor declares not to pursue the case any longer through national proceedings and withdraws the case.

167.
Article 12(2) of the 2004 BIT elaborates on the application of other Rules:

Each Contracting Party shall observe any other obligation it may have with regard to a specific investment of an investor of the other Contracting Party.

3. Egyptian Investment Law

168.
Article 8 of the Egyptian Investment Law states that "Companies and firms may not be nationalised or confiscated."
169.
Article 9 of the Egyptian Investment Law states that "Companies and firms may not be sequestered or have their assets attached, seized, distrained, frozen or confiscated by administrative means."
170.
Article 12 of the Egyptian Investment Law states that "Companies and firms shall be entitled to acquire the necessary building land and built properties to carry on or expand their business, whatever the nationality, domiciles or percentage participation of the partners."

V. THE PARTIES' CLAIMS ARISING UNDER THE 1980 BIT

171.
In this Part V, the Tribunal deals with the Parties' claims arising under the 1980 BIT. The Tribunal recalls that pursuant to the Jurisdiction Decision, the substantive provisions of the 1980 BIT will be applied to actions that took place before 5 February 2005 and the substantive provisions of the 2004 BIT will be applied to actions that took place after 5 February 2005.151
172.
The Tribunal first addresses the new jurisdictional objections raised by Respondent in its Statement of Defense (Section A) followed by allegations of expropriation (Section B), unfair and inequitable treatment (Section C), and alleged breaches pursuant to Article 2(2) of the 1980 BIT (Section D).
173.
In short, Respondent raises three new jurisdictional objections in its Statement of Defense. First, Respondent argues that the 1980 BIT does not apply to any acts against Claimant that are personal injury claims (the "Personal Injury Objection"). Second, it submits that the 1980 BIT does not apply beyond Claimant's shares and capital contributions to the Companies (the "Investment Objection"). Respondent further states that the Tribunal has no jurisdiction to award moral damages (explained in Section VIII.B.6). Respondent argues that Claimant cannot import, via the MFN clause in Article 2(2) of the 1980 BIT, investment protection standards that are not contained in the 1980 BIT. In any event, on the merits, Respondent argues that it has not breached the investment protections that Claimant seeks to import, nor any substantive provisions of the 1980 BIT.
174.
Claimant contests Respondent's jurisdictional objections, while also noting that they are untimely. Relying on the MFN clause in the 1980 BIT, Claimant argues that Respondent has breached various protections of the Agreement on Encouragement and Reciprocal Protection of Investments between the Arab Republic of Egypt and the Kingdom of the Netherlands (the "Netherlands-Egypt BIT") and the Agreement on the Promotion and Protection of Investments between the Government of the Republic of Korea and the Government of the Arab Republic of Egypt (the "Korea-Egypt BIT"). Claimant further argues that Respondent has breached the FET standard and protections against expropriation contained in the 1980 BIT itself.

A. THE TRIBUNAL'S JURISDICTION UNDER THE 1980 BIT

1. Timeliness of Respondent's Objections

Respondent's Position

175.
Respondent rejects Claimant's allegations that its jurisdictional objections are untimely and urges the Tribunal to consider the jurisdictional objections raised in its Statement of Defence.152 Respondent argues that its Request for Bifurcation only covered its objections ratione temporis and ratione materiae (that were completely separable from the merits of this arbitration) and included a broad reservation of rights to raise other jurisdiction objections that are entwined with the merits with the Statement of Defence.153
176.
Respondent cites a number of investment arbitration decisions where certain jurisdictional objections were considered in a dedicated phase, whilst others were considered with the merits.154 In any event, Respondent maintains that belated jurisdiction objections are not to be rejected outright by the Tribunal, but may cause the objecting party to be subject to procedural sanctions.155

Claimant's Position

177.
Claimant submits that at this merits phase of the arbitration it is untimely for Respondent to raise jurisdictional arguments.156 Claimant recalls that the Tribunal has previously struck out belated jurisdictional objections raised by Respondent after its Memorial on Jurisdiction of 15 July 2013.157 Claimant therefore argues that Respondent is precluded from now raising its Personal Injury Objection and Investment Objection.158 Claimant requests that the above objections be declared inadmissible.159

Tribunal's Analysis

178.
The Tribunal will deal with the specific objections made by Respondent, Respondent's Personal Injury Objection and Respondent's Investment Objection (see below at Paragraphs 183 to 187 and Paragraphs 193 to 199 respectively). The Tribunal notes that the objections made by Respondent have not been dealt with in the Decision on Jurisdiction. However, the Tribunal does not agree with Claimant that these objections were belated. The issues concerned are intricately linked with the merits and, accordingly, are to be dealt with in the context of the merits.

2. Respondent's "Personal Injury Objection"

Respondent's Position

179.
Respondent argues that the protections of the 1980 BIT cover only Finnish "investments", not Finnish "investors".160 By contrast, Respondent cites Article 3(1) of the 2004 BIT that accords protections to both "investors" and to their "investments".161 Respondent argues that had the drafters of the 1980 BIT intended to grant protections to investors, they should have explicitly stated so.162 Respondent notes that past tribunals (Biloune v. Ghana) have declined jurisdiction over claims arising from actions directed at the investor rather than the investment.163
180.
Respondent contends that the majority of the acts alleged by Claimant (such as Claimant's arrest, the imposition of the Freezing Order, the alleged political campaign against Claimant, the alleged discrimination in favour of steel companies controlled by Mr Ezz, Claimant's imprisonment, and the travel ban imposed on Claimant) are actions directed at Claimant rather than at his investment, and therefore fall outside the scope of the 1980 BIT.164 Respondent underlines that the criminal proceedings against Claimant are irrelevant to this arbitration and that Claimant should not bring "under the guise of an investment treaty claim what is in reality a personal injury claim."165

Claimant's Position

181.
Claimant maintains that Respondent's misconduct affected Claimant's investment (the Project), not simply Claimant as an investor.166 In particular, Claimant notes that Respondent's conduct prevented the Companies from pursuing the Project by depriving them of their management and that Respondent's actions against Claimant were intimately connected to his actions against the Project.167 Claimant contends that "steps against him were taken precisely in order to target (and destroy) the investment."168
182.
Further, Claimant denies any distinction between "investment claims" and "investor claims".169 He points out that the authorities cited by Respondent in support of this distinction also note that personal injury to an investor can be considered by a tribunal if the property rights affecting the investment were also affected.170 Moreover, according to Claimant, the tribunal in Biloune v. Ghana only disregarded those alleged violations of the investor's human rights that were independent causes of action and that were not relevant to the investment claim.171

Tribunal's Analysis

183.
The Tribunal understands Respondent to advance two different objections, a general and a specific one, which supplement each other. In general, Respondent argues that the term "investment" as referred to in the 1980 BIT should be interpreted narrowly with the consequence that the 1980 BIT does not provide jurisdiction to the Tribunal to consider measures taken against the investor, but only in respect of the investment.
184.
The Tribunal also notes that Respondent further limits the interpretation of the term "investment" so as to exclude indirect investment (on that see below). Finally, and in respect of the dispute to be decided here Respondent takes the view that the measures against Claimant were directed against him as a person rather than against the investment.
185.
The Tribunal holds that the approach advanced by Respondent in general or in respect of the facts of this dispute are not convincing. The success of investments depends on more factors than the unrestricted flow of capital or the absence of measures against the property. Apart from the financial aspect, the success of investments depends upon effective management and making use of the adequate technical expertise, amongst other factors. Measures against an investor or the management, or measures deteriorating circumstances which were favourable for the investment, may equally have a negative impact upon the investment. It would reduce the effectiveness of the system of investment protection system if it would only prohibit limitations to the flow of capital or infringements of property.
186.

Both Parties refer for support to Biloune v. Ghana.172 The Tribunal understands from this Biloune v. Ghana award that only those alleged violations of the investor's human rights were disregarded which had no relationship with the investment claim. Biloune v. Ghana cannot be used to support the proposition that measures taken against the investor are generally irrelevant when deciding whether an infringement of investment has taken place. In any event, there is ample evidence of measures that were directed at the investment.

187.
This brings the Tribunal to the second, specific argument advanced by Respondent. The arrest of Claimant was triggered by a letter of the Minister of Industry Technology Development to the President of the Republic in which it was noted that the capital of AISCO included a payment of USD 30 Million to MD, which had not been proven (see above at Paragraph 133). This establishes, in the view of the Tribunal, a close connection between the arrest and the investment. It is evident for the Tribunal that the Freezing Order covering the bank accounts of Claimant as well as the bank accounts of the Companies, the raid of the offices of Claimant, and the prohibition of the staff to enter the site of the Project, were investment related and, de facto, ended the Project. Therefore, in the view of the Tribunal, the measures taken by Respondent were predominantly directed against the investment.

3. Respondent's "Investment Objection"

Respondent's Position

188.
Respondent argues that the definition of "investment" in the 1980 BIT only covers "every kind of asset and more particularly, though not exclusively … (b) Shares or other kinds of interest in companies; (c) Title to money or pecuniary claim or right to any performance having an economic value" that are made by nationals of the other contracting state.173 Unlike the 2004 BIT, Respondent notes that the 1980 BIT does not cover investments made by companies that are owned and controlled by investors of the other contracting state.174
189.
Accordingly, Respondent maintains that while Claimant's shares and capital contributions to the Companies may be regarded as investments protected by the 1980 BIT, investments made by and assets held by the Companies are not "investments" under the 1980 BIT.175 Respondent argues that Claimant cannot rely on Article 5(4) of the Egypt-Korea BIT because an MFN provision only allows substantive investment provisions to be imported.176 Article 5(4) is not a substantive provision because it delineates the scope of application of the treaty, and therefore, cannot be characterised as more or less favourable than the 1980 BIT.177 Respondent argues that tribunals have cautioned against using MFN clauses to expand the scope of application of a treaty.178

Claimant's Position

190.
Claimant maintains that the protections under the 1980 BIT cover alleged misconduct against Claimant, the Companies, other members of senior management and equity stakeholders in the Companies, which was aimed at destroying the Project (i.e., the investment in question).179 Claimant argues that the shares in Companies that he held in his own name and the USD 39 million capital investment he made in the Companies are "investments" under the 1980 BIT.180 Further, Claimant contends that the investments made by and assets held by the Companies (including the rights under the Commitment Agreement, land, buildings, equipment, bank accounts, and contractual rights) are also "investments" protected by the 1980 BIT.181
191.
Claimant argues that the Companies' assets constitute investments for the purposes of the 1980 BIT.182 According to Claimant, Article 1(1)(a) of the 1980 BIT covers moveable and immoveable property, and Article 1(1)(e) covers concessions, but there is no requirement that these assets be directly held.183 Claimant points to several prior arbitral awards that have held that indirect investments are protected by investment treaties.184
192.
Claimant further claims that he can, through the MFN provision in Article 2(2) of the 1980 BIT, benefit from the protections in Article 5(4) of the Egypt-Korea BIT, which states that:

Where one Contracting Party expropriates the assets of a company which is incorporated or constitutes under its laws and regulations, and in which investors of the other Contracting Party own shares or other forms of participation, the provisions of this Article shall be applied.185

Tribunal's Analysis

193.

Respondent relies on the absence of the mention of indirect investment in the 1980 BIT compared to the 2004 BIT and two ICSID awards, Vanessa Ventures v. Venezuela and Tecmed v. Mexico.

194.
The starting point for the Tribunal has to be the definition of "investment" as contained in Article 1(1) of the 1980 BIT which reads as follows.

1. The term "investment" means every kind of asset and more particularly, though not exclusively.

a) Movable and immovable property as well as other rights, such as mortgage, lien, pledge, usufruct and similar rights;

b) Shares or other kinds of interest in companies;

c) Title to money or pecuniary claim or right to any performance having an economic value;

d) Copyrights, industrial property rights, technical processes, trade names and goodwill; and

e) Such business concessions under public law, including concessions regarding the prospecting for an extraction or winning of natural resources, which entitle the holder of a legal position of some duration;

provided that the investment has been made in accordance with the laws and regulations in the host country but irrespective of whether the investment was made before or after the entry into force of this Agreement.

195.
The Tribunal notes that Article 1 of the 1980 BIT does not expound an abstract definition of the term "investment"; there is no reference to direct or indirect investment. It rather includes the more sweeping term "every kind of asset" and resorts to a non-exclusive list of categories of investments. The specific categories included constitute examples rather than excluding others as indicated by the words "not exclusively" at the beginning of the list. The 1980 BIT at Article 1(1)(b) lists "shares or other kinds of interest in companies" as being an investment. The 1980 BIT does not require that there be no interposed companies between the ultimate owners of the company. Therefore, a literal reading of the 1980 BIT does not support the allegation that the definition of investment excludes indirect investments. The Tribunal is aware of the fact that the 2004 BIT explicitly refers to indirect investment. The Tribunal further notes that the Preamble of the 2004 BIT states the Parties' desire "…to promote greater economic cooperation between them, with respect to investments by nationals and companies of one Contracting Party in the territory of the other Contracting Party." Both factors in the view of the Tribunal do not, however, convincingly lead to an interpretation of the 1980 BIT excluding indirect investments from Article 1(1). The most reasonable interpretation for this difference between the two BITs is that such reference to indirect investment in the 2004 BIT was meant to be a clarification. To come to this conclusion, for the Tribunal, the literal reading of Article 1(1) of the 1980 BIT, which also refers to "shares or other kinds of interest in companies," is of essence. Such reference would not make sense if indirect investment was excluded from the 1980 BIT.
196.
Apart from the textual interpretation of Article 1(1) of the 1980 BIT, taking the object and purpose of the investment protection into account leads to the same result, namely, that the term "investment" covers direct and indirect investment alike.
197.
Additionally, the Tribunal would like to emphasise that, economically speaking, there is no difference between direct and indirect investment; in consequence it would be unreasonable to afford indirect investment lesser protection than direct investment. The jurisprudence is that indirect investments are covered by the definition of an "investment" unless specifically excluded. Accordingly, investments as defined in Article 1(1) of the 1980 BIT can be direct or indirect investments.
198.
This reading of Article 1(1) of the 1980 BIT is supported by the international jurisprudence of ICSID tribunals in cases interpreting other investment treaties with clauses similar to the one at hand. Examples to that extent are Siemens AG v. The Argentine Republic,186Ioannis Kardassopoulos v. The Republic of Georgia,187 and Venezuela Holdings, B.V, et al v. Bolivarian Republic of Venezuela.188
199.
On the basis of the considerations above, the Tribunal discards the narrow interpretation of the term "investment" in the 1980 BIT, as advocated by Respondent.

B. EXPROPRIATION

Claimant's Position

200.
Claimant recalls that Article 3(1) of the 1980 BIT protects investments from "any measure of expropriation, nationalization or any other dispossession directly or indirectly against the investment of a national."189 Claimant notes that the language of Article 3(1) is broad because it applies to "any other dispossession" and because it applies to measures which directly or indirectly give rise to an expropriation, nationalization, or other dispossession.190
201.
Claimant points to investment decisions in which arbitral tribunals have interpreted expropriation to include all forms of substantial deprivation. This could result, according to Claimant, from:

depriving the investor of control over the investment, managing the day-to-day operations of the company, arresting and detaining company officials or employees, supervising the work of officials, interfering in administration, impeding the distribution of dividends, interfering in the appointment of officials or managers, or depriving the company of its property or control in whole or in part.191

202.
Further, Claimant highlights that the concept of indirect expropriation or "unreasonable interference with the use, enjoyment, or disposal of property" is well-established.192 Claimant argues, relying on Quiborax v. Bolivia, that State interference with company assets can amount to indirect expropriation.193
203.
Claimant argues that the following conduct of Respondent, which deprived the Companies of the ability to manage their business, amounted to an expropriation of his investment: (i) Claimant's arrest on 5 February 2000 that deprived the Companies of their chief executive officer and resulted in the Project Partners withdrawing from the Project, (ii) the removal of Claimant's and the Companies' documents from their offices in February 2000 that deprived the Companies of their ability to manage their business, (iii) the 9 February 2000 Freezing Order and the resulting discontinuation of the salaries of the Companies' employees, (iv) the confirmation of the Freezing Order by the Cairo Criminal Court on 20 February 2000, and (v) the resulting permanent closure of the Companies' offices, the removal of their officers from the Project site, and Respondent's takeover of the Companies' properties.194
204.
Claimant clarifies that Respondent did not meet the conditions of Article 3(1)(a)-(c) of the 1980 BIT, and therefore this was not a lawful expropriation.195
205.
Claimant submits that even if the only protected investments in this case are his shareholding in and substantial capital contribution to the Companies, the seizure and non-return of the Companies' assets amounts to indirect expropriation of Claimant's investments for the purposes of Article 3 of the 1980 BIT.196 According to Claimant, he need not have lost title to the shareholding for expropriation to have taken place.197
206.
Claimant submits that Pope & Talbot v. Canada, upon which Respondent relies, in fact supports Claimant's case.198 The Pope & Talbot v. Canada tribunal found that expropriation includes action that prevents, unreasonably interferes with, or unduly delays, effective enjoyment of an alien's property, which is what Respondent has done in the present case.199
207.
Claimant denies that expropriation only results when an investor has lost control of the investment, and notes that expropriation can involve the taking of the use or reasonably expected benefit of the property.200 Claimant argues that the Companies have not been able to continue operations and that, following the reasoning of the tribunal in LG&E Energy Group v. Argentine Republic, the economic impact of Respondent's measures in terms of its duration and impact on Claimant's reasonable expectations, was expropriatory.201
208.

Claimant argues that measures need not be irreversible and permanent to amount to expropriation.202 The tribunal in SD Myers v. Canada (upon which Respondent relies) found that expropriation could be partial or temporary.203 In any event, Claimant's investment was permanently destroyed: his investment was subject to a degree and duration of interference that amounts to expropriation.204

209.

Claimant argues that the expropriatory effect of a measure, rather than any expropriatory purpose, is decisive.205 Claimant submits that there has been a substantial deprivation of his investment, even if limited to his shareholding and capital investment in the Companies.206 In any event, Claimant submits that, as per Respondent's submission, the purpose of the measures was to take Claimant's property.207

210.

Claimant clarifies that he does not intend to return to Egypt to execute the Project.208 He further clarifies that any "legitimate" concerns Respondent may have had cannot diminish Claimant's expropriation complaint because the measures taken by Respondent, being unsuitable, unnecessary, and excessive, were disproportionate.209 He further argues that the measures taken by Respondent (including Claimant's arrest before he could respond to the CMA's allegations), being in disregard of due process, were arbitrary.210

Respondent's Position

211.
Respondent denies that it has expropriated Claimant's investments either directly or indirectly.211 According to Respondent, if Egypt wanted to extend protections for "derivative claims", it would have done so expressly, as in the Egypt-Korean BIT, the 2004 Egypt-Finland BIT, and the Egypt-US BIT.212
212.
Citing Pope & Talbot v. Canada, Respondent argues that expropriation involves the taking of a property or of the use or reasonable expected benefit of the property.213 Relying on LG&E Energy v. Argentine Republic, Respondent highlights that for there to be expropriation, the investor must establish loss of control over its investment pursuant to State measures that are irreversible and permanent.214 Additionally, Respondent contends that the State measures in question must envisage the taking of the property that is the subject of the expropriation.215
213.
Respondent submits that it did not indirectly expropriate Claimant's share in the Companies.216 Respondent maintains that the test to establish indirect expropriation is stringent: Claimant must still establish substantial deprivation of its investment due to the State's conduct.217 According to Respondent, the "substantial deprivation" test requires proof of substantial loss of control or value of the investment218 and there cannot be indirect expropriation where the investor retains control over the overall investment (even though the investor has been deprived of certain rights).219 Respondent underlines that a mere loss of value of the investment cannot establish an indirect expropriation.220 A finding of indirect expropriation, in Respondent's view, requires a State's measure to be permanent or at least long-lasting.221
214.
Respondent argues that Claimant does not allege expropriation of his direct "investments" under the 1980 BIT, i.e., Claimant's shareholding in and capital contributions to the Companies.222 Respondent notes that both Companies are still in existence and Claimant continues to own his shares in the Companies: these were never taken by Respondent.223 Respondent argues that the government continues to support the Project.224 Respondent further notes that the Concession is still in force and that ADEMCO still owns the rights to the Concession.225 Respondent argues that Egypt did not cancel, rescind, or terminate Claimant's Concession.226 Respondent notes that as at the alleged period of expropriation (February 2000), the Egyptian Public Prosecutor was merely conducting investigations following the CMA's investigation and had taken conservatory measures against Claimant, all of which were valid and did not amount to an expropriation of Claimant's investments as they did not permanently deprive Claimant of his shares or capital investments in the Companies.227
215.
Respondent maintains that it did not directly expropriate the Companies.228 First, Respondent reiterates that this claim falls outside the scope of the 1980 BIT, which does not cover the assets of the Companies.229 Respondent submits that the facts of the case do not support a finding of direct expropriation by it.230 Respondent argues that the Companies' bank accounts were made subject to the Freezing Order in accordance with Egyptian law.231 Respondent argues that its authorities did not take any assets from the Project site, but merely installed measures to protect these assets.232 Respondent further alleges that its authorities did not take ownership over the assets of the Companies.233 Respondent clarifies that the measures taken against the Companies were not permanent.234 Respondent points out that Claimant has never filed a request that measures against the Companies be lifted.235 Respondent states that Claimant has not shown that access to the Project site was denied.236
216.
Respondent highlights that, since the alleged expropriation, Claimant has publically announced his intention to pick up the Project via the Companies and has freely altered his shareholding in the Companies: Claimant acquired further shares in the Companies in May 2004 and even contemplated disposing of his shares in July 2005 (even though this transaction was not completed).237

Tribunal's Analysis

217.
In order to establish the substantiality of an indirect expropriation, the Tribunal first must define the concept and in a second step ascertain whether the conditions for an indirect expropriation are met.238
218.
The 1980 BIT, like other bilateral investment agreements, does not define what constitutes an expropriation, let alone an indirect expropriation. The relevant part of Article 3(1) of the 1980 BIT reads:

Neither Contracting State shall take any measure of expropriation, nationalization or any other dispossession directly or indirectly against the investment of a national or a company of the other Contracting State except under the following conditions:…

219.
It is to be noted that this article refers to "expropriation, nationalization or any other disposition directly or indirectly against the investment of a national" without offering any definition for the terms used. Therefore, it is for the Tribunal to determine, on the basis of public international law as reflected in international jurisprudence, the criteria which qualify actions or the conduct of a host State directed at or affecting foreign investment as expropriation or other dispossession as referred to in Article 3(1) of the 1980 BIT.
220.
In scholarly writing as well as in international jurisprudence two kinds of expropriation are known: direct and indirect.
221.
In international jurisprudence, expropriation is described as a measure taken by a public authority if the measure in question deprives the investor of its investment, the deprivation is permanent, and the deprivation finds no justification under the police powers doctrine, that is, ordinary measures of a State and its agencies in the proper execution of the law.239 For an indirect expropriation to exist, it is generally accepted that the act or acts of the public authority concerned must have the effect of substantially depriving the investor of the economic value of its investment.240 It is evident that deciding whether an investor has been substantially deprived of the economic value of his investment requires a tribunal to take into account the circumstances of the case.
222.
In the dispute before the Tribunal, it is evident and not disputed by the Parties that the claim at issue does not involve direct expropriation since Claimant still is the owner of his shares in ADEMCO and AISCO and since the Concession of ADEMCO concerning mining iron ore is still valid.
223.
Therefore, it is only necessary for the Tribunal to establish the meaning of "dispossession directly or indirectly" under Article 3(1) of the 1980 BIT and to ascertain whether the acts and conduct of Respondent substantially deprived Claimant of the economic value of his investment.
224.
The interpretation of Article 3(1) of the 1980 BIT has to take into account two principles, the protection of an investment in foreign countries according to public international law on the one side and the sovereign right of States to define and implement their economic and social policy on the other. Therefore, establishing what constitutes a dispossession under Article 3(1) of the 1980 BIT means balancing these two conflicting principles. This has to be achieved by defining an appropriate threshold for what is to be considered dispossession and what constitutes acts or conduct Respondent may undertake according to its legal system.
225.
In the view of the Tribunal, the words "dispossession directly or indirectly" cover a situation where acts or the conduct of Respondent do not involve the direct taking over of assets or property of Claimant but effectively neutralize the benefit of Claimant.241 In Pope & Talbot v. Canada, the tribunal held that the necessary standard of interference to qualify a State's action as expropriation had to be that the owner "will not be able to use, enjoy or dispose of the property…."242 In Quiborax v. Bolivia it is stated that: "For an indirect expropriation to exist, it is generally accepted that the State measure must have the effect of substantially depriving the investor of the economic value of its investment."243 The Quiborax v. Bolivia award proceeds to state that: "Similarly according to the first Occidental tribunal, the question is whether there has been a 'substantial deprivation' of 'the use of reasonably expected benefits of the investment'."244 "In addition as noted in Burlington, the deprivation must be permanent and must not be justified by the police powers doctrine."245 This jurisprudence will guide the Tribunal in the following considerations. The Tribunal in the Tecmed v. Mexico case required that claimant had been "radically deprived of the economical use and enjoyment of its investment, as if the rights related thereto – such as the income or benefits related to the [investment] – had ceased to exist."246 In other words, there will be an indirect expropriation if due to the actions of Respondent, the assets involved have lost their value or economic use for Claimant.
226.
The Tribunal is not convinced by the argument of Respondent that Article 3(1) of the 1980 BIT does not cover derivative claims, which are explicitly mentioned in the 2004 Egypt-Finland BIT. The fact that such claims are included in a later BIT does not necessarily mean that the parties had agreed to exclude such claims from the earlier BIT. The explicit reference to derivative claims in the later BIT may have been the consequence of the insight that the 1980 BIT was unclear in this respect. What counts for the Tribunal is first the wording of the 1980 BIT. Article 3(1) of the 1980 BIT speaks of investment. This term is broad and does not exclude derivatives. However, the Tribunal wishes to point out that the expropriation of derivatives, i.e., economic benefits derived from investments, does not necessarily constitute an indirect expropriation. Apart from the effects produced by the measures or conduct in question it is equally necessary to take into account the purpose pursued by the host State concerned. Based on the above, the Tribunal will proceed in three steps. First, it will establish the effects the measures taken by Respondent had and still have on the investment of Claimant. Claimant argues that these measures de facto devalued his investment, whereas Respondent emphasises that the investment was without value in the first place, that the shares were still the property of Claimant, and the concession for mining was still valid. Second, the Tribunal will ascertain which purpose was pursued by Respondent with the measures undertaken and whether these were legitimate under the rules of public international law on investment protection. Respondent emphasises that the measures taken were fully legitimate under Egyptian law, which Claimant denies. Third, the Tribunal will engage in the question of whether the measures taken were proportional considering the purpose pursued, as Respondent argues and Claimant denies.
227.
The Tribunal is aware that Claimant is still the owner of his shares in ADEMCO and AISCO, a fact which Respondent considers to exclude the possibility of qualifying its measures against Claimant as indirect expropriation. The Tribunal takes a different position in this respect as already stated above at Paragraph 225. The taking of property is necessary to qualify State actions against an investor as direct expropriation, whereas other measures, short of taking property but in one way or the other invalidating the investment, such as depriving or almost fully depriving the investment of its future profitability, may be qualified as indirect expropriation. Nevertheless, the Tribunal wishes to point out that the fact that Claimant is still the owner of his shares in ADEMCO and AISCO, which have their basis in the investments made by Claimant, will have to be considered when dealing with damages. As to the effects the measures have had on the investment, the Tribunal is convinced, and Respondent has not disputed this, that the arrest of Claimant on 5 February 2000 deprived ADEMCO and AISCO of their chief executive officer. The removal of Claimant's and the Companies' documents from the offices in February 2000 deprived the Companies of their ability to manage their business. The Freezing Order and its confirmation resulted in the discontinuation of the paying of salaries to the employees. On the same days followed the closure of the offices of ADEMCO and AISCO and the removal of the officers from the Project site. All these measures de facto brought an end to all commercial activities of ADEMCO and AISCO. Respondent, without denying these facts, argues that these measures were neither permanent nor irreversible; Claimant could have returned to the management of ADEMCO and AISCO after his release from prison and after opening of access to his as well as the Companies' bank accounts and assets. He could return, as the letter of the Egyptian Prime Minister of November 2018 indicates, to his business even now. The Tribunal does not find these arguments advanced by Respondent to be convincing. Between the arrest of Claimant in February 2000 and his final rehabilitation in 2006 when the Public Prosecutor had lifted the Freezing Order against Claimant on 11 October 2006, more than six years had elapsed.
228.
The Parties dispute whether the measures have to be irreversible to qualify as indirect expropriation. The Tribunal does not consider it necessary to decide on that matter. In its view, no possibility exists to undo the negative impact that the lost 6 years had on Claimant's investment. The Tribunal is aware that the mining concession of ADEMCO is still valid. However, of the 30 years of its duration, due to the standstill of all business between February 2000 and the final rehabilitation of Claimant, 6 years had elapsed. It is, in the view of the Tribunal, unlikely that in the remaining period, the mining project could be brought to economic viability with an adequate return on the investment. At least Respondent has advanced no sustainable argument to substantiate its reasoning in this respect.
229.
In conclusion, the Tribunal holds that the measures taken by Respondent against Claimant and his investment as outlined above very significantly and irreversibly devalued his investment.
230.
On this basis, the Tribunal will proceed to the second step, namely to ascertain which purpose Respondent's measures pursued and whether these were legitimate under the rules of public international law on investment protection. Respondent characterized the arrest of Claimant and the Freezing Order concerning his, his family's and the Companies' bank accounts, as part of criminal investigations according to Egyptian law. The Tribunal is, in spite of the allegations of Claimant, not in the position to decide as to whether there were other motives for the measures taken against Claimant. However, the undisputed fact that Claimant was arrested even before the period he was given to clarify the question concerning the payment to MD had expired, casts, in the view of the Tribunal, a shadow on the whole procedure. With respect to an allegation of expropriation, the police power defence is not carte blanche ; a State's actions must be justified, meet the international standards of due process, and inter alia be proportional to the threat to public order to which it purports to respond. The Tribunal also notes that the Public Prosecutor objected to lifting the Freezing Order even after Claimant had been acquitted by the Egyptian Supreme State Security Court. However, the Tribunal has already stated (Paragraph 227 above) that the measures taken against Claimant by the prosecution had a substantial, negative effect on his investment.
231.
If the investigation had only been triggered by doubts regarding whether the payment to MD had been properly made, this did not justify a Freezing Order on the bank accounts of ADEMCO and AISCO, the closing of the site of ADEMCO and AISCO, and the prohibition on officials of the Companies from returning to the site and conducting their work. The Prosecution should have clearly distinguished between Claimant and ADEMCO as well as AISCO. Therefore, taking action against ADEMCO and AISCO directly, in particular closing the site, lacked legitimacy from the outset.
232.
To conclude, the Tribunal holds that even if the measures taken against Claimant and the Companies had a legitimate purpose they were, as far as their scope was concerned, not proportional to the purpose pursued. Therefore, they fail the police powers test. Due to the significant and lasting negative effect they had on the investment of Claimant, the measures are to be considered as indirect expropriation and thus require compensation.

C. FAIR AND EQUITABLE TREATMENT

Claimant's Position

233.
Claimant argues that Respondent has breached the FET standard contained in Article 2(1) of the 1980 BIT.247
234.
Relying on arbitral precedent, Claimant argues that the FET standard encompasses an obligation on part of the host state not to:

(i) abuse its authority or subject investors to harassment or intimidation; (ii) act arbitrarily; (iii) be capricious, indifferent or negligent in its conduct relating to the investment; (iv) act inconsistently or incoherently; (v) engage in a denial of justice; (vi) act in a discriminatory manner; (vii) fail to accord due process; (viii) fail to meet an investor's legitimate expectations; (ix) fail to act with even-handedness; (x) act disproportionately; (xi) act in bad faith; (xii) fail to provide a stable and predictable legal and business environment; (xiii) act nontransparently; or (xiv) fail to provide full protection and security.248

235.
Claimant submits that a series of acts and omissions may result in a breach of the FET standard.249
236.
Claimant submits that Respondent breached the FET standard by: (i) unlawfully requiring Claimant to acquire Egyptian nationality as a condition for allowing the Project to proceed; (ii) instituting a political campaign against Claimant, the Companies, and others involved in the Project; (iii) discriminating against Claimant in favour of steel companies owned by Mr Ezz; (iv) suggesting, through GAFI and the Committee, that there was no evidence that ADEMCO had paid MD and perpetuating false stories about Claimant; (v) prosecuting Claimant on false charges; (vi) arresting Claimant, thereby depriving the Companies of their most senior executive; (vii) removing documents from the offices of Claimant and the Companies, thereby depriving the Companies of their ability to manage the business; (viii) imposing the Freezing Order through the Egyptian Public Prosecutor on the bank accounts of Claimant, Claimant's family, and the Companies; (ix) closing and taking over the Project site and excluding the Companies' employees from the Project site; (x) including the Companies in the Freezing Order, despite the criminal charges being imposed only against Claimant; (xi) the Egyptian courts confirming the Public Prosecutor's Freezing Order; (xii) threatening and intimidating representatives of the partners of the Project to prevent them from testifying; (xiii) failing to allow Claimant to access documents for his defence; (xiv) sentencing Claimant to 15 years of hard labour on 15 February 2001; (xv) imprisoning Claimant falsely from February 2000 to March 2003; (xvi) failing to release Claimant from prison after his acquittal by the Court of Cassation on 11 June 2002; (xvii) failing to lift the travel ban on Claimant after his release from prison in March 2003; and (xviii) failing to immediately lift the Freezing Order on 16 May 2006 when the Court of Cassation dismissed the Public Prosecutor's appeal against the order of the Supreme State Security Court that acquitted Claimant.250 Additionally, Claimant alleges Respondent breached the FET obligation under the 2004 BIT, by (xix) continuing to fail to allow representatives of the Companies to access the Companies' bank accounts, assets, or the Project site after the Freezing Order was lifted on 18 October 2006; (xx) continuing to fail to provide protection and security to the Companies' assets at the Project site despite the Egyptian authorities having control over the Project site since February 2000; and (xxi) continuing to fail to return to Claimant and the Companies their property (including the documents requested by Claimant on 24 July 2012).251
237.
Claimant notes that media reports in February 2000 stated that the Project was "under attack" by senior government officials and in April 2000 the Ministry of Energy declared unreasonable the entry of any new investors into the "dead" Project (even though the Commitment Agreement was still in place).252 According to Claimant, the above actions that were taken against the Project and the Companies are a plain violation of the FET standard vis-à-vis Claimant's investment.253
238.
Claimant observes that Respondent has not presented any factual defences to the FET claim.254 Claimant argues that the shares in the Companies are an investment under the 1980 BIT and the imprisonment of Claimant (a significant shareholder, Managing Director, and Chairman of the company) was mistreatment of the investment because a State's commitment to protect an investment extends to key persons connected to the investment as well.255 In any case, Claimant argues that the criminal proceedings against Claimant were intimately connected with the Project and therefore affect whether the FET standard was violated.256 Claimant notes that the investigations against Claimant were conducted in his capacity as the Chairman/Managing Director of the Companies and the investigation pertained to fraud in the means by which Claimant acquired shares in ADEMCO, the misappropriation of ADEMCO's funds, and the falsification of contracts in respect of the work of ADEMCO.257 Claimant recalls that the Companies' offices were searched during the investigation.258
239.
Claimant argues that Respondent cannot rely on Swisslion v. Macedonia to argue that the Freezing Order was reasonable because the freezing order in that case was in place for merely five months, whereas the Freezing Order against Claimant was in place for six and a half years and the Freezing Order against the Companies is in force to date.259
240.
Claimant describes Respondent's argument that the Companies should have found a replacement for Claimant during his imprisonment as a specious argument that ignores the "culpable conduct" of Respondent.260

Respondent's Position

241.
Respondent argues that it did not fail to accord FET to Claimant's investments within the meaning of Article 2(1) of the 1980 BIT.261 Respondent reiterates that any conduct directed against Claimant or his family and any conduct directed at the bank accounts and assets of the Companies, their employees and agents, and/or against the Project cannot constitute a violation of the FET standard because it was not directed against an "investment" under the 1980 BIT.262
242.
Respondent highlights that a breach of the FET standards requires a showing of "wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of judicial propriety."263 It cites Ahmonseto v. Egypt, a case which also involved the conviction and imprisonment of a claimant for parallel criminal proceedings, in which the tribunal found that to be a violation of the FET standard, the criminal procedure must be "fundamentally unjustified and groundless" and that the annulment of a lower court's decision by a higher court does not necessarily amount to a treaty violation.264 The same tribunal found that imprisonment can only violate an investment protection if it "gravely violates the rights of the person placed in custody."265 Respondent notes that the tribunal in Ahmonseto v. Egypt ultimately decided not to opine on decisions that were issued during the criminal procedures.266
243.
Respondent maintains that the domestic court proceedings in Mr Bahgat's case were justified.267 It recalls that Claimant was not released upon acquittal because he was serving another jail sentence and that Claimant's initial requests to lift the travel ban and Freezing Order were not acted upon because they were procedurally flawed.268 Respondent notes that it cannot be held liable for breach of the FET standard as a result of the Companies' failure to appoint an alternative chairman to manage their business during Claimant's imprisonment.269
244.
Respondent additionally observes that less than 10 of the exhibits submitted by Claimant with his Reply were obtained in the document production phase of this arbitration, thus suggesting that Claimant was incorrect in arguing that he could not present a proper case because he did not have access to relevant documentation.270

Tribunal's Analysis

245.
The Tribunal proceeds from Article 2(1) of the 1980 BIT which reads:

Each Contracting State shall, subject to its laws and regulations, at all times ensure fair and equitable treatment of the investments of nationals and companies of third States.

246.
FET is an autonomous standard generally guaranteeing the rule of law in the treatment of foreign investors under the legal systems of host states. It has been held to comprise concepts such as the protection of legitimate expectations, the absence of bad faith, and the requirements that the conduct of the State be transparent, consistent and non-discriminatory and not based on unjustifiable distinctions or arbitrary.271
247.
The Tribunal does not accept the interpretation of Respondent, which reduces the FET clause of Article 2(1) of the 1980 BIT to minimum standard of treatment or to prohibit denial of justice. Respondent's arguments find no basis in Article 2(1) of the 1980 BIT nor in the object and purpose of the 1980 BIT. Respondent can also not rely on jurisprudence. The Tribunal is aware of the jurisprudence of Ahmonseto v. Egypt.272 In the view of the Tribunal, this jurisprudence focuses on arbitrariness and discrimination and not on the applicability of the FET clause as a whole. In the view of the Tribunal, the FET clause has a broader scope.
248.
The Tribunal notes that the arguments advanced by Claimant in support of his claim that Respondent has violated the FET clause touch upon the elements of fair trial and due process and are identical to the arguments used to establish that the measures undertaken by Respondent amounted to an indirect expropriation of Claimant's investment.
249.
The Tribunal is of the view, as already expressed above, that the measures taken against Claimant and the two companies were not proportional considering that it was Claimant who was charged and not his family and the Companies. However, Claimant was not able to establish convincingly that the measures taken against him were motivated by malicious intent and in violation of the applicable rules as referred to in the award in Ahmonseto v. Egypt. The reference to newspaper reports upon which Claimant relies to prove that the actions of Respondent were politically motivated is not enough to prove Respondent's improper conduct. Apart from that, the Tribunal cannot fail to note that ADEMCO and AISCO were not financed in a manner that was transparent from the outside. Even for Claimant it was difficult to establish the flow of capital and the fact that the funds invested originated from his private funds. In any event, the Supreme State Security Court found that the CMA had approved and confirmed in 1998 that the payment had been made. Therefore, the investigation was unfounded ab initio.
250.
However, it is beyond doubt for the Tribunal that the investigations against Claimant and the Companies were not guided by the principle of fair trial; on the contrary, Claimant was a victim of denial of justice. Denial of justice has been recognised to include the entire criminal process, not only the trial, and an eventual acquittal of an investor is not dispositive of whether denial of justice occurred. In international law, denial of justice covers the actions of the prosecution before trial, the trial itself, and post-trial actions. Prosecutorial misconduct, or malicious prosecution, fits neatly into the standard of denial of justice, and breaches the FET standard of treatment.
251.
Claimant was arrested even before the time had elapsed for him to clarify whether the payment to MD had been made by Claimant on behalf of ADEMCO. Even after the fact of the payment was established, the prosecution did not drop the case against Claimant. The Tribunal is aware that Article 2(1) of the 1980 BIT refers to the "laws and regulations" of the host State as potential limitations of the applicability of the FET clause, but the Tribunal cannot accept that such disregard of the principle of fair trial was common in Egypt.
252.
That Claimant was a victim of denial of justice is also based on the observations of the Supreme State Security Court of Egypt. The court determined that the proceeding against Claimant was a "clear example of fumbling, defectiveness, retrenchment and failure, and the absence of a scientific methodology in the making and taking of decisions []." The review of the process by Egypt's Supreme State Security Court reveals that Claimant's arrest, prosecution, and incarceration lacked any probable cause, and were an irregular prosecutorial proceeding, performed arbitrarily, in bad faith, with a wilful disregard of any obligation to provide reasonable due diligence in the application of due process of law. All these acts or omissions by the prosecution constitute elements of denial of justice. Respondent has not advanced any reason to doubt the objectivity of the factual assessment of that court and its reasoning.
253.
On this basis, the Tribunal concludes that Respondent has violated the clause as contained in Article 2(1) of the 1980 BIT. It shall deal with the consequential compensation in Part VIII.B.5.
254.
The Tribunal takes note of the fact that the CMA confirmed, after reviewing all the originals of the documents, that the sum of DEM 54 million was paid by Claimant to MD. The Supreme State Security Court then concluded that the oral testimonies and statements presented by the prosecution were no more than "enquires, or conclusions or personal opinion," showing lack of certainty, knowledge, conviction and conclusiveness.273 Egypt's Supreme State Security Court strongly criticised the lower court for convicting Claimant based on lack of evidence, which the Supreme State Security Court concluded was contrary to the basic expectation and demand of any citizen from a functioning justice system.274
255.
The Tribunal notes the Supreme State Security Court's assessments of the testimonies provided during trial, which resulted in the conclusion that the evidence provided by Claimant, obviously available to the prosecution, "revealed the truth of this debt and provide [sic] adequate evidence that it was paid."275 Such evidence included a confirmation of the payment by the local agent of MD during the investigation by the public prosecutor (No. 5) and a letter from the company itself (No. 3). This letter proves the irregularity and arbitrariness in arresting Claimant before the deadline for providing the evidence contained in this letter had even passed. Even absent the premature arrest, this letter as well as other evidence cited by the Supreme State Security Court refuting the probable cause against Claimant, was available to the prosecution, which disregarded it.
256.
The Tribunal not only refutes the reasoning of Respondent, which aims at limiting the scope of protection of the FET clause, it also, for the above reasons, disagrees with the argument that the domestic court proceedings against Claimant were justified. Finally, the Tribunal cannot accept the statement that ADEMCO and AISCO could have appointed an alternative chairperson. Such a statement cannot be reconciled with the fact that the sites of ADEMCO and AISCO were closed, access to the site was prohibited, and the assets of both Companies were frozen.
257.
Based on the above, the Tribunal concludes that the treatment of Claimant by the prosecution and the lower courts, even disregarding the treatment he received after his acquittal, constituted a violation of the obligations under the FET clause of Article 2(1) of the 1980 BIT.

D. BREACHES PURSUANT TO ARTICLE 2(2) OF THE 1980 BIT

Claimant's Position

258.
Claimant argues that under the MFN provision in Article 2(2) of the 1980 BIT, he is entitled to obtain the benefit of the most favourable treatment Respondent accords to foreign investors in its other investment treaties.276 Article 2(2) of the 1980 BIT states that "[i]nvestments by nationals of either Contracting State in the territory of the other Contracting State shall not be subjected to a treatment less favourable than that accorded to investments by nationals or companies of third States."
259.
Claimant accordingly invokes Article 3(1) (no impairment by unreasonable or discriminatory measures and full physical security and protection), Article 3(2) (national treatment), and Article 3(4) (observance of obligations) of the Netherlands-Egypt BIT, and Article 2(2) (full protection and security) of the Korea-Egypt BIT.277
260.
Claimant argues that the MFN provision in the 1980 BIT should not be interpreted as Respondent suggests: there is nothing in Article 2(2) that indicates that standards that are not already contained in the 1980 BIT cannot be imported from other treaties.278 Claimant argues that the cases upon which Respondent relies consider MFN clauses that are materially different to Article 2(2) of the 1980 BIT and therefore those precedent are irrelevant to this case.279 Claimant argues that in Teinver v. Argentina, the tribunal read the MFN clause narrowly on account of the following wording, which is absent in Article 2(2) of the 1980 BIT: "[i]n all matters governed by this Agreement, such treatment shall be no less favourable than that accorded by each Party to investments made in its territory by investors of a third country."280 Claimant distinguishes the narrow interpretation of the MFN clause by the tribunal in Paushok v. Mongolia, on the basis that (i) the tribunal's decision was based on the specific treaty text, and (ii) the tribunal acknowledged that MFN clauses have generally been interpreted broadly to allow the importation of substantive protections from other treaties.281 Claimant similarly distinguishes the findings of the İçkale v. Turkmenistan tribunal as being limited to the particular wording of the MFN clause in that case.282 Claimant contends, consistent with the ejusdem generis principle, that the Tribunal should apply the general approach to the interpretation of Article 2(2), which has been adopted by several investment tribunals, and allow Claimant to rely on substantive standards not contained in the 1980 BIT.283

Respondent's Position

261.
Referring to arbitral case law and the ejusdem generis principle, Respondent argues that the MFN clause in Article 2(2) of the 1980 BIT can only be used by Claimant to import investment protection standards that are already contained in the 1980 BIT, not entirely new standards that are not otherwise contained in the treaty.284 Respondent refers to Article 9(1) of the International Law Commission's Draft Articles on MFN Clauses, which states that under a MFN clause, "the beneficiary State acquires, for itself or for the benefit of persons or things in a determined relationship with it, only those rights which fall within the limits of the subject-matter of the clause."285 Respondent points out that the International Law Commission's Commentary on this draft article explains that unless the MFN process is "strictly confined to cases where there is a substantial identity between the subject matter of the two sets of clauses concerned, the result in a number of cases may be to impose upon the granting State obligations it never contemplated."286 Respondent explains that Article 2(2), being part of a specifically negotiated bilateral agreement, cannot be applied in a mechanical way, or as MFN clauses are applied in trade law.287
262.
Respondent distinguishes the cases presented by Claimant where MFN clauses were used to import protections that were absent in the treaty underlying the arbitration.288 Respondent submits that in Bayindir v. Pakistan the MFN clause was used to invoke FET provisions, but there was a reference to FET in the preamble of the base treaty.289 Respondent notes that the awards in EDF v. Argentina and Arif v. Moldova have been criticised for their treatment of the MFN clause.290 Respondent argues that the findings of the tribunal in White Industries v. India cannot be applied to the present case because that tribunal was faced with denial of justice.291 Respondent states that the tribunal in Devas v. India only imported the "full legal protection and security" standard because the respondent did not invoke the ejusdem generis principle.292
263.
Therefore, Respondent argues that the Tribunal should reject Claimant's attempt to import the following standards from the Netherlands-Egypt BIT and Korea-Egypt BIT: (i) non-impairment by unreasonable or discriminatory measures; (ii) the national treatment standard; and (iii) observance of obligations full protection and security.293

Tribunal's Analysis

264.
Having determined that Respondent has breached Articles 2(1) and 3(1) of the 1980 BIT, the Tribunal does not consider it necessary to rule on Claimant's alternative arguments based upon the MFN clause under Article 2(2) of the 1980 BIT with the view to expand the investment protection under the 1980 BIT.

VI. BREACHES OF THE 2004 BIT

265.
As noted above, in line with the Tribunal's Jurisdiction Decision, the substantive provisions of the 1980 BIT will be applied to actions that took place before 5 February 2005, and the substantive provisions of the 2004 BIT will be applied to actions that took place after 5 February 2005.294
266.
Claimant argues that Respondent breached the expropriation and FET protections contained in the 2004 BIT. Respondent denies Claimant's allegations.

A. EXPROPRIATION

Claimant's Position

267.
Claimant argues that, should the Tribunal find that there was no expropriation by 5 February 2005, Respondent's conduct after 5 February 2005 would by itself, or taken with prior conduct, amount to expropriation and a breach of Article 5 of the 2004 BIT.295
268.
Claimant argues that, after the 2004 BIT came into force, Respondent failed to lift the Freezing Order and restore the Companies' assets and the Project site.296 Claimant highlights that despite the Freezing Order being lifted, the Companies were deprived of the benefit of their assets, which were stripped of all improvements and movable properties while under Respondent's custody.297 Claimant has no access to the Companies' bank accounts, and the Companies' movable assets have disappeared.298
269.
Claimant emphasises that he is not under an obligation to exhaust local remedies before approaching this Tribunal.299 He clarifies that he never announced that he intended to return to the Project.300

Respondent's Position

270.
Respondent contends that the events between February 2000 and February 2005 do not meet the standards for indirect expropriation as set out in Paragraphs 211-216.301
271.
Respondent argues that the criminal proceedings associated with the payments to MD lasted 2.5 years and therefore were not permanent or long-term.302 Respondent clarifies that Claimant remained in jail for three years after his acquittal in the matter concerning payment to MD, on account of another three-year sentence, which it notes that Claimant has not criticised in this arbitration.303 Respondent argues that the failure to lift the travel ban and the Freezing Order does not meet the high standard of indirect expropriation, because these measures were lifted as soon as Claimant submitted the necessary requests before the authorities in an appropriate form.304 Respondent states that it cannot take responsibility for the delays caused by the rejection of Claimant's initial requests to lift the travel ban and Freezing Order, which were not compliant with the applicable procedures.305 Respondent argues that no indirect expropriation on account of Claimant's detention or the investigation into payments due to MD has been established.306 In any event, Respondent points out that Claimant could have avoided any damage to his business due to his imprisonment by simply producing the proof of transfer of funds to MD that was requested by the CMA.307
272.
Respondent argues that the sole conduct to be assessed pursuant to the 2004 BIT is the alleged failure of Respondent to restore the Companies' assets following the lifting of the Freezing Order.308 Respondent submits that Claimant has presented insufficient evidence that the Companies do not have access to their assets and bank accounts and notes that the Companies have not approached the Egyptian courts seeking any relief in this regard.309 Respondent notes that Claimant has presented his correspondence with banks confirming that the Companies' bank accounts are frozen as evidence of his inability to access the Companies' bank accounts, but notes that this is insufficient to establish an expropriation claim.310 Moreover, Respondent notes that Claimant did not raise this issue in 2011 when he announced that he would continue work on the Project.311
273.
Respondent maintains that the Project was abandoned as early as March 2000 (the month after Claimant's arrest) as evidenced in letters sent by Mr Verdier, and therefore the Project's discontinuance was not caused by Respondent.312 Respondent suggests that the decision to discontinue the Project could be because its feasibility had not been demonstrated as at February 2000.313

Tribunal's Analysis

274.
The Tribunal notes that there is a disagreement between the Parties as to when the Project was finally abandoned. Respondent relies upon the letter of Mr Verdier whereas Claimant considers activities and omissions by Respondent after the entry into force of the 2004 BIT also to be of relevance. The Tribunal holds that the indirect expropriation took place with the arrest of Claimant and the Freezing Order of his, his families' and the Companies' bank accounts. The Tribunal would like to emphasise that it was not the letter of Mr Verdier, which ended Claimant's Project. Mr Verdier's letter only informed the partners of the actions taken by Respondent. However, the Tribunal finds that acts or omissions of Respondent after the entry into force of the 2004 BIT were not material in constituting indirect expropriation; they constituted the continuation in time of acts against the investment of Claimant. On that basis, the Tribunal holds that Claimant cannot invoke Article 5 of the 2004 BIT concerning indirect expropriation, because the expropriation had already taken place.

B. FAIR AND EQUITABLE TREATMENT

Claimant's Position

275.
Claimant submits that Respondent is in continuing breach of Article 2(2) of the 2004 BIT.314 Claimant argues that, despite his acquittal by the Supreme State Security Court on 11 June 2002, he was not released from prison until March 2003, he was subject to a travel ban until June 2005, and his assets remained frozen until October 2006.315 Further, he notes that Respondent continues to deny him access to the Project site and maintains the Freezing Order against the Companies.316

Respondent's Position

276.
Respondent argues that Claimant has not established how the alleged conduct violates the stringent FET standard.317 Respondent submits that a freezing order is a standard measure under Egyptian law (and in other legal systems) that, being temporary, cannot constitute a treaty breach.318 Respondent points out that the Companies took no steps to challenge the Freezing Order when it was in force.319
277.
Respondent contends that, even if the Tribunal finds that the Freezing Order against Claimant should have been lifted sooner, this is not sufficient to find a breach of the FET standard.320 Respondent argues that Claimant has not established how the Freezing Order impacted the Project, particularly since he had bank accounts abroad that could have facilitated investment in the Project.321 Respondent further argues that Claimant has not shown how his inability to travel on account of the travel ban impacted the Project.322

Tribunal's Analysis

278.
The Tribunal wishes to state at the outset that the 2004 BIT only covers acts or omissions of Respondent that took place after the 2004 BIT entered into force. Therefore, the release of Claimant only in March 2003 falls under the 1980 BIT. However, his travel ban until June 2005, the freezing of Claimant's assets until October 2006, the denial of Claimant's access to the Project site, and the maintenance of the Freezing Order against the Companies may be assessed under the 2004 BIT. Claimant invokes the violation of the FET clause of the 2004 BIT.
279.
Article 2(2) of the 2004 BIT reads:

Each Contracting Party shall in its territory accord to investments and returns of investments of investors of the other Contracting Party fair and equitable treatment and full and constant protection and security.

280.
The Tribunal notes that Article 2(2) of the 2004 BIT addresses investors and investments alike and that Claimant, in spite of having been released from prison already in June, remained subject to a travel ban until 2005. Further, Claimant's bank accounts remained frozen until October 2006 and the bank accounts of the Companies are still frozen.
281.
Respondent offers no convincing justification for not lifting these limitations on Claimant and on his investment. The Tribunal is not convinced by the argument that Claimant had bank accounts abroad and could have used those to conduct his business. Whether such a possibility really existed is not the point; what matters is that Claimant did not have access to his funds in Egypt until 2006, nor to the Companies' funds till date. Apart from that, Claimant had no access to the site. The Tribunal cannot believe—and no reliable information has been produced by Respondent to that extent—that such treatment of an accused who has been acquitted is normal under Egyptian law.
282.
On the basis of the above, the Tribunal concludes that Respondent violated its obligation under Article 2(2) of the 2004 BIT vis-à-vis Claimant.

C. OTHER ALLEGED VIOLATIONS OF THE 2004 BIT

Claimant's Position

283.
Claimant contends that Respondent violated Article 2(2) of the 2004 BIT, which states that "[e]ach Contracting Party shall in its territory accord to investments and returns of investments of investors of the other Contracting Party … full and constant protection and security".323
284.
Claimant contends that Respondent violated Article 2(3) of the 2004 BIT, which states that:

Neither Contracting Party shall in its territory impair by unreasonable or arbitrary measures the acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments of investors of the other Contracting Party.324

285.
Claimant contends that Respondent violated Article 2(1) of the 2004 BIT, which states that:

Each Contracting Party shall accord to investors of the other Contracting Party and to their investments, a treatment no less favourable than the treatment it accords to its own investors and their investments with respect to the acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments.325

286.
Claimant contends that Respondent violated Article 12(2) of the 2004 BIT, which states that "[e]ach Contracting Party shall observe any other obligation it may have with regard to a specific investment of an investor of the other Contracting Party."326

Respondent's Position

287.
No specific arguments on these points are made by Respondent.

Tribunal's Analysis

288.
As stated already in Sections V.B, V.C, and VI.B above, the activities of Respondent directed against the investment of Claimant are to be dealt with under the 1980 BIT and under Article 3(1) of the 2004 BIT. Article 12(1) of the 2004 BIT does not offer, in the view of the Tribunal, an additional legal basis to support the claims of Claimant.

VII. BREACHES OF THE EGYPTIAN INVESTMENT LAW

Claimant's Position

289.
Claimant contends that Respondent breached Articles 8 and 9 of the Egyptian Investment Law by virtue of the conduct set out in Paragraphs 203 and 236 above.327 Claimant emphasises that Article 8 of the Egyptian Investment Law is available not only to companies. He explains that Article 8, which provides that "companies may not be nationalized or confiscated," would be rendered ineffective if only the nationalised entity (rather than the owners of the entity) could avail themselves of relief.328 Moreover, Claimant notes that the Egyptian Investment Law refers to investors at various points (including in the dispute resolution provision, Article 7).329
290.
Claimant highlights that Respondent made it impossible for the Companies to pursue their business.330 As Egyptian law protects against direct and indirect deprivation of ownership, Claimant argues that he is entitled to bring a claim under Article 8.331
291.
Claimant rejects Respondent's argument that the Freezing Order was lawful because it was imposed by administrative means.332 He argues that the Companies, having independent legal personality, should never have been subject to the Freezing Order that arose out of an investigation pertaining to Claimant and notes that he still cannot access the Companies' bank accounts because the Freezing Order continues to operate on the Companies.333
292.
Claimant argues that Respondent breached Article 12 by coercing Claimant to obtain Egyptian nationality.334 Claimant notes that Respondent does not contest that it breached Article 12 if Claimant's factual allegations are proven.335 Claimant notes that Respondent does not factually contest Claimant's account of his being coerced to take on Egyptian nationality.336 Claimant considers the letter from the Minister of Trade and Industry suggesting that Respondent has never forced anyone to take on Egyptian nationality to be self-serving.337 Claimant notes that his use of Egyptian nationality at the borders does not speak to the circumstances in which this nationality was acquired.338 Moreover, Claimant notes that he usually used his Finnish passport and only used his Egyptian passport when travelling with Egyptian officials.339
293.
Claimant criticises Respondent's reliance on the SAC Judgment on the matter of his acquisition of Egyptian nationality.340 Claimant argues that the Finnish Supreme Administrative Court is only competent to decide Claimant's Finnish nationality, not the circumstances in which Claimant acquired his Egyptian nationality.341

Respondent's Position

294.
Respondent argues that its conduct does not give rise to a breach of the Egyptian Investment Law.342 Respondent submits that the plain text of Articles 8, 9, and 12 indicates that the Egyptian Investment Law only applies to "companies and firms" and not to the owners or shareholders of the same.343 Therefore, according to Respondent, any wrongful acts alleged against Claimant or his family and personal assets falls outside the scope of the Egyptian Investment Law.344
295.
Referring back to its arguments on expropriation, Respondent contends that it did not breach Article 8 of the Egyptian Investment Law because it did not nationalise or confiscate the Companies.345 It argues that ownership of the Companies was never transferred to Respondent; Claimant is today a shareholder of ADEMCO and of AISCO and can freely transfer his shares in the Companies.346
296.
Again, referring back to its arguments on expropriation, Respondent argues that it did not breach Article 9 of the Egyptian Investment Law because it did not sequester, attach, seize, distrain, freeze or confiscate any asset of the Companies by administrative means.347 Respondent notes that the Freezing Order was not issued by administrative means but was issued as part of the criminal investigation conducted against Claimant.348 Respondent highlights, moreover, that Claimant never challenged the Freezing Order before the Egyptian courts and that the Freezing Order was temporary.349
297.
Respondent denies that it breached Article 12 of the Egyptian Investment Law by coercing Claimant to apply for Egyptian nationality in 1997 but maintains that Claimant voluntarily applied to regain his nationality in order to avail of the opportunity to invest in the Aswan region.350 Respondent states that Claimant has not before in these proceedings contested his nationality based on coercion and that Claimant repeatedly travelled abroad on his Egyptian passport.351 For its position that Claimant had voluntarily applied for Egyptian nationality, Respondent relies on the Finnish Administrative Court's decision of 26 January 2015.352 Respondent submits that the Supreme Administrative Court of Finland confirmed that "there is no reason to consider that [Claimant] has obtained Egyptian citizenship otherwise than upon his own voluntary application."353 Respondent argues that the Supreme Administrative Court's findings on Claimant's voluntary acquisition of Egyptian nationality should bind this Tribunal in the same manner that its findings regarding Claimant's dual nationality bound this Tribunal at the jurisdiction phase of this arbitration.354
298.
Respondent argues that Claimant has not provided any new evidence of Egypt coercing him to acquire Egyptian nationality and that Claimant only relies on ex post facto witness testimony from the jurisdiction phase to support his argumentation.355 Respondent points out that Claimant presents Mr Reda as a key supporter of the Project while at the same time suggesting that he contemporaneously forced Claimant to acquire Egyptian nationality.356 Respondent notes that Claimant has introduced new allegations of threat and coercion by Mr Reda in his later witness statements (that are absent in the early witness statements), which calls into question the authenticity of his claims.357 Respondent argues that the record is clear that Claimant was not coerced by Mr Reda to take Egyptian nationality.358 Respondent emphasises that any procedural irregularities that occurred in the taking of Claimant's Egyptian nationality in 1997 cannot constitute a violation of the Egyptian Investment Law.359
299.
Respondent also notes inconsistencies in Claimant's witness statements about when and whether he called the Finnish authorities after he had been informed that his Egyptian nationality was restored.360 Respondent argues that the record suggests that the Finnish immigration authorities did not know that Claimant had lost his Egyptian nationality in 1980 (making him Finnish) and acquired his Egyptian nationality in 1997 (thus, losing his Finnish nationality).361 Respondent argues that Claimant could only have a legitimate expectation of Finnish nationality, as set out by the Supreme Administrative Court of Finland, if he had been transparent with the Finnish authorities about the changes to his nationality, which he was not.362

Tribunal's Analysis

300.
Article 8 of the Egyptian Investment Law states that "[c]ompanies and firms may not be nationalised or confiscated."363 Article 9 of the Egyptian Investment Law states that "[c]ompanies and firms may not be sequestered or have their assets attached, seized, distrained, frozen or confiscated by administrative means."364 Article 12 of the Egyptian Investment Law states that "[c]ompanies and firms shall be entitled to acquire the necessary building land and built properties to carry on or expand their business, whatever the nationality, domiciles or percentage participation of the partners."365
301.
Inasmuch as the Tribunal has already concluded that the treaty was breached, the issues raised in connection with the domestic legislation are moot and there is no need to consider them.
302.
Accordingly, Claimant's request for a declaration that Respondent has violated Articles 8, 9, and 12 of the Egyptian Investment Law is dismissed. The Tribunal nevertheless notes that Claimant makes essentially the same substantive arguments pursuant to Article 8 and 9 of the Egyptian Investment Law as he does pursuant to the expropriation provisions of the 1980 BIT (Article 3(1)) and that the Tribunal has found at Paragraphs 217-232 that Respondent violated Article 3(1) of the 1980 BIT and is entitled to relief for such violations.