International law firm Bird & Bird advised Intaj Capital Limited and three businesses in the Ras El Khayma Free Zone Authority in the UAE, securing an award by Paris-seated tribunal including damages of USD 37 million (approx.).
Intaj Capital Limited, an investment fund established in the Cayman Islands, and the three businesses incorporated in Ras El Khayma Free Zone Authority in the UAE, UAE Real Estate Limited (URECO), New Roads Bitumen Company Limited (NEROBI) and Africa Oil Services Ltd (AFROSER), received the award on 21 May 2021 by a Paris-seated tribunal chaired by Professor Ibrahim Fadlallah, appointed by the ICC, with co-arbitrators Sébastien Prat appointed by the claimants, and Professor Rémy Libchaber appointed by the respondents, which awarded them damages of approximately USD 37 million.
The claimants were represented by Bird & Bird in Paris with partners Boris Martor and Jalal El Ahdab while the respondents were represented by sole practitioner El Mihoub Mihoubi, Esq. in Algiers (and for a certain period of time by Shearman & Sterling in Paris).
The dispute concerned the claimants’ investment into the Petroser group, a group of companies founded by the Sahraoui, which specialises in oil and gas services. The parties had entered discussions in 2006 and materialised their partnership in 2008 when they entered into a shareholders’ agreement. URECO, NEROBI and AFROSER took approximately a 35% interest into several companies of the Petroser group. The Petroser group developed successfully in the first few years of the partnership, but mismanagement by the Sahraoui led the claimants to attempt to sell their shares.
The parties first agreed in 2010 that the respondents would buy back the shares owned by URECO, NEROBI and AFROSER but those discussions failed in late 2012. The claimants therefore introduced an arbitration proceeding before the ICC in February 2013.
The proceedings continued in 2014 to allow the parties to finalise a settlement agreement, which was executed in February 2016 and materialised by a consent award rendered at the same time. This settlement agreement provided that the respondents would buy back the shares held by the claimants for an amount of approx. USD 32 million. A very specific process for the conclusion of those operations was agreed.
The respondents failed to adequately perform their obligations and ensure the purchase of the shares. Consequently, the claimants requested the tribunal to render a partial award, dated April 2018 whereby the arbitral tribunal instructed the respondents to pay the purchase price in escrow under penalty. The respondents’ breaches continued, and a third partial award was rendered by the arbitral tribunal in July 2019 with no effect.
The claimants ultimately requested from the arbitral tribunal that it render a final award sentencing the respondents to pay damages corresponding to the agreed purchase price, and in compensation of the claimants losses and lost profits in relation to the respondents’ breaches as well as for the penalty payments ordered by the tribunal in its previous partial awards. The claimants’ claims totalled more than USD 80 million.
The respondents argued, in relation to the payment of the purchase price, that the non-performance was excused by virtue of Algerian law, applicable to the operation and the dispute. It also argued that the claimants’ claims arising out of the breaches prior to the signature of the settlement agreement in February 2016 were inadmissible.
In its award, the tribunal ruled that the respondents were liable to compensate the claimants for their failure to pay the purchase price and in amount of USD 32 million. However, the tribunal dismissed the claimants’ claims arising out of the breaches prior to the signature of the settlement agreement. The tribunal also awarded more than USD 5 million in penalty payments and 90% of costs in favour of the claimants.
UAE Real Estate Limited (URECO), New Roads Bitumen Company Limited (NEROBI), Africa Oil Services Ltd (AFROSER) & Intaj Capital Limited v Mr Abdelmalek Sahraoui, Mr Mourad Sahraoui, Mr Omar Sahraoui, Mr Mohamed Sahraoui & Mr Rachid Sahraoui
Tribunal
Ibrahim Fadlallah (France) (chair, appointed by the ICC)
Sébastien Prat (France) (appointed by the claimants)
Rémy Libchaber (France) (appointed by the respondents)
Counsel to claimants
Bird & Bird
Partners Boris Martor and Jalal El Ahdab and associates Anissa Akentour* and Gregory Arnoult in Paris.
*No longer with the firm.
Counsel to respondents
Sherman & Sterling in Paris.
El Mihoub Mihoubi in Algiers.
