British Company Files $62 Million Claim Against Egypt.

LONDON--(BUSINESS WIRE)--July 10, 1998--Wena Hotels, a British company, today announced that it has filed a request for arbitration against the Egyptian government at the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C.

According to Nael Farargy, managing director of Wena Hotels, Wena is seeking over $62 million in damages from Egypt, which failed to protect Wena's investments in Egypt as required by Egyptian law and the Investment Promotion and Protection Agreement as required by Egyptian law and by the Investment Promotion and Protection Agreement (IPPA) signed by Egypt and the United Kingdom in London on June 11, 1975.

Wena said it had a flourishing hotels business in Egypt until the Egyptian government unlawfully expropriated its interests in its two four-star properties, one in Cairo and the other in Luxor. According to Wena, the first in a series of expropriations took place in April 1991 and involved an armed attack on Wena's two hotels by the Egyptian government, followed by the forcible ejection of Wena's staff and guests.

According to Wena, it was later able to reoccupy its premises after intensive diplomatic pressure was brought to bear on the Egyptian government. However, Wena said, following a campaign of harassment and intimidation of Wena and its executives, Egypt again evicted Wena from its Cairo hotel in June 1995 and from its Luxor hotel in August 1997. Wena's losses suffered at Egypt's hands include the seizure of its newly renovated hotels and the subsequent collapse of its entire business in Egypt.

Farargy said that the arbitration commenced today will reinforce doubts surrounding Egypt's willingness to protect foreign investments. Potential investors will note that this is not the first time Egypt has been brought before ICSID, Wena said.

In the 1980s an aggrieved foreign contractor initiated ICSID arbitration against Egypt as a result of the cancellation by Egypt of a presidential decree making land available for the construction of a tourist resort. The foreign contractor obtained a substantial award of damages.

Wena Hotels is represented in this arbitration by Shearman & Sterling, an international law firm with offices in Europe, the United States and Asia. Shearman & Sterling has extensive experience with international arbitration, including ICSID cases. The Wena Hotels arbitration is being handled by the firm's Paris office.

    CONTACT:  Wena Hotels, London
               Nael Farargy, ([phone]