Wena Hotels, Ltd. v. Arab Republic of Egypt

Wena Hotels, Ltd. (Wena) (plaintiff) and the Egyptian Hotels Company (EHC) entered into agreements for Wena to operate and manage hotels in Luxor and Cairo, Egypt. Disputes subsequently arose between Wena and the EHC about the hotels. In April 1991, crowds attacked the hotels and forcibly evicted the hotels’ staffs and guests. At the time, Wena had been operating the Luxor hotel for less than 18 months and was still renovating the Cairo hotel. The EHC participated in the attacks and seized control of the hotels. The Egyptian government (defendant) knew of the EHC’s intention to seize the hotels and did nothing to stop the EHC. Following the seizures, neither the Egyptian police nor the tourism ministry took action to promptly restore the hotels to Wena. The Egyptian government also never imposed substantial sanctions on the EHC or any EHC officials, nor did it compensate Wena for any of Wena’s losses. Wena filed an arbitration request against Egypt in the International Centre for Settlement of Investment Disputes, alleging that Egypt had violated its obligation under Article 2(2) of the Agreement between Egypt and the United Kingdom for the Protection and Promotion of Investments (IPPA). Article 2(2) required parties to the IPPA to give fair and equitable treatment to other IPPA parties’ investments and required the nation hosting an investment to ensure that the investment received full protection and security. Wena also asserted that Egypt had expropriated Wena’s investment without prompt, adequate, and effective compensation in violation of Article 5 of the IPPA. Wena sought damages of £45.7 million for lost profits, lost opportunities, and reinstatement costs, plus interest, costs, and fees. Egypt asserted that Wena’s asserted damages were too speculative and that Wena’s damages, if any, should be based on the actual amount of Wena’s investment, which was roughly $8.8 million.