Final Arbitral Award Summary award to be immediately enforced and not subject to any means of recourse in line with Article 2/8 of the Conciliation and Arbitration Annex of the Unified Agreement for the Investment of Arab Capital in the Arab States In accordance with the Unified Agreement for the Investment of Arab Capital in the Arab States Rendered in Cairo on 22/3/2013 In the Arbitral Proceeding between: Mohamed Abdulmohsen Al‐Kharafi & Sons Co. (Kuwaiti Company) represented by the Vice-President of the Board of Directors, Mr. Omar Mohamed Helmi Dessouki Plaintiff And 1‐ The Government of the State of Libya 2- The Ministry of Economy in the State of Libya 3- The General Authority for Investment Promotion and Privatization Affairs (formerly the General Authority for Investment and Ownership) 4‐ Ministry of Finance in Libya 5‐ The Libyan Investment Authority Defendants (Defendants in solidum) The Court of Arbitration is composed of: Dr. Abdel Hamid El-Ahdab: Chairman Dr. Ibrahim Fawzi: Arbitrator Justice Mohamed El‐Kamoudi El‐Hafi: Arbitrator The Plaintiff: Mohamed Abdulmohsen Al-Kharafi & Sons Co. Kuwaiti Company (represented by the Vice-President of the Board of Directors, Mr. Omar Mohamed Helmi Dessouki) Address: 3, Abbas El-Akkad Street, Nasr City – Cairo – Arab Republic of Egypt Represented by: 1- Dr Fathi Waly Address: Nile Road‐ Nasr Bldg- Giza‐ Egypt Tel: 00 202 37483059 Fax: 00 202 33367673 Email: walyfirm@gmail.com 2‐ Dr. Mahmoud Samir Sharkawi Address: 76, League of Arab States Street‐ Mouhandiseen- 9th floor- Egypt Tel: 00 202 37622044 Fax: 00 202 33382050 Email: sharkawi.lawoffice@gmail.com 3‐ Dr. Nasser Ghanim El‐Zaid, Attorney at Law Address: Al-Dasma District – Bloc 4 – 41st Street – Villa No. 2– Kuwait Tel: +965 22515194 Fax: +965 22515149 Email: phdlaw@hotmail.com 4‐ Rajab Bashir Al-Bakhnug, Attorney at Law Address: Appartment No. 5 – Haddad Building – Omar El-Mukhtar Street – Tripoli – Libya Tel: +218 4440886 Fax: +218 213333929 Email: bakhug@yahoo.com The Defendants: 1‐ The Government of the Republic of Libya Tripoli‐ Libya 2‐ The Ministry of Economy in the Republic of Libya Tripoli‐ Libya 3- The General Authority for Investment Promotion and Privatization Affairs (formerly the General Authority for Investment and Ownership) Tripoli‐ Libya 4- Ministry of Finance in Libya Tripoli- Libya 5- The Libyan Investment Authority Tripoli‐ Libya (Defendants in solidum) Represented by: 1‐ Mahfouz Ahmad El-Fokhi, Counselor Address: Court Complex- Sidi Street, 3rd floor‐ The General Authority for Investment and Ownership Tel: +218 913830984 Fax: +218 213 607116 Email: mahfudelfoghi@yahoo.com 2- Dr. Hafiza El‐Haddad Address: Beirut Arab University – Beirut Tel: +961 71 498747 Fax: +961 1 818402 Email: hafizaelhaddad@hotmail.com 3- Dr. Hisham Sadek Address: 7, El-Salloum Rushdi Street – Alexandria - Cairo Tel: +203 5429615 Fax: +203 4806129 Type of arbitration: Ad‐hoc arbitration subject to the Unified Agreement for the Investment of Arab Capital in the Arab States. Period of arbitration: Six months starting from September 14, 2012, extended with the approval of H.E. the Secretary General of the Arab League till 14/4/2013. Place of arbitration: Cairo Regional Center for International Commercial Arbitration – Cairo – 1, El‐Saleh Ayoub Street in Zamalek. Applicable Law: Libyan Law and the Unified Agreement for the Investment of Arab Capital in the Arab States. * * * PART ONE: THE FACTS Chapter One: Circumstances of the Dispute 1. On 7/6/2006, and by virtue of decision No. 135/2006, the Libyan Ministry of Tourism granted approval and license to the Plaintiff Company for the establishment of a major touristic investment project in Shabiyat Tajura (administrative district) in Tripoli – Libya. 2. On 8/6/2006, the Tourism Development Authority and the Plaintiff Company, Mohammed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures, signed a contract called “the lease of a land for the purpose of establishing a tourism investment project” (Contract No. 4) which encompassed the following arbitration clause: “Article (29): In the event of a dispute between the two parties arising from the interpretation or performance of the present contract during its validity period, such a dispute shall be settled amicably. Failing that, the dispute shall be referred to arbitration pursuant to the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States adopted on Nawar (November) 26, 1980”. By virtue of said contract the Authority leased to the Plaintiff Company a plot of land located in shabiyat Tripoli and extending over an area of 240 000 square meters. The borders of the plot of land were specified in the contract which further provides for the contractual terms and conditions agreed upon by both parties. For several years, the two parties have exchanged correspondences on land taking over to initiate the execution of works thereon. Among these correspondences, there was a letter referring to the assaults against the workers of the Plaintiff Company by police officers, and assaults by those who claim that they own the plot of land. This letter was dated 22/12/2007 and was addressed by the Plaintiff Company to the Director of the Department for the Development of Touristic Areas. It stated the following: "On 15/12/2007, and during the storage of building material, a group of individuals assaulted the workers of the contractor and forced them to stop the works and vacate the premises…" 3. Following these events, the third Defendant requested the Plaintiff to stop the works. The letter addressed by the Plaintiff Company to the Secretary of the General Authority for Tourism and Traditional Industries and dated 31/12/2007, reads as follows: "…Some individuals from the Club assaulted the contractor and forced him to stop the works…". The letter further stated that the Tourism Development Authority requested the Plaintiff to stop project execution, indicating: "…Consequently, five tourism police cars showed up and the works were stopped until a security force car arrived at the site. Afterwards, the Tourism Development Authority requested that we stop the works and remove our equipment from the site until the matter is permanently resolved…". 4. On 21/1/2009, the Director of the Department for the Development of Touristic Areas and head of the permanent working team at the General Authority for Tourism and Traditional Industries sent a letter to the Vice‐President of the Board of Directors of the Plaintiff Company, in which he referred to the proposal submitted to the Plaintiff of choosing an alternative plot of land for project execution, while retaining the current plot of land pending the resolution of all impediments. The letter reads as follows: "We have proposed that the company chooses an alternative plot of land for project execution, while retaining the current plot of land pending the resolution of all impediments. However, the Company refused the proposal and chose to wait for the resolution of the problems on the current site". 5. On 9/6/2010, the Libyan Minister of Industry, Economy and Trade issued Decision No. 203/2010 by virtue of which Decision No. 135/2006 was annulled, following the transfer of decision-making prerogatives on the approval of foreign investment projects to said Ministry. 6. On 27/3/2011, the Plaintiff submitted a request to H.E. the Secretary General of the Arab League to approve the start of the arbitral proceedings. 7. On 11/4/2011, Mr. Omar Mohamed Dessouki, the Vice‐President of the Board of Directors of the Plaintiff Company, received the approval of the Secretary General of the Arab League to initiate the necessary arbitral proceedings based on the provisions stipulated in the Conciliation and Arbitration Annex of the Unified Agreement for the Investment of Arab Capital in the Arab States. 8. On 26/5/2011, the Plaintiff notified the Defendants, through the South-Tripoli Court bailiff, of the referral of the dispute to arbitration and the appointment of an arbitrator, and requested the appointment of a second arbitrator to represent the Defendants. 9. On 23/8/2012, the Plaintiff submitted to the Arbitral Tribunal a statement of claim, including a docket. 10. On 23/11/2012, the Defendants submitted to the Arbitral Tribunal the statement of defense, including a docket. Chapter Two: The Arbitration Clause: The arbitration clause is included in the lease contract of the land plot, contract No. 4, concluded for the purpose of establishing a tourism investment project. Said contract was signed on 8/6/2006 between the Tourism Development Authority, herein represented by D. Ali Fares Ouaida, as Secretary of the People’s Committee for Tourism Development Authority from one side, and Mohammed Abdulmohsen Al‐Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures herein represented by Mr. Omar Mohamed Helmi Dessouki as the legal representative, on the other side. Article 29 of said contract stipulates the following: “In the event of a dispute between the two parties arising from the interpretation or performance of the provisions of the present contract during its validity period, such a dispute shall be settled amicably. Failing that, the dispute shall be referred to arbitration pursuant to the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States adopted on Nawar (November) 26, 1980 A.D.”. Chapter Three: The Arbitral Proceedings: 1. By virtue of the bailiff’s notice dated 26/5/2011 addressed to the Secretary of the General People’s Committee, the Secretary of the General People's Committee for Industry, Economy and Trade, the Secretary of the General People’s Committee for Finance, and to the legal representative of the General Authority for Investment and Ownership, each acting in his own capacity, notified on 26/5/2011 by the Secretary of the Litigation Department in Tripoli and authorized signatory, Attorney Abdel Ghani An‐Nasiri in his own capacity, the Plaintiff Company, Mohammed Abdulmohsen Al-Kharafi & Sons Co., appointed Dr. Ibrahim Fawzi, arbitrator, as member of the Arbitral Tribunal that will decide the request for arbitration. 2. On 30/5/2012 Arbitrator Dr. Ibrahim Fawzi received a letter from Justice Bashir el-Akari, Director of the Litigation Department in the Ministry of Justice in the Libyan Transitional government whereby he informs him that the Libyan government, legally represented herein by the Litigation Department, has designated Mr. Mahmoud El-Kamoudi El‐Hafi, Justice in the Libyan Supreme Court, as Arbitrator in the Arbitral Tribunal. 3. On 7 June, 2012, the General Assembly of the Supreme Court in the Transitional National Council in Libya issued decision No. 7 of 2012 authorising Mr. Mohamed el‐Kamoudi el-Hafi, Justice in the Supreme Court, to act as arbitrator of the Libyan party in the arbitration case between the Libyan State and Al-Kharafi International Co. 4. On 13/6/2012, the two arbitrators agreed on selecting the third arbitrator, Dr. Abdel Hamid El-Ahdab, as president of the arbitral Tribunal. The latter decided the following: 4-1. The Arbitration shall take place in Cairo. However, this shall not preclude holding hearings anywhere else. 4-2. The rules of Arbitration of the Cairo Regional Centre for International Commercial Arbitration shall be applicable to the arbitral proceedings without being administered by Cairo Center, whereby the arbitration remains non-institutional or ad hoc arbitration. 4‐3. The Tribunal decided that the arbitrators’ fees shall be equal to 400 thousand US dollars and added 40 thousand US dollars as expenses to be paid by both parties equally. If one of the parties defaults, the second party shall be immediately notified to pay on its behalf in order to carry on the arbitral proceedings. The arbitral award shall take the aforementioned into account. 4-4. The first hearing shall be held at 11:00 am on Saturday 14/7/2012 in Cairo Regional Centre for International Commercial Arbitration. 4-5. The first hearing shall determine the arbitral proceedings, dates of exchange of memoranda between the two parties, as well as the date of the oral hearing, taking into consideration the fact that the arbitration period is of six months that can only be extended by virtue of an approval from the Secretary General of the Arab League. 5. On 5/7/2012, procedural order No. 1 was issued, and provided that the Kuwaiti Plaintiff, Mohammed Abdulmohsen Al-Kharafi & Sons Co, has credited the bank account opened for the purposes of the present arbitration under the name of the chairman Dr. Abdel Hamid El-Ahdab, the sum of USD 220,000 (two hundred and twenty thousand US dollars), and that the Libyan Defendant, the General Authority for Investment Promotion represented by the Litigation Department, has not paid within the time limit, and that the Arbitral Tribunal shall notify the Plaintiff thereof and shall require him to pay on behalf of the Libyan party within a period that ends on July 25, 2012, under penalty of staying the arbitral proceedings after the said date. Should the Libyan Defendant settle its dues, the Kuwaiti Plaintiff shall be reimbursed for what it had already paid; otherwise the Libyan Defendant shall born the arbitration fees and costs. The Arbitral Tribunal also decided the following: 5-1. The 14 July 2012 first hearing shall be held on time with the presence of both parties. Representatives of each party shall bear a power of attorney allowing them to represent the parties. Each party shall also submit a list of the parties’ requests to the Arbitral Tribunal with all the necessary documents of support thereto. 5-2. Should the Kuwaiti Plaintiff fail to pay by 25/7/2012, the arbitral proceedings decided upon in the July 14, 2012 hearing shall be stayed. 5-3. Should any of the parties refrain from attending the July 14, 2012 hearing, arbitration shall continue and shall not be affected by any such absence. Article 47 of the arbitral proceedings of the Cairo Regional Center for International Commercial Arbitration (CRCICA) shall apply to the procedural order. 6. On 11/7/2012, Counselor Bashir Ali EL-Akari, Head of the Litigation Department and Head of the Foreign Disputes Committee at the Litigation Department of the Ministry of Justice in the transitional government, informed the presiding arbitrator Dr. Abdel Hamid EL-Ahdab in writing that the Litigation Department in Libya appoints Justice Mahfouz Ahmad EL-Fokhi to attend the hearing of 14/7/2012 on behalf of the General Authority for Investment and Ownership. 7. On 14/7/2012, the first hearing was held at eleven a.m. at the Cairo Regional Center for International Commercial Arbitration (CRCICA) and was attended by the attorney of the Mohamed Abdulmohsen Al-Kharafi & Sons Co, the Plaintiff Company, as well as the representative of the Litigation Department for the Defendants. The arbitrators declared their independence. The attendees endorsed the terms of reference and the procedural time table submitted by the Arbitral Tribunal without any amendments thereto. The two parties signed the terms of reference and the procedural time table as an indication of their endorsement. The terms of reference provided that this arbitration is subject to the Unified Agreement for the Investment of Arab Capital in the Arab States, and that the Arbitral Tribunal had decided that the Cairo Regional Center for International Commercial Arbitration (CRCICA) arbitral proceedings shall govern this arbitration in accordance with the requirements proper thereto, especially the timelines, as the main rules governing this arbitration are the rules set forth in the arbitral proceedings of the Unified Agreement for the Investment of Arab Capital in the Arab States stipulating that the arbitral award shall be rendered within six months from the date of the first hearing held by the arbitral Tribunal, i.e. the July 14, 2012 hearing. The Arbitral Tribunal considered that the six months period shall commence as of the July 14, 2012 hearing and not of the date of notice. The terms of reference also provided for the following: 7-1. The delay for exchange of memoranda between the two parties shall be of one month for each party, and the deadline for submitting the statement of claim shall be the 14th of September. 7-2. The Defendant, i.e. the General Authority for Investment Promotion, represented by the Litigation Department, shall communicate the statement of defense within a period ending on October 20, 2012. 7-3. The statement of defense shall reply to the particulars of the statement of claim, and contain a reference to all the documents and other evidence relied upon by the Plaintiff in the statement of claim. 7-4. Should they find a need thereto, the Defendants shall submit in their statement of defense a counterclaim, and may duly rely on a claim for the purpose of a set-off provided the Arbitral Tribunal has jurisdiction therein. 7-5. The Plaintiff shall submit a replication in response to the statement of defense within a period of fifteen days that ends on November ten. 7-6. The Defendants shall submit a rejoinder in response to the replication within a period of fifteen days that ends on the end of November. 7-7. The two parties shall submit during the hearing: the name, phone number, fax, e-mail and address of the representative that the arbitration Tribunal may contact. 7-8. The hearing shall be set on December 5, to hear witnesses and pleading arguments. Each party shall send to the arbitral Tribunal and the other party a list of their witnesses within a period ending on November 20. 7-9. Each party may submit their written arguments following the hearing within a period that ends on December 15. 7-10. The Arbitral Tribunal shall render the arbitral award within a period that ends on January 10, 2013. 7-11. Should the Plaintiff Mohamed Abdulmohsen Al-Kharafi & Sons Co. fail to pay the Defendant’s part, the General Authority for Investment Promotion represented by the Litigation Department within a period that ends on July 25, 2012, arbitral proceedings shall be stayed, and all aforementioned dates reexamined. Should the Libyan Defendant settle his part after payment was made by the Kuwaiti Plaintiff on behalf of said Defendant, the paid amount shall be returned to the Plaintiff immediately. 8. On 25/7/2012, the Arbitral Tribunal issued the procedural order No. 3 that was sent to both parties providing that, in line with procedural order No. 1 and procedural order No. 2 including the minutes of the hearing held in Cairo on 14/7/2012, a payment of USD 220,000 (two hundred and twenty thousand US dollars) was made on 25/7/2012 to the bank account bearing the name of this arbitration by Mohamed Abdulmohsen Al-Kharafi & Sons Co., thereby settling all arbitrators’ fees and. The arbitral proceedings shall therefore continue as per the minutes of the hearing held on 14/7/2012 that was signed by both parties and the arbitrators. 9. On 24/9/2012, procedural order No. 4 was issued and provided that after the Plaintiff Mohamed Abdulmohsen Al-Kharafi & Sons Co. had amended the claim to increase the relief sought from USD 55 million to USD 1.144.930 billion, a review of the arbitration fees and costs shall be carried out in line with the amendment to the claim by increasing the relief sought. The Arbitral Tribunal, in its decision dated 13/6/2012, approved the arbitration costs and arbitrators’ fees as stipulated in the Cairo Regional Center for International Commercial Arbitration (CRCICA). The Arbitral Tribunal approved the abovementioned claims amounting to USD 55 million before the statement of claim was submitted, and had endorsed the arbitration fees amounting to USD 400,000 (four hundred thousand US dollars), and an extra USD 40,000 (forty thousand US dollars), knowing that the amount approved is an average amount. The Arbitral Tribunal, and upon approval of all three arbitrators, shall approve the average rate mentioned in the tables under annex to CRCICA Arbitration Rules; accordingly, the fees would amount to USD 1,200,000 (one million two hundred thousand US dollars) after the Plaintiff has amended the claim to increase the relief sought to one billion one hundred and forty four million and nine hundred thirty US dollars, to be paid equally by the two parties, knowing that they had previously paid USD 400,000 (four hundred thousand US dollars). The value of the set fees shall be calculated as follows: 1,200,000 – 400,000= USD 800,000 (eight hundred thousand US dollars), and shall be paid within a period that ends on October 30, 2012. Should both parties fail to pay, the claim shall be limited to the relief sought claimed before the statement of claim was submitted, i.e. fifty five million US dollars. Should only one of the parties make a payment of USD 400,000 (four hundred thousand dollars) within the time limit and should the other party fail to pay, the paying party shall be required to pay USD 400,000 (four hundred thousand US dollars) within a period that ends on November 30, 2012. Payment shall be made by a transfer to BEMO bank, account No. 02058683601, arbitration account: Dr. Abdul Hamid El-Ahdab, Al Kharafi arbitration, Libya, i.e. the same bank to which the two previous transfers were made. 10. On 24/9/2012, a misprint in procedural order No. 4 was corrected, the error being that the claim was amended to increase the amount sought to one billion one hundred forty four million nine hundred thirty thousand US Dollars, and that the ceiling for the arbitration costs and the arbitrators’ fees mentioned in the tables under annex to CRCICA Arbitration Rules is of two million US Dollars. 11. On 15/10/2012, procedural order No. 5 was issued by virtue of which the Arbitral Tribunal decided to amend procedural order No. 4 so that it provides that the two parties shall pay USD 800,000 to be added to the previously paid USD 400,000; the amount of USD 800,000 shall be paid in half within a time limit that does not exceed October 25, 2012 to the bank account held under the name of Dr. Abdul Hamid El-Ahdab, Al-Kharafi arbitration/Libya - $1 $2USD- Libya. The procedural order also provided that in the event one of the parties failed to pay his part within the set time limit, the other party shall be given until November 5, 2012 to pay on his behalf, and the amount paid shall be included in the final arbitral award. Should the amount of USD 800,000 be paid in its entirety, an arbitral hearing shall be held in the presence of the Arbitral Tribunal, the parties and their representatives on Monday 12/11/2012 at ten a.m. in the Cairo Regional Center for International Commercial Arbitration (CRCICA). During this hearing, the parties and the Arbitral Tribunal shall agree on a new procedural timetable to replace the one set out in the 14/7/2012 hearing regarding the dates for submitting statements of claim, submissions, lists of witnesses, and for the hearing, witness statements, and the rendering of the arbitral award. The Arbitral Tribunal shall send, prior to the hearing of November 12, 2012 if held, a new procedural timetable that shall be discussed during this hearing. If the parties and arbitrators fail to agree over the new procedural timetable, the Arbitral Tribunal shall issue a procedural order setting new dates which shall include that the Arbitral Tribunal shall send the procedural order via e-mail, fax or express mail to the parties and their representatives. Should no objection be made to this procedural order, it shall be adopted as the basis for notifying parties of the proceedings, exchanging of memoranda and submissions by e-mail or fax, in line with article 2 of Chapter one (paragraph 2) of the Cairo Regional Center for International Commercial Arbitration (CRCICA) Arbitration Rules. This procedural order shall mention the text of the said article. 12. On 17/10/2012, upon the approval of the Arbitral Tribunal, and upon consulting both parties and their representatives, procedural order No. 6 was issued to replace the November 12, 2012 hearing with another to be held on November 17, 2012 at ten a.m. in the Cairo Regional Center for International Commercial Arbitration (CRCICA). During this hearing, a new procedural timetable shall be agreed upon for exchanging memoranda, for setting a new date for the hearing, witnesses’ testimonies and for the date of rendering the arbitral award, in the event the two parties settled the arbitration costs. 13. On 25/10/2012, procedural order No. 7 was issued in line with procedural order No. 5, stating that the Plaintiff has paid the amount indicated in procedural order No. 5. Procedural order No. 6 also provided that should the Plaintiff pay on behalf of the Defendant prior to November 5, 2012, the arbitral hearing shall be held on 17/11/2012 to agree over the procedural timetable. Otherwise, the Arbitral Tribunal shall issue a decision thereon. 14. On 2/11/2012, procedural order No. 8 was issued, stating that the Arbitral Tribunal has verified that the Plaintiff has credited the arbitration account prior to November 5 on behalf of the Defendants with the sum of USD 400,000 (four hundred thousand US dollars) that will be factored into the arbitral award, and that, in line with procedural orders No. 5 and 6, the November 17 hearing shall be held in its due date at ten a.m. at the Cairo Regional Center for International Commercial Arbitration (CRCICA), to agree over a new procedural timetable to communicate memoranda, to set a date for the hearing, witnesses’ testimonies and the rendering of the arbitral award. 15. On 9/11/2012, procedural order No. 9 was issued and a draft “terms of reference” suggesting new procedural timetable to exchange memoranda, to set a date for the hearing and the rendering of the arbitral award annexed thereto. The procedural order called upon both parties and their representatives to agree over the dates that they see convenient and that the Arbitral Tribunal deems appropriate. In the event of failure to agree over the new procedural timetable, the Arbitral Tribunal shall issue a decision thereon at the end of the hearing. 16. On 17/11/2012, procedural order No. 10 was issued, and the Arbitral Tribunal appended thereto the terms of reference agreed upon in the November 17 hearing held in Cairo and ratified by the Arbitral Tribunal. This arbitration shall be governed by this terms of reference, and the Arbitral Tribunal is keen to confirm that what has been agreed upon during the hearing, i.e. the exchange of memoranda shall be carried out via e-mail pursuant to Article 2 Chapter one Paragraph 2 of the Arbitration Rules of the Cairo Regional Center for International Commercial Arbitration (CRCICA). This was mentioned in procedural order No. 5 dated 15/10/2012. The Arbitral Tribunal requested every party who may receive a memorandum or a submission to inform the other party having received the e-mail. The terms of reference appended to procedural order No. 10 dated 17/11/2012 included the minutes of the hearing held in Cairo on 17/11/2012 which encompassed that the Chairman said that this arbitration is subject to the Unified Agreement for the Investment of Arab Capital in the Arab States, that the period of arbitration is of six months, and that the extension of this period is not an easy task as it requires the approval of the Secretary General of the Arab League. The minutes also included that the Arbitral Tribunal, upon discussions with both parties to the dispute, decided the following: 1- Memoranda shall be exchanged via e-mail as previously agreed. 2- The Defendants shall submit the statement of defense within a period ending on 24/11/2012. 3- The Plaintiff shall submit a replication within a period ending on 7/1/2013. 4- The Defendants shall submit a rejoinder in reply within a period ending on 7/2/2013. 5- The Plaintiff shall submit a final submission within a period ending on 21/2/2013. 6- The Defendants shall submit a final submission within a period ending on 6/3/2013. 7- Each party shall submit a list of all the witnesses and their testimonies within a period ending on 27/2/2013. 8- The hearing and witnesses’ testimonies shall be held on Saturday 9/3/2013, and may be extended for another day at the discretion of the Arbitral Tribunal. 9- Both parties shall present arguments in writing that do not include any new particulars within a period ending on 13/3/2013. The members of the Arbitral Tribunal, Dr. Abdul Hamid El-Ahdab, Dr. Ibrahim Fawzi and Justice Mohammad El-Hafi signed the minutes that included the agreed upon dates. The minutes were also signed by the two parties represented by Mr. Rajab Bashir El-Bakhnug, Dr. Nasser Ghanim El-Zaid, Dr Omar Dsouki and Mr Saad Salem for the Plaintiff, and Dr Hisham Sadek, Dr. Hafiza El-Haddad and Mr. Mahfouz EL-Fokhi for the Defendants. 17. On 4/1/2013, procedural order No. (11) was issued, whereby the Arbitral Tribunal decided that the submissions were received via e-mail by the arbitrators and the parties to the dispute. It further stated that the Plaintiff expressed its position and response in view of dissipating any ambiguity in the three submissions presented by Dr. Sharkawi, Dr. Wali, Dr. Zaid and Counsel El- Bakhnug. The Plaintiff also submitted to the Arbitral Tribunal the Legal Opinion of Judge Burhan Amrallah for examination. 18. On 4/1/2013, procedural order No. (12) was issued whereby it was provided that following the increase by the Plaintiff of its relief sought to the sum of USD 2,055,530,000, the Arbitral Tribunal, and after reviewing the table of arbitration costs and arbitrators' fees stipulated in the Cairo Regional Center for International Commercial Arbitration and adopted by the Arbitral Tribunal, found that the difference in arbitration costs between what the Plaintiff previously requested in its statement of claim and its current request in its replication dated 3/1/2013 is USD 700,000. The Arbitral Tribunal binds both parties to disburse the sum. Article 47 of the Arbitration Rules of the Cairo Regional Center for International Commercial Arbitration stipulated in its first paragraph that the parties shall deposit at the Center the determined administrative and arbitrators' fees before the commencement of the arbitral proceedings. The Arbitral Tribunal applied this rule when the Plaintiff increased the relief sought in its statement of claim to USD 1,144,930,000, while knowing that said paragraph also stated towards its end "…unless otherwise decided by the Arbitral Tribunal". Therefore, it is within the competence of the Tribunal to determine the deposit of the arbitrators' fees, not prior to the commencement of the arbitral proceedings but at an advanced stage of the arbitration, especially that paragraph (2) of article (47) of the Arbitration Rules of the Cairo Center granted the Arbitral Tribunal the freedom to violate the rule of payment prior to the commencement of the proceedings. The Arbitral Tribunal, within its competence and as stipulated by the Statute of the Unified Agreement for the Investment of Arab Capital in the Arab States and paragraph (1) of article (47) of the Arbitration Rules of the Cairo Regional Center for International Commercial Arbitration, may determine the payment of arbitrators' fees on the basis of the new requests submitted during the course of the arbitration. The Arbitral Tribunal already sent a request to His Excellency the Secretary General of the Arab League to extend the arbitration period when the Plaintiff increased its relief sought to USD 1,144,930 and decided to stay the arbitral proceedings pending the disbursement of the arbitration costs and arbitrators' fees on the basis of this new relief sought. His Excellency the Secretary General of the Arab League approved the request of the Arbitral Tribunal and extended the arbitration period to 14/4/2013. The Arbitral Tribunal may no longer submit a request for extension again, given that the provisions of article (9) of the Conciliation and Arbitration Annex of the Unified Agreement for the Investment of Arab Capital in the Arab States, expressly provide that the Secretary General may extend the period only once. Therefore, the Arbitral Tribunal has decided to move forward with the arbitral proceedings on the basis of the relief sought by the Plaintiff in the sum of USD 2,055,530,000 and entrusted both parties to equally pay the arbitration costs and arbitrators' fees until March 4, 2013. In case of non-disbursement, the arbitration case shall proceed until the rendering of the final arbitral award on the basis of the value of the relief sought mentioned in the statement of claim in the sum of USD 1,144,930,000. Procedural order No. (12) provided that the arbitral proceedings, deadlines and procedural dates signed by both parties on November 17 and approved by the Arbitral Tribunal shall remain unamended. 19. On 4/1/2013, procedural order No. (13) was issued, whereby the Arbitral Tribunal entrusted the Plaintiff Company with the task of informing the Libyan Ministry of Finance of all the case papers, exhibits and any other submissions issued by the Plaintiff as of the date of issuance of this procedural order, following the request of the Plaintiff to join the Ministry of Finance as a party. 20. On 7/1/2013, procedural order No. (14) was issued, whereby the Arbitral Tribunal noted that the submission of some of the parties were sent to the Cairo Regional Center for International Commercial Arbitration. The Arbitral Tribunal further noted and ascertained that the present arbitration is an ad-hoc arbitration subject to the Unified Agreement for the Investment of Arab Capital in the Arab States, whereby article (6) therein stipulates that the Arbitral Tribunal "shall determine its own procedure" and therefore requests that, as of the issuance of this procedural order, all correspondences, under any form, shall be addressed to the Arbitral Tribunal, while designating the members of the Tribunal and applying the procedures relating to the proceedings in accordance with the decisions of the arbitrators, without being linked to any arbitration institution or center applying these procedures. 21. On 16/1/2013, procedural order No. (15) was issued, whereby the Arbitral Tribunal approved in form the joinder of the Libyan Ministry of Finance to the present arbitral proceedings, given that such joinder preserves its right of defense and due process, following the receipt by the Arbitral Tribunal from attorney Rajab El-Bakhnug, the authorized representative of the Plaintiff Company, of a copy of a document issued by the South-Tripoli Court of First Instance containing the joinder of a party to an arbitration case and that the Ministry of Finance shall be notified of all the exhibits pertaining to the arbitration case as well as the dates of the hearings. 22. On 15/2/2013, procedural order No. (16) was issued, whereby it was noted that the Plaintiff, Mohamed Abdulmohsen Al-Kharafi & Sons Co., paid its share of the arbitration costs and arbitrators' fees in accordance with the requirements of procedural order No. (12), and in the sum of three hundred and fifty thousand US dollars. It further noted that if the Defendant fail to pay their equal share of the costs and fees in accordance with the requirements of procedural order No. (12), the Arbitral Tribunal shall entrust the Plaintiff to pay the balance of three hundred and fifty thousand US dollars until March 4, 2013, to be factored into the arbitral award. If the Plaintiff fails to pay this sum on behalf of the Defendants by the specified date, the sum of three hundred and fifty thousand US dollars disbursed by the Plaintiff shall be returned and the claim shall proceed on the basis of the value of the relief sought mentioned in the statement of claim. 23. On 20/2/2013, procedural order No. (17) was issued following the receipt by the members of the Arbitral Tribunal of the submissions presented by the representatives of the Plaintiff by the date of issuance of this order, whereby a request was made to add the Libyan Investment Authority to the Defendants' list. By virtue of this order, the Arbitral Tribunal entrusted the Plaintiff with the task of informing the Libyan Investment Authority of all the arbitral documents as well as all that was issued and shall be issued by the Plaintiff as of the date of issuance of this order. 24. By virtue of procedural order No. (18), the Arbitral Tribunal informed both parties to the dispute that the Plaintiff paid, prior to March 4, 2013, the sum of three hundred and fifty thousand US dollars in accordance with procedural order No. (16). Therefore, the value of the dispute now stands at USD 2,055,530,000, two billion fifty five million five hundred and thirty thousand US dollars. 25. On 27/2/2013, procedural order No. (19) was issued, whereby it was provided that the Arbitral Tribunal has been notified on that date of a copy of the notification sent to the Libyan Investment Authority on 26/2/2013, through the member of the Litigation Department, attorney Mahfouz El-Fokhi, entrusted with notification and receipt given that he was joined to the case. The Arbitral Tribunal, in its attempt to ensure the right of the Libyan Investment Authority to defend its position and maintain equality between all parties and their right to due process, has decided to grant the Authority a deadline extending till March 7, 2013 to submit its statement of defense to the request to join it as a Defendant, whereas the Plaintiff shall have the right to respond on March 8, 2013. A hearing shall be held during which witnesses will testify about the joinder of the Libyan Investment Authority to the arbitral proceedings on March 10, 2013 following the end of the hearing that shall be held and during which witnesses will testify about the main issue in accordance with procedural order No. (10). The hearing of March 10, 2013 shall be dedicated to the aforementioned issue and the witnesses’ statements shall be heard in the event there are witnesses designated by one or both parties. Both parties shall submit on March 14 their written arguments limited to the subject of the hearing and dedicated to the issue of joining the Libyan Investment Authority to the case. The written arguments shall not include any new evidence outside the framework of the hearing. 26. Following procedural order No. (10) and procedural order No. (19), procedural order No. (20) dated 5/3/2013 noted that on Saturday March 9, 2013, a hearing shall be held during which witnesses will testify, to be extended until Sunday March 10, 2013, at 10 a.m. at the Cairo Regional Center for International Commercial Arbitration to examine the merits of the dispute. The second independent hearing to be held on Sunday at 3$1 $2 p.m. shall examine the request of the Plaintiff to join the Libyan Investment Authority to the arbitral proceedings and listen to the witnesses’ statements and arguments of the attorneys. 27. Procedural order No. (20) has determined the schedule of the hearing to be held on Saturday March 9, 2013. It shall commence at 10 o'clock in the morning with the hearing of witnesses, mainly: expert Habib el-Masri, an expert from Ernst & Young, an expert from the firm of Ahmad Ghatour, an expert from the firm of Khaled el-Ghannam, and engineer Salah el-din Mohamed Malek. The attorneys for the Plaintiff and the Defendants shall then have the opportunity to address their questions to the witnesses. The Arbitral Tribunal shall also have the right to address their questions to the witnesses at any stage. Afterwards, the attorneys for the Plaintiff and Defendants shall present their argument respectively. The hearing of Sunday March 10, 2013 shall be held at 3$1 $2 and shall examine the request to join the Libyan Investment Authority to the arbitral proceedings. The witnesses, if any, shall be heard and the attorneys for the Plaintiff and the Defendants shall present their arguments respectively. Both parties shall then submit their arguments on the main issue and on the request to join the Libyan Investment Authority as a party which shall include no new argument, by no later than 13/3/2013. 28. On 5/3/2013, procedural order No. (21) was issued, based on a request from Dr. Fathi Wali sent to the Arbitral Tribunal on that same date whereby a proposal was made to amend the deadlines set forth in procedural order No. (20), by virtue of which the Arbitral Tribunal has decided to extend the deadline for submission, following the hearing, to March 16, 2013. The afternoon hearing of March 9 and 10 shall commence at 5$1 $2 and proceed till 10 o'clock in the evening. The schedule of the two hearings to be held on Saturday March 9 and Sunday March 10 shall remain as it was set forth in procedural order No. (20). The proposal of Dr. Fathi Wali shall be submitted in the first hearing of Saturday March 9 for discussion between the Plaintiff and the Defendants to reach an agreement on any amendments thereto. If no consensus was found between all attorneys, the schedule of the dates set forth in procedural order No. (20) shall remain the same. 29. On 12/3/2012, procedural order No. (22) was issued whereby the Arbitral Tribunal has decided to conclude the proceedings and entrust the Counsels for the Plaintiff and the Defendants with the task of submitting a written statement via email of the argument they presented in the hearings of March 9 and 10 without making any addition by no later than March 17 of this year, following the pleading of the Counsels for both parties, the statements of the three witnesses of the Plaintiff and the reading of the provisions of Article 31 of the Arbitration Rules of the Cairo Regional Center for International Commercial Arbitration adopted by the Arbitral Tribunal for this dispute. The Tribunal shall also ask if any of the parties have any further evidence or witnesses they would like to produce. Otherwise, the Arbitral Tribunal shall decide to close the proceedings. 30. On 10/3/2013, the expert witnesses have attended the hearing, mainly Habib Khalil El-Masri, Khaled Abu El-Faraj Ahmad Fahim El-Ghannam and Salah El-din Mohamed Malek. All witnesses were questioned by the attorneys for the Plaintiff and the Defendant and they all ascertained the veracity of the content of their report. It was also determined through the testimony of the witnesses that the value of the lost profit ranged between USD 1,744,242,52 and USD 2,550,600,000, whereas experts Habib El-Masri and Khaled Abu El-Faraj Ahmad Fahim El-Ghannam testified, in response to a question by the Arbitral Tribunal, that the damages resulting from lost opportunities which are real and certain constitute lost profits, further stating that the compensation value in each report represent the minimum profits that could have been achieved under the current circumstances in Libya. 31. The minutes of the hearings held on March 9 and 10, 2013 were drawn up and signed by the members of the Arbitral Tribunal Dr. Abdel Hamid El-Ahdab, Dr. Ibrahim Fawzi, Judge Mohamed El-Hafi, and Khaled Othman, the secretary of the Arbitral Tribunal. It was also signed by attendants for the Plaintiff Company, mainly Dr. Fathi Wali, Dr. Mahmoud Samir El-Sharkawi, Dr. Rajab Bashir El- Bakhnug, Dr. Nasser El-Zaid, Dr. Mohamed El-Kalyoubi, Dr. Omar El-Dessouki, and Mr. Saad Salem, and attendants for the Defendants, mainly Dr. Hisham Sadek, Dr. Hafiza El-Haddad, Mr. Mahfouz El-Fokhi, Mr. Mustapha El-Fitouri Ahmad El- Soueih, Mr. Youssef Mohamed El-Ahrash, Mr. Abdel Majid El-Shtiwi and Mr. Abdallah El-Tebouli, following the submission of argument by the Counsels for the Plaintiff and the Defendants in front of the Arbitral Tribunal. 32. On 16/3/2013, procedural order No. (23) was issued, whereby the Arbitral Tribunal decided to close the proceedings, following the conclusion of the arguments and declared that the arbitrators shall deliberate for purposes of making an arbitral award. 33. On the evening of March 17, 2013, and following the issuance of procedural order No. (23), an argument was sent by the Plaintiff's attorney. 34. On 18/3/2013, procedural order No. (24) was issued whereby the Arbitral Tribunal decided to reject the submission presented by the Plaintiff's attorney on 17/3/2013 and refrain from introducing it in the deliberations for the purpose of making an arbitral award. The Arbitral Tribunal noted and ascertained that all the submissions pertaining to the present arbitration, whether submitted by the Defendants or the Plaintiff, were received within the dates set and agreed upon by the parties to the present arbitral dispute. PART TWO: POSITIONS OF THE TWO PARTIES: Chapter One: Facts alleged by the Plaintiff: 1. On 8/12/2005, the Plaintiff sent a letter to the Secretary of the People's Committee for Tourism Development Authority in which the Plaintiff requested preliminary approval for the establishment of a touristic project in Andalusi street, Tajura city, in the hope of receiving approval to initiate work upon the completion of administrative procedures and taking over of the project land. 2. On 8/12/2005, the Plaintiff received through the Vice President of its Board of Directors an invitation from the Secretary of the People's Committee for Tourism Development to discuss the establishment of the project. 3. On 7/6/2006, decision No. 135 of 1374 a.P. (2006 A.D.) was issued, granting investment approval to Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures represented by Mr. Omar Mohamed Helmi Dessouki; address/ Abbas El-Akkad St. – Cairo – Arab Republic of Egypt; for the execution of a tourism investment project (a five-star tourist hotel, a service commercial center, hotel apartments, restaurants, and recreational areas). The decision also included: 3.1. The rented location in Tajura, (Sidi al Andalusi), Shabiyat (administrative district) Tripoli. 3.2. Project surface area of 24 hectares. 3.3. Investment value of USD $130,000,000 (one hundred and thirty million US dollars). 3.4. Project execution period of seven and a half years. 3.5. Investment period of ninety years. 3.6. Approval is granted in accordance with the terms and conditions stipulated in Law No. (5) of 1426 a.P. (1997 A.D.) on the promotion of foreign capital investment and its executive regulations, and Law No. (7) of 1372 a.P. (2004 A.D.) regarding Tourism and its executive regulations. 3.7. The Tourism Development Authority shall register the project in the investment registry and carry out the necessary procedures in this regard. 3.8. 0.1% of the investment value shall be deposited in the Authority's account in consideration of reviewing project drawings, designs and technical studies, execution follow-up and promotion in local and international forums. 3.9. Abrogating decision No. (33) of 1374 a.P. (2006 A.D.) on the approval of investment for the execution of a tourism investment project. 3.10. Decision No. (135) of 2006 also stipulated that it shall come into force on the date of its issuance and that competent authorities shall be entrusted with its implementation. 4. On 14/6/2006, the Secretary of the People's Committee for Tourism Development Authority sent a letter to the Vice-President of the Board of Directors of the Plaintiff Company to which was enclosed the text of decision No. 135 of 1374 a.P. (2006 A.D.) on the approval of investment for the execution of the tourism investment project, subject of the lease contract signed by the lessor and the lessee (the Plaintiff Company) on 18/6/2006. 5. On 18/6/2006, the Plaintiff Company and the People's Committee for Tourism Development Authority signed the lease of the land, extending over an area of 240 000 square meters, on which the touristic project is to be established. The lease contract shall remain in force for a period of ninety-nine years, as of the date of taking over of the land in question. 5.1. The lessor – the Tourism Development Authority – acknowledged that the land is the property of the Libyan State and that the signatory of the contract is legally entitled to privatize, sign the lease, and establish that there are no in-kind rights whatsoever thereon. 5.2. The lessor undertookd to hand over to the Plaintiff Company a plot of land free of occupancies and persons, or legal and physical impediments which may prevent the initiation of project execution or operation during the usufruct period and upon signing of the contract. 5.3. The lessor (General People's Committee for Tourism) undertook to permit the lessee (the Plaintiff Company) to take possession of the land for the purpose of executing the project by virtue of decision No. 135 of 1374 a.P. issued by the Secretary of the General People's Committee for Tourism. 5.4. The lessee (the Plaintiff Company) acknowledged that it has carried out a thorough due diligence examination of the land and has accepted to conclude a contract thereon. 5.5. It was stipulated in the contract that the land usufruct value shall be of 720,000 Libyan Dinars, to be paid annually during the contract validity period to the Treasury of the lessor at the beginning of every financial year. 5.6. The lease contract provides for the right of the lessor to send a notice to the lessee (the Plaintiff Company) in the event of a delay in the payment of the usufruct value. If the lessee fails to make the payment prior to the end of the specified period, and within thirty days following the date of notice, the lessor may grant the lessee a similar period. If no payment was made after the given deadline, the lease shall be terminated without prior warning or notice and the lessor shall have the right to clear the land through administrative means. 5.7. The lessor undertook to provide, prior to the handover of the land and at its own expense, access in order to ensure the right of passage to the lessee, its vehicles and employees in accordance with tourism specifications and undertook to provide electricity, phone, water, and sanitation services up to the borders of the plot of land within a period of six months following the signature date of the contract. 5.8. The lessee company shall prepare project designs and maps, determine related specifications, material and quantities, and take into account scientific and engineering rules in accordance with the project timetable adopted by the lessor. The lessee shall commit to delivering a copy of the design and execution documents to the lessor for review within a period of one month following the date of receipt. If no observations were made during the specified period, said documents shall be deemed final. 5.9. The lease contract stipulates in article (22) that the project execution period shall be seven and a half years starting from the receipt date of the necessary building permits in accordance with the timetable adopted by the lessor. 5.10. The lessee undertook to prepare the plot of land, demolish existing buildings and remove the rubble to public landfill sites at its own expense, following the taking over of the plot of land free of occupancies, persons and impediments, whether legal or physical, which may prevent the initiation of project execution or operation. 5.11. The lease stipulated the right of the lessee to conclude agreements and contracts with third parties to execute or operate the works of the project, provided that said agreements do not include any obligations on the part of the lessor and that the lessee remains responsible for any damage to the lessor caused by a third party. 5.12. The lessee undertook to preserve the safety and security of the site and notify the competent security authorities of any disturbance by virtue of the lease. 5.13. The lease stipulated that the investment project shall enjoy the exemptions and privileges stipulated in Law No. (5) of 1426 a.P. on the promotion of foreign capital investment and its executive regulations, and Law No. (7) of 1372 a.P. regarding Tourism and its executive regulations. 5.14. Article (23) of the lease contract stipulates that the lessee shall be entitled to make any additions or amendments to project-related activities, with the approval of the lessor. 5.15. Article (24) of the lease contract stipulates that the lessor shall be entitled to terminate the lease if the lessee does not initiate project execution within three months following the date of receipt of project execution permits, unless the lessee submits a written justification acceptable to the lessor. 5.16. The lease contract stipulated that the lessee shall hand over the project fully executed at the end of the lease contract without having the right to claim any funds or compensation in exchange for any cost incurred during project execution and preparation stages. 5.17. The lessor undertook to respect the rights of the lessee and third parties ensured by the Law, including studies, drawings and technical specifications. 5.18. The lessor and the lessee undertook not to establish any in-kind rights whatsoever on the plot of land during the contract validity period, unless within the limits of its provisions. The lessor also undertook to warrant against legal disturbances, by third parties, of enjoyment of the site. 6. On 22/6/2006, the Plaintiff Company, represented by Mr. Omar Dessouki, the Vice-President of the Board of Directors, sent a letter to Mr. Ali Fares Ouaida, the Secretary of the People's Committee for Tourism Development Authority, in which it was stated that the Company transferred the amount of USD $130,000, one hundred and thirty thousand U.S. Dollars, as stipulated in article (3) of decision No. 135 of 2006 dated 7/6/2006. The Plaintiff Company also attached thereto a copy of the money transfer receipt. 7. On 9/7/2006, the Plaintiff sent a letter to Mr. Ali Fares Ouaida, the Secretary of the People's Committee for Tourism Development Authority, in which it requested an appropriate date for the taking over of the plot of land, subject of the lease contract concluded on 8/6/2006. 8. On 29/7/2006, the Plaintiff, represented by Mr. Omar Dessouki, the Vice- President of the Board of Directors, sent a letter to Mr. Ali Fares Ouaida, the Secretary of the People's Committee for Tourism Development Authority, in which it requested a suitable date to send the proposed committee to take over the plot of land free of occupancies and impediments to put in place a project timetable and an appropriate action plan for project execution. 9. On 13/9/2006, the Plaintiff asked Mr. Ali Fares, the Secretary of the People's Committee for Tourism Development Authority, to resume official procedures to hand over the land and stated that Engineer Saad Salem shall be its authorized representative for the purpose of taking over the land to initiate project execution. 10. On 1/11/2006, the Plaintiff Company, represented by Mr. Omar Dessouki, the Vice-President of the Board of Directors, requested Mr. Ali Fares Ouaida, the Secretary of the People's Committee for Tourism Development Authority, to be provided with the specified date to hand over the land on which the tourism investment project shall be established, in accordance with article (5) of the lease contract, indicating that it fulfilled its full obligations and is preparing soil studies, project engineering designs and execution timetable, at the earliest convenience as per his request. 11. On 20/2/2007, the minutes of handing over and taking over of a touristic investment site were drawn up in the presence of the site delivery committee at the Tourism Development Authority, and Engineer Saad Ahmad Salem, the designated representative of the Plaintiff Company authorized to sign on its behalf. The minutes indicated that the two parties examined the site and specified the borders, i.e. the beach on the northern side, the highway on the southern side, public property on the eastern side and public property on the western side. The committee was represented by members Engineer Ali Ramadan El-Doukali, Engineer Hassan Bashir Kaddoura, and Engineer Khadouja Mukhtar Boro. The minutes were signed by the Head of the committee Mukhtar Mohamed El-Dawass for the Defendants and Engineer Saad Ahmad Salem for the Plaintiff and were adopted by the Secretary of the Administration Committee of the Tourism Development Authority. 12. On 27/2/2007, a project registry extract was issued under number 11/2007 indicating that the name of the project is Sidi al Andalusi Tourism Complex, the location of the project is in Sidi al Andalusi – Tajura – shabiyat Tripoli (administrative district) –, the name and surname of the legal representative is Omar Mohamed Dessouki, the date of submitting the application is 12/2/2007, the project approval decision number is 135 dated 7/6/2006, the license number granted to establish investment business has not been issued yet, further indicating that the investment costs are USD $130,000,000, the financing sources are 38.47% self-financing, 46.15% loans, 15.39% other sources. The extract also specified that the project beneficiary is Mohamed Abdulmohsen Al-Kharafi Co. for General Trading and Contracting of Kuwaiti nationality, its contribution value is USD $130 million, while its contribution percentage is of 100%, referring also to the fact that the project is exempt of investment contract stamp duty, while stipulating that the exemption validity period is unspecified. Moreover, the extract also mentioned that incoming in-kind shares of capital formation are USD $70 million in buildings and constructions, USD $10 million in equipment and material, USD $800 thousand in various transportation means, USD $10 million in furniture and supplies, USD $10 million in intellectual property rights, USD $22 million in general capital (raw materials), and the overall in-kind shares are USD $130 million. The extract was issued based on a request by the project owner for use within the limits of the law, and the data stated therein reflects the reality of the project up to the issuance date. 13. On 22/4/2007, the Plaintiff Company, represented by Engineer Saad Salem, sent a letter to the Secretary of the Tourism Authority, to which was attached the minutes of handing over and taking over of the border points signed on 20/4/2007. In this letter, the Plaintiff Company requested the removal of all occupancies, persons, and all legal and physical impediments to ensure the handing over and taking possession of the land to initiate project execution. A copy of the letter was sent to the Secretary of the General Authority for Investment Promotion. The former received this letter on 23/4/2007 and the latter received this letter on 24/4/2007. 14. On 15/5/2007, the Plaintiff Company, represented by Mr. Omar Dessouki, the Vice-President of the Board of Directors, sent another letter to the Secretary of the General Authority for Investment Promotion, in which it referred to its letter dated 22/4/2007 and stated that the land remains occupied by containers, pipes and equipment belonging to the General Company for Building and Construction guarded by a group of individuals and a small cafeteria building. The Plaintiff Company also requested that all necessary measures be taken to ensure that the site is free of impediments to initiate project execution without delay. This letter was received on that exact date and a copy was sent to the Secretary of the Tourism Authority. 15. On 1/7/2007, Mr. Ammar El-Mabruk, the Secretary of the General Authority for Tourism and Traditional Industries sent a letter to the Vice-President of the Board of Directors of the Plaintiff Company, referring to the meeting held with him with regard to approval for investing in the project without entering into a national partnership with the Plaintiff Company, provided that the latter completes hotel construction to complete stage one of the project, in preparation of its opening on the occasion of the 40th anniversary of the Revolution in 2009 A.D. The Secretary of the General Authority for Tourism and Traditional Industries also requested a reply at the earliest convenience and a pledge that the hotel shall be built by the specified date, along with a detailed timetable for project execution stages and asked that project designs be submitted for approval. Mr. Ammar El- Mabruk added that all problems impeding the completion of the project by the specified date shall be resolved. 16. On 11/7/2007, Dr. Ali Fares Ouaida, the Director of the Department for the Development of Touristic Areas, sent a letter to the Director of the Plaintiff Company, Mohammed Abdulmohsen Al-Kharafi & Sons Co., in which he requested final project plans and designs on $1 $2 size paper and a 3D project CD. 17. On 22/7/2007, the Plaintiff Company inquired with the Department of Real Estate Registry about the nature of the plot of land and requested the registration of its land usufruct right and the issuance of a real estate certificate attesting said usufruct right. The employee at the Department of Real Estate Registration in Tajura indicated that it exists on the site planning No. 796 registered in the name of the Libyan State - file No. 16813, specifying further that a contract of sale of a usufruct right was deposited thereon on behalf of Umma Bank and that said property is currently registered in the name of Umma Bank. 18. On 28/7/2007, the Plaintiff Company requested the Director of the Department for the Development of Touristic Areas to be provided with the specified date to take over the land for the purpose of finalizing the project timetable, given that it is closely related to the date of handing over the plot of land free of occupancies and impediments by virtue of the contract. 19. On 1/8/2007, the Plaintiff Company, represented by Mr. Omar Dessouki, the Vice-President of the Board of Directors, requested the Secretary of the General Authority for Tourism and Traditional Industries to: 19.1. Provide proof that the land is owned by the Libyan State and is free of mortgages or occupancies of any kind in compliance with decision No. 135 of 2006. 19.2. Handover the site free of impediments during the month of August. 19.3. Provide the company with the necessary approvals and permits for the execution of project works within a period of one week following the date of submittal of said approvals and permits. 19.4. Adopt project plans by the competent authorities within a period of one week following the submittal of said plans. 19.5. Provide the company with the necessary approval for the import of equipment and material necessary for project execution upon the submittal of the necessary applications forms. 19.6. Issue work and residency permits for the technical, financial, and administrative cadres and all necessary labor for the execution of the project upon submittal of application forms. 19.7. Issue approvals for import and necessary documentary credits and money transfers for the execution of the project works within a period of five working days as of the date of application of these forms through commercial banks and the Central Bank of Libya. 19.8. Facilitate and acquire all customs exemptions and procedures in a way that does not lead to the suspension of the works. 19.9. Fully cooperate with security forces, as well as with the tourism police force and municipal guards, to assist in expediting project execution without delay. 19.10. Approve in principle the management of the hotel through a global hotel management company. The Plaintiff Company also stated that the Authority's cooperation shall provide incentives and motivations for the achievement of the project on time, adding that a timetable was being prepared based on the main points, given that a consolidation of efforts of all relevant official authorities may assist in achieving the intended goal. Said letter was received on 1/8/2007. 20. On 1/8/2007, the Secretary of the Administrative Committee at the Public Property Authority sent a letter to the General Manager of the Umma Bank, in which he stated that the Secretary General of the General People's Committee entrusted the Public Property Authority with the task of carrying out necessary procedures to annul the decision allocating the plot of land to the Umma Bank located at Sidi al Andalusi and al-Manara in Tajura and provide an alternative plot of land to the Bank or return the amount paid in exchange for the land, and requested the Bank to refer to him in order to discuss the necessary settlement. 21. On 7/8/2007, Mr. Ammar el-Mabruk El-Taif, the Secretary of the General Authority for Tourism and Traditional Industries and the Head of the Authority sent a reply to the Vice-President of the Board of Directors of Mohammed Abdulmohsen Al-Kharafi & Sons Company, stating the following: 21.1. The Company shall be provided with whatever may be needed to prove ownership of the land, along with a usufruct right certificate for the project. 21.2. Handover of the site free of any impediment can be settled and the Company may contact the Authority to determine the impediments on the site, to be later resolved and cleared. 21.3. Approvals shall be sent to the Company upon their submittal. 21.4. Issuance of the residency and work permits submitted by the Company through the Committee specifically established to expedite all procedures relevant to the projects that shall be launched on the occasion of the 40th anniversary of Al-Fateh Revolution. 21.5. Hotel management by global companies is considered an internal affair concerning the company and the remaining points shall be resolved through Law No. (5) on the promotion of foreign capital investment, and Law No. (7) regarding Tourism Investment. 22. On 22/8/2007, Engineer Hashem Mohamed Eel-Zawi, the Assistant Secretary of the Authority for Investment Promotion, replied to the request submitted by the Plaintiff Company for a permit to erect a temporary fence around the allotted investment site in Tajura, stating that there was no objection to the erection of the fence, pending the completion of the remaining procedures. 23. On 28/8/2007, the General Company for Building and Construction received a letter from the Plaintiff Company in which it requested the transfer of all its belongings located at the project site and that the Plaintiff Company wished to erect a fence around the land upon the removal of said belongings, stating that the Plaintiff Company has contracted this plot of land for the establishment of a touristic project in Tajura in compliance with contract No. (4) of 2006 concluded with the Tourism Development Authority at the General People's Committee for Tourism, entitled the Sidi al Andalusi Tourism Complex. 24. On 2/9/2007, Mr. Ali Fares Ouaida, the Director of the Department for the Development of Touristic Areas, received a letter from the Plaintiff Company, Mohamed Abdulmohsen Al-Kharafi & Sons Co., represented by Engineer Saad Salem, including the timetable specifying the project execution course up to the handover date on the occasion of the anniversary of the Revolution. The letter also stipulated that the timetable is closely linked to the handover of the project land free of all occupancies. 25. On 11/9/2007, a real estate certificate for State property was issued on behalf of Mohamed Abdulmohsen Al-Kharafi & Sons Co. for Trading and Contracting, by virtue of which the Department of Real Estate Registration and Documentation in Tajura testified that the real estate is a plot of land owned by the Libyan people extending over an area of twenty four (24) hectares in the Center of Tajura, map No. 796, bordering the Mediterranean Sea on the north, public property on the east, Shat road on the south, and the Tourist Village on the west. It further indicates that the lease contract extends over a period of ninety years and is issued by the Kariya Milad Kathoury Office for the drawing up of contracts on behalf of Mohamed Abdulmohsen Al-Kharafi & Sons Co. for Trading and Contracting. It also stipulated that the property was registered in the temporary Socialist Real Estate Registry in folder No. 1 page 24. 26. On 17/9/2007, the Director of the Department for the Development of Touristic Areas and head of the permanent working team requested that the General Manager of the General Company for Building and Construction cooperate fully and clear the site swiftly of all occupancies to enable the Plaintiff Investor Company to initiate project execution on time, given that there is specified timetable for project execution, and that the presence of some persons, storages, supplies and belongings hinders the initiation of project execution. The Director of the Department for the Development of Touristic Areas referred in a letter sent to the General Company for Building and Construction to the letter addressed by the Plaintiff Company in which it requested that the General Company removes its belongings located at the site for the purpose of erecting a fence around the land. Said letter was received by the General Company for Building and Construction on 28/8/2007. 27. On 30/9/2007, the General Authority for Tourism and Traditional Industries sent a request to the Plaintiff Company to submit architectural drawings of the Andalusi Village project in Tajura for study, based on the approvals regarding the introduction of the project among the proposed projects to be launched on the occasion of the 40th anniversary of the Revolution on 9/9/2009, in accordance with the structure specified by the technical committee, to be submitted in triplicate form, on $1 $2 size paper, along with three hard copies of the comprehensive technical report on $1 $2 size paper, and on a CD in three copies. 28. On 8/10/2007, Dr. Ali Fares Ouaida, the Director of the Department for the Development of Touristic Areas requested that the President of the Board of Directors of the Plaintiff Company and the project consultant personally attend the exhibit for tourism investment projects on 4/11/2007, and requested that the Plaintiff Company expeditiously draws up all the necessary various designs, on a minimum size of 0.7 × 1 meter, submits the designs compiled on $1 $2 size paper in triplicate form and on a CD in three copies, and prepares three-dimensional configuration of the project master plan, provided that the plans are final, approved of, and the investor is able to prepare a visual presentation of said project. 29. On 24/10/2007, the Director of the Department for the Development of Touristic Areas received three copies and three CDs detailing the designs. 30. On 30/10/2007, Engineer Saad Salem from the Plaintiff Company sent a letter to Dr. Ali Fares Ouaida, the Director of the Department for the Development of Touristic Areas, in which he informed him that during the execution of the works on the fence around the project land, some individuals prevented the contractor from proceeding on the basis of their ownership of the land, stating that works have been stopped and that this problem has caused a delay in the execution of the works. Therefore, he requested that all necessary steps be made towards radically resolving the problem and ensuring that no future confrontation takes place. 31. On 1/11/2007, Engineer Saad Salem from the Plaintiff Company sent a letter to the Director of the Department for the Development of Touristic Areas in which he informed him that the fence was found to be destroyed on the morning of that day and that a police report was filed. 32. On 12/11/2007, the Director of the Department for the Development of Touristic Areas and head of the permanent working team requested that the Vice-President of the Board of Directors of the Plaintiff Al-Kharafi Company submits the final project designs immediately to the technical committee for review and adoption, in triplicate form, size 3 and on a CD in 3 copies, as follows: 32.1. Project's technical report 32.2. Project's master plan 32.3. Project's horizontal projections 32.4. Project's architectural façade 32.5. Project's structural sections 32.6. Project's general perspectives. 33. On 12/11/2007, Engineer Saad Salem from the Plaintiff Company sent a letter to the Director of the Department for the Development of Touristic Areas to inform him that municipal guards in Tajura rejected the permit granted to the Company by the General Authority for Investment Promotion for the erection of a temporary fence, and that the sign placed on the project land in the name of Tahrir Club in Tajura for maritime sports, diving and cricket field which claims possession and ownership of the project land, was not yet removed. He further stated that for these reasons, the temporary fence was not completed with the view of initiating project execution, which may adversely affect the project timetable. 34. On 12/11/2007, Mr. Ammar El-Mabruk, the Secretary of the General Authority for Tourism and Traditional Industries sent a letter to the Assistant Secretary of Technical Affairs and the Office for the Implementation of Housing Projects and Facilities, in which he requested a swift clearance of the site assigned for the touristic project of the Kuwaiti Al-Kharafi Company, given that the project execution period is determined by an execution timetable, and that storages and supplies belonging to the Office for the Implementation of Housing Projects and Facilities hinder the work progress of the tourism investment project, which could in turn damage the interests of the investor. 35. On 18/11/2007, the Director of the Department for the Development of Touristic Areas sent a letter to the Director of the Municipal Guard Office in Tripoli, in which he indicated that the fence on the site was attacked and destroyed, and that some individuals put up a sign claiming that the land was assigned for the construction of their sports club, stating further that this is hindering the work of the Investor Company, and that it is necessary to remove the sign and send police patrols to prevent such illicit interruptions. 36. On 22/11/2007, the Plaintiff Company sent a letter to Mr. Ammar el-Mabruk El- Taif, the Secretary of the General Authority for Tourism and Traditional Industries, in which it referred to previous correspondences on the removal of occupancies, person, legal and physical impediments from the site. It also referred to the minutes of handing over and taking over of the site border points drawn up on 20/2/2007. It also informed him that the land was still occupied by containers, pipes, equipment belonging to the General Company for Building and Construction and guarded by a group of individuals, as well as a small building consisting of a cafeteria under the name of Nakhle coffee shop owned by Ibrahim Abdel Salam Abu Zahir and Abdel Raouff Ahmad Akrim who claim that they hold a twenty-five year contract of usufruct concluded with Al Tahrir Sports and Cultural Club in Tajura. Furthermore, the Plaintiff Company stated that some citizens claimed ownership of parts of that land, indicating that according to the abovementioned, it failed to initiate execution of the project works despite finishing the preliminary designs. The Plaintiff Company also expressed its hopes for an intervention to enable it to take over the site free of impediments to initiate project execution without delay, given that no positive procedures were carried out to remove said occupancies and impediments. 37. On 5/12/2007, the Plaintiff Company received a letter from the Secretary of the General Authority for Tourism and Traditional Industries in which the latter praised the distinguished participation of the Plaintiff Company in the 2009 Al-Fateh Exhibit for Tourism Investment Projects, a fact which contributed to the success of the Exhibit and received acclaim from officials and visitors alike who prized its valuable efforts in this regard. 38. On 22/12/2007, the Vice-President of the Plaintiff Company sent a letter to the Director of the Department for the Development of Touristic Areas, in which he informed him that during the erection of the fence and the storage of building material, a group of individuals attacked the contractor's workers, and forced them to stop the works and vacate the premises under the pretense that the land is owned by the Tahrir Club in Tajura. He also informed him that the Plaintiff Company hoped that the Department entrusts security forces with the task of protecting workers from violations to enable them to continue their work and make sure that the handing over timetable is not adversely affected. 39. On 31/12/2007, the Vice-President of the Plaintiff Company sent a letter to the Secretary of the General Authority for Tourism and Traditional Industries, informing him that the Company charged the contractor on 22/10/2007 with the task of erecting the fence around the land and that municipal guards stopped the works. Furthermore, he stated that two people from the Security Forces arrived at the site and requested that both the contractor and the Engineer head to the Security Forces headquarters, although they were informed that all documents were found to be correct and in order. Accordingly, works were stopped due to the fact that these accidents were recurrent following the destruction of the fence and the erection of a fence from cement and bricks. Furthermore, attacks on the contractor and workers, forcing them to stop the works, are one issue that remained unresolved. Following the interventions of the Tourism Development Authority in coordination with the tourism police, the Company commissioned the contractor again on 27/12/2007 to store material and hire workers to initiate execution of the works under the supervision of the tourism police. However, on 29/12/2007, municipal guards stopped the works, and seized the equipment and workers under the pretense that urban planning did not approve the project. After the Tourism Development Authority ordered the company to pursue the work, and following the return of the contractor to proceed with the project execution, five municipal guard cars showed up, followed by five tourism police cars. Consequently, the works were stopped until a security car arrived at the site. Afterwards, the Tourism Development Authority requested the Plaintiff Company to stop the work and remove its equipment from the site until the matter is permanently resolved. On 30/12/2007, the Plaintiff Company discovered that the fence was destroyed yet again. Therefore, an intervention was needed, given that all these factors were adversely affecting the project execution timetable and handing over date. 40. On 13/2/2008, Mr. Ammar el-Mabruk El-Taif, the Secretary of the General Authority for Tourism and Traditional Industries sent a letter to the People's Leadership Coordinator in Tajura, in which he requested the opinion of the People's Leadership in Tajura to make the proper decision towards investors with whom investment contracts were concluded and to whom land usufruct certificates were issued, such as the tourism Andalus project for the Kuwaiti Al- Kharafi Company, referring to the meeting held with the Coordinator concerning touristic projects executed on Tajura beaches, based on the decision of the People's Leadership Coordinator in Tajura of refraining from establishing such projects in the region located on the coast between Andalus village to the west and Harrouj village to the east. 41. On 19/2/2008, Dr. Ali Fares Ouaida, the Director of the Department for the Development of Touristic Areas, asked the Vice President of the Board of Directors of Mohamed Abdulmohsen Al-Kharafi & Sons Co. to participate in the presentation of the tourism company's project designs, in such a way to promote these projects in terms of investment, operational and marketing aspects. That request was reiterated on 7/10/2008. 42. On 14/5/2008, Mr. Ezz El-Din Barakat, the Director of the Technical Administration of MAK Holding Company for tourism and hotels sent a letter to the Secretary of the People's Committee for Tourism, to which he attached the mechanical, construction and architectural preliminary drawings along with the project's technical report. In his letter, the Director referred to the endeavors carried out for the execution of the project. He also indicated that the Company contracted the Holiday Inn International Company for hotel and hotel apartment management. Also, the Company contracted another distinguished company for project design to provide execution supervision and design services, as well as Hill International Company for execution work management. Contractors were also qualified for the execution of works. This letter was delivered on 15/5/2008. 43. On 15/9/2008, Mr. Ezz El-Din Barakat, the Director of the Technical Administration of MAK Holding Company for tourism and hotels sent a letter to the Secretary of the People's Committee for Tourism, in which he referred to his correspondence delivered on 15/5/2008, reiterating its content and requesting assistance to the contractor entrusted with the project execution to overcome impediments still present at the site and delaying the project execution timetable. The impediments included a workshop for the highway contractor placed inside the project land, along with an open sewer line that crosses the project land, carrying untreated sewage to the sea. This letter was received on 15/9/2008. 44. On 23/9/2008, the Director of the Technical Administration of MAK Holding Company for tourism and hotels sent a letter to the Secretary of the People's Committee for Tourism, reasserting for the third time the need for assistance to initiate project execution, in the hope of achieving it on time, reiterating what was mentioned earlier about impediments on the site, and referring to article (5) of the lease contract concluded between the Tourism Development Authority and Mohamed Abdulmohsen Al-Kharafi & Sons Co. for Trading and Contracting, which stipulates: (The first party shall be required to hand over the plot of land free of occupancies and persons to the second party, guaranteeing that there are no physical or legal impediments preventing the initiation of project execution or operation during the usufruct period). This letter was delivered on 23/9/2008. 45. On 21/1/2009, the Director of the Department for the Development of Touristic Areas and head of the permanent working team sent a letter to the Vice President of the Board of Directors of Mohamed Abdulmohsen Al-Kharafi & Sons Company, in which he referred to the reasons mentioned by the latter that hindered the initiation of project execution to be launched on the occasion of the 40th anniversary of the Revolution on 9/9/2009. Given these reasons, a suggestion was made to choose an alternative site for project execution, provided that the Company retains this site pending the resolution of all impediments. He further stated that if the Company refuses to choose an alternative site and prefers to wait for the resolution of the problems on the current site, and given that this decision is left to the Company, then the problems impeding the initiation of project execution shall be resolved, indicating that he was well aware of the importance of respecting the timetable and the reasons for the delay. 46. On 11/7/2009, Vice President of the Board of Directors of Mohamed Abdulmohsen Al-Kharafi & Sons Company sent a letter to Dr. Mahmoud Ahmad El-Foutaissy, the Secretary of the Administration Committee of the General Authority for Investment and Ownership, in which he mentioned that the Company gained the trust of official authorities in the Great Libyan Jamahiriya to initiate the tourism investment activity by virtue of Investment Law No. 5 of 1997 and Law No. 7 of 1372 a.P. Furthermore, he stated that the Plaintiff Company concluded a contract with the General People's Committee for Tourism – Tourism Development Authority on 8/6/2006 to acquire a plot of land extending over an area of twenty four (24) hectares in Tajura in Tripoli. The land was registered and a real estate certificate was issued on behalf of the Company in exchange for the establishment of a major touristic project composed of a five-star hotel of 450 rooms, a commercial mall, in addition to 84 hotel apartments in accordance with the contract concluded with the Tourism Development Authority. He further stated that the Company immediately prepared economic feasibility studies and project technical designs in cooperation with the Tourism Development Authority. These designs were delivered and approved with the knowledge of the Authority on 24/10/2007. It was agreed that the hotel management company would be Holiday Inn which also participated in preparing the designs. The Company also contracted the company which shall carry out project building management and subcontractors. As a result, the Company incurred huge amounts of money and was surprised to find at the beginning of the project execution that the site was not free of occupancies and impediments. Accordingly, it notified all competent authorities that it was unable to take over the site and therefore was unable to meet the handing over date. It submitted an application to delay the project handover date, pending the resolution of problems and impediments on the project land. The Company was at the time awaiting assistance in resolving these problems to resume project works. A copy of this letter was sent to the Secretary of the General People's Committee, the Secretary of the General Authority for Tourism and Traditional Industries, the Secretary of the General People's Committee for Industry, Economy and Trade, the Director of the Department of the General Authority for Investment and Ownership, the Director of the Office for Committee Affairs, and the Director of the Legal Office. 47. On 1/9/2009, Engineer Saad Salem from the Mohamed Abdulmohsen Al-Kharafi & Sons Company sent a letter to the Director of the Department for Real Estate Affairs at the General Authority for Investment and Ownership, informing him that to date, no positive steps were made to remove the occupancies and impediments on the site preventing the initiation of project execution. This letter was delivered on 3/9/2009. 48. On 22/10/2009, Mr. Omar Dessouki, the President of the Board of Directors of Mohamed Abdulmohsen Al-Kharafi & Sons Company, sent a letter to Dr. Mahmoud Ahmad El-Foutaissy, the Secretary of the Administration Committee of the General Authority for Investment and Ownership, in which he referred to the letter sent on 11/7/2009 and its content, indicating that to date, the land has not yet been cleared of impediments, thus preventing the taking over of the land in compliance with Article (5) of the contract concluded with the Tourism Development Authority at the General People's Committee for Tourism on 8/6/2006. He therefore requested that all necessary procedures are made to remove the impediments and hand over the land, referring to costs incurred by the Company for the project designs and testing, and the losses incurred from the delay, which adversely affects the Company and project execution, and prevents it from profiting from its services and deprives all concerned parties from the return on their investment. This letter was delivered on 22/10/2009. 49. On 9/1/2010, Engineer Saad Salem from the Mohamed Abdulmohsen Al-Kharafi Company asked the Secretary of the Administration Committee of the General Authority for Investment and Ownership to alert the competent authorities to stop the violations arising from some individuals who began to erect a fence around the land, subject of the contract concluded with the Tourism Development Authority at the General People's Committee for Tourism on 8/6/2006, and the provisions of article (5) therein stipulating the taking over of the land free of impediments. He also mentioned that when the Company began building the fence around the land, the works were stopped despite the fact that the Company received the proper approval from the competent authorities. A copy of this letter was sent on 10/1/2010 to the Secretary of the General People's Committee for Industry, Economy and Trade, and the Secretary of the General Authority for Tourism and Traditional Industries. 50. On 9/1/2010, Mohamed Abdulmohsen Al-Kharafi & Sons Company asked Professor Abdel Raouff Bashir El-Najjar, attorney at law, to file a police report at the police station in Tajura to verify a fact regarding the public property consisting of a plot of land extending over an area of twenty four (24) hectares in Tajura, subject of map No. 796, and authentication file No. 16813, bordering the Mediterranean Sea on the north, public property on the east, Shat road on the south, and the Tourist Village on the west where it owns a usufruct right, by virtue of the lease contract. The police report was filed on grounds that this real estate is to date occupied by a group of individuals and the Company is unable to utilize it in accordance with what was mentioned in the contract. Professor Abdel Raouff Bashir El-Najjar replied by saying that a police report was filed in this regard in the Tajura police station on 10/1/2010. 51. On 2/2/2010, Dr. Jamal El-Nouweissry El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to Mr. Omar Mohamed Dessouki, the Vice-President of the Board of Directors of Mohamed Abdulmohsen Al-Kharafi & Sons Company, in which he referred to decision No. 135 of 1374 a.P. (2006 A.D.) issued by the General People's Committee for Tourism regarding the approval for the execution of the Sidi al Andalusi Tourism Complex project in Tajura, Tripoli. He also referred to contract No. 4 of 2006 A.D. on the usufruct of said site concluded formerly with the Tourism Development Authority and requested that the Company coordinates with the Authority for the effective taking over of the site and submits all architectural drawings and designs for discussion and approval by the competent authorities. He also asked him to transfer a part of the investment project capital within a period of 30 days as of the receipt of the letter. 52. On 15/2/2010, Mohamed Abdulmohsen Al-Kharafi & Sons Company sent a reply to Dr. Jamal El-Lamoushi, the Secretary of the General Authority for Investment and Ownership dated 2/2/2010 (Nawar 1378 a.P.), to which it attached drawings containing electrical, mechanical, construction and architectural drawings of the Sidi al Andalusi Tourism Complex project in Tajura. It also mentioned that the set of drawings were submitted in triplicate form to the General People's Committee for Tourism on May 14, 2008. Given that no observations were made on the designs, the Company requested that said designs be approved, indicating that the attachments to its letter were the set of architectural drawings, construction drawings, electro-mechanical drawings, fire-resistant drawings, and a CD containing all project-related details. This letter was delivered on 16/2/2010. 53. On 11/3/2010, Engineer Saad Salem from the Mohamed Abdulmohsen Al-Kharafi & Sons Company sent a letter to Dr. Jamal El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership in reply to his letter dated 20/2/2010 on the Sidi al Andalusi Tourism Complex, in which he indicated that all necessary steps were taken by the Company to comply with the request of coordination with the competent Authority on handover procedures, and suggested two dates, 10 and 11/3/2010, for handing over and taking over, given that this process requires the presence of legal and administrative representatives as well as engineering consultants from the Company. The Company requested the specification and proposal of the appropriate date, given that the Authority has not yet replied to the proposal mentioned in its letter dated 3/3/2010. The letter dated 11/3/2010 was delivered on 11/3/2010 and a copy of this letter was sent to the Secretary of the General People's Committee for Industry, Economy and Trade, the Governor of the Central Bank in Libya and the Director of the Investment Authority. 54. On 19/4/2010, Engineer Saad Salem from the Mohamed Abdulmohsen Al-Kharafi & Sons Co. sent a letter to Dr. Jamal El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership, in which he requested a meeting with him, referring to his letter dated 11/3/2010. 55. On 9/6/2010, Dr. Jamal El-Nouweissry El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures, to which he attached the Decision of the General People's Committee for Industry, Economy and Trade No. 203 of 1378 a.P. (2010 A.D.) issued on 10/5/2010 by virtue of which Decision of the General People's Committee for Tourism No. 135 of 2006 regarding the authorization for the execution of a tourism investment project (a five-star tourist hotel, a service commercial center, hotel apartments, restaurants, and recreational areas) was annulled, and requested the Company to end all the procedures adopted for the initiation of project execution. A copy of the letter was sent to the Secretary of the General People's Committee, the Secretary of the Secretary of the General People's Committee for Industry, Economy and Trade, the Governor of the Central Bank in Libya, the Secretary of the Administration Committee of the Department of Real Estate Registration and Documentation and the Department of Real Estate Affairs, the Director of the Office for Legal Affairs and the Director of the Office for Committee Affairs. 56. The Decision of the General People's Committee for Industry, Economy and Trade No. 203 of 1378 a.P. (2010 A.D.), in its first article, stipulated the following: "Approval on the investment granted to Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting and Industrial Structures by virtue of Decision No. 135 of 1374 a.P. (2006 A.D.) referred to in the decision preamble as the tourism investment project execution, shall be cancelled”. Article (2) of said decision also stipulated that the “General Authority for Investment and Ownership shall carry out all necessary legal procedures to cancel the project registration from the Investment Registry and apply the provisions of the previous article”. Furthermore, article (3) of said decision stipulated that “the decision shall come into force as of its issuance date, and all competent authorities must implement its provisions”. The decision was issued on 10/5/2010 as mentioned on the bottom of the decision page. 57. On 17/6/2010, Mr. Omar Dessouki, the Vice-President of the Board of Directors and authorized representative of the Plaintiff Company sent a letter to the Secretary of the General People's Committee for Industry, Economy and Trade, in which he stated that the Company was astonished with the decision issued by the General People’s Committee for Industry, Economy and Trade No. 230 of 2010, abrogating decision No. 135 of 2006, without providing any cause or justifications for the issuance of such a decision at a time when the Company was discussing the handover of the site to initiate project execution with the General Authority for Investment and Ownership. He further stated that the Company did not take over the land from the beginning of the contracting period and was faced with police orders to stop working on the site. Furthermore, the Company had found materials and facilities belonging to third parties on the site and discovered that the land was owned by other companies and banks, making it impossible for the Company to take over the land despite the fact that it owns the proper real estate certificate which gives it priority and precedence over third parties to take possession of the project land. He went on to say that the Company had corresponded with several competent authorities, asking them for assistance in clearing and handing over the land to enable it to initiate project execution and prevent any further delay, in which it stated that it had prepared the necessary designs and the economic feasibility study and had contracted Holiday Inn Company for hotel management to manage the project. Furthermore, the Company had sent all these documents to the General Authority for Investment and Ownership for approval and issuance of permits, had settled the percentage predetermined for the project in accordance with article (3) of decision No. 135 of 1374 a.P. and had provided all necessary assurances that it shall not fail to execute the project following the administrative expenses, losses and costs it had incurred. Mr. Dessouki stated further that the Company had opened accounts in Libyan banks and transferred the amount of USD $130,000, i.e. 1% of the investment value, adding that the project cannot have an estimated cost without the land. Mr. Dessouki also asserted that the Company had spent millions of dollars out of its foreign accounts and had agreed to join hands with any public or private Libyan partner when the Investment Authority so requested. The Company had also accepted to work with any company suggested by the Authority, which demonstrated its willingness to execute the project either solely or jointly with third parties. Furthermore, Mr. Dessouki indicated that the Company had complied with all legal formalities, determined to proceed and initiate project execution, stating that the past reasons for delay were still existent and were not caused by the Company, which remains to this day the definite aggrieved party. Moreover, Mr. Dessouki had asked that the Authority reconsiders the matter, annuls Decision No. 203 of 2010, and removes all the obstacles from the land, in preparation of the handing over of the land free of obstacles and legal impediments, stating that the Company shall accept any responsibility for any delay on its part if the annulment was based thereon, but such a delay was inexistent. Mr. Dessouki concluded by saying that he requested a meeting to discuss the reasons behind the issuance of the decision and asserted the Company's willingness to submit all necessary documents supporting its case in order to recover the land and initiate project execution. This letter was delivered on 20/6/2010. A copy was sent to the Secretary of the Administration Committee of the General Authority for Investment and Ownership, the Governor of the Central Bank in Libya, the Secretary of the Administration Committee of the Department of Real Estate Registration and Documentation and the Department of Real Estate Affairs, the Director of the Office for Legal Affairs and the Director of the Office for Committee Affairs. 58. On 8/7/2010, the Plaintiff Company sent a letter to the Secretary of the Privatization and Investment Board informing the latter of not having received an answer to its abovementioned letters and that no justification of the decision to withdraw the project has been made to it. The Plaintiff Company said that it has consequently found itself obliged to move from the phase of cooperation and joint investment to a phase of disputes and conflict, but that it trusts the Libyan Laws in this regard. The letter was delivered on 8/7/2010. A copy was sent to the Secretary of the General People’s Committee, the Governor of the Central Bank in Libya, the Secretary of the Committee of the Department of Real Estate Registration and Documentation and the Department of Real Estate Affairs, the Director of the Office for Legal Affairs and the Director of the Office for Committee Affairs. 59. On 4/8/2010 Attorney Rajab Bashir El-Bakhnug, representing the Plaintiff Company, sent a letter to the Secretary of the Committee of the General Authority for Investment and Ownership soliciting a response to the company’s letters sent on 17/6, 29/6, and 8/7/2010, in which the Company had sought to know the grounds on which the annulment stands. In the letter, the Company attributes the delay to the Authority, a fact that can be proved by the dozens of letters expressing the Company’s complaints and claims concerning the handover of the project land in order to start the execution of the project. The letter was delivered on 5/8/2010. 60. On 13/8/2010, Dr. Jamal El-Nouweissry El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to the Vice-President of the Board of Directors of the Plaintiff Company by virtue of which he informs the latter that the General Authority for Investment and Ownership has spared no effort and has provided all the possible assistance and support for the Company to execute the project, that the project execution authorization decision granted to the Company was issued in conformity with the conditions and requirements of Law No. (5) of 1997 and its executive regulations including the obligation to execute within a specific timeframe, and that the Authority had warned the Company of the need to execute its commitments under penalty of law. The Authority’s letter also mentioned that the project site is one of the best sites in Tripoli allocated to the Company based on trust in the latter’s capacity to execute this vital project, but that it is unacceptable that a 24-hectare-land located at the heart of Tripoli remains unused for four years. The letter affirms that the cancellation of the project license does not imply a rupture in ties, and that the Authority is ready to provide the necessary assistance to the Company for the execution of any investment project that the latter sees appropriate in the Great Libyan Jamahiriya. 61. On 17/8/2010, Attorney Rajab Bashir El-Bakhnug representing the Plaintiff Company replied in a letter to Dr. Jamal El-Nouweissry El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership, whereby he affirms that the cancellation of the project has resulted in significant damage and financial loss to the company, which shall be borne by the party committing a violation of the law that governs the project and guarantees the right to compensation. The letter also mentioned that the Company had been unable to execute the project because the land was not handed over; knowing that the handing over of the project site is the first obligation of the General Authority for Investment and Ownership vis-à-vis the Company which shall, in turn, initiate the project execution. Therefore, the Authority’s failure, to date, to fulfill its obligation to hand over the land, is the reason of the delay and the cause of the damage and loss incurred by the Company whose right to compensation is guaranteed by the Libyan Law. El- Bakhnug added that since the Authority’s letter dated 13/7/2010 A.D. failed to provide any legal or reasonable justification allowing the General Authority for Investment and Ownership to cancel the project, he recalls his request to the Authority to present the legal grounds of cancelling the project awarded to the Company while emphasizing that the delay in execution does not incur any liability on behalf of the Company but lays the full legal liability on the General Authority for Investment and Ownership alone. 62. On 13/9/2010, Attorney Rajab Bashir El-Bakhnug representing the Plaintiff Company addressed a notice, through the bailiff, in which he mentioned that Mohamed Abdulmohsen Al-Kharafi & Sons Company has lodged a request to approve the establishment of a tourism investment project (a hotel, a commercial center, apartments, restaurants, and recreational areas) in Tripoli as per Law No. (5) of 1997, and Law No. (7) of 2004. The Company had also submitted the necessary studies, and Decision No. (135) of 2006 had been issued. On 8/6/2006, the Company signed a land lease contract with the Tourism Development Authority and paid the ensuing fees, most important of which was 1% of the project value. Consequently, a real estate certificate of the 24 hectares project site was issued with a ninety-year validity. The Company prepared the studies, drawings, and designs, sent them to the Department for the Development of Touristic Areas, and tried several times to take over the land, but third parties were occupying the site, and the municipal guard prohibited the Company from erecting a fence thereon. Correspondence in regards to the issue continued from 15/5/2007 until May 2010 without the land being evacuated nor handed over to the Company. The Company was later surprised by the issuance of Decision No. (203) by the General People’s Committee for Industry, Economy, and Trade cancelling the project without any justification thereof, while the General Authority for Investment and Ownership was violating the law by failing to perform its legal obligations as per the contract and the Law, including the obligation to hand over the project land free of occupancies and persons, and provide support to the Company during the erection of the fence and execution of the project. The letter also mentioned that the Company had already notified the General Authority for Investment and Ownership to decide, within a period of thirty days, either to annul Decision No. (203) of 2010 issued by the General People’s Committee for Industry, Economy, and Trade, and handover the project land free of persons and occupancies and provide support for the Company during the project execution, or to pay the Company a compensation of five million US dollars that only partly covers the losses incurred so far in project related expenses, and that the Company says is ready to corroborate with conclusive documents. In both cases, the Company accepts to cancel the project and terminate the contractual relationship between the two parties. Nevertheless, if the Authority does not approve any of the two options, the Plaintiff Company, Mohamed Abdulmohsen Al-Kharafi & Sons Co. preserves its right to resort to arbitration as per the Contract and agreement with the General People’s Committee for Tourism, as it also preserves its right to claim a compensation of 5.4 million and four hundred thousand US dollars covering the total of lost expenses, another fifty million US dollars covering part of its lost profits during the project life span- a right guaranteed and warranted by the Libyan Laws-, and a reasonable amount in compensation of moral damages incurred by the Company- being an international specialized Company with high reputation in terms of executing international commitments towards its clients-, as well as a compensation of all the expenses related to attorneys and arbitral proceedings, which shall take effect upon the lapse of the said thirty-day period until the final settlement of accounts between the two parties. The notice was delivered on 13/9/2012. 63. On 11/10/2010, Dr. Jamal El-Nouweissry El-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to the Vice-President of the Board of Directors of the Plaintiff Company acknowledging receipt of notice through bailiff on 28/9/1378 a.P./2010 A.D. by virtue of which the latter requested either the annulment of Decision (203) of 2010 or compensation. The Secretary further stated that the Authority has spared no effort and overcome all difficulties for the Company to execute the project in due time and suggested several solutions in this regard. He added that the cancellation decision does not intend to eliminate the Company’s role in the Libyan investment sector but was necessary in the framework of applying the applicable laws, and that, in view of the Company’s good reputation, the Authority assures once again its willingness to assist the Company in finding a location where it could establish a project that it deems appropriate. In the letter, the Authority suggested to hold a joint expert meeting tasked to find a common ground for cooperation and benefit from the Company’s investment potential in the Great Libyan Jamahiriya. According to the Authority, the suggested meeting would also serve as a platform to discuss the repercussions of Decision No. (203) of 2010 A.D. in a direct manner so as to find solutions that promote joint and mutually advantageous collaboration and investment, stressing that the Authority is keen on eliminating all obstacles and problems preventing the Company and other investors in the Great Libyan Jamahiriya from executing, managing, and operating their projects in a timely, beneficial, and profitable manner, hence achieving the goals of the Law on Investment Promotion in the Great Libyan Jamahiriya. A copy of the letter was sent to the Director General of the Inter-Arab Investment Guarantee Corporation (IAIGC). 64. On 29/10/2010, Attorney Rajab Bashir El-Bakhnug representing the Plaintiff Company replied to the letter of the Secretary of the Administration Committee of the General Authority for Investment and Ownership dated 11/10/2011 assuring that the Plaintiff Company had already prepared the studies, drawings, and designs and therefore insists on the location agreed upon in the contract and regrets that the Authority has failed, as implied in the letter, to hand over the said site. El-Bakhnug recalled his previous letter of 17/8/2010 and his notice of 13/9/2010 communicated through the bailiff and the Litigation Department. He also attached to the letter the bank statements revealing the Company’s spending on the projects amounting to USD 5,746,000 (five million seven hundred and forty six million US dollars), and finally expressed his wish to hold a meeting within one week as of the letter date in order to discuss the issue and reach an amicable solution. 65. On 12/1/2011, the Plaintiff Company sent a letter to Dr. Jamal El-Nouweissry el-Lamoushi, the Secretary of the Administration Committee of the General Authority for Investment and Ownership, thereby confirming that it had delivered all project-related documents to a team of counsels with the intention of initiating arbitral proceedings. Nevertheless, prior to initiating the arbitral proceedings, the Company reiterates its sincere wish to work and invest in the Great Libyan Jamahiriya, and insists on the execution of the same project on the same land as all the studies and drawings were prepared accordingly upon the legal conclusion of the contract for investment on the said land. The letter also mentioned that the Company was - and still is - not wishing to dispute or initiate legal action against the Authority, and that it certainly does not seek enrichment at the expense of the latter; However, it insists to protect the funds of shareholders and execute the project related commitments to third parties, hoping that the Authority would review the decision and looking forward to being called again to start the project execution of the same land and site prior to initiating the arbitral proceedings, so as to stop and cancel the arbitration. The Company finally wished to consider its request as a matter of utmost importance and urgency. The said letter was delivered on 13/1/2011. 66. On 26/3/2011, the Vice-President of the Board of Directors of the Plaintiff Company addressed a letter to H.E. the Secretary General of the League of Arab States informing the latter that Mohamed Abdulmohsen Al-Kharafi & Sons Company L.L.C (a Kuwaiti Company) had, by virtue of Decision No. (135) of 2006, concluded a contract with the General People’s Committee for Tourism representing the Great Socialist Libyan Jamahiriya, to invest in touristic activities. The said contract No. (4) was signed on 8/6/2006 under Investment Law No. (5) of 1997 and Law No. (7) of 2004 upon the Company’s fulfillment of all administrative, financial, and legal requirements necessary for the completion of the contract. However, on 10/5/2010, the Company was surprised to know that the General People’s Committee for Industry, Economy, and Trade has issued Decision No. (203) of 2010 cancelling and withdrawing the said project. The Company failed to reach any amicable solution for the issue: the unjust decision has inflicted it with an enormous loss, not to mention the moral damages, while the Libyan authorities were unable to present any justification of the cancellation. Nevertheless, since agreements and contracts are subject to the Unified Agreement for the Investment of Arab Capital in the Arab States issued on 26 November 1980, and since Article 29 of the contract with Libyan authorities provides for the referral of disputes arising between the two parties to arbitration- unless a mutually satisfying amicable solution is reached- the Company decided to initiate arbitral proceedings against the Great Socialist People’s Libyan Jamahiriya and the concerned authorities and departments affiliated thereto, and to appoint, as arbitrator from its side, Dr. Ibrahim Fawzi, former Egyptian Minister of Industry, who accepted the appointment. 67. On 11/4/2011, the Director of the Office for Legal Affairs addressed a statement to the Vice-President of the Board of Directors of the Plaintiff Company (in Libya), signed for him by Hassan Abdel Latif, minister plenipotentiary at the Secretariat of the League of Arab States, informing the Plaintiff Company thereby that, after presenting the case to H.E the Secretary General and informing him of the Company’s decision to initiate arbitral proceedings against the Great Socialist Arab Libyan Jamahiriya and its affiliated authorities and departments as per the contract concluded with the Company, H.E. approved that the Company initiates the necessary arbitral proceedings based on the provisions stipulated in the Conciliation and Arbitration Annex of the Unified Agreement for the Investment of Arab Capital in the Arab States. 68. On 26/5/2011, the Plaintiff Company has sent a notice, through a special bailiff of the South-Tripoli Court of First Instance, to the Secretary of the General People’s Committee, the Secretary of the General People’s Committee for Industry, Economy, and Trade, the Secretary of the General People’s Committee for Finance, and the legal representative of the General Authority for Investment and Ownership, each acting in his own capacity, and all represented by the Litigation Department at the Court Complex, El Sidi Street, Tripoli. The notice mentioned that the Company had already approached the General People’s Committee for Tourism in the Great Libyan Jamahiriya seeking its approval to invest in a touristic project in Tripoli pursuant to Law No. (5) of 1997 and Law No. (7) of 2004, and that pursuant to Decision No. 135/2006 issued by the Secretary of the General People’s Committee for Tourism on 7/6/2006, the Company signed the contract for land lease from the Tourism Development Authority on 8/6/2006, and settled all related fees, and tried several times to take over the land after having prepared all the studies and designs that are necessary for the project execution and initiated correspondence with all concerned parties to take over the site. But the Company was surprised, on 6/6/2010, by the General People’s Committee for Industry, Economy, and Trade’s Decision No. (203) of 2010 cancelling the entire project without any justification. Consequently, the Company sent letters to the legal representative of the General Authority for Investment and Ownership acting in his own capacity, on 17/6/2010 and 29/6/2010 and 8/7/2010 requesting to schedule a meeting to discuss the case, then sent other letters on 4/8/2010 and 17/8/2010 seeking the legal justification of the project cancellation. However the General Authority for Investment and Ownership replied only once to the correspondences of the company by a letter dated 13/7/2010 communicating general information about the project without mentioning any legal grounds justifying the project cancellation. Similarly, the letter mentioned that the delay is due to the shortcoming and unhelpfulness caused formerly by the Tourism Development Authority, and currently by the General Authority for Investment and Ownership that has breached the law and failed to fulfill its legal responsibilities as per the contract and the Law, including the handover of the leased land free of occupancies and persons, and supporting the Company throughout the process of building fences and executing the project. The Plaintiff Company also stated in its notice that the perusal of project related documents and correspondence proves that the delay was caused formerly by the Tourism Development Authority and currently by the General Authority for Investment and Ownership and that no shortcoming or contravention originated from the side of the Company that is still eager, willing, determined, and motivated to execute the project in the best way possible, and the shortest time frame practicable, for the benefit of both parties. The notice highlighted the fact that all efforts exerted to reach an amicable solution have failed but the Company’s rights are protected by the Libyan Law No. (5) of 1997 and Law No. (7) of 2004, as well as the Civil Libyan Law and the Unified Agreement for the Investment of Arab Capital in the Arab States, that is binding to the Great Socialist People’s Arab Libyan Jamahiriya being a signatory thereof. The Plaintiff Company also confirmed that it had notified the official Libyan authorities of the arbitration whether administratively or financially involved, appointed Dr. Ibrahim Fawzi to be a member of the arbitral Tribunal that will decide the arbitration pursuant to the provisions of the Law and the abovementioned Unified Agreement, and requested the parties to be notified to appoint their own arbitrators within a period of thirty days as of the date of receipt of the notice, otherwise the League of Arab States shall make the said appointment on their behalf pursuant to the provisions of the Law and of the Unified Agreement for the Investment of Arab Capital in the Arab States. Once the Arbitral Tribunal is complete, the Company shall submit the dispute thereto and claim the compensation of all its losses and material and moral damages incurred by the illicit cancellation of its tourist investment project in Libya, and the lost benefits of the anticipated life span and investment duration of the project. The bailiff delivered copies of the notice sent by the attorney of the Plaintiff Company Mohamed Abdulmohsen Al-Kharafi & Sons for General Trading and Contracting, and Industrial Structures, along with a copy of the notice on the decision to resort to arbitration and request to appoint an arbitrator, through Mr. Abdul Ghani Al Nasiri- in his capacity as Secretary of Administration at the Tripoli Litigation Department- who is authorized to represent the four parties to be notified in their own capacities, and to sign the acknowledgement of receipt on their behalf, which he did. The said notice sent by the Plaintiff Company along with the request to resort to arbitration and to appoint an arbitrator consists of five pages. The bailiff has notified the parties of the need to activate the agreed upon arbitration and appoint an arbitrator as per the Law and the Unified Agreement for the Investment of Arab Capital in the Arab States. Attorney Rajab Bashir El-Bakhnug signed for the Plaintiff Company and the notice was delivered on 26/5/2006. Chapter Two: Statements of the Plaintiff: 1. On the Liability of the Defendants: The Plaintiff Company stated that following the promulgation of Law No. (5) of 1997 on the Promotion of Foreign Capital Investment in Libya, it decided to submit a request to invest in a major touristic project in Libya. Accordingly, a contract was signed by and between the Plaintiff Company as foreign investor, and the Libyan State represented by the Ministry of Tourism in its capacity of the administrative authority competent in Libya to look into tourism investment requests and issue the necessary approvals and licenses thereof. Thus, by the contract signed on 8/6/2006, the Tourism Development Authority, being one of the departments of the Libyan Ministry of Tourism at the time, leased a 24-hectare state-owned land located on the seaside area of Tajura in Tripoli and categorized for tourist projects, for a period of ninety years starting from the date of taking over of the land. The Plaintiff Company added that the Tourism Development Authority undertook to hand over the land free of occupancies, and that the contract sets forth an obligation to pay the annual rent in advance, provided that the first year rent is paid within thirty days as of the date of taking over of the land. It further mentioned that the Tourism Development Authority also undertook to provide passageways, electricity, telephone, water, and sanitation within a period not exceeding six months as of the date of signature of the contract, and not to establish any in-kind rights on the land throughout the contract validity. The Plaintiff Company undertook to pay the rent in due time, to prepare the project designs and submit them to the Tourism Development Authority, not to waive its right to lease to third parties, and to complete the project within a period of seven years and a half starting from the date of issuance of the building permit. Both parties agreed that the investment project shall enjoy the exemptions and privileges set forth in Law No. (5) of 1997 and provisions of Law No. (7) of 2004 on Tourism. Moreover, the two parties to the contract agreed to act in accordance with Law No. (5) of 1997, Law No. (7) of 2004, and other relevant Libyan Laws when the contract fails to cover the situation at hand, and that any dispute arising from the interpretation or performance of the contract shall be solved amicably, or otherwise referred to arbitration as per the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States of 26/11/1980, given that the said Agreement is binding to the Libyan State in matters related to Arab Investments. The Plaintiff Company also said that the Libyan Minister of Tourism issued Decision No. (135) of 2006 after it had submitted the necessary studies and documents and received approval on the investment in a tourist project consisting of a tourist hotel, a commercial center, residential apartments, restaurants, and recreational areas in the region of Tajura, Sidi Al Andalusi in Tripoli, at a total value of 130 million USD and for a period of ninety years, as per the provisions of Law No. (5) of 1997 on the Promotion of Foreign Capital Investments and Law No. (7) of 2004. The Company also mentioned that it had paid 130 thousand USD to the Tourism Development Authority against the latter’s perusal of drawings and designs, and that the project was registered under No. 11/2006 in the Investment Registry pursuant to which a real estate certificate was issued from the Department of Real Estate Registration and Documentation on 11/9/2007 proving that the 24-hectare land is owned by the Libyan State and has been leased to the Plaintiff Company for a period of ninety years. However, the Plaintiff Company has been claiming since 29/7/2006 and until 9/6/2010 the handing over of the land free of occupancies and persons in order to start the project execution, while the Defendants have been neglecting, failing, and subsequently refraining from fulfilling their commitment to hand over the land. The third Defendant who was unable to hand over the land revealed in some of its letters that the land was actually sold to the Umma Bank. The sale was later confirmed by the Department of Real Estate Registry, and conclusively proved the ill intention of the Defendants. The Plaintiff Company attempted to save what could be saved after the delimitation of the borders of the land by trying to erect an external fence to protect the land but encountered legal disturbances, by third parties, of enjoyment of the site. The third Defendant, being called upon by the Company to intervene and stop such disturbance, failed to fulfill its obligation to provide guarantee against any disturbance of quiet possession by a third party pursuant to the contract and the Libyan Civil Law. To top it all, the Defendants added to their contractual liability by cancelling the approval granted to the Plaintiff Company by virtue of Decision No (135) of 2006, whereby the said Company was notified of Decision No (203) of 2010 issued by the Minister of Industry and Trade cancelling the former approval decision. The Defendants refused to review the cancellation decision and rejected all amicable solutions to the prejudice and damages incurred by the Plaintiff Company by reason of the cancellation. All of the abovementioned events have incurred contractual liability on the Defendants who, without any legal ground whatsoever from the applicable Libyan Law agreed upon by both parties or any other law in the world, refused to satisfy their commitments vis-à-vis the Plaintiff Company set forth in the lease contract and the Civil Law, and breached the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States. The Plaintiff Company added that all elements of contractual liability are available from the side of the Defendants and that, as is internationally known, the elements of the contractual liability are three: the contractual fault, the damages resulting therefrom, and the causal relationship between the contractual fault and the resulting damages. Based on the above, it has narrated the history of the relationship between the two disputing parties for the arbitral Tribunal to consider it when assessing the damages. The Company identifies that the contractual fault of the Defendants consists in entirely breaching the terms of the lease contract concluded on 8/6/2006 by failing to handover the leased land - knowing that the said land handing over is a major obligation of the third Defendant - and failing to warrant against any disturbances, by third party, of the enjoyment of the site, and failing to satisfy any of their contractual obligations, hence also violating Decision No (135) of 2006 issued by the Ministry of Tourism in Libya by the tourism-investment-related powers then granted thereto by virtue of Law No. (7) of 2004. The said Decision actually constitutes the contract that has granted to the Plaintiff Company the right to establish a touristic investment project and enjoy the ownership and investment of the said project for a period of ninety years along with the privileges set forth in Law No. (5) of 1997 on the Promotion of Foreign Capital Investments. Furthermore, the Defendants have intentionally refrained from handing over the land thereby breaching their obligations, and violated the provisions of Articles 570 and 573 of the Civil Libyan Law by failing to warrant against legal disturbances, by third parties, of enjoyment of the site, i.e. Umma Bank claiming ownership of the land. The Defendants also failed to guarantee the Company against legal disturbance by third parties including the General Company for Building and Construction who claimed right of lease of the land, the Tajura Club, or the Owner of the coffee shop equally claiming right of lease of the same land for 25 years. Such legal disturbance simultaneously constitutes a physical disturbance of quiet enjoyment by the Defendants having granted the said rights, and given the fact that the land is owned by the State and managed by the Ministry of Tourism for being categorized as a tourist project, by virtue of the Minister of Tourism Decision No (202) of 2005. However, the Tourism Development Authority is the Authority empowered to lease the said land to tourist investments by virtue of the Libyan Council of Ministers Decision No. (87) of 2006. The Plaintiff Company added that the abovementioned disturbances occurred during the lease period without any intervention from the part of the Defendants, which resulted in the inability of the Plaintiff Company to make profit from the leased property. The Defendants also violated the terms of the lease contract and blatantly breached the provisions of the Libyan Civil Law, particularly Articles 147, 209, 563, 570, and 573 thereof. On 10/5/2010 the General Authority for Investment and Promotion instructed the Minister of Industry, Economy, and Trade to issue Decision No (203) of 2010, cancelling the approval and license previously granted to the Plaintiff Company to conduct touristic investment projects in Libya. The said Decision consequently cancelled the registration of the project in the Investment Registry, negating thereby the legal existence of the Plaintiff Company in Libya and repulsing it therefrom. The Company believes that such a decision should have been prevented by the Ministry of Economy and confirms that, despite everything, it has paid the amount of 130 thousand US dollars to the third Defendant in fulfillment of its only obligation provided for in Article 3 of the annulled decision. The Plaintiff Company added that the Defendants’ failure to justify the cancellation constitutes an illegal act violating Article 147 of the Libyan Civil Law according to which: the contract is the law of the parties and shall be performed as indicated in its provisions and in goodwill, and a contract is not limited to its provisions but also draws on other requirements in conformity with the law, practice, and justice due to the nature of commitment as per article 148. The Defendant’s illegal act violates Articles 1 (paragraph 1), 6 (paragraphs 1, 4, 6), and 15 of Law No. (5) of 1997 and Article 2 (paragraph 7) of Law No. (7) of 2004 on Tourism. The Plaintiff Company emphasized that the said illegal act, which has caused great damages thereto, constitutes a violation of Articles 2 and 9/1 and 10/a, b, and d of the Unified Agreement for the Investment of Arab Capital in the Arab States issued on 26/11/1980. The said Agreement was ratified by Kuwait on 1/4/1982, and Libya on 4/5/1982, and the Plaintiff Company is 100% Kuwaiti, registered in Commercial Register of Kuwait under No. 53472. The contractual fault committed by the Defendants lies in the fact that the third Defendant, who is directly involved, has signed in acknowledgement of receipt of letters and documents that it had issued against the Company, while Article 40 of the Unified Agreement considers that the papers, documents, and certificates issued by the competent authorities in any State Party shall serve as sufficient evidence for invoking the rights and affirming the obligations arising from the Agreement and that the papers issued by affiliated authorities, be it the Ministry of Tourism or the Ministry of Economy, shall be considered as official and authentic as per Articles 377 and 378 of the Libyan Law. By being negligent and careless, the Defendants, namely the General Authority for Investment and Ownership and the Ministry of Economy in Libya caused financial damages to the Plaintiff Company and prejudiced the Libyan State and its Administration by their illegal act that violates the ends and essence of the Investment Law as established by the Legislator and the Libyan People, and reinforced in Article 3 of the new Libyan Law No. (9) of 2010 on the Promotion of Investment that also provides for greater guarantees and protection of the foreign investor in its Articles 23 and 24. In the light of the above, the two mentioned Defendants have prejudiced the investment and are both aware of the fact that their faulty act has caused enormous material and moral damages to the Libyan State. 2. On the Fault and Damages: The Plaintiff Company continued by describing the damages incurred and stating the elements of the contractual liability due on the part of the Defendants. According to the Plaintiff Company, the damages started on the day following the conclusion of the contract on 8/6/2006, which binds the Defendants to pay compensation pursuant to article 166 of the Libyan Civil Code which provides that: “any fault that causes damage to another person render its perpetrator liable to payment of compensation in respect thereof”. The damages are both material and moral, and the second and third Defendants have caused them by their intentional contractual fault as they refrained from fulfilling their obligation of handing over the project land and enabling the Company from executing the investment project and benefiting therefrom for a period of ninety years, in addition to having terminated the lease contract and the approval of investment, despite being whole, valid, and free of irregularities. Such fault obliges the faulty party to compensate the Plaintiff Company for direct damages, foreseeable and unforeseeable, noting that the Defendants’ fault is considered as fraud, and their liability as tort, in view of the serious fault committed. Therefore, the Plaintiff Company is entitled to claim compensation of unforeseeable damages from the Defendants, as the lost opportunity of profit from the investment extends to ninety years minus seven and a half years of execution. The Company’s deprivation of its profits is possible and expected, and Article 224/1 of the Libyan Civil Code provides that “Compensation shall cover the loss incurred by the creditor as well as his lost profit provided that this is a natural consequence of the non-fulfillment of the obligation or the delay in its fulfillment”. The Plaintiff Company added that it can claim the lost profits throughout the contract duration at the annual high profit margin that directly results from the efficiency of the Company and the situation of the market which will be prospering in Libya, deprived of foreign investments for the past fifty years. The Plaintiff Company said it cannot but approve the report of the German Company RODDLE MIDDLE EAST specialized in accounting and project management, who, after examination of all sides of the project, concluded that the Plaintiff Company’s lost profits during the contract duration are estimated at one billion and eighty nine million US dollars (USD 1,089,000,000). The Plaintiff Company enclosed a copy of the report including a breakdown of the mentioned amount based on the relevant internationally acknowledged calculation methods. It added that compensation is due for a pending requirement that constitutes at the same time a tort, and that the Company is not claiming compensation for both liabilities, but has joined them to obtain one compensation that reflects the characteristics of the two liabilities. The Plaintiff Company further mentioned that the moral damages injure the non- financial interests of the aggrieved party, and the Libyan and French laws allow the compensation of moral and material damages equally. By the same token, several scholars allow the claim of such compensation to give the aggrieved party a substitute to their moral damages and hence, the Courts and Arbitral Tribunals determine the sufficient amount of compensation. In light of the above, the Plaintiff Company pointed out that it is one of the leading international companies in the field of investment and contracting, and earning this project in Libya has added to its moral credit in the international financial and business market. However, the moral damages have undermined the Company’s trustworthiness and credibility gained by earning this investment project, noting that the value of the Company’s international moral and commercial component is estimated at one million USD. A report on the matter was also submitted. 3. On the Causal Relationship: The Plaintiff Company stated that the relationship between the contractual fault and the damages resulting therefrom is a given and cannot be proved wrong. Said relation has been established by the mere failure of the Defendants to carry out their contractual obligations, namely, the failure to handover the leased land free of impediments to the Company upon the contract signature, as provided for by article 563 of the Libyan Civil law. The causal relationship has also been confirmed by the issuance of Decision No. (203) of 2010 cancelling the investment approval and license granted to the Company three years earlier, while the Defendants did not attempt to handover the leased land. The said delictual faults constitute alone the direct cause of direct and indirect damages incurred by the Plaintiff Company hereby claiming compensation. Chapter Three: Requests of the Plaintiff Company: The Plaintiff Company requested that a decision be issued in its favor against the Libyan State, and the General Authority for Investment and Ownership that is the authority competent to manage foreign investments in Libya, and the Libyan Ministry of Economy, jointly, considering that the second and third Defendants are executive departments affiliated to the Libyan Government. The said decision is requested to be final and binding, amounting to one billion one hundred and forty four million and nine hundred and thirty thousand US dollars (USD 1,144,930.00) detailed as follows: 1. An amount of six millions five hundred and thirty nine thousand Libyan Dinars (LYD 6,539,000) or the equivalent of five million and thirty thousand US dollars (USD 5,030,000) depending on the exchange rate determined by the Central Bank of Libya at the date of the memorandum, in compensation of the value of losses and expenses incurred by the office of the Plaintiff Company starting the date of its inauguration in Libya pursuant to Decision No. (135) of 2006 until the date of its closure. A report prepared by an external auditor was submitted in this regard. 2. An amount of one billion and eighty nine million US dollars (USD 1,089,000,000) in compensation of lost profits after due consideration of the operation and management of the project for ninety years as per the report of the specialized German company RODLLE MIDDLE EAST. 3. An amount of fifty million US dollars (USD 50,000,000) in compensation of moral damages to the Company’s reputation in the financial and business market inside Kuwait and internationally. The Company hereby mentions that the amount is merely symbolic. 4. An amount of USD 420,000 to cover the arbitration expenses. 5. An amount of USD 500,000 to cover the estimated fees that the Company owes to its attorneys from the beginning of the dispute until the rendering of the final arbitral award. Chapter Four: Facts alleged by the Defendants: The Defendants exposed the following facts: 1. On 7/6/2006, the Secretary of the General People's Committee for Tourism issued decision No. (135) of 1374 a.P. (2006 A.D.) agreeing to grant investment approval to Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures for the execution of a tourism investment project (a five-star tourist hotel, a service commercial center, hotel apartments, restaurants, and recreational areas over 24 hectares in Tajura city, (Sidi al Andalusi), Shabiyat (administrative district) Tripoli). 2. The investment value of the project was determined at USD $130,000,000 (one hundred and thirty million US dollars) and the duration of the project 7 and a half years. The investment period is 90 years. 3. The terms and conditions of the project are those stipulated in Law No. (5) of 1426 a.P. (1997 A.D.) on the promotion of foreign capital investment and its executive regulations, and Law No. (7) of 1372 a.P. (2004 A.D.) regarding Tourism and its executive regulations. 4. On 8/6/2006, the Tourism Development Authority (First Party) and Mohamed Abdulmohsen Al-Kharafi & Sons Co. (Second Party) signed a contract for the lease of a land for the purpose of establishing the tourism investment project. 5. The land, subject of the contract, is a state-owned land, and the Tourism Development Authority is entrusted with the allocation of lands within the Touristic Development areas and sign their lease contracts in accordance with the General People’s Committee’s Decision N. o (87) of 1374 AH (2006 AD) in view of promoting tourism services in the region where the land, subject of the contract, is located. 6. The Secretary of the General People's Committee for Tourism had issued Decision No. 202 of 1373 AH (2005 AD) giving the land, subject of the contract, a touristic nature. 7. Article Two of the contract stipulated that the area is 240,000 $1 $2. It is delimited by the beach on the northern side, public property on the western side, the highway on the southern side, public property on the eastern side. 8. Article Two of the contract stipulated that the investment period of the land is ninety years, as of the date of taking over of the land in question. 9. The land usufruct value shall be of 720,000 Libyan Dinars, to be paid annually during the contract validity period to the Treasury of the lessor. 10. Article (14) of the contract stipulates that the contract shall not be waived, totally or partially, to other parties, unless upon written approval, otherwise the contract shall be considered null without any need whatsoever for taking any judicial procedure, notwithstanding the right to ask for damages. 11. Article (15) of the contract stipulates that the project shall be executed under the supervision of the third Defendant in line with the technical specifications of the contract, the maps, the nature of work and the professional standards, whereas the Plaintiff shall commit to using materials, equipment and tools of good quality, and providing technical staff having experience in execution, management and operation. 12. Article (16) of the contracts stipulates that the Plaintiff shall be bound by the technical observations and reports made by the First Party of the contract and related to the adopted designs for the investment project. 13. Article (24) stipulates that the first party to the contract has the right to terminate it in case the Second Party does not initiate the project execution within three months following the date of receipt of project execution permits, unless the Second Party submits a written justification acceptable to the First Party. 14. Article (30) of the contract stipulates that unless otherwise stipulated in this contract, the contract shall be governed by Law No. (5) of 1426 a.P. (1997 A.D.) and Law No. (7) of 1372 a.P. (2004 A.D.). 15. Article (29) stipulates that: “In the event of a dispute between the two parties arising from the interpretation or the performance of the provisions of this contract while in force, the dispute shall be solved amicably; failing that,, the dispute shall be referred to arbitration in accordance with the provisions stipulated in the Unified Agreement for the Investment of Arab Capital in the Arab States issued on November 26, 1980. 16. On 20/2/2007, the minutes of handing over and taking over minutes of a touristic investment site were signed, including: 16.1. Information on the investment site: The Andalusi investment site, area 24 hectares, contract No. 4, dated 8/6/2006. 16.2. Party which took over the site: Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting, and Industrial Structures. 16.3. The First Party and the investment site delivery committee at the Tourism Development Authority. The Second Party is a designated representative of the Plaintiff Company authorized to sign on its behalf. 16.4. The two parties examined the site and specified the borders, i.e. the beach on the northern side, the highway on the southern side, public property on the eastern side and public property on the western side. 17. The Tourism Development Authority (the third Defendant) gave the Plaintiff Company an extract of the Tourism Investment Registry. 18. On 27/11/2007, the Department of Real Estate Registration and Documentation under the General People’s Committee of Justice in the Arab Popular Libyan Jamahiriya issued a real estate certificate on state-owned lands, showing that the described land is owned by the Libyan state and that it is occupied by Mohamed Abdulmohsen Al-Kharafi & Sons Co. for General Trading, Contracting and Industrial Structures (The Plaintiff) by virtue of a ninety-year lease contract. 19. The First Party of the contract, i.e. the Tourism Development Authority that has been called the General Authority for Tourism and Traditional Industries by virtue of a Decision No. 87 of 1375 a.P. (2007 A.D.), started to detect slowness in the performance of obligations. The Authority sent to the Plaintiff Company on 1/7/2007 a letter asking it to present a detailed timetable of the project execution stages as well as the required designs of the project for approval, the more so as the Plaintiff had undertook to ensure completion on the 40th anniversary of the Revolution on 9/9/2009. 20. Moreover, the Director of the Department for the Development of Touristic Areas at the General Authority for Tourism and Traditional Industries sent on 11/7/2007 a letter to the Plaintiff Company asking it to provide the celebrations supervising committee with the project plans and designs in $1 $2 format and a three-dimension CD on the project. 21. The Plaintiff Company having not responded, the Director of the Department for the Development of Touristic Areas and the Director of the permanent working team at the General Authority for Tourism and Traditional Industries sent a letter referring therein to the meeting that took place on 11/9/2007 and reiterated his request about receiving the drawings before 14/11/2007 and speeding up the elaboration of the different designs of the project. He sent another letter on 12/11/2007 asking to have the final designs of the project to submit them to the Committee for review and approval, and to start immediately the execution. 22. The Plaintiff Company remained busy with the temporary problem of the fence on the project site, claiming that the lack of completion of the fence affects the project timetable, a project which final designs have not been adopted. What is worth noting here is the letter dated 30/10/2007 in which the Plaintiff Company alleged that an event would take place on 31/10/2007. 23. Two years after the contract was signed and the Plaintiff Company took over the land, subject of the contract, the head of technical management at the Plaintiff Company sent on 14/5/2008 a letter to the Head of the People’s Committee for Tourism, informing him that he had the pleasure to submit the drawings including the preliminary architectural, construction, mechanical and electrical designs along with the project’s technical report. 24. What has been achieved towards the project execution: 24.1. The Company contracted the Holiday Inn International Company for hotel and hotel apartment management. 24.2. It also contracted another distinguished company for project design to provide execution supervision and design services. 24.3. It contracted Hill International Company for project execution work management. 24.4. Candidate contractors were qualified for the execution of works. The most experienced and most competent were selected to execute the project as per the defined timetable. 25. On 11/9/2008, the Secretary of the General Authority for Investment Promotion sent a letter to the Plaintiff Company informing it therein that, based on Decision No. (135) of 1374 a.P. (2006 A.D.), and in conformity with Article 29 of the executive regulation of Law No. (5) of 1426 a.P. (1997 A.D.) on the Promotion of Foreign Capital, the most important reasons for liquidating the investment project are: 25.1. The specific period of the investment project has expired and the investor did not submit a request to extend the period, or the extension was not approved. 25.2. The project is unlikely to continue its activity, and in case a final position of the investment project has not been presented, the Authority will have to take all necessary legal procedures. 26. On 8/1/2009, instead of answering the letter of the General Authority for Investment Promotion dated 11/9/2008, the Plaintiff Company wrote to the Department for the Development of Touristic Areas asking to be exempted of the project handover on time. 27. Less than two weeks later, the Director of the Department for the Development of Touristic Areas and the Director of the permanent working team at the General Authority for Tourism and Traditional Industries sent on 21/1/2009 a letter to the Plaintiff Company, referring therein to the suggestion made to choose an alternative site for project execution, provided that the Company retains this site pending the resolution of all impediments. Yet the Plaintiff Company rejected the alternative and preferred to keep the site. 28. On 4/7/2009, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to the Plaintiff Company asking it to present the executive position of the project and the actual achievement rate, along with the needed timetable to complete the execution process. 29. On 11/7/2009, the Plaintiff Company sent a letter to the Secretary of the Administration Committee of the General Authority for Investment and Ownership, in which it concluded that it had reached a position where it cannot meet the requirement of timely handover and that it had officially submitted a request to postpone the handover of the project. 30. On 2/2/2010, the Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter to the Plaintiff Company in which he asked the company to submit all the designs and drawings to be discussed and adopted by the competent authorities, and to transfer a part of the capital of the investment project within a period of 30 days. 31. On 24/2/2010, the Plaintiff Company replied to the correspondence dated 2/2/2010, saying it has delivered the project drawings and designs and that it was still waiting for the visa of Mr. Omar Mohamed Dessouki, Vice-President of the Board of Directors of the Plaintiff Company, to open up an account and supervise the handover of the site, which may lead to a delay which is not under its control. 32. The Plaintiff Company did nothing to transfer a part of the capital amounting to USD 130,000,000. Its answer to such a request came late in its letter dated 17/6/2010, while commenting on Decision No. 203 of 2010. Said decision canceled the approval given for the project. In Paragraph Seventh of this letter, the company said it opened up accounts in Libyan banks and informed the General Authority for Investment and Ownership about it. Could it then transfer 10% of the investment value totaling $13m on these accounts while the project land was still not handed over, and while the project could not even have an estimated cost with no land, knowing that the Company had spent millions of dollars out of its foreign accounts? 33. On 19/4/2010, the Administration Committee of the General Authority for investment and ownership (the 3rd Defendant) recommended to annul the investment approval decision granted to the Plaintiff Company. 34. On 26/4/2010, the Secretary of the Administration Committee of the Department of Real Estate Registration and Documentation sent a letter to the Secretary of the Administration Committee of the General Authority for Investment and Ownership (the 3rd Defendant), in which he asked him to take all legal procedures to terminate the lease contract signed with the company as the company did not start the agreed upon project execution throughout four years. 35. Upon the recommendation of the Administration Committee of the General Authority for Investment and Ownership (the 3rd Defendant) to cancel the investment approval, the General People's Committee for Industry, Economy and Trade issued on 10/5/2010 Decision No. (203) of 1378 a.P. (2010 A.D.) cancelling the approval granted by virtue of Decision No. (135) of 1374 a.P. (2006 A.D.). 36. On 3/6/2010, the Secretary of the General Authority for investment and Ownership sent a notice to the Plaintiff Company asking it to take all necessary procedures to put an end to the formalities related to the initiation of the project execution. 37. On 7/6/2010, Decision No. (213) of 1378 a.P. (2010 A.D.) decreed to give back the ownership of the land to the Libyan State, and to cancel all acts on the real estate plot, registered formerly in the name of the Promotion and Tourism Investment Department, at Tajura Shabiyat (administrative district) Tripoli (Sidi el Andalusi village), and stating that it is owned by the Libyan State. 38. On 17/6/2010, the Plaintiff Company sent a letter to the Third Defendant in which it requested a meeting to discuss the reasons behind the issuance of the decision cancelling the investment approval. It acknowledged in the letter that it did not transfer the amount equaling 10% of the investment value and that the project cannot even have an estimated cost. 39. On 13/7/2010, the Secretary of the Administrative Committee of the Third Defendant sent a letter to the Plaintiff Company in which he explained the reasons behind the decision to cancel the project, on top of which the lack of project execution and the fact that four years have passed since the site was allocated and that it was impossible to keep a 24-hectare land in the heart of Tripoli unexploited. 40. On 3/8/2010, the Plaintiff Company entrusted its counsel Rajab El-Bakhnug with the mission of communicating and corresponding with the 3rd Defendant. In case those contacts fail, it will resort to arbitration. 41. On 5/8/2010, the Company’s counsel sent a letter to the 3rd Defendant, concluding with the hope they could cooperate and reach a fast amicable solution. 42. On 11/8/2010, the Director of the Office for Legal Affairs acting for the 3rd Defendant answered back, clarifying to the Plaintiff Company’s counsel that the letters of the Plaintiff Company were answered on 23/7/2010. 43. On 8/8/2010, the Plaintiff Company’s counsel asked the Third Defendant to list the legal grounds they based themselves on to cancel the project, despite the fact that those reasons were exposed in the third Defendant’s letter on 13/7/2010. 44. On 13/9/2010, the Plaintiff Company notified the third Defendant through a bailiff to choose within thirty days one of the following: 44.1. Annul Decision No. 203/2010, clear the project site of all persons and impediments, hand over the project land and protect it so that it undertakes to execute the project. It then undertakes to immediately start execution as soon as the above is implemented. 44.2. Or pay a compensation of USD 5,000,000 (Five million US dollars), knowing that this amount is only a part of the losses incurred by the Plaintiff Company. 44.3. By implementing one of these two options, the Company agrees to cancel the project and to fully end the contractual relation between the two parties. 44.4. In case the Third Defendant did not choose any of these two options, the Plaintiff Company reserves the right to resort to arbitration and to claim an amount equaling USD 5,400,000 (Five Million Four Hundred Thousand US dollars), as overall financial losses incurred on the project, as well as USD 50,000,000 (Fifty Million US dollars) as part of the lost profits by the Plaintiff Company during the anticipated life span of the project, which is a right ensured and guaranteed by the Libyan civil law, and a fair amount representing the moral damages, lawyers’ fees and arbitration expenses, until all financial problems and issues are conclusively solved between the two parties. 45. On 29/10/2010, the Plaintiff Company’s counsel sent a letter to the Third Defendant, attaching thereto the receipts of the expenses that the company has allegedly spent on the project. 46. On 20/10/2010, the Third Defendant sent a letter to the Plaintiff Company explaining therein that the project cancellation came in accordance with the provisions of the applicable law in Libya, and that it hopes to find the appropriate solutions in a teamwork spirit. 47. On 12/1/2011, the Plaintiff Company sent a letter to the Third Defendant notifying it that all the documents have been submitted to a team of counsels to initiate arbitral proceedings. 48. On 6/2/2011, the Third Defendant sent a letter to the Plaintiff Company, as an answer to its last letter dated 12/1/2011, exposing therein that Decision 203 of 2010 cancelling the investment approval was issued in conformity with the Libyan Law, and that the Defendant was ready to hold a meeting to find an appropriate solution in a teamwork spirit. 49. On 26/5/2011, the Plaintiff Company notified the Defendant that the dispute was referred to arbitration. Chapter Five: Statements of the Defendants made in defense: First: On the jurisdiction: The Defendants state that four issues arise from the provisions of Article 29 of the contract drawn up on 8/6/2006 between the Plaintiff Company and the third Defendant: a- Issue One: Determining the dispute settlement means – the Defendant points out that the provisions of Article 29 of the contract is limited to describing the two means of dispute settlement, the amicable settlement and arbitration in case of failure of the first one. a-1- Notwithstanding the agreement to refer to amicable settlement when the interpretation of the contract’s provisions or their performance during its enforcement is at issue, the Plaintiff Company failed to follow this path although it had asked its counsel to opt for amicable correspondence. Said counsel addressed a letter to the third Defendant on 5/8/2010 with the hope of cooperating to reach an amicable and swift solution. a-2- On 13/9/2010, the Plaintiff Company notified the third Defendant through the Court bailiff to decide, within a period of no more than 30 days, whether to annul decision 203/2010 and remove occupancies and people from the site, hand over the project site land and protect the same in order to carry out the project as per what has been agreed upon; or pay the amount of USD $5 million in compensation of part of its losses in the project. The adoption of either one of these two options shall put an end to the contractual relationship between the two parties. a-3- If the third Defendant fails to pick one of these two solutions within 30 days, the Plaintiff reserves the right to resort to arbitration and claim the amount of five million and four hundred thousand US dollars (USD $5,400,000), or the equivalent of the overall financial losses invested in the touristic project which was cancelled by virtue of Decision 203/2010, in addition to USD $50 million to cover part of the profits lost during the anticipated project life span, which is a right guaranteed and warranted by the Libyan civil law, and an amount equivalent to the moral damages it has incurred being an international company with a good reputation in honoring its international obligations with its clients, as well as attorneys’ fees and arbitration costs until the final settlement of financial affairs. a-4- On 12/1/2011, the Plaintiff Company sent a letter to the third Defendant whereby it confirms having provided the attorneys’ team with the project documents to proceed with the arbitral proceedings, hence ruling out the amicable settlement before it even starts. a-5- Article (2) of the Conciliation and Arbitration Annex of the Unified Agreement for the Investment of Arab Capital in the Arab States ratified by Libya on 4/5/1982 stipulates that if both parties fail to agree to conciliation or where the Conciliator proves unable to render his decision within the specified period or where the parties do not agree to accept the solutions proposed, they may agree to resort to arbitration. a-6- No serious effort has been made to reach a settlement. The Plaintiff Company having resorted to arbitration, the third Defendant may invoke the inadmissibility of the arbitration case due to premature filing given that the amicable settlement was precluded, whereas the contract and the Conciliation and Arbitration Annex provided for referring to amicable settlement as long as the parties had agreed on the same before resorting to arbitration. b- Issue Two: Personal scope of the Arbitration Agreement as to the parties: b-1- The Arbitration Agreement is only binding to the parties, signatory of the agreement, and therefore: b-1-1- It shall not be deemed permissible to invoke the Arbitration clause against the State of Libya, i.e. the first Defendant, for it was not part of the contract concluded on 8/6/2006. Hence, it shall not be considered party to this arbitration. It shall not also be permissible because the third Defendant is an independent juridical person, and Article 14 of the General People's Committee Decision No. 87 of 1375 a.P. (2007) on establishing the General Authority for Tourism and Traditional Industries provides for merging the Tourism Development Authority and the Traditional Industries Development Authority into the General Authority for Tourism and Traditional Industries, provided that all their assets are referred to the General Authority, which now holds their rights and carries out their obligations. b-1-2- Article 15 of Decision No. 87 of 1375 a.P. (2007) stipulates that the competencies granted to the General People's Committee for Tourism in matters related to investment pursuant to Decision No. 7 of 1372 a.P. are vested to the Authority for Investment Promotion. All the contracts, rights, and obligations that are concluded on its part in relation to tourism investment shall be referred to the Authority for Investment Promotion, which now holds their rights and carry out their obligations. b-1-3- The General Authority for Investment and Ownership was established as per Decision No. 89 of 1377 a.P. (2009). Article 1 thereof stipulates that the Authority shall have the status of an independent juridical person and enjoy financial autonomy. It shall be affiliated to the General People's Committee for Industry, Economy and Trade and hold the necessary powers to regulate and handle matters related to investment and ownership. b-1-4- Article 12 of Decision No. 89 of 1377 a.P. (2009) provides for the merger of the General Authority for Investment Promotion and the General Authority for the Ownership of Public Companies and Economic Units into the General Authority for Investment and Ownership. All their obligations and assets shall be referred to it and it shall be entrusted with their competencies and tasks, and their employees shall be moved therein in the same positions. Paragraph 2 of Article 3 of said Decision provides that the General Authority for Investment and Ownership shall implement investment legislation pursuant to the provisions of Law No. 5 of 1426, Law No. 7 of 1372 a.P., and Law No. 6 of 1375 a.P., as well as relevant regulations. Article 7 of said Decision provides that the Secretary of the Administration Committee shall represent the Authority before third parties and before the courts. Decision No. 608 of 1377 a.P. (2009) provides for the appointment of Dr. Jamal El-Nouweissry El-Lamoushi Secretary of the Administration Committee of the General Authority for Investment and Ownership. b-1-5- The First Party to the contract, the Tourism Development Authority, was replaced by a legal person of Public Law currently named ‘General Authority for Investment and Ownership ’ (the third Defendant) as revealed in the statement of facts. It has an independent juridical capacity and is independent from the State of Libya and the Ministry of Economy. It shall be exclusively considered party to the present arbitration case, provided that the Arbitral Tribunal has jurisdiction of subject matter thereon. b-2- It shall not be deemed permissible to invoke the Arbitration clause concluded in the contract drafted on 8/6/2006 against the Ministry of Economy (Second Defendant): The Ministry of Economy in Libya is not party to the contract concluded on 8/6/2006, and therefore, it shall not be admissible to invoke the Arbitration clause stipulated in the contract against it, given that, pursuant to Decision No. 89 of 1377 a.P. (2009), the third Defendant is an independent juridical person and enjoys financial autonomy and has replaced the Tourism Development Authority, the first party to said contract, and is affiliated to the General People's Committee for Industry, Economy and Trade, hence, having the competence to be in charge of investment and ownership. Consequently, the third Defendant is the sole signatory of the contract, and the Arbitration clause shall only be invoked against it, in accordance with the substantive scope of the Arbitration clause. c- Issue Three: The substantive scope of the Arbitration clause: Arbitration, being an agreement between the two parties, limits the Arbitral Tribunal to the dispute that the parties have agreed to submit thereto. c-1- Article 29 of the contract drafted on 8/6/2006 strictly determines the scope of disputes that can be submitted to arbitration after efforts to reach amicable settlement have totally failed, be it in relation to the nature of these disputes or their timetable. This Article has limited the disputes that can be arbitrated between the parties to the interpretation of the contract or its performance during its enforcement. c-2- The Plaintiff claims the equivalent of five million and thirty thousand U.S. dollars (USD $5,030,000) depending on the exchange rate determined by the Central Bank of Libya at the date of its memorandum, in compensation of the losses and expenses incurred for the opening of its office in Tripoli pursuant to Decision No. 135 of 2006. These losses are accurately reflected in the budget of the Plaintiff Company from 2006 to 2010. c-3- The Plaintiff Company requests the amount of one billion and eighty nine million US dollars (USD $1,089,000,000) in compensation of the lost profits after due consideration of the operation and management of the project for ninety years. c-4- The Plaintiff Company claims the amount of fifty million US dollars (USD $50 million) as symbolic moral damages in compensation of the Company’s reputation and international position. c-5- The Plaintiff Company requests the amount of USD $420,000 to cover arbitration costs. c-6- The Plaintiff Company seeks the amount of USD $500,000 to cover the estimated fees that will be paid to its attorney from the beginning of the dispute until the issuance of the arbitration award. c-7- The overall amount of these claims equals to one billion one hundred forty four million nine hundred and thirty thousand US dollars (USD $1,144,930,000). They are not included in the substantive scope of the Arbitration clause and are not, in any way, related to the interpretation of the contract or its performance during its validity period. In fact, they are the result of the administrative decision No. 203 of 1378 a.P. (2010) on cancelling the investment approval. c-8- The agreement for arbitration in disputes relating to the interpretation of the contract shall not extend to specific disputes over the failure to perform obligations thereof. c-9- The agreement for arbitration in issues pertaining to the performance of the contract during its enforcement does not include disputes caused by issues falling outside the scope of the contract or related to the request for termination, rescission or compensation therefrom. c-10- The interpretation of the Arbitration clause substantive scope as a basis for the jurisdiction of the Arbitral Tribunal shall respect the joint will of its parties in compatibility with the principles of good faith in contractual obligations. c-11- Decision No. 203 of 1378 a.P. (2010) is an administrative decision whereby the Authority expresses its single will to produce a final legal effect. Said decision was issued due to the breach by the Plaintiff Company of the terms and conditions laid down in law No. 51 of 1426 (1997) on the promotion of foreign capital investment and its executive regulations. It is separate from the contract drafted on 8/6/2006 where the Arbitration clause is mentioned; which supports the request of the third Defendant on the inadmissibility of the arbitration case as it falls outside the scope of the Arbitration clause. d- Issue Four: The Unified Agreement for the Investment of Arab Capital in the Arab States shall not apply, save for the arbitration rules therein. d-1- After perusing Article 29 of the contract concluded on 8/6/2006, it appears that the reference made to the said Agreement is limited to being a mechanism to settle dispute without any further rules therein, provided that the contracting parties did not expressly call for its adoption and integration in the contract, particularly if it is not possible to apply automatically the provisions of the Agreement, which is the case here. d-2- The non-application of the Agreement, barring the arbitration rules thereof, is supported by the fact that this Agreement has limited the substantive scope of its application to the Arab capital and Arab capital investment. d-3- The statement made by the Plaintiff Company in its letter dated 17/6/2010 that it cannot transfer 10% of the investment value, or the equivalent of USD $13 million US dollars, to these accounts, asserts that the substantive scope for the application of this Agreement is not fulfilled ipso facto as no transfer of Arab capital has been made from the State of Kuwait to Libya for investment. Second: On the applicable law: a- The Libyan Law shall apply to the settlement of the dispute: a-1- Article 30 of the contract dated 8/6/2006 stipulates that “unless otherwise provided for in this contract, the provisions of Law No. 5 of 1426 (1997 A.D.) on the promotion of foreign capital investment and its executive regulations, Law No. 7 of 1372 a.P. (2004 A.D.) on tourism and its executive regulations, as well as other legislation in force in Libya shall apply. The Arbitral Tribunal chose the Libyan Law to apply to the settlement of the dispute. a-2- The selection of the Libyan Law requires to identify the nature of the issue in question, and at first instance, the contractual relationship between the Plaintiff Company and the third Defendant. a-3- Even though the parties to the contract named the latter “Lease Contract”, its provisions and the legal rules that the parties chose to apply confirm that it is an administrative contact, and specifically, a contract authorizing exploitation of public funds through usufruct, rather than a lease contract. a-4- The contract is deemed to be an administrative contract if one of its parties is a legal person of Public Law with activities related to a public utility and if it includes terms and conditions that are not common in the Private Law. Upon reviewing the articles of the contract dated 8/6/2006, it appears that the contract is drafted by a legal person of Public Law, and includes terms and conditions that are not common in the Private Law, given that it determines the type of the contracted project. In other words, the contracting party is not entitled to establish any other projects. It further entails a highly unusual clause that compels the contracting party to carry out the project in a specified period, which shows the intention of the Authority to adopt the procedure of the Public Law. Another highly unusual clause is the Authority’s right to terminate the contract without taking further measures, be it at the delay in paying the fees in consideration of using and benefitting from the land on the maturity date or when the investor fails to initiate the project execution within a period of three months from the date of receiving the license pursuant to Articles 8 and 14 of the present contract. Article 14 thereof included, as well, a highly unusual clause that does not allow waiving the project or transferring the rights thereto to third parties without an express consent from the Administration. As for Articles 15 and 16, they also comprise a highly unusual clause granting technical supervision and control to the Administration during the construction and usufruct period. Articles 20 and 21 obliged the contracting party to use local necessary raw materials, tools and equipment, to employ and train local labor force, if any, otherwise employ foreign technical labor force. Article 26 of the contract imposes on the contracting party to hand over the project to the Authority at the end of the usufruct period in a good operating condition without having the right neither to claim the expenses invested in the project nor to ask for compensation. All these terms and conditions are uncommon in the Private Law. They are prescribed in the preliminary rules to issue investment approval decisions also provided for in Law No. 5 of 1426 (1997) and Law No. 7 of 1372 a.P. (2004). Therefore, the contract dated 8/6/2006 is characterized as an administrative contract. b- The contract is a contract authorizing exploitation of public funds through usufruct: b-1- The present contract falls under administrative contracts since the relationship between the third Defendant and the Plaintiff Company involve the development of the specified State-owned land aiming at enhancing the level of tourism services in the region through the establishment of a touristic project. The project, subject of this contract, has been granted to the Plaintiff Company by authorizing usufruct for a period of ninety years in return for LYD 720,000 all over the contract period. b-2- The rules to apply to this administrative contract are described in the Libyan Laws that govern such contracts, in particular, the decision of the General People’s Committee, Decision No. 138 of 1372 a.P. (2004) providing for the issuance of the executive regulations of Law No. 5 of 1426 (1997) and Decision No. 89 of 1377 a.P. (2009) on the establishment of the General Authority for Investment and Ownership. b-3- Article 27 of the People’s Committee Decision No. 138 of 1372 stipulates that the party authorized to invest shall execute the project within a period of six months from being notified of the approval to establish the project. It further states that the People’s Committee may recommend the withdrawal or cancellation of the approval decision or liquidate the whole project in the event where the execution is not completed within the set or extended deadline, if the investor fails to make serious efforts to execute the project, is physically unable to execute it, or if he breaches any of the obligations set forth in this article or any of the provisions of Law No. 5 of 1426 and its executive regulations. b-4- Article 1 of Decision No. 89 of 1377 a.P. (2009) stipulates that the third Defendant is an independent juridical person and enjoys financial autonomy, is affiliated to the General People’s Committee for Industry, Economy and Trade, and has the powers to regulate and handle matters related to investment and ownership. b-5- Article 3 of Decision No. 89 of 1377 a.P. (2009) sets domestic and foreign investment affairs as part of the third Defendant’s competencies pursuant to the provisions of Law No. 5 of 1426 and Law No. 7 1327 a.P. b-6- Article 1 of the General People’s Committee Decision No. 194 of 1377 a.P. (2009) stipulates that real estate investment shall mean undertaking building and construction operations for the purpose of building villages, hotels, resorts, recreational areas, restaurants, and tourism facilities for tourism investment purposes, hence the need for a decision from the third Defendant. As per Article 3 of the present decision, the third Defendant may terminate the usufruct contract and return the land ownership to the State if the party, to which the plots of land have been allocated by the State, fails to proceed with the execution of investment projects within a year from the completion of their registration in the Department of Socialist Real Estate Registration and Documentation. Therefore, the investor shall not claim any compensation other than the cost of the contract value. b-7- An Authority authorized to issue an approval for investment, is also authorized to cancel the same in the event of a failure to invest, given that an approval granted to an investment project shall be cancelled as the project always remains related to the purpose for which it was established. The approval shall not, hence, be final. Decision No. 203 of 1378 a.P. (2010) cancelling the investment approval is issued pursuant to the Libyan Laws. b-7-1- Even though three years have already passed since the approval decision has been issued, the Plaintiff Company failed to submit the project’s final designs yet. b-7-2- The Plaintiff Company failed to open bank accounts for the project in accordance with the provisions of Article 22 of the executive regulation of law No. 5 of 1426 on the promotion of foreign capital investment. b-7-3- The Plaintiff Company failed to transfer any funds or provide any assets or equipment for the project. b-7-4- The Plaintiff Company failed to pay any fees in consideration of using and benefitting from the land as per the contract. b-7-5- The Plaintiff Company asked to be exempted from handing over the project by the specified date. b-7-6- The Plaintiff Company refused to choose an alternative site for the project execution and retained the original site. b-7-7- When it was still holding the name of “General Authority for Investment Promotion”, the third Defendant notified the Plaintiff Company on 11/9/2008 of the expiry of the project period and that the investment project shall be liquidated in case it fails to submit a final position within a week. b-7-8- The Secretary of the Administration Committee of the General Authority for Investment and Ownership sent a letter on 4/7/2009 to the Plaintiff Company whereby he asked it to provide the project’s current execution status and the exact work progress along with the timetable and the date expected to initiate project execution within a week. b-7-9- The correct characterization of the Plaintiff Company’s requests in the present statement of defense leads to the application of the appropriate legal rules of the Libyan Law governing the subject of the dispute, upon which Decision No. 203 of 1378 a.P. (2010) is based. Given that the claim is a compensation claim to obtain damages that the Plaintiff Company claim having incurred due to this decision, such characterization and the present legal rules grant this decision the legality in light of the provisions of Article 8 of the General People’s Committee No. 194 of 1377 a.P. (2009). The administrative decision cancelling the investment approval provides for the application of these legal texts. Therefore, the Plaintiff Company may not request any compensation. b-7-10- The statement of claim based on the fulfillment by the Defendants of the contractual liability elements is not legally valid. Third: On the absence of the legal and factual basis of the Plaintiff Company’s Statement of Claim: 1. The Plaintiff Company established the claim, at times, on the basis of contractual liability and, at other times, on the combination of the contractual and tort liabilities. 2. The contractual fault constituting the first element of the contractual liability is not fulfilled by the Defendant, namely as the alleged damages for which the Plaintiff Company is requesting compensation due to the issuance of the decision on cancelling the investment approval resulted from the fact that the Company breached the provisions of the Libyan Law. 3. There is no ground to what the statement of claim has mentioned regarding the serious fault made by the second and third Defendants in terms of abstaining from handing over the land. Said fault was refuted in exhibit No. 13 provided by the Plaintiff Company, proving conclusively that it has taken over the investment site, subject of the contract, on 20/2/2007 and in its letter sent to the Director of the Department for the Development of Touristic Areas whereby it acknowledges the taking over of the site. 4. It is unsubstantiated to say that the second and third Defendants refrained to warrant against legal disturbances, by third parties, of enjoyment of the site as the real estate certificate delivered to it on 27/11/2007 had set the plot herein described to be a property of the State of Libya and the Plaintiff Company shall occupy it by virtue of a contract for ninety years. 5. It is baseless for the Plaintiff Company to say that the third Defendant had recommended the issuance of Decision No. 203 of 2010 to cancel the approval and to consider such action as a contractual fault necessitating compensation as this is only a fulfillment of its obligation to control the investment. 6. Article 3 of Decision No. 89 of 1377 a.P. (2009) entrusted domestic and foreign investment affairs to the third Defendant. Article 8 of Decision No. 194 of 1377 a.P. (2009) provided for the return of the ownership to the State if the project execution works are not initiated within a period of no more than a year from the registration in the Department of Socialist Real Estate Registration and Documentation. Consequently, the third Defendant did not commit any contractual fault. 7. If Article 147 of the Libyan Civil Code stipulates that “pacta sunt servanda”, i.e. that a “contract is a binding code for contracting parties. It shall neither be rescinded nor amended unless agreed upon by both parties or for the reasons stipulated in the law”. The recommendation of the third Defendant to annul the decision on the project approval is in compliance with the Libyan Law for this is an administrative contract. 8. A party to a contract with the Authority shall not be permitted to refrain from performing its contractual obligations on time under the pretense that administrative procedures caused the Authority to fail to fulfill one of its obligations. It shall rather proceed with the execution and claim compensation. 9. The execution period of an administrative contract is fundamental and binding for the two parties to a contract. In breach thereof by the contracting party, the Authority may terminate the contract. 10. The third Defendant suggested a new site to the Plaintiff Company but the latter rejected this proposal. The Plaintiff should have taken over the new site and commenced the execution of the touristic investment project. However, knowing that it refused to do so, the fault lies with the Plaintiff. Accordingly, the Authority is entitled to cancel the investment approval and the Plaintiff Company has no reason to say that the fault lies with the third Defendant and has no grounds to request any compensation for any damages it may have incurred. 11. The third Defendant only recommended the cancellation of the approval following the failure of all efforts to urge the Plaintiff Company to execute the project. 11-1. The Authority sent a letter to the Plaintiff Company dated 11/9/2008 on the expiry of the specified project period and the failure to submit an extension request, further stating that the investment project shall be liquidated unless a final position is provided within a week. 11-2. The Plaintiff Company acknowledged in its letter dated 8/1/2009 that it failed to carry out the project according to the specified period and asked to be exempted from handing over the same at the set date. 11-3. The Authority suggested an alternative site pending the resolution of the obstacles, but the Plaintiff Company rejected such a suggestion. 11-4. The Secretary of the Committee of the third Defendant sent a letter to the Plaintiff Company on 4/7/2009, in which he requested the project’s current implementation status, the exact work progress along with the necessary timetable for project completion and the estimated date for the initiation of project execution within a week. 11-5. On 2/2/2010 the Plaintiff Company was required to present architectural drawings and designs for discussion and adoption, and transfer part of the investment capital within a period of 30 days. 11-6. On 24/2/2010 the Plaintiff Company sent a reply in which it stated that it had submitted all project drawings and was awaiting a visa to open the bank account and oversee the taking over of the project site, which resulted in a delay beyond its control. 11-7. Failure of the Plaintiff Company to open the account or transfer part of the capital is a breach of its obligations. This alone can cause the issuance of the decision to cancel the investment approval. The Plaintiff acknowledged such a breach in its correspondences whereby it questioned the logic behind transferring 10% of the project’s investment value, i.e. the equivalent of USD $13 million prior to the handing over of the project site, while knowing that the project may not even have an estimated value without the plot of land. 12. The request made by the third Defendant to cancel the investment approval falls within its competencies and complies with the Libyan Law applicable to the dispute. Hence, it cannot be considered as a contractual fault that gives the Plaintiff Company the right to claim compensation. 13. It is established by the jurisprudence that the Authority is liable for administrative decisions in the event where the decision is vitiated, causing damages, and where there is a causal relationship between the decision’s illegality, i.e. the Authority’s fault, and the damages affecting the person. The administrative decision to cancel the approval is well founded, not vitiated and such fault cannot be attributed to the Authority, but to the Plaintiff Company, given that: 13-1. More than three years have elapsed and the Plaintiff Company did not execute the project nor presented the final designs. 13-2. The Plaintiff Company failed to open bank accounts in the name of the project in Libya. 13-3. The Plaintiff Company failed to settle any payment in consideration of the usufruct right as per the contract. 13-4. The Plaintiff Company rejected the proposal to choose an alternative site. 13-5. It failed to initiate the project execution during a period of no more than a year from the completion of registration. 13-6. The Plaintiff Company lingered in the project execution, which is confirmed in the dates of conclusion of the contracts, for: 13-6-1. Just about two years following the signature of the contract on 8/6/2006, the Director of the Technical Administration in the Plaintiff Company sent a letter in which he states having submitted the architectural, construction, mechanical, and electrical preliminary drawings along with the project's technical report. 13-6-2. The Plaintiff Company has not shown serious efforts towards the execution of the project in good faith, claiming that things will happen on 31/10/2007 whereas the letter was dated 30/10/2007. 13-6-3. The Plaintiff Company’s allegation that the site chosen by the third Defendant is not free of impediments, is of no consequence. Contracts binding for both parties should be enforced according to the circumstances and cases stipulated in the contract, knowing that it has carried out a thorough due diligence examination of the plot of land, has accepted to conclude a contract thereon, and took over the plot of land on 20/2/2007. It did not make allegations that the Authority had manipulated nor vitiated its will, and stated that it had to take necessary administrative, technical, and legal measures, and failed to transfer funds or equipment for the project or initiate the project execution within a period of no more than a year from the completion of registration. 14. The Plaintiff Company lingered in the conclusion of the contracts till 14 May, 2008: 14-1. Until 13/2/2008, the Plaintiff Company had yet failed to sign the design and planning service contract agreement. 14-2. Article 22 of the contract dated 8/6/2006 calls for the completion of services within a period of 36 months from the enforcement of said agreement referred to in Article 22 of Part 1 on General Provisions. 14-3. The General Provisions make reference to the conditions prescribed in the Client-Consultant Model Services Agreement (FIDIC, Third Edition 1998). Article 21 of said Agreement stipulates that “the agreement is effective as of the date of receipt by the consultant of the client’s letter of acceptance of the consultant’s proposal or of the latest signature necessary to complete the formal agreement, whichever is he later”. In compliance with this article, the contract concluded by the Plaintiff Company is not effective yet. 14-4. Paragraph 16.1.d of the contract signed between the Plaintiff Company and the consultant provides for the compliance with the laws and regulations of the Egyptian customs. Article 17 stipulates that the liability period is equal to the contract period extending over one year from the execution of project works. The Egyptian laws shall be applicable in the event of another period. Reference to Egyptian laws is often made given that, in international contracts, the Authority shall choose the applicable law. However, the issue relating to the customs and its compliance with the Egyptian law is deemed exceptional as it falls under the matters governed by the Libyan Law. 15. The contract on the feasibility study drafted on 1/2/2008 stipulated that the work shall commence on the second week of March 2008. In other words, the feasibility study was initially inexistent until mid March 2008 whereas the project was supposed to be handed over on 9/9/2009. 16. All the aforementioned shows that the Plaintiff Company did not take serious endeavors to execute the project, and that the Defendants did not make any fault unlike the Plaintiff Company, which shall have no right to compensation. 17. The aforementioned does not prejudice the integrity of what the Plaintiff Company mentioned on page 16 of the statement of claim that it had fulfilled the only obligation to be executed in advance: paying 0.1% of the investment’s total value, i.e. USD $130 thousand, to the Treasury of the Libyan State. Saying that this is the sole obligation falling upon the Plaintiff Company is not deemed admissible given that it implies to follow a chronological order in the execution of its obligations. That said, the Company acknowledges that it has failed to execute any other obligation. 18. The documents presented by the Plaintiff Company do not include any evidence that the second and third Defendants have deliberately refrained from fulfilling their obligation to hand over the investment land as it is well established in the minutes of handing over and taking over drawn up on 20/2/2007 that the third Defendant has handed over the land, while every time it asked the Plaintiff Company to submit the drawings and designs, the latter pretended to be coping with impediments. 19. The statement of the Plaintiff Company regarding the delictual faults made by the Defendants stand groundless: 19-1. In reference to Law No. 5 of 1426 on the Promotion of Foreign Capital Investment, Article 1 (1) provides for the promotion of foreign capital investment to establish investment projects in line with the States’ general policy, and economic and social development objectives. It further provides that there is no such capital as mentioned in paragraph 6 of Article 3 of said law. Therefore, the Plaintiff Company cannot insist on applying this law in the absence of any investment project in the sense referred to in paragraph 7 of Article 3 of the law. The exceptional advantages described in Article 15 address the investor whose conduct is in compliance with the legal rules and provisions of this law. Article 1 (1) also stipulates that the project and foreign capital are not established and the provisions of said law cannot be applicable to the present dispute. Moreover, the Defendants have not breached paragraph 7 of Article 2 of Law No. 7 of 1372 a.P. (2004) on Tourism, providing that tourism aims at “encouraging Libyan and foreign investors to invest in touristic projects in order to develop the national income resources and sources”. Failing to do so asserts that the Plaintiff Company did not invest in touristic projects and breached the purposes of this article. 19-2. The Defendants did not commit any acts described as violations of the Unified Agreement for the Investment of Arab Capital, given that: 19-2-1. The State of Kuwait and the State of Libya are both members to the Unified Agreement for the Investment of Arab Capital, and the reference made in the contract dated 8/6/2006 to this agreement is limited to the inclusion of the arbitration mentioned therein as a means for dispute settlement barring any other rules thereof. The reference of the parties to arbitration prescribed therein is common and the provisions of this agreement shall not be automatically applied. 19-2-2. This Agreement has limited the substantive scope of its application to Arab capital and investment of the same, yet in this case, no capital has been transferred from Kuwait to Libya. 19-2-3. The Plaintiff Company shall have no right to any compensation by applying the provisions of this Agreement given that Article 2 thereof stipulates that States Parties shall allow capital transfer and undertake to protect the investor, safeguard the investment, and its related revenues and rights and, to the extent possible, to ensure the stability of legal provisions. This is the purpose of the Libyan Law on Investment Promotion. Therefore, the capital should achieve economic development in the State receiving it. As this failed to happen, the allegations of the Plaintiff Company on the breach of the provisions of Article 2 of said Agreement should be disregarded, along with the claim of the Plaintiff Company in Article 9 (1) and Article 10 (a, b, and d) of this Agreement given that no Arab capital was transferred from one State to another. 19-2-4. Article 14 of the Unified Agreement for the Investment of Arab Capital in Arab States imposes some obligations upon the investor. Said Article lays the foundation of international principles, such as the investor’s compliance with the legal rules of the State hosting the investment. In breach thereof, he shall be held liable. The same is reflected in this case. The Defendants are not in breach of the Libyan Law or the provisions of this Agreement, nor committed any contractual faults. The Plaintiff Company has failed to fulfill its contractual obligations as per the contract dated 8/6/2006 and breached the provisions of the Libyan Law; therefore, its claim for compensation shall be rejected. Fourth: On the absence of the legal and factual basis of the Plaintiff Company’s compensation claim: The obligation for compensation necessitates the commission of a fault that prejudices a causal relationship. 4-1. The Plaintiff Company claims compensation in the absence of a fault. It is settled that none of the Defendants have committed faults and cannot be held liable in this case. Compensation without fault is not allowed by virtue of contractual and tort liability. 4-2. The Plaintiff Company is not entitled to any compensation and the figures provided thereby shall not be taken into consideration, given that: 4-2-1. At a first stage, the request mentioned in the notice sent through the bailiff limiting the value of compensation to five millions U.S. Dollars is unsubstantiated, as: 4-2-1-1. The notice addressed to the third Defendant offered two proposals: the annulment of Decision 203/2010, the evacuation of the project site from people and occupancies, the handover of the plot of land as agreed upon, the protection of the Company which in return undertakes to initiate immediate execution; or paying the Company a compensation of five million and thirty thousand US dollars as part of the losses incurred in the project, and accepting the termination of the project and the contractual relationship between the two parties. This proposal cannot be accepted in the absence of faults committed by the third Defendant. Had the Company spent the amount, this would have revealed. Had the third Defendant agreed to annul Decision No. 203/2010, how would the Company possibly agree to end the relationship, while it should have started the business relationship all over again? 4-2-1-2. There is no proof that the amount requested by the Plaintiff in the statement of expenses dated 29/10/2010 has been spent in fact. On 8/1/2009, the Company declared that it was unable to execute the project. On 27/1/2009, it claimed having concluded a contract with Hill Company to manage the project, and the latter requested the amount of USD $215,000 to cover the fees of executed works, while the contract drafted for this purpose was not signed. The details included in the statement regarding the bonuses paid to individuals and the senior management of the project in 2010, i.e. after the cancellation of the same. These bonuses amounted to USD $250,000. The expenses paid by the Plaintiff Company to the senior management and Engineer Saad Salem for the years from 2006 to 2010 without undertaking any works in the project, except that the latter took over the plot of land on 20/2/2007; this prove these expenses to be false and the Defendants shall not to be held liable for them. 4-2-2. At a second stage,
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