Djezzy GSM

Legal dispute with Orascom

A few years after the company was privatized, Naguib Sawiris's Orascom Telecom purchased a majority share in the company, and under his leadership, Djezzy grew rapidly, becoming Orascom’s most profitable subsidiary and one of Algeria’s leading mobile service providers.

The legal conflict began to escalate in 2008, when the Algerian government announced its intent to increase its stake in Djezzy and exert more control over the telecommunications sector. This move was perceived by Sawiris as a direct challenge to his ownership and a breach of the terms under which Orascom had invested in Algeria.

In 2010, Russian company VimpelCom bought and merged with Orascom for $6.4 billion. In 2012 Sawiris sued the Algerian government at the International Centre for the Settlement of Investment Disputes (ICSID) for $4 billion in damages, stating that the government had "pursued a campaign of interference and harassment" and "forced" him to sell the company at a cheap price through the merger with VimpelCom. In 2014, VimpelCom agreed to sell a 51% stake in Djezzy to the Algerian National Investment Fund (FNI) for $2.64 billion, ending the essence of the dispute. In 2017, the ICSID ruled in favor of the government of Alegria and declined Sawiris's $4 billion claim.

The Algerian government’s position was that Orascom Telecom had not fulfilled certain regulatory requirements and that the company was not paying its fair share of taxes. These claims were part of a broader pattern of increasing scrutiny and regulation of foreign investments in Algeria, particularly in strategic sectors like telecommunications. Orascom Telecom argued that the Algerian government’s actions constituted an expropriation of its assets, a claim that would require compensation under international investment agreements. The Algerian government, on the other hand, insisted that it was merely enforcing national laws and regulations and that Orascom’s complaints were unfounded. One of the key issues was whether the Algerian government’s actions amounted to a violation of the bilateral investment treaty between Egypt and Algeria, which was designed to protect investments from unfair treatment. Orascom claimed that the government’s actions were discriminatory and breached the terms of this treaty.