Formation of a Committee for the Re

The Prime Minister issued Decree No. 2324 for the Year 2016^[1] (the “Decree”) regarding the formation of a committee presided by the Prime Minister to look into privatized companies that were the subject of final court judgments that declared their privatization null and void. The Decree was adopted in light of the administrative court rulings issued in the aftermath of the Revolution of January 2011 voiding a number of administrative contracts according to which various State owned enterprises were privatized in the last two decades. The Higher Administrative Court has issued a number of final judgments and enforcement has not yet taken place.

Background

Following the January 2011 Revolution a number of NGOs and lawyers filed lawsuits before the administrative courts requesting the nullification of the privatization of several companies, carried out in the context of the privatization project and economic reforms adopted by the Government during the last two decades. Indeed, the administrative courts have issued such judgments that were confirmed by the Higher Administrative Court, most notably regarding Shebin ElKom Weaving Company, Tanta Flax and Oil Company and the International Company for Boilers and Steel Fabrication. Since then, no serious steps were taken by the Government towards the enforcement of the above court rulings because of a number of difficulties, most importantly, (1) the valuation and sourcing of the cost for repossessing the companies as well as (2) deciding the status of former employees who are requesting their reinstatement at the companies. In light of the foregoing, the Decree was issued to form a committee and grant it the authority to examine the case of each of those companies that were the subject of final court rulings. The following is an overview of the provisions of the Decree.

The Provisions of the Decision

The Decree provides for the formation of a committee presided by the Prime Minister and composed of the Minister of Justice, the Minister of Finance, the Minister of Public Sector Affairs and the Minister of Investment. The committee is granted the authority to look into the case of companies that, by virtue of final court rulings, shall be repossessed by the State. The committee shall carry out the enforcement of the court rulings and negotiate with the relevant parties and decide on employees’ claims. The committee may invite to its meetings ministers, governors or such other persons it deems necessary for its discussions. A Technical Assisting Committee shall be formed and composed of three expert members from the Ministry of Public Sector Affairs and a representative of the relevant holding company and shall be presided by one of the advisors of the Minister of Public Sector Affairs. The Technical Assisting Committee shall prepare the agenda and recommendations for each case for the ministerial committee and shall carry out what is being assigned by the ministerial committee.

Conclusion

The present Decree has dealt with a controversial matter that has been subject to extensive debate. There might be disagreement on the findings of the court rulings, but the enforcement is without doubt a difficult task for all the legal and economic issues it raises, most importantly the valuation of the companies and the reinstatement of former employees in light of the bad financial situation of the companies and the ability (or inability) of employees to repay the end of service and early retirement packages they had previously obtained from those companies. [1] Prime Minister Decree No. 2324/2016, Official Gazette, Issue No. 35, 1 September 2016.