A group of American investors has filed an arbitration suit against the Egyptian government requesting compensation of over $100 million for the expropriation of their interests in the Egyptian cotton industry.

The suit has been registered by ICSID, an affiliate of the World Bank based in Washington, DC, which administers the arbitration of disputes between states and foreign investors.

The US investors include Champion Trading Company, a Delaware corporation based in Greenwich, CT, and the family of Connecticut-based businessman Mahmoud Wahba, which invested in the Egyptian cotton industry at the personal invitation of the Egyptian Prime Minister.

According to the complaint, immediately after Egypt passed laws privatising and liberalising cotton trading and ginning in 1994, the US investors established the largest private cotton trading and ginning venture in Egypt. The venture expanded quickly, gaining a market share of about 18 per cent of the entire annual Egyptian cotton crop (valued at $250 million), leasing 17 cotton gins and employing around 5000 workers.

The complaint describes how the government then took a series of measures that effectively destroyed the US owned venture by trying to force it to deliver its cotton inventory to government owned domestic mills without payments or at the lowest cost possible.

Wahba confirms that the Egyptian government has put his family under great pressure, and says: "As US investors, my family and the companies they own are entitled to full compensation, and I am confident that the World Bank tribunal will agree".