ESQ Legal Practice Magazine JUNE 2014 EDITION | Page 20

EGYPT PREVAILS
ON FORK-IN-THE-ROAD
PROVISION

In an unpublished ICSID decision last month (the Decision), reported in
Global Arbitration Review and Investment Arbitration Reporter, the Arab
Republic of Egypt (Egypt) successfully knocked out the majority of claims
brought by California-based H&H Enterprises Investments (H&H) by way of
jurisdictional arguments based on the “fork-in-the-road” provision contained
in the US-Egypt bilateral investment treaty (the BIT).

F

ork-in-the-road
provisions in BITs
generally limit an
investor to choosing
only one of a number
of agreed dispute resolution
procedures. For example, if an
investor submits its dispute to
the local courts, then a fork-inthe-road provision would
20 I EsQ legal practice

prevent the investor from also
pursuing other dispute
resolution procedures under
the BIT, such as international
arbitration. In the absence of a
fork-in-the-road provision,
submission of a dispute to
local courts will not preclude
the investor from pursuing
other dispute resolution

options.
It is thought that this is only
the second BIT claim to be
denied jurisdiction on the
basis of a fork-in-the-road
provision. It serves as a
reminder to investors with
potential contractual and
international law claims to
consider carefully the

provisions of the relevant BIT
before beginning proceedings
in any forum.
The dispute concerns a long
term management and
operation contract concluded
in 1989 between H&H and
Grand Hotels of Egypt (GHE)
regarding the Ain El Sokhna
Hotel on the Gulf of Suez in
Egypt (the Resort). In October
1993, GHE commenced
arbitration against H&H in
Cairo under the contract,
seeking termination of the
contract (the Cairo
Arbitration). H&H filed a
counterclaim in the Cairo

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