EGYPT Trends and Developments Contributed by: Muhammad Ussama and Adam El Shalakany, Shalakany Law Office
employer submits that it was and remains caused by bad faith choices and actions made by the bank and the main contractor (by concluding an assignment agreement behind the employer’s back and without obtaining the latter’s approval of such assignment as required under the relevant clause of the construction contract). • The employer had to comply with the court (execu- tion) orders because the latter is governed by a legal system which mandates total compliance with court judgments and orders. By comply- ing with the relevant court (execution) orders, the employer mitigated its damages by evading civil and/or criminal sanctions that the employer would have otherwise potentially suffered in case of non- compliance. • The bank’s claims vis-à-vis the employer remain mere claims that are being disputed by the employer. In disputing the bank’s purported rights and claims, the employer has advanced serious legal arguments that rest and rely on established facts and admissible evidence. Also, the bank failed to secure any court order and/or judgment from any competent court against the employer in relation to any or all of the bank’s purported rights and claims stemming from the assignment agreement. Hence, the employer submits that
the employer is not legally obliged to do anything with respect to the bank’s purported rights and claims. On the other hand, court (execution) orders secured by sub-contractors, as already outlined above, do enjoy a legally binding power. Thus, the relevant court (execution) orders must be deemed to prevail and to have priority over the bank’s mere contractual claims that remain, until such time that these are created and/or confirmed by court, hang- ing in the air. Conclusion It is true that, in complex project structures, risk is not only allocated by contract; it is often a product of the structure itself. Parties should, thus, lean on the side of caution to a reasonable extent and not rush to adopt untested corporate structures of bundles of agreements that have not been tried and tested in the relevant jurisdiction(s). This article addressed some substantive arguments that frequently arise in high-quantum disputes involv- ing on-demand bonds and assignment of rights agree- ments. However, there exist some other substantive as well as procedural legal issues that are worth fur- ther consideration.
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