EGYPT Law and Practice Contributed by: Mohamed Hashish, Heba El Abd and Mariam Rabie, Soliman, Hashish & Partners
the date of publication of the FRA’s initial approval of the tender offer; or • engaging in actions or transactions that would materially affect the company’s assets, increase its financial obligations, or hinder the future devel - opment of its activities, unless these actions or transactions were carried out in the ordinary course of business prior to the FRA’s initial approval of the tender offer. However, in general, pursuant to the Companies Law, the company’s articles of association may require obtaining the board of directors’ approval for the transfer of shares. 9.3 Common Defensive Measures Generally, defensive measures are prohibited. Howev - er, the company’s articles of association may require the board of directors’ approval for the transfer of shares. See 9.2 Directors’ Use of Defensive Meas- ures . 9.4 Directors’ Duties Generally, defensive measures are prohibited. Howev - er, the company’s articles of association may require the board of directors’ approval for the transfer of shares. See 9.2 Directors’ Use of Defensive Meas- ures . 9.5 Directors’ Ability to “Just Say No” In accordance with the Companies Law, the compa - ny’s articles of association may require the approval of the board of directors prior to the sale of shares.
cases, they are also liable for any misleading state - ments. This being said, pursuant to the Civil Code, if a party does not perform its contractual obligations, the other party is entitled to request the defaulting party to per - form its obligations. If the defaulting party does not perform its obligations, the affected party may claim damages. Accordingly, in light of the above, litigation is frequent in M&A deals, given that the buyer may claim dam - ages for any defects discovered after the transaction, or in the event of any misleading information, in addi - tion to the possibility of claiming damages in the event of non-performance of the contractual obligations. 10.2 Stage of Deal Litigation usually takes place after the transaction, whereby the dispute involves claiming damages relat - ing to the obligations stipulated in the pre-contractual document or the contract. The parties may claim dam - ages for defects discovered after the transaction, or in the event of any misleading information, in addition to the possibility of claiming damages in the event of non-performance of the contractual obligations. The damages are assessed by the court on a case- by-case basis, based on the value of the losses suf - fered and any deprived profits that the defaulted party would have expected at the time of concluding the contract, unless otherwise agreed upon in the con - tract or stipulated by the law. 10.3 “Broken-Deal” Disputes The details of disputes between parties regarding bro - ken transactions are not publicly available.
10. Litigation 10.1 Frequency of Litigation
As a general rule under the Civil Code, the seller is not answerable for any defects of which the purchas - er was aware at the time of the sale or any defects that could have been discovered by the purchaser by examining the subject of the sale with the care of a reasonable person, unless the purchaser proves that the seller affirmed the absence of those defects. Furthermore, the sellers are usually liable for binding provisions under pre-contractual document, and in all
11. Activism 11.1 Shareholder Activism
In Egypt, shareholder activism is not explicitly reg - ulated, and accordingly it has not been common in Egypt; however, shareholders’ rights are provided for under the Companies Law and the Capital Markets Law, allowing accordingly the shareholders to pursue
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