Mohamad Talaat is the Managing Partner of Baker & McKenzie’s Cairo office. He is a widely recognized figure in his areas of practice and has many years of experience in the field of real estate.
What is the nature of the relationship between a law firm and the legal in-house department and the nature of integration between them?
This is an interesting question. As a matter of fact I have always questioned myself about the reasons of having a legal department and yet in house lawyers resort to outside counsel. I have never been an in house lawyer myself, however from what I have seen throughout my years as a legal practitioner; that the in house lawyer tends to be more focused on the day to day company operations but once it comes to impartial opinions or disputes; in house counsels delegate the matter to an off counsel firm as usually an outside counsel is more impartial with the issues given to them and not withstanding any issues that the in house counsel may encounter.
On top of that with respect of litigation and cases before the courts, usually the in house counsel delegates these matters to the outside counsel to handle them, and an outside counsel role is to be supportive. Also there is an economic side to this because if the day to day operations of the company were referred to an outside counsel it will be much more expensive and this is the reason companies hire in house lawyers.
Many in house lawyers try to eliminate the use of outside counsel. This may be due to the turbulence in harmony between them, and either the in house lawyer is trying to prove value to the company or the firm that works with the in house has proven to be useless.
What are common types of contracts you work on in the field of real estate?
This varies on the nature of work we are assisting the company in, whether a real estate company in construction, land purchase, sale contracts and all the way to share transfers between shareholders, but mainly most of our work is focused on contracts with end users “buyers” and land processes with the government.
What is your opinion on the current laws and procedures “law no 8 and law no 59″
In my opinion there is no reason for an investment law now, it’s main reason is to give incentives to the investors and the current mind set doesn’t deliver on this part. It may have existed in previous times. The tax incentives – which is the foremost incentive – has been eliminated from the law. Therefore the Companies’ Law should by itself suffice and include all aspects. People might disagree with me but this is what should be implemented in order to have improvement.
What is your opinion on the latest law being drafted (2015)?
To be frank with you there is no need for it. We need first to implement the current laws and train the current governmental employees to be more cooperative with investors as many employees interpret the laws in unamenable manner for investors which impedes the investment in Egypt. On top of that the administrative implementation of the law must be focused on. It is not sufficient to have slogans and not to focus on details which are very important to provide a solution for the problems which the investors are facing.
Sometimes the nationality of foreign investors in relation with laws and jurisdiction affect local investment, what solutions do you apply in this regard?
There are no exceptions on the nationality of foreign investors except in the nationality of commercial agents and purchasing of agriculture land based on the agricultural reform law in 1952 which is still in place till now; foreigners cannot acquire land in the Delta area and in Sinai. In this respect Egypt is actually more liberal than many other Arab countries when it comes to land ownership.
What do real-estate companies prefer from a law firm; Litigation or arbitration – the choice in real-estate dispute resolution and the role ICSID “International Centre for Settlement of Investment Disputes”?
Arbitration is becoming more in trend for companies but due to the cost of the procedures companies now resort to litigation “economic court” as it is more expeditious when in it deals with cases, the ICSID is different as it is meant to enable investors to proceed against the government.
What are the government red tape and legal hurdles do you represent real-estate companies in?
This is primarily on the land acquired from the government, sometimes the government is quite rigid in its position but in almost all cases all disputes are solved amicably.
What is your opinion on FIDIC and the role of FIDIC contracts?
FIDIC is a model construction contract. Sometimes it is useful for companies. Egypt is not registered with the FIDIC association because we have the contractors association which sometimes doesn’t comply with the rules of FIDIC but we use the same principles applied in FIDIC contracts and from my point of view in Egypt we should adopt FIDIC for better contracts.
What are the steps law firms carry out to ensure a due diligence practice by real estate companies?
This mainly revolves on the registration of lands, we make sure that the land ownership is solid and we make sure that companies abide with all the laws relating to ownership of properties and land.
How do law firms initiate land registration process for real estate companies?
This is usually carried out by our associates and there is a problem with this, the registration process of land is very complicated and would be repelling for investors and companies.
Do you have any personal remarks?
Better planning and paying more attention to details, we should focus more on solving problems and not create slogans that end up in vain.