Damac Properties has said it will file an arbitration claim against the Egyptian government at the International Centre for Settlement of Investment Disputes, after Egypt’s court ruled the UAE-based developer had purchased land unlawfully.

Egypt’s criminal court in Giza sentenced Damac Properties’ chairman Hussain Sajwani to five years in jail, fined him AED149.5m ($40m) and ordered the developer to return land Damac had purchased on the Red Sea Coast to the government.

The case against Damac Properties’ chairman was regarding Damac’s acquisition of 30 million square metres of land along Egypt’s Red Sea coast land to build its planned Gamsha Bay project. The Egyptian court found that the 2006 sale of land to Sajwani by the Tourism Ministry was illegal.

In a press release dated 11 May, Damac Properties said it rejected the Egytian court’s ruling regarding the purchasing of lands on the Red Sea coast and there is “no evidence of wrongdoing on the part if Mr Sajwani”.

The developer said the court judegment was politically motivated and “the result of a political ‘campaign of persecution’ against any businessman who conducted business with the former Mubarak Government”.

Sajwani was not present for the court proceedings and Egypt’s Attorney General Abdel Meguid Mahmoud has now issued a memorandum to Interpol for Sajwani’s arrest.

Egypt’s former tourism minister Zuhair Garanah and local businessman Hicham Al-Hazeq have also been sentenced for their roles in the land deal.