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Monday, May 20, 2024 | Back issues
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Court Cans Suit Over Coca-Cola Plant in Egypt

MANHATTAN (CN) - Coca-Cola did not illegally purchase a Cairo bottling facility forcefully taken from a Jewish family in Egypt by the Nasser regime in the 1960s, the 2nd Circuit ruled.

The Coca-Cola Co. established its first bottling plant in Egypt in the 1940s by leasing and operating land and buildings from the family of Raphael Nessim Bigio. The Bigios had owned the property in the Cairo suburb of Heliopolis since 1929, but the Bigios say they were expelled from Egypt in 1965 because of anti-Semitism.

Egypt had sequestered and nationalized their property in 1962 as part of "the anti-Jewish policies of its then President Gamal Abdel Nasser," according to the Bigios' complaint.

But Bigio says he returned in 1979 and obtained a decree from the Ministry of Finance that the property "had never been legally sequestered or nationalized and accordingly remained" Bigio property.

In the meantime, however, the property had come into the possession of the Misr Insurance Co., a government-owned entity that refused to turn it over to the Bigios.

When Egypt announced the privatization of the bottling facility in 1993, Bigio notified Coca-Cola of his family's interest in the property. Coca-Cola scheduled a meeting with the Bigios, but it closed on a deal to acquire ownership interest in the property and facility before the meeting took place. The purchase was a joint venture with MAC Beverages.

Failing to enforce the Ministry's decree in the Egyptian legal system, Bigio and his family filed a 1997 lawsuit in the Southern District of New York, claiming rightful ownership of Coca-Cola's property in Cairo.

They also claim that Coca Cola knew the property had been taken illegally, but continued to business with the Egyptian Ministry of Finance, which controlled the property and bottling facility.

The initial 1997 suit was dismissed under the Alien Tort Statute on the grounds that there was no jurisdiction and that the act of state doctrine barred the exercise of jurisdiction. On appeal, however, the 2nd Circuit reversed and remanded the case for further proceedings. The Bigios refiled with the Southern District court in 2009, claiming "unlawful taking and exclusion of plaintiffs," trespass, conversion, civil conspiracy and aiding an abetting, and unjust enrichment.

The case was again dismissed, with the court finding this time that Egyptian law prevails. It also said the Bigios "have not plausibly alleged that defendants enriched themselves without just cause."

A three-judge panel affirmed on all counts Monday.

Though the complaint alleges "a tragic story of religious discrimination in Egypt in the 1960s," that the alleged wrong "was inflicted by the Egyptian government, Misr Insurance Company, and CCE, not by Defendants," Judge Debra Ann Livingston wrote for the court.

Coca-Cola Co. and its subsidiary occupied the property under a legitimate claim of right and therefore their possession is not illegal, the decision states.

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