A litigation funder has reached a confidential settlement with the estate of late Finnish mining investor Mohamed Abdel Raouf Bahgat, ending a £16.74 million ($21.2 million) legal fight over proceeds from a long-running arbitration case against Egypt.

The High Court of Justice of England and Wales finalized the settlement on Tuesday, officially closing the multimillion-pound dispute, court records show.

Mining Investor’s $43.8M Arbitration Victory Sparks Legal Clash

Bahgat secured a $43.8 million arbitral award in 2019 from a tribunal in The Hague after his iron ore project in Egypt was shut down by the government two decades earlier. With interest, the award ballooned to $115 million by August 2020. After years of enforcement battles, Bahgat ultimately settled in November 2021 for a $99.5 million payout.

Buttonwood Legal, a third-party litigation funder, had financed the arbitration with an initial £2.3 million commitment in 2011. However, in 2022, Buttonwood took legal action in the High Court, claiming it had yet to receive its share of the award.

Funders and Investors at Odds Over Settlement Terms

As arbitration costs escalated, Bahgat sought additional funding from Vannin Capital PCC. In 2017, Buttonwood and Bahgat renegotiated their terms in a settlement agreement, which the funder claims Bahgat later breached.

Buttonwood sought approximately £14.6 million, including £1.42 million in unpaid principal, £5.15 million in interest, and nearly £8 million in success fees.

Bahgat, however, contested the claim, arguing the agreement was unenforceable due to what he called an “extremely high rate of interest” and an inflated “fund protection fee.”

Egyptian Government’s Role in Investor’s Downfall

Born in Egypt but later a Finnish national, Bahgat was selected in the late 1990s to develop iron ore resources near Aswan. He founded Aswan Development and Mining Co. (Ademco) and Aswan Iron & Steel Co. (AISCO), with Ademco receiving a 30-year mining concession.

But in 1999, a new Egyptian prime minister allegedly took hostile steps to reverse his predecessor’s policies, leading to Bahgat’s arrest in 2000. He spent over three years in jail on misappropriation charges before being acquitted in 2002. His assets were frozen, police seized the project, and mining operations never resumed.

In 2011, Bahgat initiated arbitration, where a tribunal ruled that Egypt had expropriated his investment and unjustly detained him in bad faith.

Legal Teams Silent as Settlement Closes Case

Neither party has publicly commented on the settlement.

Case Information

• Plaintiff: Buttonwood Legal Capital Ltd.
• Defendant: Estate of Mohamed Abdel Raouf Bahgat
• Case: Buttonwood Legal Capital Ltd. v. Bahgat
• Court: High Court of Justice of England and Wales (Case No. CL-2022-000190)
• Legal Representation:
  • Buttonwood Legal: Iain MacDonald of Gough Square Chambers, instructed by Signature Litigation LLP
  • Bahgat’s Estate: Lisa Lacob of 3VB and Andrew Gurr of Serle Court, instructed by Peters & Peters Solicitors LLP