In an interview with Who's Who Legal, Khaled El Dardiry speaks about his life as an in-house counsel for Orascom Construction Industries in Egypt and discusses the challenges of working in emerging markets.
"Urbanisation in emerging countries has forced governments to invest in infrastructure – increasing construction activity and demand for equipment."
Position: Legal affairs manager
Company: Orascom Construction Industries SAE
Location: Cairo, Egypt
Number of employees: More than 40,000 in 20 countries
The emerging markets will be a significant driver of the construction industry in the next decade according to the Global Construction 2020 report by Global Construction Perspectives and Oxford Economics. The report forecasts a sharp increase in construction levels from US$7.5 trillion today to US$12.7 trillion by 2020 as a result of burgeoning activity in India, Brazil and China; meanwhile, more developed regions of the world are predicted to show modest growth. It is clear that companies need to set their sights on the emerging world as part of their strategy for long-term success.
Urbanisation in emerging countries has forced governments to invest in infrastructure – increasing construction activity and demand for equipment. The types of projects vary, ranging from transportation to commerce and tourism. However, while the opportunities are vast, working in emerging markets is not without risks. These territories require enhanced due diligence and local knowledge of regulatory issues, procurement laws and business culture.
Orascom Construction Industries (OCI), a leading contractor in emerging markets, knows better than most the reality of working on these projects. Based in Cairo, Egypt, OCI has been active in the industry for more than 50 years and operates in North Africa, Europe, the US, the Middle East and Central Asia. It also produces and exports nitrogen-based fertilisers.
When working in emerging markets the company employs strategies to mitigate risks. According to its legal affairs manager Khaled El Dardiry, from a legal perspective this often means opting for international dispute resolution methods and a foreign governing law.
Khaled El Dardiry joined the company in 2006 after working as a litigator for three years and as a public prosecutor in Egypt, working on criminal cases. An experienced litigator, this gives him something of an edge in corporate law, enabling him to foresee when things could go wrong; a skill of the utmost importance in the construction industry where dispute avoidance is paramount to save costs and time to ensure the maximum return on projects.
Who’s Who Legal spoke to Khaled El Dardiry to find out more about his role within the company and his experience of working in emerging markets.
Tell us about your role.
Our legal department is not very traditional in nature, in the sense that each associate contributes to all work flow regardless of their speciality. Nonetheless, there are parameters within which we work when the workflow increases. My main speciality is advising the company on the legal aspects of the financing arrangements. I am also involved in corporate and M&A transactions in collaboration with the general counsel.
Describe a typical day.
OCI is a very vibrant company with transnational operations in Europe, the US, the Middle East, North Africa and Central Asia, which makes each day different. I don’t think there are typical days at OCI, there is always something going on; either a corporate restructuring, negotiations with governments about on going projects, new projects in new jurisdictions, or ongoing operations that constantly need legal support. I believe the working environment and diverse mix of work is very enriching.
When do you enlist the support of external lawyers?
As in-house counsel our philosophy is to try to depend on inside sources for matters of local law and hire international firms for global transactions. We also try to limit the involvement of external counsel in order to make the best use of our internal resources and benefit the company overall.
What qualities do you look for in a private practitioner? Do these differ depending on the task at hand?
The qualities one usually seeks in a private practitioner depend primarily on the task at hand. There are common qualities one usually looks for, such as intelligence, attention to detail and responsiveness. However, some specific tasks require specific skills.
Tell us about any special projects your team has been working on recently. Which law firm did you use?
The most distinctive project we have worked on recently was the offer of a subsidiary of our group (an entity listed on Euronext/NYSE) to acquire all of the global depository receipts of the parent company that were listed on the London Stock Exchange as well as local shares listed on the Egyptian Exchange. This is all part of a wider project aiming to list the Group in the Netherlands. Several US investors – led by Bill Gates – backed the transaction. Allen & Overy advised the company on English, American and Dutch aspects of the matter and Sarie-Eldin & Partners advised on Egyptian law.
Describe the legal marketplace in Egypt. Is there a lot of choice for clients? Do you tend to use international or local firms?
I think the legal marketplace in Egypt is still immature. We have very good lawyers but as a client you will usually depend on a handful of names for premium service. The younger lawyers are changing this situation, but we still need to develop a more profound focus on specialisation and training. The number of lawyers with international skills and exposure also needs to increase.
Orascom specialises in working in emerging markets. Does this create any additional challenges for the company? How has the company adapted itself to enable the smooth running of its projects in these markets?
OCI works in emerging and developed markets. In emerging markets you always try to mitigate the different risks you predict. From a legal perspective, opting for international dispute resolution methods and a foreign governing law is one way to mitigate the uncertainties of dealing with different jurisdictions.
Following unrest in 2011, economic growth in Egypt has been slow. Has this impacted the company? Conversely, what areas are seeing growth?
There is no doubt that the political unrest in Egypt has affected the company and the market in general. However, I believe this is only temporary in nature and growth will eventually occur. I think there is a significant growth opportunity in the development of infrastructure.
What are the main challenges facing lawyers in emerging markets at present?
I think the main challenge facing lawyers in emerging markets is the uncertainty of laws. The legal infrastructure should instill confidence to investors, allowing lawyers to provide them with a more definitive picture of the legal aspects of the business in question. The legal reform process in some of these emerging markets is yet to be completed. When it is, this should provide a more sound economic structure for investments.