I. THE DISPUTE

1. In 1987 a series of meetings were held between Mr Hesham Alashmawy, a dual citizen of the United States and Egypt, who is Claimant’s President, and senior officials of Grand Hotels of Egypt (“GHE”), a company owned by the Government of Egypt, which at that time owned and managed certain of the country’s hotels as well as with the Egyptian Ministry of Tourism. Following these meetings, Mr Alashmawy was invited to inspect existing hotel properties in which the Egyptian Government was seeking foreign investment and various tracts of land that the Government had designated for tourism development or sale.

2. In February 1988, Claimant was incorporated in the State of California, and in February 1989, Mr Alashmawy formed the Egyptian American Company for Development and Tourism – H&H Enterprises (“H&H Egypt”). On 10 April 1989, Mr. Alashmawy made a proposal to GHE for the purchase of the Ain El Sokhna hotel and adjoining land. The proposal, which Claimant alleges was accepted by GHE, and which Claimant therefore says granted it an option to buy the Resort (the “Option to Buy”), took the form of a one-page letter addressed to the then chairman of GHE.