February 2026 – Kosheri, Rashed & Riad

Ibrahim Raslan
February 18, 2026

The 10% Power Play: How Minority Shareholders Can Uncover Corporate Secrets

The 10% Power Play: How Minority Shareholders Can Uncover Corporate Secrets https://krr-law.com/wp-content/uploads/2026/02/inspection-of-the-companys-png.png 1640 924 Ibrahim Raslan Ibrahim Raslan https://secure.gravatar.com/avatar/87f82c73ffa59207e0e9e1cd906a7b78cbd4af6060ffea3bb7df43717d03d9c4?s=96&d=mm&r=g February 18, 2026 February 18, 2026

The Myth of the “Silent Partner”

In the high-stakes arena of corporate governance, a pervasive myth persists: that unless you hold a majority stake, you are merely a passenger. Many minority investors resign themselves to the role of the “silent partner,” operating under the assumption that a 51% stake is the only way to influence a Board of Directors or pierce the veil of corporate secrecy. This assumption is not only common it is a strategic misunderstanding of the law.

As a legal professional, I often see investors overlook the potent “hidden” leverage granted to those with far less than a controlling interest. Under the right regulatory framework, a 10% stake is not a passive position; it is a statutory key that can unlock the company’s most guarded records and hold leadership personally accountable.

The Magic Number is 10 (Not 51)

While the “majority rules” mantra dominates boardrooms, Article 158 of Law No. 159 of 1981 provides a critical counter-balance. It is essential to distinguish between different corporate structures here: while a 20% threshold generally applies to banks and partners in various entities, the law grants a specific, lower threshold for joint-stock companies.

In these companies, a 10% ownership interest is legally sufficient to trigger a formal inspection of company activities. This is a deliberate legislative safeguard; the law recognizes that a 10% partner has enough “skin in the game” to justify state-backed scrutiny if they suspect serious violations by the board or auditors.

Beyond the Financials Accessing the “Secrets”

Transparency is the primary enemy of corporate misconduct. The law ensures that shareholders are not limited to the polished figures found in annual reports. Access to the “secrets” the internal deliberations and administrative records is facilitated through the General Authority for Investment and Free Zones (GAFI) and the General Authority for the Capital Market.

The legal mechanism for this access hinges on a broad definition of eligibility:

“The term ‘any person with a legitimate interest’ here includes administrative authorities as well as partners or shareholders of the company.”

By exercising this right, a 10% shareholder can scrutinize internal documents, minutes, and auditor reports. This is not merely a fishing expedition; it is a tool to verify whether general assemblies were convened regularly and lawfully. Crucially, it allows an investor to confirm they are receiving their exact “lawful share” of profits as mandated by the law and the company’s articles of association, rather than simply accepting the board’s figures.

The Minister of Economy is Your Escalation Point

When internal transparency fails, the law provides an administrative escalation path that involves the highest levels of economic oversight. Initiating a formal inspection is a rigorous process that requires strict adherence to a chronological sequence of actions:

Request & Share Deposit: A formal request is submitted to the Minister of Economy. At this stage, the requesting partners must deposit their shares with the application a “liquidity lock” that remains until a final decision is reached.
Committee Formation: The Minister issues a decision to form an inspection committee, which includes a representative from the Central Auditing Organization.
Submission of Evidence: The applicant must provide concrete evidence supporting the necessity of the inspection.
Confidential Session: A private hearing is held to collect statements from both the applicants and the board members.
Deposit of Expenses: If the process proceeds, the requesting partners must then deposit the necessary funds to cover the costs and expenses of the inspection.
The Inspection Order & Expert: Once expenses are secured, the committee orders a formal inspection of the company’s books and appoints an expert to conduct the examination.

The “Nuclear Option” Dismissing the Board

If the committee substantiates allegations of misconduct, the “Power Play” transitions from investigation to execution. This is the ultimate check on board power. Upon finding serious violations, the administrative authority will immediately call for a General Assembly.

To ensure neutrality, this assembly is chaired by the head of the competent administrative authority rather than a board member. Under this oversight, the assembly holds the power to:

Dismiss Board Members: Remove those responsible for violations.
Enforce Joint Liability: Hold the responsible parties personally and jointly liable for compensation regarding losses suffered.
Nullify Unlawful Decisions: Any decision made in violation of legal requirements is deemed null and void, provided this does not prejudice the rights of bona fide third parties.

The Strategic Nuance: While a 10% stake triggers the meeting, the power to enact these “nuclear” resolutions requires a broader coalition. To be valid, resolutions must be approved by partners holding half of the share capital (50%). The 10% play is the catalyst, but victory requires building a majority consensus.

The Cost of Vigilance (The “Skin in the Game” Requirement)

These rights are robust, but they are not intended for frivolous use. The requirement to deposit shares and cover inspection expenses serves a dual purpose. For the company, it prevents disruptors from stalling operations without cause. For the investor, it represents a strategic calculation: you must be willing to lock up your liquidity and commit capital to the pursuit of transparency.

As a consultant, I view these requirements not as barriers, but as filters that validate the “legitimate interest” of the claimant. It ensures that when a 10% holder moves, the board knows the threat is serious and backed by a commitment to see the process through to the end.

Conclusion: From Passive Investor to Active Guardian

The legal framework of Law No. 159 of 1981 makes it clear: minority rights are not a courtesythey are a statutory mandate. By understanding the leverage provided by the 10% threshold in joint-stock companies, an investor can transition from a position of passive observation to one of active fiduciary oversight.

As you evaluate your portfolio, you must ask yourself: Do you truly know the “lawful share” of the profits you are entitled to under your company’s articles of association, or are you simply taking the board’s word for it? In the eyes of the law, you have the power to find out.

Ibrahim Raslan
February 5, 2026

Arbitration

Does Winning an Arbitration Actually Pay Off? The Surprising Shift in Legal Cost Recovery

Does Winning an Arbitration Actually Pay Off? The Surprising Shift in Legal Cost Recovery https://krr-law.com/wp-content/uploads/2026/02/Arbitration-Cost-Recovery-law-png-1.png 820 462 Ibrahim Raslan Ibrahim Raslan https://secure.gravatar.com/avatar/87f82c73ffa59207e0e9e1cd906a7b78cbd4af6060ffea3bb7df43717d03d9c4?s=96&d=mm&r=g February 5, 2026 February 5, 2026

Introduction: The High Cost of Being Right

Arbitration has long been the preferred vehicle for resolving complex international disputes, prized for its efficiency and specialized expertise. Yet, for many years, a significant shadow has loomed over the process: its high-priced character. For a business stakeholder, the prospect of a Mult million-dollar legal battle carries a haunting question: If we prevail, will we actually be made whole, or is victory merely a “hollow” win once the legal bills are tallied?

The ability to recover costs is not merely a procedural footnote; it is a fundamental security mechanism. For a modern enterprise, understanding how and when these expenses are reimbursed is the difference between a successful risk mitigation strategy and a disastrous financial drain. Recent shifts across major arbitral institutions are fundamentally de-risking this decision, transforming arbitration from a costly necessity into a more predictable path to indemnity.

The DIAC Evolution: From Strict Definitions to Comprehensive Coverage

The Dubai International Arbitration Centre (DIAC) has undergone a dramatic transformation that directly addresses the “legal fee gap.” Under the previous DIAC Rules of 2007, the definition of arbitration costs was bound by a “strict meaning.” Article 2.1 of the Appendix focused almost exclusively on the administrative mechanics—Centre fees, tribunal expenses, and the costs of tribunal-appointed experts. Notably, it excluded party-appointed experts and remained silent on the single largest expense: the legal fees of the parties themselves.

The DIAC Arbitration Rules 2022 fundamentally restructure this landscape. Article 36.1 now provides an explicit mandate for the recovery of “fees of the legal representatives.” Furthermore, from a strategic cash-flow perspective, the new rules empower the Tribunal to decide on costs at any stage of the proceedings, whether through a separate award or within the final award. This flexibility allows businesses to potentially recover costs earlier, rather than waiting years for a final resolution.

“The costs of the arbitration shall include amongst other things any registration fees under the Rules, the Centre’s administrative fees, the fees and expenses of the Tribunal and any experts (whether appointed by the parties and/or the Tribunal), the fees of the legal representatives and any expenses incurred by those representatives, together with any other party’s costs as assessed and determined by the Tribunal.” — Article 36.1, DIAC Rules 2022

The ICC and the Power of “Reasonable” Interpretation

The International Chamber of Commerce (ICC) provides a different, yet equally vital, form of security through Article 38.1. Rather than an exhaustive list, the ICC relies on the strategic gatekeeping of the word “reasonable.”

By empowering the tribunal to award “reasonable legal and other costs,” the ICC rules provide a broad spectrum of interpretation. This ensures that while “lawyers’ fees” are recoverable, the tribunal maintains the authority to penalize inefficient legal maneuvering or disproportionate spending. For a business, this creates a balanced environment: you are protected in your pursuit of justice, but the “reasonable” standard prevents the arbitration from descending into a contest of who can spend the most on counsel.

“The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court… as well as the fees and expenses of any experts appointed by the arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration.” — Article 38.1, ICC Rules

The CRCICA Principle: Making the Loser Pay

The Cairo Regional Centre for International Commercial Arbitration (CRCICA) offers one of the most comprehensive frameworks for cost recovery (Articles 41-49), meticulously detailing both administrative and operational expenses. Under Article 41, recoverable costs include registration and administrative fees, tribunal fees, and even the fees of an “appointing authority” if the Centre is not designated as such.

Crucially, CRCICA’s list of operational costs is extensive, covering:

Reasonable travel and expenses for arbitrators and witnesses.
Fees for tribunal-appointed experts and administrative assistance like translation.
The “legal and other costs” of the parties, specifically including the significant expense of party-appointed experts.

CRCICA generally adheres to the “unsuccessful party” principle—a true indemnity model where the loser pays. However, the tribunal retains the discretion to “share out” these costs. This is essential for complex commercial disputes where “winning” isn’t always binary. If a party achieves only partial success, the tribunal can split costs proportionally, ensuring that the final financial burden accurately reflects the legal reality of the claims won and lost.

Arbitration Costs as a Strategic Business Tool

The shift toward explicit recovery of “lawyers’ fees” represents a pivotal change in how corporations view dispute resolution. When the rules support full indemnity, legal departments are no longer mere “cost centers”; they become “value recovery centers.”

Knowing that these expenses are recoverable changes the entire risk-reward calculus for a company. This recovery mechanism acts as a security feature that encourages business actors to rely on arbitration despite its high initial costs. By treating the “high-priced” nature of the process as a recoverable investment rather than a definitive loss, stakeholders can pursue their claims with the confidence that their financial position will be restored upon a successful verdict.

Conclusion: The Future of Dispute Resolution

The modernization of rules within centers like DIAC, ICC, and CRCICA signals a more business-friendly future for international arbitration. By closing the “legal fee gap,” these institutions have ensured that a victory in the tribunal translates into a victory on the balance sheet.

As the path to meaningful financial recovery becomes clearer, the historical drawback of high arbitration costs is effectively neutralized. The question for business leaders is no longer whether they can afford to arbitrate, but rather: given that your costs are now recoverable, can you afford not to?

Get in touch with Kosheri, Rashed & Riad to assess your case and craft an arbitration strategy that maximizes both your prospects of success and your recoverable costs.