CAIRO—An Egyptian court on Monday upheld a ruling that said the government cannot transfer control of two key Red Sea islands to its main financial backer, Saudi Arabia, deepening a rift between the two Middle Eastern countries.
The alliance between Egypt and Saudi Arabia, two of the most influential Sunni countries in the world, has been tense for over a year, with Egypt refusing to substantially bolster Saudi war efforts in Syria and Yemen, despite receiving over $25 billion in aid since 2013. Saudi Arabia has given the money in an effort to salvage Egypt’s economy, which has been battered by political turmoil since the 2011 uprising.
Monday’s verdict is widely expected to further shake, but not break, these strained ties.
“The Saudi government will be unhappy about this,” said Mustapha Kamel al-Sayyid, a political science professor at Cairo University. “But eventually, Saudi will come to terms with the fact that having Egypt on its side is more important than these islands,” he said.
Many analysts agree that Saudi Arabia is eager to make sure Egypt does not slide into civil unrest and to preserve its alliance with the country, the largest Arab military power in the region.
Monday’s verdict, issued by the highest administrative court, is final and cannot be appealed in any other administrative court.
But the Egyptian government is mounting a separate challenge in a parallel legal forum, the Supreme Constitutional Court. The government questions the administrative court’s right to rule on the matter, its lawyers said.
“The administrative courts have no business reviewing such decisions in the first place,” said Rafik Sherif, the deputy head of the State Lawsuits Authority, the official body that represents the government in this case and in all legal disputes. “These are sovereign acts, and the judiciary has no right to question them.”
There are two articles in Egyptian laws that immunize sovereign decisions from oversight by the courts, but they do not define them. These articles, according to the antigovernment lawyers, stand in direct contradiction with the country’s Constitution, which was ratified in 2014 and plainly states that no administrative decision is above the courts.
Rights groups have accused Egypt’s judges of being deferential to the government of President Abdel Fattah el-Sisi since he came to power in 2013. But a minority of judges, mostly ones in higher courts, according to analysts, have jealously guarded their independence and have sometimes acted as an autonomous check on the powers of Mr. Sisi.
The two contested islands, Tiran and Sanafir, are both arid. They lie at the mouth of the Gulf of Aqaba, a strategic corner of the Red Sea that gives them control over the only sea route to the Israeli port city of Eilat and the Jordanian port city of Aqaba.
Saudi Arabia transferred Tiran and Sanafir to Egyptian control in 1950 amid concerns that Israel might seize them. Mr. Sisi publicly promised to return them to Saudi Arabia during a visit by the Saudi monarch, King Salman, last year.
Judge Ahmed el-Shazly, who issued the verdict, said the government did not provide any proof that the islands were Saudi, according to state media. “Egypt’s sovereignty over Tiran and Sanafir is absolute; the government did not present a document that changes this fact,” he said.
Tiran and Sanafir were virtually unknown to the Egyptian public until Mr. Sisi’s government announced in April that it would hand them over to Saudi Arabia.
The move struck a nationalist nerve and was immediately perceived as a sellout, sparking street protests and a continuing furor.
In televised video of the verdict session, people in the court were seen erupting in jubilation after the verdict was announced, shouting, “Egyptian! Egyptian!”