The story
AOI was established by its four member-states - Egypt, Qatar, Saudi Arabia and the UAE - in response to the threat posed by the advanced Israeli defence industry. The initial capitalisation of AOI was USD 1 billion, contributed in equal part by the four member-states, although with the understanding AOI would be based in Egypt.
Westland Helicopters v. Arab Organisation for Industrialization
In 1978, AOI and Westland Helicopters, a British aerospace company, established the Arab British Helicopter Company as a joint venture, but a year later AOI announced the company's liquidation. In ensuing arbitration, the International Chamber of Commerce made an award, on grounds of breach of the principles of natural law and good faith, in favour of Westland Helicopters and against AOI's four member-states. This award was later annulled by the Court of Justice of Geneva, which annulment was upheld by the Swiss Federal Supreme Court, on grounds that the arbitrators had jurisdiction over AOI but not over the organisation's member-states.
Egyptian isolation
Following the signing of the Egypt-Israeli peace treaty (1979), Egypt had its membership to the Arab League suspended and a policy of economic isolation implemented against it. It was in this atmosphere that the three AOI member-states other than Egypt - Qatar, Saudi Arabia and the UAE - withdrew from the AOI, causing its collapse.
In 1983, the Egyptian chief-of-staff restated his interest in the joint manufacture of weapons, but it was only after the 1987 Arab League summit in Amman, Jordan, when the Arab League re-admitted Egypt and the other Arab states normalised relations with Egypt, that the possibility of renewed co-operation among the AOI member-states seemed possible.
The UAE seemed similarly eager to reinvigorate the AOI: in 1988, Egypt and the UAE held talks with Qatar about its re-entry into the AOI, at which an agreement for closer co-operation between Egypt and Qatar in the fields of culture and communication was signed.
From Wikipedia’s article on Arab Organization for Industrialization, shared under CC BY-SA 4.0.4