Egypt: International Arbitration Comparative Guide

Last Updated: 10 September 2019
Article by Ismail Selim
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1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

The applicable law is the Law No. 27 for the 1994 regarding arbitration in civil & commercial matters (Egyptian Arbitration Law) as amended, which is based on the UNCITRAL Model Law on international commercial arbitration (1985). It applies to domestic, international and foreign arbitrations. There is also substantial case law dealing with the application of the Arbitration Law.

Pursuant to article 12 of the Egyptian Arbitration Law, the arbitration agreement must be in writing; otherwise it will be null and void. It shall be considered in writing not only if it is included in a document signed by both parties, but also if it is included in letters and other means of written communication exchanged between the parties.

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

The Egyptian Arbitration Law applies to domestic, international and foreign arbitrations. The said Law applies to arbitration proceedings taking place in Egypt, regardless of the nature of the dispute, even if one or both parties are public juristic persons. The Egyptian Arbitration Law also applies to international commercial arbitration proceedings conducted abroad when the parties agree to be subject to its provisions. Finally, the Court of Cassation ruled that in compliance with article III of the New York Convention of 1958, the Egyptian Arbitration Law shall govern the enforcement of foreign awards even if the parties had not agreed to subject their relevant foreign arbitration proceedings to the said Law.

A distinction shall be made between international and foreign arbitration proceedings. In one respect, article 3 of the Arbitration Law states that arbitration proceedings are considered international if the subject matter relates to international trade. A matter is deemed to relate to international trade in the following circumstances:

  • the respective head offices of the parties are situated in two different countries;
  • the agreement is to resort to institutional arbitration;
  • the dispute is linked to more than one state; and
  • the respective head offices of the parties are situated in the same country but one of the places listed hereunder is located outside such country:
    • the seat of arbitration;
    • the place of performance of the essential part of the obligations; or
    • the place most closely linked to the subject matter of the dispute.

In another respect, arbitration proceedings are foreign under the said Law if they are merely conducted outside Egypt, meaning that the seat of arbitration is outside Egypt even if the venue of the hearing is in Egypt.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

The Egyptian Arbitration Law was influenced by the UNCITRAL Model Law on International Commercial Arbitration (1985), subject to some deviations as follows:

  • the applicability of the Egyptian Arbitration Law to both domestic and international arbitration. That approach was for political reason given that parliament members of the opposition were assimilating international arbitration to mixed court that used to exist in Egypt from 1875 to 1949;
  • the extra-territorial application of the Egyptian Arbitration law to proceedings seated abroad if the parties have agreed to such application, including the international jurisdiction of the Egyptian courts to decide upon setting aside proceedings;
  • the adoption of an additional criteria for ascertaining the international nature of an arbitration, namely the parties' agreement to apply the rules of an arbitral institution ;
  • the Egyptian Arbitration law does not explicitly exclude the conclusion of an arbitration agreement through electronic means, which remains governed by the applicable Egyptian laws;
  • for arbitration clauses by reference, the Egyptian Arbitration law requires the reference to be explicit to incorporate the arbitration clause itself;
  • the public policy requirement of an odd number of arbitrators;
  • a partial award and a preliminary arbitral award on jurisdiction may not, according to the Egyptian Arbitration law, be challenged before the Egyptian judiciary until a final award is rendered;
  • an arbitral tribunal does not have a default power to order interim measures unless such power is conferred thereon by the parties' agreement;
  • if the parties have not agreed on the language of the proceedings, the language shall be Arabic unless the arbitral tribunal determines otherwise;
  • if the parties have not agreed on the legal rules applicable to the substance of the dispute, the arbitral tribunal shall apply the substantive rules of the law it considers most closely connected to the dispute
  • the arbitral tribunal shall render the final award within the period agreed upon by the parties. In the absence of such agreement, the final award must be made within 12 months of the date of commencement of the arbitral proceedings. In all cases the arbitral tribunal may decide to extend the period of time, provided that it shall not exceed six months, unless the parties agree on a longer period
  • if, in the course of the arbitral proceedings, a matter falling outside the scope of the arbitral tribunal's jurisdiction is raised, or if a document submitted to it is challenged for forgery, or if criminal proceedings are undertaken regarding the alleged forgery or for any other criminal act, the arbitral tribunal may decide to proceed with the subject matter of the dispute without any reliance on the incidental matter raised or on the document alleged to be a forgery or on the other criminal act. Otherwise, the arbitral tribunal shall suspend the proceedings until a final judgment is rendered in this respect. Such measure shall entail suspension of the period for making the arbitral award
  • the possibility of setting aside an arbitral award if the arbitral tribunal has excluded the lex causae chosen by the parties; and
  • the Egyptian Arbitration law provides for only three grounds based upon which an exequatur may be denied as follows:
    • contradiction with a prior judgment rendered on the substance of the dispute by the competent Egyptian court;
    • violation of Egyptian public policy (construed narrowly by the courts); and
    • failure to properly notify the award to the party against whom it was rendered.

Finally, it is worth mentioning that the Egyptian Arbitration Law has not adopted the amended UNCITRAL model law of 2006.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

Under Egyptian law, party autonomy with respect to the choice of the substantive applicable law is well established, and the parties are free to choose their applicable substantive law, subject to exceptional legislative constraints (as in technology transfer contracts and remuneration of Egyptian commercial agents, where application of Egyptian law is mandatory). According to the Egyptian Arbitration Law, if the parties' fail to agree or choose the applicable substantive law, whether explicitly or implicitly, the arbitral tribunal shall apply the law, which it deems to be the most closely connected to the dispute1.

On the other hand, most of the procedural rules governing the conduct of the proceedings are not mandatory and the parties may derogate therefrom by agreement. However, a few rules appear to be mandatory. For example:

  • Witnesses and experts may not be heard under oath;
  • awards may not be rendered by truncated tribunals, but may be rendered by a majority of arbitrators;
  • time allowed for the issuance of the award in ad hoc arbitrations is limited to 12 months but can be extended to 18 months;
  • A ruling on recusal of an arbitrator, when the arbitrator does not step down voluntarily, can only be obtained through court action;
  • In case an arbitrator is replaced, at least one hearing shall be held in the presence of the substitute arbitrator;
  • Challenges to a tribunal's decision on jurisdiction can only be brought in a nullity action after the final arbitration award is issued.

It is established through judgments of the Egyptian Courts that, except for rules related to public order, arbitral tribunals are not bound by norms considered mandatory in domestic litigations2.

Footnotes

1. If the substantive law is unclear, the arbitral tribunal may instruct the parties to submit evidence in support of their views on the applicable law and its content, and/or request the provision of expert evidence to ascertain the content of such law.

2. Court of Cassation, Challenge No. 547/51 JY, session dated 23 December 1991; Court of Cassation, Challenge No. 1259/49 JY, session dated 13 June 1983.

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

The legal framework in relation to arbitration is not likely to change in the near future. There is just a possibility that a draft law is elaborated with regard to the existing unregulated arbitration centers. This draft law would not apply to the Cairo Regional Centre for International Commercial Arbitration ("CRCICA") which was established by virtue of Headquarters Agreement between the Asian African Legal Consultative Organisation ("AALCO") and the Arab Republic of Egypt.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Egypt adhered to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1959 without making any declarations or notifications.

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

In 1974 Egypt acceded to the 1965 Convention of the International Bank of Reconstruction and Development of Washington (IBRD) that established the International Centre for the Settlement of Investment Disputes (ICSID).

Further, Egypt has ratified several regional conventions relating to international commercial and investment arbitration, including:

  • the 1954 Convention on Enforcement of Decisions between the States of the Arab League;
  • the 1974 Convention on the settlement of Investment Disputes between the Hosting Countries of Arab investors and the nationals of other Arab countries;
  • the Amman Arab Convention on Commercial Arbitration of 1987; and
  • the Unified Agreement on the investments of Capitals in Arab States of 1980, which was signed in Amman and entered into force on 7 September 1981.

In addition, Egypt has signed 115 bilateral investment treaties (BITs) that include possible recourse to arbitration, of which 30 did not enter into force and 13 were terminated.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Arbitration is not permitted in matters that cannot be subject to compromise. It is not permissible to refer to arbitration disputes concerning personal status or public policy, such as criminal matters, constitutionality of law, real estate ownership, etc.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

According to the Arbitration law, the choice of the seat is without prejudice to the arbitral tribunal's power to convene in any place it deems appropriate, which entails the possible conduct of hearings and meetings abroad. Vice versa, hearings and procedural meetings can be conducted in Egypt, even if a foreign jurisdiction is selected as the seat of arbitration. Egyptian courts have also acknowledged the distinction between the legal seat and the geographical venue for conducting one or more procedures of the arbitration.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

In addition to contractual requirements such as consent, capacity and the existence of a legal relationship, the following requirements must be satisfied for there to be a valid arbitration agreement:

  • the arbitration agreement must relate to matters that are subject to compromise;
  • the arbitration agreement must be made in writing; otherwise, it shall be null and void. It will be written if it is included in written communication exchanged between the parties. This requirement is widely interpreted to include an arbitration agreement concluded by electronic offer and acceptance. The silence of agreement in this regard may be considered as acceptance of the arbitration agreement if there are continued transactions between the parties where the arbitration agreement is part thereof;
  • in accordance with article 702 of the Egyptian Civil Code and article 76 of Civil and Commercial Procedures Law, the arbitration agreement may not be concluded by an agent except by virtue of private and specific written delegation; otherwise, the arbitration clause will not be effective in relation to the principal; and
  • with regard to disputes relating to administrative contracts, agreement on arbitration shall be reached upon the approval of the competent minister or the official assuming his or her powers with respect to public juridical persons.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

Yes, article 23 of the Egyptian Arbitration Law (no.27/1994) states that "the arbitration clause shall be treated as an independent agreement separate from the other terms of the contract". It goes on to specify that the validity of the arbitration agreement is not connected nor affected by the enforceability or validity of the contract to which it pertains.

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

The arbitration is conducted in Arabic, unless another language or languages are agreed upon by the parties or determined by the arbitral tribunal.

The parties to the arbitration are entitled to agree on the place of arbitration in Egypt or abroad. Without such an agreement, the arbitral tribunal will determine the place of arbitration, taking into consideration the circumstances of the case and the convenience of the place to the parties. This shall be without prejudice to the power of the arbitral tribunal to convene in any place it considers appropriate to undertake any of the arbitral proceedings.

Under CRCICA rules, in absence of an agreement by the parties, the arbitral tribunal shall, promptly after its appointment, determine the language or languages to be used in the proceedings. The same applies to the place of arbitration that shall be determined by the arbitral tribunal, in absence of the parties' agreement, having regard to the circumstances of the case.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

The arbitral tribunal is empowered to rule on motions related to its non-competence, including motions predicated on the absence of an arbitral agreement, its expiry or nullity or its failure to include the subject matter of the dispute. This shall be invoked no later than the date of submission of the respondent's statement of defence. Those pleas may be decided upon by the arbitral tribunal before ruling on the merits or join them to the merits in order to adjudicate both together.

4.2 Can a tribunal rule on its own jurisdiction?

The Arbitration Law adopted the competence-competence principle by virtue of which the arbitral tribunal has jurisdiction to rule on its own jurisdiction and to decide over any jurisdiction-related claims including the existence, validity and scope of the arbitration agreement. This is also enforced by the principle of separability of the arbitration agreement.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

A state court seized with a dispute in respect of which an arbitral agreement exists must decide that the action is non-admissible if the defendant invokes a plea of non-admissibility before raising any request or defense in the case.

Further, it is worth mentioning that at the end of the arbitration, a party can bring an action in court for nullity of the arbitration award on the basis of lack of jurisdiction. In all cases, jurisdictional challenges must be recorded in the arbitration process before defenses on the merits. Otherwise, the party bringing these challenges can be deemed to have waived its right to challenge.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

Generally speaking, a party to arbitration (a natural or juristic person) must enjoy capacity to exercise (have the legal capacity to validly sign contracts).

In accordance with article 702 of the Egyptian Civil Code and article 76 of Civil and Commercial Procedures Law, the arbitration agreement may not be concluded by an agent except by virtue of private and specific written delegation; otherwise, the arbitration clause will not be effective in relation to the principal.

In this context, it is worth mention that arbitration in relation to administrative contracts is permissible provided the arbitration agreement is approved by the competent minister or by whomever assumes his or her authority with respect to public entities. The power to approve the arbitration agreement may not be delegated. Approval may be rendered subsequent to the conclusion of the administrative contract and does not need to be written or expressed in a specific form. A recent CRCICA award held that approval may be implicit, inferred from the circumstances of the case3.

In 2010, the Cairo Court of Appeal held that ministerial approval is a legislative requirement for the validity of the arbitration clause and is addressed to both parties4. Similarly, in 2011, the Administrative Supreme Court upheld the principle that ministerial approval of the arbitration clause is addressed to both parties5. Some CRCICA tribunals have held that the arbitration agreement is not invalidated due to the absence of ministerial approval because this requirement should not be applicable to international commercial arbitrations conducted with foreign investors6, the Arbitration Law does not provide for an annulment sanction for violation of article 1, and such requirement needs to be fulfilled by the administrative entity and not the other party (ie, it is the sole responsibility of the administrative entity and it should bear the liability for not obtaining ministerial approval)7.

In 2015, the Egyptian Court of Cassation upheld a relatively anti-arbitration interpretation of Article 1(2) of the Egyptian Arbitration Law. The Egyptian Court of Cassation has confirmed the precedents of the Conseil d'Etat that without Ministerial approval arbitration clauses in administrative contracts are ineffective, and any award made as a result of them will be annulled. Persons who are negotiating administrative contracts to be entered into with Egyptian public bodies must therefore be vigilant should they wish to select arbitration as the means of resolving any future dispute with the Egyptian State or any other Egyptian public juristic person. Written approval of the competent minister must be obtained on or before the date of signature of the administrative contract.

Footnotes

3. CRCICA Arbitration Case No. 676/2010, award dated 21/08/2011, Journal of Arab Arbitration, Issue No. 17, pp. 263-264.

4. Cairo Court of Appeal Judgment No. 111/126 JY, hearing dated 30 March 2010 referred to in Mohamed Amin El Mahdy, ‘Return to the Problematic Arbitration in Administrative Contracts Disputes', Journal Arab Arbitration, Issue No. 19, p. 26.

5. Administrative Court Judgment No. 11492/65 JY, session dated 7 May 2011.

6. CRCICA Arbitration Case No. 382/2004, session dated 7 March 2006 referred to in Walid Mohamed Abbas, Arbitration in Administrative Disputes of Contractual Nature, 2010, Dar El Gama'a El Gadida, pp. 221–222.

7. CRCICA Arbitration Case No. 464/2006, session dated 2 July 2006; CRCICA Arbitration Case No. 553/2007, session dated 5 November 2009 referred to in Journal of Arab Arbitration, Issue No. 13, December 2009, p. 237; CRCICA Arbitration Case No. 567/2008, session dated 12 September 2009 referred to in Journal of Arab Arbitration, Issue No. 13, December 2009, p. 237; CRCICA Arbitration Case No. 495/2006, award dated 17 May 2007, referred to in Journal of Arab Arbitration, Issue No. 12, pp. 121–123.

5.2 Are the parties under any duties in relation to the arbitration?

The parties' freedom to agree on an arbitration regime of their choice and to prescribe the procedure to be followed is subject to few limitations. The arbitration agreement must be a valid one according to the law which governs it. This will usually be the law governing the substantive contract, in which the arbitration clause is embedded, but is not necessarily that law. The possibility of dépeçage arises because the arbitration agreement is regarded as a separate agreement to the substantive contract in which it is contained. In addition the arbitral procedure itself should comply with the mandatory rules of law of the lex arbitri. The lex arbitri is often the law of the place of the seat of the arbitration, but not invariably so.

After the commencement of arbitration, the parties shall not influence or infringe upon the impartiality and independence of the arbitrators8. Further, they shall fully cooperate with the arbitral tribunal to fulfil its obligation to proceed with reasonable expedition.

Footnote

8. Arbitrators must be impartial and independent of the parties (Articles 16(3) and 18(1), Arbitration Law).

5.3 Are there any provisions of law which deal with multi-party disputes?

The Arbitration Law does not provide special rules in this respect.

On the other hand, the CRCICA rules provide particular rules concerning the appointment of arbitrators in multiparty arbitrations. According to article 10 of the CRCICA rules, where three arbitrators are to be appointed and there are multiple parties as claimant or as respondent, unless the parties have agreed to another method of appointment of arbitrators , the multiple parties jointly, whether as claimant or as respondent, shall appoint an arbitrator. In the event of failure of the multiple parties to jointly appoint an arbitrator, the Centre shall, at the request of any party, constitute the arbitral tribunal, and in doing so, may revoke any appointment already made, and appoint or reappoint each of the arbitrators and designate one of them as the presiding arbitrator.

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

As mentioned before, the arbitration Law adopted the principle of freedom to arbitrate with preference always given to the contractual provisions, including those regulating the choice of the applicable law. However, if the parties fail to agree on the legal rules to be applied to the merits of the dispute, the arbitral tribunal shall apply the substantive rules of the law it deems most closely connected to the dispute.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

Article 39 of the Egyptian Arbitration Law (no.27/1994) provides that "the arbitral tribunal shall apply to the substance of the dispute the rules chosen by the two parties". The choice of substantive law by the parties is not restricted, save for certain exceptional legislative constraints (e.g. in technology transfer contracts and for the remuneration of Egyptian commercial agents). Article 39 of the Egyptian Arbitration Law goes on to state that where the parties fail to agree on the applicable substantive law, the tribunal is to apply the substantive law it finds "most closely connected to the dispute". Article 39 further states in its paragraph 3 that in all events the arbitral tribunal shall respect the terms of the contract and any usage of trade applicable to the transaction.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

Consolidation of separate arbitral proceedings under one or more contracts is possible, but conditional upon the parties' agreement.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

The Egyptian Arbitration Law does not regulate third-party participation in arbitration. However, CRCICA rules regulate the joinder of a third person to the arbitration proceedings provided that such third person is a party to the arbitration agreement.

7.3 Does an arbitration agreement bind assignees or other third parties?

An arbitration agreement, like any agreement, imposes certain obligations on its parties. However, only its parties are bound by it. Thus, the extension of the arbitration agreement to non-signatories is generally prohibited. Article 145 of the Civil Code provides that the effect of a contract extends to the contracting parties and the general successors without prejudice to the rules relating to inheritance, unless it appears from the contract, the nature of transaction or from the law that such intention shall not affect the general successor. The general principle is that third parties or non-signatories are not bound by an arbitration agreement except in very limited cases. Indeed, the Egyptian Court of Cassation decided on 22 June 2004 that an arbitration agreement may be extended to a non-signatory if it was proven that it had taken part in the execution of the obligations entered into by the signatory, or created confusion regarding the party vested with obligations.

8 The tribunal

8.1 How is the tribunal appointed?

According to article 17 of the Egyptian Arbitration Law (no.27/1994), the parties are free to choose their arbitrators, either directly or by deciding on the method and timeframe for that choice. This may include reference to an appointment procedure contained in institutional rules or the designation of an independent appointing authority. Where the parties have failed to make their choice or to determine the method of choice, Article 17 provides the necessary steps for appointing the tribunal. In case of in case of disagreement by the parties on a sole arbitrator, the competent state court, as determined by article 9 of the same law, shall have jurisdiction to appoint the sole arbitrator. In case of a tripartite tribunal, the general rule is that each party appoints an arbitrator, and the party appointed arbitrators choose the third. If either party fails to appoint an arbitrator or if the party appointed arbitrators fail to agree on a third, a judge, as determined by article 9 of the same law, is entrusted with appointing the arbitrator as required.

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

Art 16 of the Arbitration Law is permissive as to the requirements to sit as arbitrator. The said Article solely prohibits minors and those who are under guardianship or have been deprived of their civil rights by reason of an indictment for a felony or a misdemeanour breaching honesty or due to a declaration of his bankruptcy. Further, Article 16 does not require the arbitrator to be of a given gender or nationality, unless otherwise agreed upon between the two parties.

In Egypt, practicing lawyers regularly sit as arbitrators. However, retired judges and law professors are sometimes appointed by parties or institutions. It is worth mentioning that in construction arbitration, engineers also frequently sit as arbitrators. The law allows active judges to serve as arbitrators provided that the appointed judge obtains an authorization from the Supreme Judicial Council.

CRCICA, the leading arbitral institution in Egypt, has been supporting gender diversity in arbitral panels. For the list procedure provided under articles 8 and 9 of CRCICA Rules on the appointment of arbitrators, the CRCICA endeavors that there are female arbitrators amongst the identical list sent to the parties. Further, the CRCICA signed on 10 December 2017 the Equal Representation in Arbitration Pledge. Further, as a sign of support to diversity, the CRCICA has appointed in 2017 a female Deputy Director for the first time since its inauguration. Finally, the CRCICA also supports age diversity and geographic diversity.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

Under the Arbitration Law, an arbitrator may be challenged in the case of circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator may also be challenged if he or she does not possess the qualifications agreed to by the parties. It is important to note that arbitrators must resign if faced with a clear conflict of interest. Article 19 provides that the request for recusal shall be submitted in writing to the arbitral tribunal, indicating the reasons for recusal, within 15 days from the date the applicant becomes aware of the composition of such tribunal or the conditions justifying the recusal. Such request shall be referred by the tribunal to the state court for its final decision.

Pursuant to article 20 of the Arbitration Law, if an arbitrator is unable to perform his or her mission or fails to perform it, interrupts performance in a manner that leads to unjustifiable delay in the arbitral proceedings, does not abstain or is not removed by agreement between the parties, the competent state court may terminate his or her mission on the basis of the request of either parties.

According to the prevailing scholarly view as well as jurisprudence, institutional rules regulating challenges and removal of arbitrators shall apply provided that the removal is decided by an independent panel, meaning that Article 19 of the Law mainly applies to ad hoc proceedings.

8.4 If a challenge is successful, how is the arbitrator replaced?

Under the Arbitration law, challenges are decided by the competent court and a time limit of 15 days from the date of knowledge of the circumstances giving rise to such justifiable doubts is applicable. Moreover, a party may not, according to the Arbitration law, challenge the same arbitrator more than once in the same proceedings.

According to Article 21 of the Arbitration law, arbitrators can be replaced if they are recused or discharged or if they resign from their mandate for any other reason. The replacing arbitrator is appointed pursuant to the same procedures followed for the appointment of the arbitrator being replaced.

In case of institutional arbitration the applicable rules would include specific provisions on the regulation of challenges. For example, the current rules and practice of CRCICA is that any challenges must be submitted within 15 days after it has been notified of the appointment of the challenged arbitrator, or within 15 days from the date of knowledge of the circumstances giving rise to justifiable doubts as to an arbitrator's impartiality and independence. If the challenged arbitrator does not resign, the challenge shall be decided by an ad hoc legal committee of three members selected from among the members of the CRCICA's Consultative (advisory) Committee and beyond. A substitute arbitrator is appointed pursuant to the same procedures followed for the appointment of the arbitrator being replaced.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

All arbitrators, including those who are party-appointed, have to be independent and impartial. The arbitrator shall avoid ex parte communications with any party regarding the arbitration.

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) procedure, including evidence?

The parties are free to negotiate their own procedural rules, subject to mandatory provisions (for example, both parties must be treated equally and fairly). If the statutory rules (or the agreed rules) are silent, the arbitrators generally have a very broad discretion to determine the procedural rules.

As regard evidence, it is worth mentioning that each party shall have the burden of proving the facts relied on to support its claim or defence. Witnesses, including expert witnesses who are presented by the parties to testify to the arbitral tribunal on any issue of fact or expertise. Their statements are presented in written form and signed by them. The arbitral tribunal determines the admissibility, relevance, materiality and weight of the evidence offered.

The arbitral tribunal may appoint one or more experts to submit on certain specific issues determined by the arbitral tribunal, a written report or an oral report to be included in the meeting. A copy of the terms of reference regarding the report entrusted to the expert will be sent to each party immediately after its submission, granting each party the opportunity to express its opinion thereon. Each of the parties is entitled to review and examine the documents upon which the expert relied in his or her report.

The arbitral tribunal may decide, after the submission of the expert's report, whether on its own initiative or upon the request of a party to the arbitration, to hold a hearing to hear the expert and to provide the parties with the opportunity to examine and cross-examine the expert about his or her report. During the meeting, each of the parties may present one or more expert witnesses to give testimony on the issues raised in the report of the expert appointed by the arbitral tribunal, unless otherwise agreed upon between the parties.

The IBA Rules on the Taking of Evidence are not regulated under Egyptian law. There are no legal impediments preventing the parties from agreeing to apply or seek guidance from said Rules. Articles 20–22 and 27 of the Law of Evidence in Civil and Commercial Matters (the Evidence Law) regulate production of documents with rules that are somewhat similar to the IBA Rules on the Taking of Evidence.

(b) interim relief?

The parties to an arbitration may agree that the arbitral tribunal can take any temporary or interim measure that may be required according to the nature of the dispute at the request of a party. For example, the tribunal may maintain or restore the status quo pending determination of the dispute, take action that would prevent, or refrain from taking action that is likely to cause, current or imminent prejudice to the arbitral process, etc. The tribunal may modify, suspend or terminate an interim measure it has granted upon application of a party or on the tribunal's own initiative. The tribunal may ask the parties to present whatever guarantee that it deems sufficient to cover the expenses of such temporary or interim measure.

Thus, the parties should explicitly and specifically agree to grant arbitrators this power.

If the party against whom the order was issued fails to execute it, the arbitral tribunal, upon the request of the other party, may authorise the latter to undertake the procedures necessary for the execution of the order, without prejudice to the right of said party to apply to the president of the concerned court for rendering an execution order.

(c) parties which do not comply with its orders?

The tribunal has very broad discretion in relation to procedure where the agreed rules or the statutory rules are silent. For example, the tribunal can Order disclosure of documents known to be in a party's possession. Request a party to produce a certain witness, but cannot compel witness attendance. Negative inferences can arise when a party does not comply with the tribunal's request. The arbitrators do not have powers to issue interim orders (for example, attachment orders and injunctions) unless this is agreed by the parties in the arbitration agreement or subsequently.

(d) issuing partial final awards?

The arbitral tribunal may issue partial award, disposing of one or more monetary or other substantive issues between parties.

(e) the remedies it can grant in a final award?

An arbitral tribunal generally enjoys a broad authority and power to order any declaratory relief, monetary compensation, specific performance, interest, and costs. However, an arbitral tribunal is not generally entitled to order punitive damages or interest in excess of the applicable cap on interest depending on the nature of the dispute.

(f) interest?

The interest is 4 per cent per annum in civil matters and 5 per cent per annum in commercial matters. However, the parties may agree upon another rate of interest either in the event of delay in effecting payment or in any other case in which interest has been stipulated, provided that it does not exceed 7 per cent. A creditor may demand damages in addition to interest if he or she establishes that a loss, in excess of the interest, was owing to bad faith on the part of the debtor.

According to article 50(3) of the Commercial Code, in case of commercial loans or cost incurred by a merchant in favour of its customer, the merchant may claim interest at the rate applicable by the Central Bank. Such rate is currently 11.75 per cent per annum.

Finally, interest on banking loans and transactions with bank customers are determined by virtue of party autonomy without being subject to any maximum statutory rate.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

If the respondent fails to participate in the arbitration without valid cause, the Egyptian Arbitration Law enables the arbitral tribunal to continue with the proceedings and objectively assess the claims of the claimant prior to rendering an award. However, it should be noted that a non-participating or absent party should be duly notified of all the documents submitted and orders issued, and given a proper and adequate opportunity to present its case and defenses at every stage of the proceedings.

8.8 Are arbitrators immune from liability?

There are no provisions in the Egyptian Arbitration Law dealing with this issue. However, in practice, arbitrators are generally immune from liability vis-à-vis the parties except in cases of fraud, corruption and/or gross negligence. In contrast, institutional rules will usually deal with the immunity of arbitrators in a more direct manner. As Egypt's leading arbitral institution, the CRCICA is a prime example, as it states in its article 16 that: "save for intentional wrongdoing, neither the arbitrators, the Centre, […] nor any person appointed by the arbitral tribunal shall be liable to any person based on any act or omission in connection with the arbitration".

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

A state court seized with a dispute in respect of which an arbitral agreement exists must decide that the action is non-admissible if the defendant invokes a plea of non-admissibility before raising any request or defence in the case.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

The Arbitration Law provides for certain instances whereby the Egyptians courts may intervene in the arbitral proceedings subject to the request of either party to the dispute. For example, the local court may order that provisional or conservatory measures be taken, whether before the commencement of arbitral proceedings or during the procedure on the basis of an application from one of the parties; the president of the Court referred to in article (9) of the Egyptian Arbitration law shall, upon request from the Arbitral Tribunal, be competent to: pass judgment against defaulting or intransigent witnesses imposing the penalties prescribed in articles 78 and 80 of the Law of Evidence in Civil and Commercial matters; and order a judicial delegation.

Egyptian courts will not grant an injunction to restrain proceedings started overseas in breach of an arbitration agreement. However, any judgment issued in these proceedings would not be enforceable in Egypt.

As have been mentioned before, if the arbitral tribunal does not have jurisdiction under the arbitration agreement to issue interim awards, the parties can request the Egyptian Courts to issue interim awards (for example, injunctions and attachments).

To sum up, Egyptian courts may assist the arbitral process in many respects, including by:

  • granting interim measures9 (Article 14);
  • appointing arbitrators (Article 17)10;
  • deciding on challenges to arbitrators (Article 19); and
  • deciding whether to extend the time limit to issue the award or terminate the arbitral proceedings (Article 45).

The risk of an Egyptian court intervening to frustrate an arbitration seated in its jurisdiction is quite minimal, as the courts are not generally allowed to intervene in the arbitration proceedings. However, if a document is challenged as a forgery the jurisdiction to rule on this lies with the courts. This could delays the arbitral proceedings. The Arbitration Law expressly provides that all challenges to the arbitral tribunal's decisions and preliminary awards must await the final conclusion of the arbitration process and the issue of the final arbitration award.

Footnotes

9. The Arbitration Law does not specifically empower arbitral tribunals and domestic courts to order security for costs. However, security for costs may be ordered as part of the domestic court's general power to grant interim measures in support of the arbitral process under Article 14 of the Egyptian Arbitration Law. Similarly, Article 24.1 of the law allows the parties to empower the arbitral tribunal to grant any interim relief it deems appropriate, which may arguably include security for costs.

10. Article 17 of the Arbitration law provides that if the parties disagree on one or more of the arbitrators to be appointed, the domestic court – determined by Article 9 to be the Cairo Court of Appeal by default unless otherwise agreed by the parties – will appoint the sole arbitrator or intervene as necessary to appoint all or some of the arbitrators.

9.3 Can the parties exclude the court's powers by agreement?

Pursuant to the Arbitration law, arbitral awards cannot be appealed. As for setting aside, Article 54 of the act provides that a waiver by a party of its right to set aside the award does not preclude the setting-aside application, if the waiver was made before the award was issued.

10 Costs

10.1 How will the tribunal approach the issue of costs?

There is no reference in the Egyptian Arbitration Law on the issue of costs. Since the law refers in its article 25 to the institutional rules chosen by the parties, it is worth mentioning that pursuant to Article 42 paragraph 1 of CRCICA Rules, the tribunal fixes the cost of the arbitration. Paragraph 2 of the same article exhaustively enumerates the elements of the costs. These include the registration fee, the administrative fees, the arbitral tribunal's fees, reasonable travel and other arbitrators' expenses, the reasonable cost of expert advice and of other assistance, the reasonable witness expenses, the legal and other costs incurred by the parties in relation to the arbitration, any fees of the appointing authority other if it is not the CRCICA.

With regard to the allocation of costs, article 46 of the CRCICA Rules declares the principle that the costs are borne by the unsuccessful party. The tribunal may nevertheless take a different approach if it finds it is more reasonable.

It falls out of the Tribunal's jurisdiction to decide upon the costs relating to the enforcement of the award as they are governed by the laws pertaining to the cost of judicial proceedings in Egypt.

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

There are no restrictions under the Egyptian Arbitration Law on what the parties may agree on in terms of costs in an arbitration seated in Egypt. However, since article 25 of the Egyptian Arbitration Law refers to the chosen institutional rules, it is worth noting that the Arbitrators' Fees and the Registration and Administrative Fees under Articles 43, 44 and 45 of the CRCICA Rules are set in accordance with the Tables annexed to these Rules and cannot be subject to an agreement to the contrary by the parties except in the ad hoc proceedings administered by the CRCICA where the parties can agree on a different determination of the fees.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

Third-party funding of arbitral claims (TPF) is not regulated under Egyptian law. Further, there are no regulatory restrictions specific to TPF. Indeed, TPF has already happened in practice and its relevant agreement is valid insofar as it does not violate any mandatory rule of Egyptian law.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

The arbitral award must be in writing and signed by the arbitrators including the reasons upon which it is based, unless the parties to arbitration have agreed otherwise. The arbitral award must include:

  • the names and addresses of the parties;
  • the names, addresses, nationalities and capacities of the arbitrators;
  • a copy of the arbitration agreement;
  • a summary of the parties' claims, submissions, and documents;
  • the dispositive part of the award and the date and place of its issuance; and
  • the reasoning, whenever its inclusion is required.

12.2 Must the award be produced within a certain timeframe?

The agreement of the parties may impose a time period within which the arbitral tribunal must make its award to ensure that the case is dealt with efficiently. In the absence of such an agreement, the award that finally disposes of the entire dispute must be rendered within 12 months of the date of commencement of the arbitral proceedings. In all cases, the arbitral tribunal may decide to extend the deadline, provided that the period of extension does not exceed six months, unless the parties agree on a longer period.

If the arbitral award is not rendered within the 12-month period, the parties to arbitration may request the president of the competent court to issue an order either extending the time limit or terminating the arbitral proceedings. In the latter case, a party may bring the dispute to the court having initial jurisdiction to adjudicate the case.

The Court of Cassation has decided that the arbitral proceedings governed by UNCITRAL or CRCICA rules are not bound by a time limit for rendering the final award.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

Arbitral awards issued according to the Arbitration Law have authority of res judicata and are enforceable by the president of the court competent of the dispute. The application for enforcement of the arbitral award shall be accompanied by:

  • the original award or a signed copy;
  • a copy of the arbitration agreement;
  • an Arabic translation of the award if it is not issued in Arabic; and
  • a copy of the procés-verbal attesting the deposit of the award.

The president of the court issues his or her decision without hearings.

However, enforcement may be refused for three reasons:

  • contradiction with a judgment previously rendered by the courts on the subject matter of dispute;
  • violation to public policy in Egypt; or
  • non-communication with the party against whom it was rendered.

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

Arbitral awards rendered in accordance with the provisions of the Arbitration Law may not be challenged by any of the means of recourse provided for in the Code of Civil and Commercial Procedures.

An action for the nullity of the arbitration award may be instituted in the following cases:

  • if there is no arbitration agreement, if it was void, voidable or its duration had elapsed;
  • if either party to the arbitration agreement was, at the time of conclusion of the arbitration agreement, fully or partially incapacitated according to the law governing his or her legal capacity;
  • if either party to the arbitration was unable to submit a defence as a result of not being duly notified of the appointment of an arbitrator, of the arbitral proceedings or for any other reason beyond his or her control;
  • if the arbitral award excluded the application of the law agreed upon by the parties to govern the subject matter in dispute;
  • if the composition of the arbitral tribunal or the appointment of the arbitrators had been undertaken in violation of the law or contrary to the parties' agreement;
  • if the arbitral award dealt with matters not falling within the scope of the arbitration agreement or exceeding the limits of this agreement; or
  • if the arbitral award is null and void or the arbitration proceedings affecting the award are null and void.

The court adjudicating the action for nullity shall ipso jure annul the arbitral award if it contains a violation of public policy in Egypt.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

The action for nullity of the arbitral award must be brought before the competent court within 90 days following the date of notification of the arbitral award to the party against which it was rendered.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

No particular mention is made of the question of confidentiality in the Arbitration Law save for article 44(2), which provides that the arbitral award may not be published in whole or in part unless the parties have given approval. However, under CRCICA rules, the parties undertake to keep confidential all awards, decisions and materials submitted by the parties in the arbitral proceedings. This undertaking applies to the arbitrators, the tribunal-appointed experts and the secretary of the arbitral tribunal. Though they may, in writing, expressly agree to the contrary.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

No particular mention is made of the question of confidentiality in the Arbitration Law save for article 44(2), which provides that the arbitral award may not be published in whole or in part unless the parties have given approval. However, under CRCICA rules, the parties undertake to keep confidential all awards, decisions and materials submitted by the parties in the arbitral proceedings. This undertaking applies to the arbitrators, the tribunal-appointed experts and the secretary of the arbitral tribunal. Though they may, in writing, expressly agree to the contrary.

15.2 Are there any exceptions to confidentiality?

There is an implied duty of confidentiality not only with respect to the arbitral proceedings and documents submitted, but with respect to the award itself which may not be made public without the parties' consent, unless the award has been subject to nullity or enforcement proceedings, at which point its content will then fall in the public domain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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