Establishment of The Egyptian Center for Arbitration and Settlement of Non-Banking Financial Disputes (ECAS)
Resolution no. 2597 of 2020
In financial disputes, regardless of whether they concern individuals or companies, entrepreneurs face the problem of prolonged litigation processes when utilizing this traditional dispute resolution method. In recent years, it has become necessary to create a new and optimal solution based on flexible, reliable, and credible mechanisms for the resolution of disputes of this nature.
Accordingly, Law no. 10 of 2009 concerning the regulation and supervision of non-banking, financial markets and instruments was issued, stipulating in Art (10) that the ECAS shall be established by a decision issued from the President of the Republic, which disputing parties can resort to if they initially (or later) agree to settle the dispute through arbitration.
In the implementation of the aforementioned law, President Abdel Fattah El-Sisi issued resolution no. 335 of 2019 establishing the ECAS. Moreover, the Prime Minister’s resolution no. 2597 of 2020 further clarified the Articles of Association (“AoA”) of the Center, as well as the rules and procedures of its operation.
Under Art (3) of the AoA, ECAS’s scope of work extends to encompass all disputes arising from the application of laws concerning non-banking, financial transactions, in particular, those disputes arising between partners, shareholders, or members of companies and entities operating in the field of non-banking financial markets, whether between individuals or between themselves, and companies and entities within this sector, in addition to disputes concerning clients or beneficiaries of non-banking financial activities with such companies and operative entities.
The establishment of the ECAS in the meantime reflects the state’s attention in promoting investment and reinforcing the investor’s confidence. This in turn, will result in the enhancement of opportunities for market prosperity, since investors prefer arbitration in dispute settlement for several reasons, the most important of which are:
1- Timely proceedings.
2- Confidentiality of information.
3- Usage of accumulated experiences in the field of non-banking financial activities to ensure that the issuance of decisions is in line with the nature of transactions in non-banking financial activities.
4- The special features of certain activities that are suitable for the adoption of the arbitration mechanism.
Lastly, the aim of this article is to highlight that the Egyptian state is pursuing the modernization and implementation of legislation that addresses the challenges within the Egyptian market realistically, taking into account the overall aim of increasing sustainable and diversified economic development.
To find out more, please fill the form or email us on: info@eg.andersen.com
