Legal Alert 116
The Role of Egyptian Courts in Arbitration
In light of ِArbitration law No. 27 of 1994
Similar to many jurisdictions around the world, Egypt has adopted alternative dispute resolution methods, diverging from the more traditional method of litigation. More specifically, it has incorporated arbitration into its legal system through Law No. 27 of 1994 on Arbitration in Civil and Commercial Matters. This law, modeled after the UNICTRAL Model Law on International Commercial Arbitration, governs any arbitration proceedings following substantive Egyptian law.
One of the most important controversial aspects when it comes to arbitration, whether in Egypt or abroad, is the interplay between litigation and arbitration. In other words, any arbitration law must address the role of national courts in arbitration. Egypt’s Arbitration Law addresses this area by dictating that courts have the power to enforce and challenge awards.
Firstly, Egyptian courts have the power to enforce arbitration awards, whether in a domestic or international sphere. However, as per Article 58 of the Arbitration Law, Egyptian courts will only accept awards that do not contravene a previous judgement rendered by Egyptian courts in a similar dispute, do not contravene public policy, and those that have been duly notified in a procedurally-correct matter. Article 56 clarifies that recognition and enforcement is automatic upon the fulfillment of Article 58, and is then obtained through ex parte proceedings by a judge.
More specifically, the procedural steps to enforcing an award are laid out in Ministerial Decree No. 8310 of 2008. To start off, parties are to file an application to deposit the award, translated in Arabic. The Court then registers this application and sends it to the Technical Bureau for Arbitration Matters, an entity falling under the Ministry of Justice. The Bureau then renders its opinion on the application and ensures that it complies with Egyptian law. Upon this approval, the court then deposits the award and issues an official report to that effect. After this deposit, the beneficiary must then submit a petition for enforcement. This petition is to include a description of the case at hand. It is then submitted to the presiding judge at the competent court. The competent court is required to respond to the beneficiary within one day of receipt, whereas it will subsequently notify the debtor. This finally leads to the granting of an “exequatur” within 30 days of notification
Secondly, it is important to note that arbitral awards can be challenged but not appealed. As in most other jurisdictions, Egyptian national courts cannot delve into the subject matter of the dispute, as parties cannot appeal the details of the matter in front of national courts. For that reason, Egyptian courts have exclusive jurisdiction over challenges of the award. Article 53(1) of the Arbitration Law dictates that Egyptian courts will only challenge and possibly annul arbitral awards if:
- The award was based on an invalid arbitration agreement;
- Either party to the agreement was fully or partially incapacitated;
- Either party was denied the opportunity to be represented properly before the tribunal;
- The arbitral award failed to reflect the law of the tribunal;
- The composition of the tribunal or its arbitrators conflicted with the parties’ agreement;
- The award dealt with matters outside of the scope of the agreement;
- The award or the procedures leading up to it contain a legal violation.
Finally, it is worthy to note that national courts also have the power to render interim or conservatory measures during the carrying out of arbitration proceedings, as dictated in Article 14.
In conclusion, arbitration is an important feature of any civilized, economically-advanced jurisdiction. In turn, Egypt has long adopted its own arbitration law, which adequately addresses the age-old question of how national courts can step in and aid arbitration. In Egypt, courts have a key role in the enforcement and annulment of awards – both key aspects to the existence of arbitration in Egypt.
Andersen Tax and Legal in Egypt has a number of experts with successes in commercial arbitration who can assist with dispute resolutions. Please contact us if you have any questions.