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Commercial Arbitration 2017

Last verified on Friday 19th May 2017

Egypt

Mohamed Abdel Wahab
Zulficar & Partners

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
    1. Egypt consented to joining the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) on 2 February 1959, ratified same on 9 March 1959, and it entered into force as part of the Egyptian legal system on 7 June 1959 without any reservations or declarations.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
    1. Egypt is a party to a number of bilateral and multilateral treaties on arbitration. It is worth mentioning that, in addition to ratifying the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 (the ICSID Convention) on 3 May 1972, Egypt has concluded a considerable number of bilateral investment treaties (exceeding 100 BITs), as well as several bilateral treaties on judicial cooperation that refer to mutual cooperation in the recognition and enforcement of arbitral awards. These include: the Egypt-France Treaty dated 22 December 1974; the Egypt-Argentina Treaty dated 11 May 1992; the Egypt-Germany Treaty dated 16 June 2005; the Egypt-UK Treaty dated 11 June 1975; the Egypt-USA Treaty dated 11 March 1986; the Egypt-Spain Treaty dated 3 November 1992; the Egypt-Qatar Treaty dated 12 February 1999; the Egypt-Greece Treaty dated 16 July 1993; the Egypt-Bahrain Treaty dated 4 October 1997; the Egypt-Cyprus Treaty dated 21 October 1998, the Egypt-UAE Treaty dated 11 May 1997, the Egypt-Lebanon Treaty dated 16 March 1996, the Egypt-Latvia Treaty dated 24 April 1997, the Egypt-Japan Treaty dated 28 January 1977, the Egypt-India Treaty dated 9 April 1997, the Egypt-Albania Treaty dated 22 May 1993, Egypt-Algeria Treaty dated 29 March 1997, the Egypt-Australia Treaty dated 3 May 2001, the Egypt-Canada Treaty dated 13 November 1996, the Egypt-Croatia Treaty dated 27 October 1997, the Egypt-Austria Treaty dated 12 April 2001, the Egypt-Czech Republic Treaty dated 29 May 1993, the Egypt-Denmark Treaty dated 24 June 1999, the Egypt-Hungary Treaty dated 23 May 1995, the Egypt-Finland Treaty dated 3 March 2004, the Egypt-Italy Treaty dated 2 March 1989, the Egypt-Jordan Treaty dated 8 May 1996, the Egypt-Mali Treaty dated 9 March 1998, the Egypt-Malta Treaty dated 20 February 1999, the Egypt-Morocco Treaty dated 14 May 1997, the Egypt-Netherlands Treaty dated 17 January 1996, the Egypt–Portugal Treaty dated 29 April 1999, the Egypt-Saudi Arabia Treaty dated 13 March 1990, the Egypt-Sweden Treaty dated 15 July 1978, the Egypt-Tunisia Treaty dated 8 December 1989, the Egypt-Yemen Treaty dated 6 June 1996, the China–Egypt Treaty dated 21 April 1994, the Egypt-Kuwait Treaty dated 17 April 2001, the Egypt-Armenia Treaty dated 9 January 1996, the Egypt-Belarus Treaty dated 20 March 1997, the Egypt-BLEU (Belgium-Luxembourg Economic Union) Treaty dated 28 February 1999, the Egypt-Bosnia and Herzegovina Treaty dated 11 March 1998, the Egypt-Bulgaria Treaty dated 15 March 1998, the Egypt-Comoros Treaty dated 13 November 1994, the Egypt-Ethiopia Treaty dated 27 July 2006, the Egypt-Iceland Treaty dated 8 January 2008, the Egypt-Kazakhstan Treaty dated 14 February 1993, the Egypt-Democratic People’s Republic of Korea (North Korea) Treaty dated 19 August 1999, the Egypt-Republic of Korea (South Korea) Treaty dated 18 March 1996, the Egypt-Libya Treaty dated 3 December 1990, the Egypt-Malawi Treaty dated 21 October 1997, the Egypt-Malaysia Treaty dated 14 April 1997, the Egypt-Mongolia Treaty dated 27 April 2004, the Egypt-Palestine Treaty dated 28 April 1998, the Egypt-Oman Treaty dated 25 March 1998, the Egypt-Poland Treaty dated 1 July 1995, the Egypt-Romania Treaty dated 24 November 1994, the Egypt-Russian Federation Treaty dated 23 September 1997, the Egypt-Serbia Treaty dated 24 May 2005, the Egypt-Singapore Treaty dated 15 April 1997, the Egypt-Slovakia Treaty dated 30 April 1997, the Egypt-Slovenia Treaty dated 28 October 1998, the Egypt-Somalia Treaty dated 29 May 1982, the Egypt-Sri Lanka Treaty dated 11 March 1996, the Egypt-Sudan Treaty dated 8 July 2001, the Egypt-Switzerland Treaty dated 7 June 2010, the Egypt-Syria Treaty dated 28 April 1997, the Egypt-Thailand Treaty dated 18 February 2000, the Egypt-Turkey Treaty dated 4 October 1996, the Egypt-Turkmenistan Treaty dated 23 May 1995, the Egypt-Ukraine Treaty dated 21 December 1992, the Egypt-Uzbekistan Treaty dated 16 December 1992, and the Egypt-Vietnam Treaty dated 6 September 1997.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
    1. The Egyptian Arbitration Act No. 27 of 1994 (the Arbitration Act) was inspired by the UNCITRAL Model Law on International Commercial Arbitration (1985), subject to some amendments. Among the most notable deviations from the Model Law are:

      • the applicability of the Arbitration Act to both domestic and international arbitration;
      • the possible extra-territorial application of the Arbitration Act to proceedings seated abroad if the parties have agreed to such application;
      • the Arbitration Act adopts additional criteria for ascertaining the internationality of an arbitration;
      • the Arbitration Act does not explicitly refer to the conclusion of an arbitration agreement through electronic means, but does not expressly exclude such possibility, which remains governed by the applicable Egyptian laws;
      • in case of an arbitration agreement that is incorporated by reference, the Arbitration Act requires the reference to be unequivocally explicit to incorporate the arbitration agreement itself;
      • the Arbitration Act requires an odd number of arbitrators;
      • a preliminary arbitral award on jurisdiction may not, according to the Arbitration Act, be challenged before the competent Egyptian court until a final award is rendered;
      • under the Arbitration Act, an arbitral tribunal does not have a default power to order interim relief unless such power is conferred thereon by the parties’ agreement;
      • according to the Arbitration Act, if the parties have not agreed on the language of the proceedings, the language shall be Arabic;
      • failing any designation by the parties, the arbitral tribunal shall, according to the Arbitration Act, apply the law that it considers to have the closest connection to the dispute;
      • the possibility of vacating an arbitral award if the arbitral tribunal has excluded the lex causae chosen by the parties; and
      • the Arbitration Act, while acknowledging the prevalence of any international treaties ratified by Egypt, provides for only three conditions on which an exequatur may be refused. These are:
        • inconsistency with a prior judgment rendered on the merits by the competent Egyptian court;
        • contravention of Egyptian public policy; and
        • failure to validly notify the award to a losing party.
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
    1. The Cairo Regional Centre for International Commercial Arbitration (CRCICA) is an independent non-profit international organisation that administers domestic and international arbitral proceedings. It is a leading regional institution located in Egypt and many international arbitrations are administered under its auspices. The CRCICA also acts as an appointing authority and generally adopts the “list procedure” in making its appointments.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. Whilst there are currently no branches for foreign arbitral providers in Egypt, they can operate therein by holding hearings and administering proceedings under their respective Rules.

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
    1. There are no specialised arbitration courts per se. However, there are certain specialised circuits within the court structure that normally handle arbitration-related judicial proceedings. In international commercial arbitration, the national court that is empowered to undertake judicial intervention prior to, during, or subsequent to arbitral proceedings is the Cairo Court of Appeal, unless the parties agree on a different Court of Appeal. In any event, Egyptian courts are generally familiar with the law and practice of international arbitration.

      However, it is also worthy of note that the CRCICA has recently entered into an agreement with the International Court of Arbitration for Sport (ICAS) in 2012 nominating it as a host of an Alternative Hearing Centre (AHC) for the Court of Arbitration for Sport (CAS) based in Switzerland.

    Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
    1. Pursuant to the Arbitration Act, an arbitration agreement may cover future disputes. Whether a clause or a submission agreement, the arbitration agreement must satisfy the following requirements:

      • standard contractual requirements such as consent, capacity, and the existence of a legal relationship;
      • in administrative contracts, an arbitration agreement must be approved by the competent minister, or whoever assumes his or her authority with respect to public entities, and delegation in this regard is prohibited;
      • it must be in writing;
      • it must deal with matters that are arbitrable; and
      • in the case of a submission agreement (compromis), the parties must define the dispute subjected to the arbitral proceedings or the agreement would be null and void.
  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
    1. Yes. Any matter that is not capable of a settlement is non-arbitrable. Examples of non-arbitrable matters include: criminal matters, personal status or family relations, and/or rights in rem over immovables such as registration of real estate mortgages.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
    1. Extension of arbitration agreements to third parties may be exceptionally permitted if it can be demonstrated that there is express or implied consent by such third party, or if the factual and legal matrix of the proceedings warrant such extension. It is worth noting that in practice extension of arbitration agreements to third parties is increasingly requested on the basis of diverse doctrines such as agency, group of companies, implied consent, ratification, alter ego, estoppel, assignment, succession, etc. However, Egyptian courts, whilst acknowledging that consent remains a cornerstone of the arbitral process and that extension to third parties is exceptional, are yet to develop a clear trend on the admissibility of certain doctrines of extension. On a different note, while the Arbitration Act did not explicitly address extension and/or joinder by specific provisions, joinder of third parties, whether at the request of a party or at the request of a third party, remains conditional upon the consent and approval of all parties as evinced by the judicial decisions rendered in this regard.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
    1. Consolidation of separate arbitral proceedings under one or more contracts is possible, but conditional upon the parties’ agreement.

  11. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?

    1. Egyptian courts have, hitherto, had the chance to address the ‘group of companies doctrine’ in one case decided by the Supreme Court of Cassation, where the court recognised the exceptional application of the doctrine subject to stringent criteria. The Court’s position was that the sheer existence of a group of companies would not, per se, suffice to pierce the separate and independent corporate veil of each member of the group. However, if it is proven that the members of the group have participated in the implementation, performance, and/or termination of the contract(s) in dispute and it became evident that such group has been acting as one economic unit whose independent legal personalities are no longer distinguishable in relation to the other contracting party, then the arbitration agreement may be extended to such members of the group and they may be joined in the arbitral proceedings. In any event, a scrupulous case-by-case review of the factual matrix and the applicable legal norms remains necessary.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. According to the Arbitration Act, arbitration agreements are separable from the main contract and are not affected by the latter’s invalidity, termination and/or or rescission insofar as the arbitration agreement itself is valid.

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
    1. The principle of competence-competence is generally recognised in Egypt. The Arbitration Act provides that the arbitral tribunal shall decide over any jurisdiction-related claims including the existence, validity and scope of the arbitration agreement. However, in practice, there exist instances where Egyptian courts, in relation to administrative contracts, have decided over the existence and validity of an arbitration agreement prior to or while arbitral proceedings were still pending and irrespective of the arbitral tribunal’s jurisdiction.

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
    1. The parties are encouraged to explicitly agree on:

      • the scope of the arbitration agreement as courts tend to construe arbitration agreements narrowly since arbitration is, hitherto, considered an exception to court jurisdiction,
      • the explicit, accurate, and proper reference to the applicable institutional rules in case of institutional arbitration
      • the realistic ratione temporis of arbitral proceedings in case of ad hoc arbitration, or otherwise the Arbitration Act dictates that the proceedings may be terminated by an application to the competent Egyptian court upon the lapse of a maximum period of 18 months from the date of commencement of arbitral proceedings;
      • the language of the proceedings, as the default language is Arabic in the absence of the parties’ choice;
      • the applicable lex causae, or otherwise the arbitral tribunal would determine the law that it deems to have the closest connection to the dispute;
      • in case of adopting multi-tiered dispute resolution clauses, the parties must clearly define the exact procedures and time limits required prior to proceeding to the arbitration phase; and
      • the arbitral tribunal’s power to grant or order interim measures and relief, if the parties so desire, as Egyptian law does not inherently confer such power on the arbitral tribunal in the absence of the parties’ consent.
  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
    1. Institutional international arbitration is increasingly becoming more common than ad hoc international arbitration. However, it is not uncommon to agree to the application of the UNCITRAL Rules in ad hoc international arbitrations in some industries such as oil and gas.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
    1. The most important issues to consider when drafting a multiparty arbitration agreement are the explicit reference to whether several parties shall jointly appoint one or more arbitrators, and the careful choice of the applicable institutional rules in case of institutional arbitration, as certain institutions may reserve the right to solely appoint all arbitrators or disregard the parties’ choices in case of multiparty clauses that are not sufficiently and adequately clear on the appointment procedures.

    Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
    1. Unless otherwise agreed by the parties, the Arbitration Act states that proceedings commence on the day the respondent receives the notice of arbitration. There are no mandatory procedural time limits enshrined in the Arbitration Act and relating to the commencement of arbitral proceedings, and the parties may agree on a different date to mark the commencement of the proceedings.

    Choice of law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
    1. Under Egyptian law, party autonomy with respect to the choice of the 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 Arbitration Act, 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 dispute.

      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.

    Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
    1. There are no specific restrictions or limitations on the choice of an arbitrator other than having attained the age of majority, enjoying full legal capacity and capable of disposing of his/her own rights. The arbitrator shall accept his/her appointment in writing and shall declare any events giving rise to justifiable doubts as to his/her impartiality and independence. However, whilst judges or members of the judiciary may sit as arbitrators, they are required to obtain an administrative permission from the judiciary to sit as arbitrators in a specific case. In any event, the parties’ choice must be in compliance with the agreed contractual conditions.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
    1. Unless otherwise agreed by the parties, non-nationals may act as arbitrators in Egypt, and there are no special immigration requirements.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
    1. A distinction between ad hoc and institutional arbitration is necessary in this context. In case of institutional arbitration, the applicable institutional rules shall apply. However, in case of ad hoc arbitration that is not subject to specific agreed arrangements, the Arbitration Act provides that the default number of arbitrators is three, and that the competent Egyptian court shall undertake the appointment of arbitrator(s), upon the request of one of the parties, and its decision in this respect is final and not subject to any appeal or challenge.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
    1. Whilst the Arbitration Act is silent in this regard, arbitrators generally enjoy immunity from suit save in exceptional cases of fraud, corruption and/or gross negligence. It is worth noting that institutional rules normally include specific provisions on immunity of arbitrators. For example, article (16) of the CRCICA Rules states:

      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.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
    1. Arbitrators can secure payment of their fees in Egypt by withholding the award until the agreed and/or applicable fees are paid. In institutional arbitration, the fees are held in an account or in escrow by the institution until the final award is rendered. It is worth noting that the Arbitration Act does not address the issue of fees, but all institutional rules include specific provisions on fees and their payment.

    Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
    1. According to the Arbitration Act, an arbitrator may not be challenged unless serious and justifiable doubts as to his/her impartiality or independence exist. Under the Arbitration Act, 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 Act, challenge the same arbitrator more than once in the same proceedings.

      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. 

    Interim relief

  25. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    1. The Arbitration Act grants an arbitral tribunal the right to award provisional or interim relief only if the parties have agreed to confer such power upon the arbitral tribunal. It is also acknowledged that such power could be conferred upon the arbitral tribunal by agreeing to the application of institutional rules that provide for such default power. The Arbitration Act does not provide a list of the types of relief available to arbitrators, but it is generally accepted that an arbitral tribunal, if the parties so agree, has the discretion to order any type of interim relief or provisional measures that are warranted provided that such relief is available under the applicable law to such relief. Alternatively, a party may directly seek to obtain such interim relief or provisional measure directly from the competent Egyptian court and this is never considered a waiver of the arbitration agreement.

      On a different note, while Egyptian law does not prohibit or regulate anti-suit injunctions, the standard court practice in Egypt is that courts do not normally issue anti-suit injunctions in support of arbitration agreements.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
    1. The Arbitration Act states that an arbitral tribunal is entitled to request adequate security for the costs incurred in securing the interim relief. Similarly, national courts are free to decide on whatever security is required to ensure the implementation of an order for interim or provisional measures.

    Procedure

  27. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

    1. 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, such as that witnesses and experts may not be heard under oath, and that awards may not be rendered by truncated tribunals, but may be rendered by a majority of arbitrators.

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
    1. If the respondent fails to participate in the arbitration without valid cause, the Arbitration Act 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 defences at every stage of the proceedings.

  29. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

    1. The Arbitration Act states that the parties are free to agree on the procedural rules in an arbitration, and in the absence of such agreement the arbitral tribunal shall apply the rules it deems appropriate in accordance with the Arbitration Act. The evidence that may be admitted in arbitral proceedings in Egypt are documentary evidence, witness testimony, expert reports, and/or inspection by the arbitral tribunal. Evidence is normally adduced by each party in support of its claims and/or defences. However, Egyptian law does, exceptionally, provide for a limited process of production of documents in specific cases as provided by the Egyptian Code of Evidence No.25 of 1968.

      The IBA Rules on the Taking of Evidence in International Commercial Arbitration are increasingly used in international arbitrations seated in Egypt, subject to the parties’ agreement. If agreed, such Rules would apply in the manner, and to the extent, agreed.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
    1. Arbitral tribunals do not possess the coercive and executive powers enjoyed by courts. Accordingly, if a party does not submit to, and comply with, the orders of the arbitral tribunal, the latter may draw negative inferences that could adversely affect the non-complying party’s position, especially if no adequate or reasonable justification is provided for a failure to comply. An arbitral tribunal is entitled to seek an Egyptian court’s assistance in this respect, especially in cases of penalising witnesses who do not comply or ordering third parties to produce documents in their possession and/or undertake certain actions as properly and legally ordered by the arbitral tribunal.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
    1. It is worth noting that the common law practice of discovery is neither recognised nor applicable in Egypt. While the arbitral tribunal enjoys, under the Arbitration Act, wide powers in conducting the proceedings and assessing the evidence submitted, the issue of production of documents is normally governed by the relevant provisions in the Egyptian Code of Evidence No.25 of 1968, which provides for limited requests for production in specific exceptional cases. In this regard, article (21) of the Egyptian Code of Evidence No. 25 of 1968 confirms the requirements of document production, these are: (i) the specificity and characteristics of the document(s) requested, (ii) the document’s content to the extent possible, (iii) the document’s materiality and relevance to the disputed fact, (iv) the circumstances and indications that prove that such document is in the possession of the opposing party, and (v) the basis for ordering the production thereof.

      As previously mentioned, the IBA Rules on the Taking of Evidence in International Commercial Arbitration may well apply as, and to the extent, agreed upon by the parties.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
    1. It is not mandatory to hold a final hearing on the merits. However, in practice, if one party requests a hearing, the arbitral tribunal is expected to order one if warranted or justified.

  33. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    1. According to the Arbitration Act, 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. Egyptian courts have also acknowledged the distinction between the legal seat and the geographical venue for conducting one or more procedures of the arbitration.

    Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?
    1. Unless otherwise agreed by the parties, an arbitral tribunal may decide by majority. The majority under Egyptian law is quantitative, so the presiding arbitrator may not solely render the award if no majority is achieved. 

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
    1. 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.

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
    1. Dissenting opinions are permitted under Egyptian law. Whilst such opinions are not standard practice, they are not uncommon. The submission of such opinions is practically dependent on the arbitrators’ relationship, the manner of deliberations, and the arbitrator’s perception of his/her role.

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
    1. Pursuant to the Arbitration Act, an arbitral award must:

      • be in writing and signed by the arbitrators (if the minority refused to sign the award, the majority must include the reasons for the minority’s refusal to sign);
      • be reasoned unless the parties have agreed otherwise, or the applicable procedural law mandates such reasoning;
      • include the names and addresses of the parties;
      • include the names, addresses, nationalities, and title of arbitrators;
      • include a copy of the arbitration agreement (an explicit citation of the arbitration agreement would suffice);
      • include a summary of the parties’ claims, statements, and relevant documents;
      • have an operative part (dispositive) ordering specific remedies;
      • include the date and place of issuing the award; and
      • depositing the original award or a certified copy thereof (including any certified translation thereof, if not in Arabic) with the competent Egyptian court.
  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
    1. The strict time limits provided under the Arbitration Act that normally apply to ad hoc arbitration relate to:

      • the ratione temporis of the proceedings and the need to render a final award within 18 months from the date of commencement of the proceedings unless the parties have agreed on a longer duration;
      • the 30-day time limit for the delivery of the award to the parties after signature by the arbitrators;
      • the 90-day time limit for challenging arbitral awards from the date of formal notification of the award;
      • the 30-day time limit for filing a request for an interpretation, correction, and/or additional award from the date of receipt of the award; and
      • the 30-day time limit for challenging the order or refusal to issue an exequatur from the date of rendering or declining such order.

    Costs and interest

  39. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

    1. Parties are generally able to recover fees paid and costs incurred. While the general practice is that costs should follow the event, the absence of any provision on allocation of costs in the Arbitration Act has enabled arbitral tribunals to enjoy broad discretion in splitting or allocating the fees and costs between the parties, unless otherwise agreed amongst the parties. In practice, the culture of "splitting the baby" is not uncommon in Egyptian arbitration practice with respect to costs. However, a gradual shift towards the application of international norms of costs allocation can be traced in practice, and cases are increasingly decided on the basis of the "loser pays" rule or the ‘costs follow the event’ rule in so far as the winning party is able to justify and substantiate its fees and costs.

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
    1. It is a standard practice that arbitral awards include an award of interest insofar as claimed by the parties. However, the Court of Cassation has ruled that parties may not agree to, and awards may not provide for, the payment of interest exceeding 7 per cent (in non-banking operations) per annum. This 7 per cent cap is judicially considered a manifestation of Egyptian public policy. If the parties’ have not agreed on an interest rate, the legislative and customary interest rate as per the Egyptian Civil Code is 5 per cent in commercial matters and 4 per cent in civil matters. If the parties agree to an interest rate above 7 per cent, it must be reduced to the 7 per cent cap, unless the matter falls within one of the few legislative exceptions under Egyptian law such as banking transactions. It is also worth noting the compounded interest is perceived to be contrary to public policy, unless a clear and unequivocal trade usage on compounding interest exists in the pertinent transaction.

    Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
    1. Arbitral awards are not subject to any form of appeal under Egyptian law.

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
    1. The only form of recourse against an arbitral award, whether in domestic or international arbitration, is a nullity action. The Arbitration Act provides an exhaustive list of the grounds according to which an award may be set aside or annulled. These grounds mirror those available under article (34) of the UNCITRAL Model Law, with three notable differences, these are:

      • inarbitrability is not explicitly mentioned as a ground for setting-aside, although it is practically considered a variation of public policy considerations;
      • the possibility of setting aside an award if it excluded the application of the law chosen by the parties to govern the merits; and
      • the possibility of setting aside an award if it is tainted with any nullity, or if the proceedings were void in a manner that affected the award itself.

      The ambiguity of the latter ground has rendered it one of the most frequently invoked grounds for nullity. However, Egyptian courts have developed stringent criteria for assessing such nullity and have, hitherto, adopted a restrictive approach to nullity, especially with respect to international arbitration. 

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
    1. Pursuant to the Arbitration Act, an agreement to exclude any form of recourse against an award is valid and enforceable only if such agreement was concluded after the award was rendered and notified to the parties. In other words, a waiver of the right of recourse is not valid prior to issuing the award.

    Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
    1. While the Arbitration Act provides for the explicit primacy of international conventions (such as the New York Convention), the grounds for refusal of recognition or enforcement under the Arbitration Act do not include a provision similar to article V(1)(e) of the New York Convention pertaining to non-enforcement of awards that have been set aside. That said, it is worth noting that Egyptian courts have not, hitherto, adopted a clear position with respect to the French doctrine of delocalising arbitral awards. Accordingly, Egyptian courts will assess on a case-by-case basis whether an award that has been set aside by the courts in the seat of arbitration is enforceable in Egypt.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
    1. Recent enforcement decisions have shown that the trend with respect to international arbitration (in non-administrative contracts) is pro-enforcement. While the procedure for recognition and/or enforcement appear to be a daunting process, Egyptian courts appear to be enforcement friendly with respect to international arbitration, and the public policy ground is normally narrowly construed.

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
    1. A defence of state or sovereign immunity at the enforcement stage will not normally be successful, unless enforcement is sought against publicly owned assets that are not subject to enforcement, such as a public utility or public interest funds.

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. Arbitral proceedings are generally confidential and the Arbitration Act provides that an arbitral award may not be published, in whole or in part, unless agreed by the parties. 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, where its content will then fall in the public domain.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
    1. The Arbitration Act does not address such issue explicitly. However, it is unchallenged that the evidence produced and the pleadings filed remain confidential. Nevertheless, a party may seek to rely on such evidence and pleadings in other proceedings provided that no privileged or confidential information is disclosed. Any such disclosure requires a court order to that effect or the consent of the concerned parties.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
    1. Legal counsel are bound by the ethical code of the Bar Association and standard professional code of ethics. While the Arbitration Act does not include a specific set of ethical standards applicable to arbitrators and counsel, they are generally expected to adhere to the acceptable ethical standards prevailing in practice, unless they are specifically and extraterritorially bound by certain standards prevailing in their own jurisdiction.

      The IBA Guidelines on Party Representation in International Arbitration (2013) are not yet commonly used in the jurisdiction, but are increasingly offering guidance in international proceedings seated in Egypt.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
    1. Foreign counsel and arbitrators should note that:

      • 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;
      • discovery and/or production of documents under Egyptian law is limited to exceptional cases (unless the parties agree to the application of the IBA Rules);
      • a preliminary award on jurisdiction may not be challenged before the court until a final award is rendered;
      • a presiding arbitrator may not issue an award on his or her own; and
      • an arbitral tribunal lacks the power to order interim relief without the parties’ agreement.
  51. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction?

    1. Egyptian law generally and the Arbitration Act, more specifically, do not expressly address the issue of third-party funding in arbitration. Thus, it may not be argued that third party funding is prohibited per se under Egyptian law. However, certain principles ought to be carefully considered in this context.

      First, under the Egyptian Advocacy Law No. 17 of 1983, legal or counsel fees may be in the form a share in the dispute (or disputed amounts). Thus, counsel may not act as a funder to his or her client insofar as the funding arrangement with counsel provides for a clear share in the proceeds, since champerty is illegal.

      Second, issues of illegality may arise of the third-party funding arrangement is characterised as gambling contract, since gambling arrangements are considered void, given the fact that Islamic Shari’a prohibits gambling. Article 2 of the Egyptian Constitution of 2014 provides that the principles of Islamic Shari’a are considered the primary source of legislation” in Egypt.

      Notwithstanding the above, there are no express prohibitions or restrictions on third-party funding in Egypt, insofar as the funding arrangement is not a gambling contract and counsel funding is not in the form of champerty. It is expected that, in due course, the matter will be subject to clear regulation to determine the legally permissible practices in this increasingly important area of arbitration practice.   

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?


  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?


  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
  63. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction?