Commercial Arbitration: Egypt

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Egypt

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. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Egypt

Egypt is a party to a number of bilateral and multilateral treaties on arbitration. The most recent treaty is the Egypt-MERCOSUR Preferential Free Trade Agreement, which entered into force in September 2017. It is worth mentioning that, in addition to ratifying the Convention of the Arab League on the Enforcement of Judgments and Arbitral Awards of 1952 (the Arab League Convention) on 28 August 1954, 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, the Unified Agreement for Investment of Arab Capital in the Arab States (the Arab Investment Agreement) signed on 26 November 1980 in Amman and entered into force on 7 September 1981, the Organisation of the Islamic Conference Investment Agreement of 1981 (the OIC Investment Agreement) on February 1988, the Convention establishing the Multilateral Investment Guarantee Agency (the MIGA Convention) of 1985, and signing the COMESA Investment Agreement on 23 May 2007, the Riyadh Arab Agreement for Judicial Cooperation of 1983 on 2014. Egypt has concluded several bilateral treaties on judicial cooperation that refer to mutual cooperation in the recognition and enforcement of arbitral awards, which by way of illustration include the following treaties: Egypt-Tunisia of 1976, Egypt-Italy of 1978, Egypt-France of 1982, Egypt-Jordan of 1987, Egypt-Morocco of 1989, Egypt-Bahrain 1989, Egypt-Libya of 1993,  Egypt-China of 1994, Egypt-Hungary of 1996, Egypt-Syria 1998, Egypt-UAE of 2000, Egypt-Oman of 2002 and Egypt-Kuwait of 2017. Egypt has also concluded a considerable number of bilateral investment treaties (exceeding 100 BITs), 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-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 1997, 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. 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?

Egypt

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, therefore nothing prohibits the conclusion of arbitration agreements by electronic means and insofar as the electronic communication fulfills the requirement of writing, the arbitration agreement shall be valid; 
• in the 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. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Egypt

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 arbitrations are administered under its auspices. The CRCICA also acts as an appointing authority and generally adopts the “list procedure” in making its appointments.

In addition to CRCICA, there exist other specialised arbitration bodies such as the Egyptian Settlement and Arbitration Centre for Sports established in 2017 by the Egyptian Olympic Committee and the Egyptian Centre for Voluntary Arbitration and Settlement of Non-Banking Financial Disputes, which is established within the Financial Regulatory Authority by virtue of the Presidential Decree No. 335 of 2019, and its statutes as well as its arbitration and mediation rules were issued on 10 December 2020 by virtue of the Prime Ministerial Decree No. 2597 of 2020.

5. Can foreign arbitral providers operate in your jurisdiction?

Egypt

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. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Egypt

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, and supportive of, the law and practice of international arbitration.

However, it is also worthy of note that the CRCICA has 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. In May 2017, the CRCICA has signed the Belt and Road ArbitrationInitiative Cooperation Agreement with the Beijing Arbitration Commission/Beijing International Arbitration Centre (BAC/BIAC) and the Kuala Lumpur Regional Centre for Arbitration (KLRCA). In December 2017, the CRCICA has also signed a cooperation agreement with the Permanent Court of Arbitration (PCA), during the conference celebrating the 50th Anniversary of UNCITRAL: Global Inclusion and Dispute Resolution: Harmonizing Trends in International Arbitration, which enables PCA hearings to take place at the CRCICA premises and vice versa. More recently, in 2019, CRCICA has signed three cooperation agreements, respectively with (1) the Nairobi Centre for International Arbitration (NCIA) in August 2019; (2) the Lagos Court of Arbitration (LCA) in September 2019; and (3) the Abu Dhabi Global Market (ADGM) on 30 September 2019. The cooperation agreements with NCIA and LCA involve, inter alia, promoting and developing arbitration techniques through joint capacity building events, cooperation in the achievement of the goals of the African Arbitration Association (AfAA), and that NCIA and LCA shall be alternative hearing centres of the CRCICA in Kenya and Nigeria and vice versa. Similarly, the ADGM Arbitration Centre (ADGMAC) shall be the CRCICA’s alternative hearing centre for its arbitrations and mediations to be conducted in the United Arab Emirates. Furthermore, the ADGM can be chosen as the seat of arbitration for cases administered under CRCICA Rules.  

7. 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?

Egypt

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;
• it must be in writing or else it is null. The writing requirement includes a document signed by the parties, an agreement by exchange of correspondences or other means of communication, and/or an incorporation into the contract by reference to a document containing an arbitration agreement insofar as the reference is explicit in considering the arbitration agreement part of the parties’ contract;
• it must deal with matters that are arbitrable; and
• in the case of a submission agreement, the parties must define the dispute subjected to the arbitral proceedings or the agreement would be null and void.

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. This has been confirmed by a judgment of the State Council that was rendered on 5 March 2016, where it ruled that the arbitration agreement is void when the competent minister, or whoever assumes his or her authority with respect to public entities, has not approved it, and that such requirement is a matter of public policy. It also ruled that the arbitration agreement must deal only with matters that are arbitrable and in the case of a submission agreement the parties must identify the dispute subjected to the arbitral proceedings or the agreement would be null and void (State Council, Challenge No. 8256 of JY 56, hearing session dated 5 March 2016).

Moreover, as of December 2020, pursuant to Prime Ministerial Decree No. 2592 of 2020, in contracts to be concluded with a state entity (ie, the state, its organs and state-controlled entities) and a foreign investor that include an arbitration agreement, or that will be amended to include an arbitration agreement, these shall first be reviewed by the High Committee for Arbitration and International Disputes prior the approval of the competent minister, or whoever assumes his or her authority with respect to public entities. The aforementioned committee is a ministerial committee that is reconstituted every now and then, in charge of reviewing and opining on pending international arbitration cases in both commercial and investment cases involving a state entity (ie, the state, its organs and state-controlled entities).

8. Are any types of dispute non-arbitrable? If so, which?

Egypt

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. 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?

Egypt

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, while 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 applicability/inapplicability of certain doctrines of extension. For example, in a decision rendered on 13 February 2014, the Egyptian Court of Cassation has faced the opportunity to discuss the procedural and formal aspects of joining a third party to the arbitration proceedings and has explained the following:

Although the arbitration dispute is generally limited to the parties to the arbitration agreement, however either party may request the joining of a person not a party to the arbitration agreement but to which the arbitration agreement may be extended, provided that the request shall be submitted by one of the parties in the form of a joining request or intervention request. (Court of Cassation, Challenge No. 7595 of JY 81, Hearing Session dated 13 February 2014)

On a different note, while the Arbitration Act did not explicitly address extension 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. However, in a decision rendered by the Egyptian Court of Cassation on 13 March 2018, the Court held that the arbitration agreement itself, whether an arbitration clause or a submission agreement (compromis), is a contract to which the general principles of contract law apply. Then, the Court explicitly referred to the issue of extension of the arbitration agreement to third parties and to other contracts connected to the principal contract on the basis of several doctrines and principles listing them by way of example such as: group of companies, group of contracts, universal succession, mergers or assignment (Court of Cassation, Challenges Nos. 2698, 3100 and 3299 of JY 86, Hearing Session dated 13 March 2018).

10. 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?

Egypt

Consolidation of separate arbitral proceedings under one or more contracts is possible, but conditional upon the parties’ agreement, whether directly, or indirectly through the choice of institutional rules that permit consolidation of proceedings.

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

Egypt

First, Egyptian courts have had the chance to address the "group of companies doctrine" in a case decided by the Egyptian 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.

Nevertheless, in a very important decision of the Egyptian Court of Cassation rendered on 13 March 2018, the Court held that an arbitration agreement cannot exist without consent of the parties, but added that an arbitration agreement may extend to third parties and to other contracts connected to the principal contract on the basis of several doctrines and principles including the group of companies doctrine. (Court of Cassation, Challenges Nos. 2698, 3100 and 3299 of JY 86, Hearing Session dated 13 March 2018)

12. Are arbitration clauses considered separable from the main contract?

Egypt

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. 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 tribunals jurisdiction and competence?

Egypt

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. In this regard, it is worth noting that article 13 of the Arbitration Act, which partially reproduces article 8 of the UNCITRAL Model law, has excluded the “referral exception” whereby the state courts may accept to decide over jurisdiction if it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. This entails that the arbitral tribunal enjoys the priority to decide its competence over state courts. However, in practice, there exist instances where Egyptian courts, in relation to administrative contracts and beyond, 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. 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?

Egypt

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. 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?

Egypt

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.

In this regard, in a judgment rendered on 22 October 2019, the Court of Cassation has provided insight on what is meant by an arbitral institution under article 3 of the Arbitration Act by stating the following:

It is inferred from the travaux préparatoires of Law No. 27 for the year 1994 on Arbitration in Civil and Commercial Matters, and its international sources, and the doctrine and jurisprudence of international arbitration, that a permanent arbitral institution or an arbitration centre, considered under this law [the Arbitration Act], is that institution or that centre established and based in Egypt by virtue of an international or regional treaty, law, or pursuant to a law, for the purpose of administering international commercial arbitration cases, as well as all permanent arbitral institutions or arbitration centres headquartered outside Egypt, which are internationally or regionally well-known and has gained the trust of clients – over the years – in the field of international business, trade and investment, for their internal rules and regulations and stable administrative bodies refined by practical experience and frequency of administering arbitration cases, which ultimately provides for legal and procedural security for the parties to arbitration. [Bracketed words added]

In the same judgment, reference was made to ICC International Court of Arbitration serving as an example of an arbitral institution fulfilling the above-mentioned criteria (Court of Cassation, Challenge No. 14126 of JY 88, Hearing Session dated 22 October 2019).

In the same vein, another judgment of the Court of Cassation rendered on 11 April 2019 ruled that it is not a prerequisite for an arbitration to be international to have its subject matter related to international trade. The Arbitration Act adopts specific legislative criteria for a "deemed internationalisation", among which is resorting to arbitral institutions in Egypt or abroad (Court of Cassation, Challenge No. 11348 of JY 88, Hearing Session dated 11 April 2019).

16. 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.

Egypt

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.

17. 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?

Egypt

Unless otherwise agreed by the parties, the Arbitration Act states that proceedings commence on the day the respondent receives the request for 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.

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

Egypt

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. The Arbitration Act has not provided for a specific set of connecting factors that the arbitrators shall follow in determining the substantive rules having the closest connection with the dispute. The choice of the applicable substantive rules will be dependent on the nature of the dispute and shall be determined on a case-by-case basis.

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.

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Egypt

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 or her own rights. The arbitrator shall accept his or her appointment in writing and shall declare any events giving rise to justifiable doubts as to his or her impartiality and independence. However, while judges or members of the judiciary may sit as arbitrators, they are required to obtain an administrative permission from the Supreme Judicial Council to sit as arbitrators in a specific case. In any event, the parties’ choice must be in compliance with the agreed contractual conditions. 

However, a judgment of the Egyptian Court of Cassation rendered on 9 January 2018 ruled that the absence of the Supreme Judicial Council authorisation for a sitting judge to sit as an arbitrator in a specific case – despite being in breach of the Judicial Authority Law – does not affect the validity of the arbitral award. (Court of Cassation, Commercial Circuit, Challenge No. 9968 of JY 81, Hearing Session dated 9 January 2018)  

20. 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?

Egypt

Unless otherwise agreed by the parties, non-nationals may act as arbitrators in Egypt, and there are no special immigration requirements.

21. 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?

Egypt

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. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Egypt

While 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. In this regard, in January and May 2019 the Egyptian courts passed and confirmed imprisonment sentences against certain arbitrators and members of a purported local arbitration institution who were engaged in the rendering of an arbitral award in sham arbitral proceedings. Charges of misappropriation by fraudulent means and forgery were made against the sentenced individuals (Al-Nozha Misdemeanor Court in Cairo, Case No. 12648 of JY 2018; Cairo Court of Appeal, Appeal No. 695 of JY 2019 (East Cairo Appeals)). This was an exceptional case that involved a flagrant criminal scheme that resulted in the issuance of a US$18 billion award against Chevron and enforcement petitions were also declined by US courts in California and Houston in relation to the award resulting from the sham proceedings in Cairo.

It is also 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. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Egypt

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.

24. 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?

Egypt

According to the Arbitration Act, an arbitrator may not be challenged unless serious and justifiable doubts as to his or 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.

There is a wealth of judgments rendered by Egyptian courts on challenges against arbitrators and arbitral awards on grounds pertaining to duties of disclosure, impartiality and independence. In a judgment rendered on 8 March 2021, the Cairo Court of Appeal reconfirmed the well-established definition of independence and impartiality of an arbitrator as previously held by earlier court decisions, by stating that it consists in the absence of a connection of dependency or a financial or a psychological relation that is contradictory to the arbitrator’s independence which constitutes a real danger of bias or creates justifiable doubts in this regard (Cairo Court of Appeal, Challenge No. 42 of JY 136, Hearing session dated 8 March 2021).

On 22 February 2022, the Court of Cassation upheld the above-mentioned well-established definitions of independence and impartiality of an arbitrator by expressly referring to the IBA Guidelines on Conflicts of Interest in International Arbitration (2014) and quoting, in its judgment, the wording of Clause 3.3.5 of the Orange list, which reads ‘a close family member of the arbitrator is a partner or employee of the law firm representing one of the parties, but is not assisting with the dispute’. In the case at hand, the respondent discovered by coincidence, after the issuance of the arbitral award, that the chairman of the arbitral tribunal has not disclosed that one of the partners of the law firm representing the claimant in the arbitration proceedings was a family relative, however, this partner was not involved with any counsel work related to the arbitration case. In this respect, the Court explained that the arbitrator’s duty of disclosure is a binding legal obligation that is necessary to warrant the integrity and impartiality in the conduct of the arbitration process. The arbitrator’s failure to disclose does not in itself lead to the annulment of the arbitral award, however, the court examining the nullity action assesses in light of the surrounding circumstances of the arbitration case, whether the undisclosed circumstance justifies in itself or leads in a reasonable manner to infer a real danger of bias, which requires a substantive assessment of the facts on a case-by-case basis. On this occasion, the Court of Cassation confirmed that the duty of independence and impartiality of arbitrators is a fundamental principle under the Egyptian Arbitration Act, such that it is equally applicable to all arbitrators whether party-appointed arbitrators, chairmen of arbitral tribunals, or arbitrators appointed by an arbitral institution or even by a court judgment. Furthermore, the Court added that the Egyptian judiciary warrants and ensures the independence and impartiality of arbitrators, which is among the reasons that prove the increased trust by international arbitration parties to choose Egypt as the seat of arbitration (Court of Cassation, Commercial and Economic Circuit, Challenge No. 13892 of JY 81, Hearing session dated 22 February 2022).

In the 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 are 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  CRCICA’s Advisory Committee and beyond. According to the CRCICA’s Advisory Committee’s By-Laws, the decisions on challenges and replacement of arbitrators are considered final and unchallengeable.

25. 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?

Egypt

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. Furthermore, under the Arbitration Act, arbitral tribunals may award interim relief by issuing an interim award. It is worth noting that interim awards do not have res judicata effect, thus, enforcement of interim awards is not common. However, in 2017, the president of the Cairo Court of Appeal, in an ex parte proceedings, enforced, for the first time, an interim decision rendered by an ICC arbitral tribunal seated in Paris (Cairo Court of Appeal, Arbitration Orders, Ordinance No. 39 of JY 134, dated 8 November 2017). This enforcement order has been affirmed by the Cairo Court of Appeal in an adversarial proceeding (Cairo Court of Appeal, Case No. 44 of JY 134, hearing session dated 9 May 2018). 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. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Egypt

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.

27. 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)?

Egypt

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 non-arbitrability of disputes that cannot be subject to a compromise and rights in rem, witnesses and experts may not be heard under oath, awards may not be rendered by truncated tribunals, tribunals may not be constituted from an even number of arbitrators and parties may not agree to exclude the right to apply for setting aside of an award prior to the rendering of the said award

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

Egypt

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 must be given a proper and adequate opportunity to present its case and defences at every stage of the proceedings.

29. 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?

Egypt

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 arbitral tribunal enjoys the power to admit, assess and weigh evidence. The arbitral tribunal’s powers include: undertaking any evidentiary procedure it deems appropriate, reversing a procedure it had previously ordered and the discretion to decide on the evidence on record. Arbitrators also have the right to accept or deny a party’s request for an order on evidentiary procedures without prejudice to the party’s defence rights. The evidence that may be admitted in arbitral proceedings in Egypt is documentary evidence, witness testimony, expert reports and/or site inspection by the arbitral tribunal. Evidence is normally adduced by each party in support of its claims 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.

As to the Prague Rules on the Efficient Conduct of Proceedings in International Arbitration, it is too early to decide on the issue of their applicability as they remain to be tested, comparing to the IBA Rules, which have the advantage of being in use for decades. Moreover, even though Egypt is a civil law country, the choice of the Prague Rules will depend on the background of the parties and not just the seat of arbitration.

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Egypt

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 insofar as the tribunal has jurisdiction to order same.

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Egypt

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. Is it mandatory to have a final hearing on the merits?

Egypt

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

Egypt

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. This distinction between the seat and venue (physical place) has been reaffirmed by a Court of Cassation decision on 27 October 2020 which held that owing to the globalisation of the legal profession and since the ratification of the New York Convention, arbitration has gradually become delocalised. The Court also acknowledged that virtual hearings are increasingly being used in arbitrations across the globe, thanks to the modern communications tools available to the parties, conveying the message that virtual hearings are consistent with the Arbitration Act (Court of Cassation, Economic and Commercial Circuit, Challenge No. 18309 of JY 89, Hearing session dated 27 October 2020). Furthermore, another judgment by the Cairo Court of Appeal, rendered on 8 March 2021, reaffirmed the distinction between the legal seat and physical place of hearings and held that the hearings may take place at different places/venues; however, the legal seat remains one (Cairo Court of Appeal, Challenge No. 42 of JY 136, Hearing session dated 8 March 2021). 

34. Can the tribunal decide by majority?

Egypt

Unless otherwise agreed by the parties, an arbitral tribunal may decide by majority provided that the award states the reason(s) for non-signature by the minority, otherwise the award runs the risk of being set aside. The majority under Egyptian law is quantitative, so the presiding arbitrator may not solely render the award if no majority is achieved.

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Egypt

There are no specific limitations imposed on remedies or relief, other than issues related to public policy. An arbitral tribunal generally enjoys a broad authority and power to award any declaratory relief, monetary compensation, specific performance, interest and costs. However, an arbitral tribunal is not generally entitled to award punitive damages.

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Egypt

Dissenting opinions are permitted under Egyptian law. Whilst such opinions are not standard practice and not expressly addressed under the Arbitration Act, they are not uncommon. The submission of such opinions is practically dependent on the arbitral tribunal dynamics, the manner of deliberations, and the arbitrator’s perception of his or her role and views on issues in dispute.

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Egypt

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. 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?

Egypt

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.

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

Egypt

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. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Egypt

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.

In the context of the Egyptian Commercial Code of 1999, article 50 thereof provides that interest may be payable at the rate set by the Central Bank of Egypt (the CBE) in relation to (i) commercial loans; and (ii) amounts or expenses pertinent to the trader’s trade. To the extent the parties’ dealing falls within the purview of article 50, the rate declared by the CBE may exceed the 7 per cent set under the Civil Code and this would not be contrary to public policy.

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Egypt

Arbitral awards are not subject to any form of appeal under Egyptian law.

42. Are there any other bases on which an award may be challenged, and if so what?

Egypt

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. This restrictive approach is demonstrated by recent Court of Cassation decisions, whereby the Court held that grounds for annulment of arbitral awards are exhaustively listed in article 53 of the Arbitration Act, and that a nullity action is not an appeal. On 24 June 2021, after almost a decade, the Court of Cassation dismissed the nullity action brought by the Libyan state in relation to the famous Kharafi vs. Libya arbitral award and held that the court examining the nullity action shall not conduct a de novo review of the merits, such that any error in the arbitral tribunal’s assessment does not qualify as a ground for annulment given that a nullity action is not an appeal (Court of Cassation, Civil and Commercial Circuit, Challenge No. 12262 of JY 90, Hearing session dated 24 June 2021). While on 8 July 2021, in a case involving a state entity (the Damietta Port Authority), the Court of Cassation adopted the same restrictive approach but annulled the arbitral award instead of dismissing the nullity action, on the ground of violation of Egyptian public policy being one of the grounds for annulment under article 53 (2) of the Arbitration Act. The Court held that review courts are bound not to re-examine the subject matter of the dispute or even delve into the arbitral tribunal’s findings, unless a matter of public policy is in play. In this case, for the first time in its history, the Court of Cassation annulled, on its own initiative, the arbitral award for its violation of Egyptian public policy (Court of Cassation, Civil and Commercial Circuit, Challenges Nos. 1964 and 1968 of JY 91, Hearing session dated 8 July 2021).

43. 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?

Egypt

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.

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Egypt

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, 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. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Egypt

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. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Egypt

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.

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Egypt

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. 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)?

Egypt

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. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Egypt

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. 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?

Egypt

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. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Egypt

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.   

Even though there is no express requirement of disclosure of the existence or identity of funders, non-disclosure may raise conflict of interest issues and so it is likely that disclosure would occur as a matter of practice and this in fact happened in one funded case that was seated in Cairo under the UNCITRAL Rules.