Answer ... The applicable law is the Law No. 27 for the 1994 regarding arbitration in civil & commercial matters (Egyptian Arbitration Law) as amended, which is based on the UNCITRAL Model Law on international commercial arbitration (1985). It applies to domestic, international and foreign arbitrations. There is also substantial case law dealing with the application of the Arbitration Law.
Pursuant to article 12 of the Egyptian Arbitration Law, the arbitration agreement must be in writing; otherwise it will be null and void. It shall be considered in writing not only if it is included in a document signed by both parties, but also if it is included in letters and other means of written communication exchanged between the parties.
Answer ... The Egyptian Arbitration Law applies to domestic, international and foreign arbitrations. The said Law applies to arbitration proceedings taking place in Egypt, regardless of the nature of the dispute, even if one or both parties are public juristic persons. The Egyptian Arbitration Law also applies to international commercial arbitration proceedings conducted abroad when the parties agree to be subject to its provisions. Finally, the Court of Cassation ruled that in compliance with article III of the New York Convention of 1958, the Egyptian Arbitration Law shall govern the enforcement of foreign awards even if the parties had not agreed to subject their relevant foreign arbitration proceedings to the said Law.
A distinction shall be made between international and foreign arbitration proceedings. In one respect, article 3 of the Arbitration Law states that arbitration proceedings are considered international if the subject matter relates to international trade. A matter is deemed to relate to international trade in the following circumstances:
- the respective head offices of the parties are situated in two different countries;
- the agreement is to resort to institutional arbitration;
the dispute is linked to more than one state; and
- the respective head offices of the parties are situated in the same country but one of the places listed hereunder is located outside such country:
- the seat of arbitration;
- the place of performance of the essential part of the obligations; or
- the place most closely linked to the subject matter of the dispute.
In another respect, arbitration proceedings are foreign under the said Law if they are merely conducted outside Egypt, meaning that the seat of arbitration is outside Egypt even if the venue of the hearing is in Egypt.
Answer ... The Egyptian Arbitration Law was influenced by the UNCITRAL Model Law on International Commercial Arbitration (1985), subject to some deviations as follows:
- the applicability of the Egyptian Arbitration Law to both domestic and international arbitration. That approach was for political reason given that parliament members of the opposition were assimilating international arbitration to mixed court that used to exist in Egypt from 1875 to 1949;
- the extra-territorial application of the Egyptian Arbitration law to proceedings seated abroad if the parties have agreed to such application, including the international jurisdiction of the Egyptian courts to decide upon setting aside proceedings;
- the adoption of an additional criteria for ascertaining the international nature of an arbitration, namely the parties' agreement to apply the rules of an arbitral institution ;
- the Egyptian Arbitration law does not explicitly exclude the conclusion of an arbitration agreement through electronic means, which remains governed by the applicable Egyptian laws;
- for arbitration clauses by reference, the Egyptian Arbitration law requires the reference to be explicit to incorporate the arbitration clause itself;
- the public policy requirement of an odd number of arbitrators;
- a partial award and a preliminary arbitral award on jurisdiction may not, according to the Egyptian Arbitration law, be challenged before the Egyptian judiciary until a final award is rendered;
- an arbitral tribunal does not have a default power to order interim measures unless such power is conferred thereon by the parties’ agreement;
- if the parties have not agreed on the language of the proceedings, the language shall be Arabic unless the arbitral tribunal determines otherwise;
- if the parties have not agreed on the legal rules applicable to the substance of the dispute, the arbitral tribunal shall apply the substantive rules of the law it considers most closely connected to the dispute
- the arbitral tribunal shall render the final award within the period agreed upon by the parties. In the absence of such agreement, the final award must be made within 12 months of the date of commencement of the arbitral proceedings. In all cases the arbitral tribunal may decide to extend the period of time, provided that it shall not exceed six months, unless the parties agree on a longer period
- if, in the course of the arbitral proceedings, a matter falling outside the scope of the arbitral tribunal's jurisdiction is raised, or if a document submitted to it is challenged for forgery, or if criminal proceedings are undertaken regarding the alleged forgery or for any other criminal act, the arbitral tribunal may decide to proceed with the subject matter of the dispute without any reliance on the incidental matter raised or on the document alleged to be a forgery or on the other criminal act. Otherwise, the arbitral tribunal shall suspend the proceedings until a final judgment is rendered in this respect. Such measure shall entail suspension of the period for making the arbitral award
- the possibility of setting aside an arbitral award if the arbitral tribunal has excluded the lex causae chosen by the parties; and
the Egyptian Arbitration law provides for only three grounds based upon which an exequatur may be denied as follows:
- contradiction with a prior judgment rendered on the substance of the dispute by the competent Egyptian court;
- violation of Egyptian public policy (construed narrowly by the courts); and
- failure to properly notify the award to the party against whom it was rendered.
Finally, it is worth mentioning that the Egyptian Arbitration Law has not adopted the amended UNCITRAL model law of 2006.
Answer ... Under Egyptian law, party autonomy with respect to the choice of the substantive applicable law is well established, and the parties are free to choose their applicable substantive law, subject to exceptional legislative constraints (as in technology transfer contracts and remuneration of Egyptian commercial agents, where application of Egyptian law is mandatory). According to the Egyptian Arbitration Law, if the parties’ fail to agree or choose the applicable substantive law, whether explicitly or implicitly, the arbitral tribunal shall apply the law, which it deems to be the most closely connected to the dispute1.
On the other hand, most of the procedural rules governing the conduct of the proceedings are not mandatory and the parties may derogate therefrom by agreement. However, a few rules appear to be mandatory. For example:
- Witnesses and experts may not be heard under oath;
- awards may not be rendered by truncated tribunals, but may be rendered by a majority of arbitrators;
- time allowed for the issuance of the award in ad hoc arbitrations is limited to 12 months but can be extended to 18 months;
- A ruling on recusal of an arbitrator, when the arbitrator does not step down voluntarily, can only be obtained through court action;
- In case an arbitrator is replaced, at least one hearing shall be held in the presence of the substitute arbitrator;
- Challenges to a tribunal's decision on jurisdiction can only be brought in a nullity action after the final arbitration award is issued.
It is established through judgments of the Egyptian Courts that, except for rules related to public order, arbitral tribunals are not bound by norms considered mandatory in domestic litigations2.
1. If the substantive law is unclear, the arbitral tribunal may instruct the parties to submit evidence in support of their views on the applicable law and its content, and/or request the provision of expert evidence to ascertain the content of such law.
2. Court of Cassation, Challenge No. 547/51 JY, session dated 23 December 1991; Court of Cassation, Challenge No. 1259/49 JY, session dated 13 June 1983.
Answer ... The legal framework in relation to arbitration is not likely to change in the near future. There is just a possibility that a draft law is elaborated with regard to the existing unregulated arbitration centers. This draft law would not apply to the Cairo Regional Centre for International Commercial Arbitration (“CRCICA”) which was established by virtue of Headquarters Agreement between the Asian African Legal Consultative Organisation (“AALCO”) and the Arab Republic of Egypt.
Answer ... Egypt adhered to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1959 without making any declarations or notifications.
Answer ... In 1974 Egypt acceded to the 1965 Convention of the International Bank of Reconstruction and Development of Washington (IBRD) that established the International Centre for the Settlement of Investment Disputes (ICSID).
Further, Egypt has ratified several regional conventions relating to international commercial and investment arbitration, including:
- the 1954 Convention on Enforcement of Decisions between the States of the Arab League;
- the 1974 Convention on the settlement of Investment Disputes between the Hosting Countries of Arab investors and the nationals of other Arab countries;
- the Amman Arab Convention on Commercial Arbitration of 1987; and
- the Unified Agreement on the investments of Capitals in Arab States of 1980, which was signed in Amman and entered into force on 7 September 1981.
In addition, Egypt has signed 115 bilateral investment treaties (BITs) that include possible recourse to arbitration, of which 30 did not enter into force and 13 were terminated.