Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
International Arbitration
The tribunal
How is the tribunal appointed?

Answer ... According to article 17 of the Egyptian Arbitration Law (no.27/1994), the parties are free to choose their arbitrators, either directly or by deciding on the method and timeframe for that choice. This may include reference to an appointment procedure contained in institutional rules or the designation of an independent appointing authority. Where the parties have failed to make their choice or to determine the method of choice, Article 17 provides the necessary steps for appointing the tribunal. In case of in case of disagreement by the parties on a sole arbitrator, the competent state court, as determined by article 9 of the same law, shall have jurisdiction to appoint the sole arbitrator. In case of a tripartite tribunal, the general rule is that each party appoints an arbitrator, and the party appointed arbitrators choose the third. If either party fails to appoint an arbitrator or if the party appointed arbitrators fail to agree on a third, a judge, as determined by article 9 of the same law, is entrusted with appointing the arbitrator as required.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

Answer ... Art 16 of the Arbitration Law is permissive as to the requirements to sit as arbitrator. The said Article solely prohibits minors and those who are under guardianship or have been deprived of their civil rights by reason of an indictment for a felony or a misdemeanour breaching honesty or due to a declaration of his bankruptcy. Further, Article 16 does not require the arbitrator to be of a given gender or nationality, unless otherwise agreed upon between the two parties.

In Egypt, practicing lawyers regularly sit as arbitrators. However, retired judges and law professors are sometimes appointed by parties or institutions. It is worth mentioning that in construction arbitration, engineers also frequently sit as arbitrators. The law allows active judges to serve as arbitrators provided that the appointed judge obtains an authorization from the Supreme Judicial Council.

CRCICA, the leading arbitral institution in Egypt, has been supporting gender diversity in arbitral panels. For the list procedure provided under articles 8 and 9 of CRCICA Rules on the appointment of arbitrators, the CRCICA endeavors that there are female arbitrators amongst the identical list sent to the parties. Further, the CRCICA signed on 10 December 2017 the Equal Representation in Arbitration Pledge. Further, as a sign of support to diversity, the CRCICA has appointed in 2017 a female Deputy Director for the first time since its inauguration. Finally, the CRCICA also supports age diversity and geographic diversity.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

Answer ... Under the Arbitration Law, an arbitrator may be challenged in the case of circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator may also be challenged if he or she does not possess the qualifications agreed to by the parties. It is important to note that arbitrators must resign if faced with a clear conflict of interest. Article 19 provides that the request for recusal shall be submitted in writing to the arbitral tribunal, indicating the reasons for recusal, within 15 days from the date the applicant becomes aware of the composition of such tribunal or the conditions justifying the recusal. Such request shall be referred by the tribunal to the state court for its final decision.

Pursuant to article 20 of the Arbitration Law, if an arbitrator is unable to perform his or her mission or fails to perform it, interrupts performance in a manner that leads to unjustifiable delay in the arbitral proceedings, does not abstain or is not removed by agreement between the parties, the competent state court may terminate his or her mission on the basis of the request of either parties.

According to the prevailing scholarly view as well as jurisprudence, institutional rules regulating challenges and removal of arbitrators shall apply provided that the removal is decided by an independent panel, meaning that Article 19 of the Law mainly applies to ad hoc proceedings.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
If a challenge is successful, how is the arbitrator replaced?

Answer ... Under the Arbitration law, 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 law, challenge the same arbitrator more than once in the same proceedings.

According to Article 21 of the Arbitration law, arbitrators can be replaced if they are recused or discharged or if they resign from their mandate for any other reason. The replacing arbitrator is appointed pursuant to the same procedures followed for the appointment of the arbitrator being replaced.

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. A substitute arbitrator is appointed pursuant to the same procedures followed for the appointment of the arbitrator being replaced.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
What duties are imposed on arbitrators? Are these all imposed by legislation?

Answer ... All arbitrators, including those who are party-appointed, have to be independent and impartial. The arbitrator shall avoid ex parte communications with any party regarding the arbitration.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

Answer ... (a) procedure, including evidence?

The parties are free to negotiate their own procedural rules, subject to mandatory provisions (for example, both parties must be treated equally and fairly). If the statutory rules (or the agreed rules) are silent, the arbitrators generally have a very broad discretion to determine the procedural rules.

As regard evidence, it is worth mentioning that each party shall have the burden of proving the facts relied on to support its claim or defence. Witnesses, including expert witnesses who are presented by the parties to testify to the arbitral tribunal on any issue of fact or expertise. Their statements are presented in written form and signed by them. The arbitral tribunal determines the admissibility, relevance, materiality and weight of the evidence offered.

The arbitral tribunal may appoint one or more experts to submit on certain specific issues determined by the arbitral tribunal, a written report or an oral report to be included in the meeting. A copy of the terms of reference regarding the report entrusted to the expert will be sent to each party immediately after its submission, granting each party the opportunity to express its opinion thereon. Each of the parties is entitled to review and examine the documents upon which the expert relied in his or her report.

The arbitral tribunal may decide, after the submission of the expert’s report, whether on its own initiative or upon the request of a party to the arbitration, to hold a hearing to hear the expert and to provide the parties with the opportunity to examine and cross-examine the expert about his or her report. During the meeting, each of the parties may present one or more expert witnesses to give testimony on the issues raised in the report of the expert appointed by the arbitral tribunal, unless otherwise agreed upon between the parties.

The IBA Rules on the Taking of Evidence are not regulated under Egyptian law. There are no legal impediments preventing the parties from agreeing to apply or seek guidance from said Rules. Articles 20–22 and 27 of the Law of Evidence in Civil and Commercial Matters (the Evidence Law) regulate production of documents with rules that are somewhat similar to the IBA Rules on the Taking of Evidence.

(b) interim relief?

The parties to an arbitration may agree that the arbitral tribunal can take any temporary or interim measure that may be required according to the nature of the dispute at the request of a party. For example, the tribunal may maintain or restore the status quo pending determination of the dispute, take action that would prevent, or refrain from taking action that is likely to cause, current or imminent prejudice to the arbitral process, etc. The tribunal may modify, suspend or terminate an interim measure it has granted upon application of a party or on the tribunal’s own initiative. The tribunal may ask the parties to present whatever guarantee that it deems sufficient to cover the expenses of such temporary or interim measure.

Thus, the parties should explicitly and specifically agree to grant arbitrators this power.

If the party against whom the order was issued fails to execute it, the arbitral tribunal, upon the request of the other party, may authorise the latter to undertake the procedures necessary for the execution of the order, without prejudice to the right of said party to apply to the president of the concerned court for rendering an execution order.

(c) parties which do not comply with its orders?

The tribunal has very broad discretion in relation to procedure where the agreed rules or the statutory rules are silent. For example, the tribunal can Order disclosure of documents known to be in a party's possession. Request a party to produce a certain witness, but cannot compel witness attendance. Negative inferences can arise when a party does not comply with the tribunal's request. The arbitrators do not have powers to issue interim orders (for example, attachment orders and injunctions) unless this is agreed by the parties in the arbitration agreement or subsequently.

(d) issuing partial final awards?

The arbitral tribunal may issue partial award, disposing of one or more monetary or other substantive issues between parties.

(e) the remedies it can grant in a final award?

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.

(f) interest?

The interest is 4 per cent per annum in civil matters and 5 per cent per annum in commercial matters. However, the parties may agree upon another rate of interest either in the event of delay in effecting payment or in any other case in which interest has been stipulated, provided that it does not exceed 7 per cent. A creditor may demand damages in addition to interest if he or she establishes that a loss, in excess of the interest, was owing to bad faith on the part of the debtor.

According to article 50(3) of the Commercial Code, in case of commercial loans or cost incurred by a merchant in favour of its customer, the merchant may claim interest at the rate applicable by the Central Bank. Such rate is currently 11.75 per cent per annum.

Finally, interest on banking loans and transactions with bank customers are determined by virtue of party autonomy without being subject to any maximum statutory rate.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

Answer ... If the respondent fails to participate in the arbitration without valid cause, the Egyptian Arbitration Law 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 defenses at every stage of the proceedings.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
Are arbitrators immune from liability?

Answer ... There are no provisions in the Egyptian Arbitration Law dealing with this issue. However, in practice, arbitrators are generally immune from liability vis-à-vis the parties except in cases of fraud, corruption and/or gross negligence. In contrast, institutional rules will usually deal with the immunity of arbitrators in a more direct manner. As Egypt’s leading arbitral institution, the CRCICA is a prime example, as it states in its article 16 that: “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”.

For more information about this answer please contact: Ismail Selim from The Cairo Regional Centre of International Arbitration
International Arbitration