Egypt: Competition Litigation Comparative Guide

1 Legal framework

1.1 Which laws regulate competition in your jurisdiction?

The main general law that regulates competition in Egypt is the Competition Law (3/2005) and its Executive Regulation 1316/2005.

The Competition Law was amended several times. The last amendment entered into force on 8 April 2019.

For banks, the Banks Law (194/2020) excluded banks from the scope of application of the Competition Law, providing that the Competition Law does not apply to banks. It also provides that banks must not engage in anti-competitive practices, such as agreements that:

• set the prices of services or contract terms;
• divide markets;
• allow for the provision of services at below cost; or
• force clients, service providers or suppliers to refrain from dealing with competitors without justifiable cause.

Further, it provides that in case of an anti-competitive practice, the board of directors of the Central Bank may order the violating bank to rectify the situation immediately or within a certain period; otherwise, the act in question will be null and void. The law also allows the Central Bank to:

• deregister the bank and prevent it from conducting banking activities;
• order the bank to make non-interest-bearing deposits in the Central Bank;
• impose financial sanctions on the bank; and/or
• dismiss its officials.

1.2 Which authorities are responsible for enforcing the competition legislation? What is their general approach to enforcement?

The Egyptian Competition Authority (ECA), which was established by virtue of Law 3/2005, is responsible for enforcing the competition legislation (Article 11 of the Competition Law as per the latest amendment by Law 190/2008).

The ECA has several functions – it:

• examines complaints and investigates potential competition violations on its own initiative;
• conducts research;
• provides advisory opinions to state entities on competition issues;
• maintains a database on the economic activities of the state; and
• provides opinions on draft laws and regulations that might affect the competition environment.

It is also competent to coordinate with similar authorities in other countries on matters of common interest, informing the public of the contents of the competition laws and promoting a culture of competition. Further, it publishes periodical reports containing decrees, recommendations and measures it has taken; and prepares an annual report on its activities and its plans for the future (Article 11 of the Competition Law; Article 31 of Executive Regulation 1316/2005).

The ECA's approach to competition law enforcement is becoming increasingly intrusive and active. This is reflected in a recent increase in enforcement.

With respect to the banking sector, the Central Bank is the authority that enforces the competition rules.

2 Private claims

2.1 What types of private claim may be brought for breach of competition law in your jurisdiction?

Egyptian law allows for private enforcement. According to general principles of civil law, anyone that suffers damage as a result of a wrongful act has the right to seek compensation for the damage sustained (Article 163 of the Civil Code).

Thus, private enforcement can take the form of a private claim based on tort for damages before the competent civil court.

In addition, civil claims for compensation can be raised as a direct action before a criminal court, to be decided alongside a criminal lawsuit concerning the same violation. This is because according to Egyptian law, anyone that suffers harm as a result of a criminal act can choose between:

• raising a civil claim before the criminal court to be heard together with the criminal action; or
• raising a separate civil action before the civil court to seek damages.

However, since criminal cases arising from the Competition Law can only be initiated through the submission of a prior request from the chairman of the Egyptian Competition Authority (ECA) (Article 21 of the Competition Law), this constitutes a limitation on bringing civil actions before the criminal courts.

However, the other route – that is, raising a separate civil claim before the civil court – remains open. Nothing in the law provides that raising a criminal action by ECA is a precondition for raising a separate civil claim by the victims of the wrongful acts. On the contrary, Article 20(3) of the Competition Law provides that the ECA's decisions are without prejudice to the liabilities arising from violations of the Competition Law.

In this case, the competent court will be the economic civil courts, which has exclusive jurisdiction over all disputes arising from the application of certain laws, including the Competition Law (the Law on the Establishment of Economic Courts (120/2008)).

However, criminal proceedings cannot not be initiated in relation to violations of the Competition Law without prior written request from the chairman of the board of directors of the ECA based on the approval of a majority of its members, which must be submitted to the Egyptian public prosecutor, who has the authority to initiate a criminal lawsuit (Article 21 of the Competition Law).

2.2 What is the legal basis for bringing a claim for breach of competition law?

The legal basis for bringing a private civil action for breach of the Competition Law is tort law. According to Egyptian law, any violation of a legal obligation is considered a tortious fault, which entitles the victim to a tort claim for damages arising from this violation (Article 163 of the Civil Code).

3 Parties

3.1 Who has standing to bring a claim for breach of competition law?

With respect to private civil actions, anyone that suffers damage as a result of a breach should have standing to bring a civil claim for damages (Article 163 of the Civil Code (Law 131/1948)).

Criminal proceedings can be initiated by the public prosecutor only after receiving a prior written request from the chairperson of the board of directors of the Egyptian Competition Authority (Article 21 of the Competition Law).

3.2 Can a claim for breach of competition law be brought against parties outside the jurisdiction?

Yes, since the provisions of the Competition Law extend to acts committed abroad if these acts:

• could result in the prevention, restriction or harm of the freedom of competition in Egypt; and
• constitute a crime under the Competition Law (Article 5 of the Competition Law).

3.3 Can a claim for breach of competition law be brought against individuals, or only companies?

Civil claims for breach of the Competition Law can be brought against both natural and legal persons, since the persons addressed by the Competition Law are defined as such (Article 2(a) of the Competition Law).

Criminal actions can be brought only against natural persons. However, if the violation was committed by a company employees or representative in the name of the company or for its benefit, the company will be jointly liable for the fines that can be awarded (Article 25 of the Competition Law). In addition, if the violation was committed by a company, the criminal action will be brought against the natural person responsible for the actual management of the company if he or she was aware of the violation and his or her mismanagement contributed to the violation.

4 Collective actions

4.1 Is it possible to bring a collective action for breach of competition law in your jurisdiction? If so, what is the applicable regime?

There are no class or group actions under Egyptian law, except under the Labour Law. However, a claimant may opt to file a case and other affected parties may decide to intervene and join the case.

Furthermore, unions are also entitled to raise claims on behalf of their members.

4.2 Do collective actions proceed on an ‘opt-in' or an ‘opt-out' basis?

Not applicable.

4.3 Do collective actions require certification? If so, what requirements must be met to obtain certification?

Not applicable.

5 Forum

5.1 In what forum(s) are claims for breach of competition law heard in your jurisdiction?

Claims for breach of competition law, whether criminal or civil, are heard before the economic civil courts (Articles 4 and 6 of the Law on the Establishment of Economic Courts).

6 Bringing a claim

6.1 What is the limitation period for claims for breach of competition law in your jurisdiction?

With respect to civil claims, the applicable limitation period is three years from the date on which the claimant becomes aware of the violation committed, or at most 15 years from the date of commission of the violation (Article 172(1) of the Civil Code).

However, since a civil claim for breach of the Competition Law is raised in connection with an act that usually constitutes a crime, this limitation period will not start to run until the limitation period for the criminal lawsuit has lapsed (Article 172(2) of the Civil Code).

The limitation period for criminal cases is three years from the date of commission of the crime. If the crime is of a continuous nature (eg, exclusivity of a dominant firm or a cartel agreement), the limitation period will begin to run after the last day on which the crime is committed.

6.2 What are the formal requirements for bringing a claim for breach of competition law?

Formal requirements include the serving of a statement of case and valid notification of this statement of case to the defendant through the routes specified in the Civil and Commercial Procedures Code. Further, the lawsuit must be raised before the competent court that has jurisdiction both ratione materiae and in terms of the amount in dispute. The claimant must also have standing and capacity, and a valid interest in bringing the lawsuit.

6.3 What are the procedural and substantive requirements for bringing a claim for breach of competition law?

If the claimant has chosen the civil route, the procedure begins with the registration of a statement of case with the competent court, which then notifies this statement to the other party.

If the claimant has chosen the criminal route, it must file a complaint with the Egyptian Competition Authority (ECA) by filing an official complaint form. Upon investigating and finding a violation, the chairperson of the ECA may request that the public prosecutor raise a claim before the criminal court.

As regards the substantive procedures, the claimant must prove the harm sustained as well as the provisions of the Competition Law that have been breached.

6.4 What are the implications if a public enforcement action in relation to the same behaviour is pending? Can a claim still be brought?

According to Article 265/2 of the Criminal Procedural Law, a civil action must be suspended until the criminal action is decided. This states: "If the civil action is filed before the civil courts, its ruling shall be suspended until a final ruling is passed on the criminal action filed before or during its initiation."

6.5 How is jurisdiction over the claim determined?

The competent courts are the economic civil courts. Jurisdiction is allocated between circuits of the economic courts according to the value of dispute. If the value does not exceed EGP 10 million, the first-instance circuits will be competent. If the value of the dispute exceeds that amount, the appeal circuits will be competent.

6.6 How is the applicable law determined?

The applicable law is the Egyptian law on competition violations that have an effect in Egypt. According to Article 5 of the Competition Law, this law applies to acts committed abroad if they:

• could result in the prevention, restriction or harm of the freedom of competition in Egypt; and
• constitute a crime under the Competition Law.

6.7 Under what circumstances must security for costs be provided?

Security for costs must be provided in certain cases. For example, a party appealing a first-instance final judgment must provide security for costs amounting to EGP 100 (Article 221 of the Civil and Commercial Procedures Code). Further, the enforcement of first-instance judgments in commercial matters is conditioned on the provision of security (Article 289 of the Civil and Commercial Procedures Code).

6.8 Are interim remedies available in competition litigation? If so, how are they obtained?

Interim remedies are available in civil competition litigation. Interim remedies can be requested where there is fear of irreparable damage due to the delay until a judgment has been issued on the merits (Article 45 of the Civil and Commercial Procedures Code).

Interim remedies can be obtained in two ways. The first is to request them in the same lawsuit raised on the merits of the claim and before the same circuit of the court hearing the merits (Article 45 of the Civil and Commercial Procedures Code). The second is to request them in a separate interim claim raised before a competent judge appointed specially for this purpose at the economic court (Article 3 of the Law on the Establishment of the Economic Courts).

7 Disclosure and privilege

7.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply?

Litigants may request an order from the court to oblige the other party – or even a third party – to disclose certain specific documents or information that the other party or third party may hold if it can be shown that the document in question is material and relevant to the dispute. (the Law on Evidence in Commercial and Civil Provisions (25/1968)).

A party may request the court to order the other party to disclose a document that it is thought to possess in any of the following cases:

• The law allows for the other litigant to be requested to present the document;
• The document is common between the claimant and the defendant; and
• The party that is requested to present the document depended on that document at any stage of the litigation (Article 20 of the Law on Evidence in Commercial and Civil Provisions).

The request for disclosure must include:

• a description of the requested document;
• a detailed description of its content;
• the facts that it is required to prove;
• evidence that it is held by the counterparty; and
• the reason for obliging the other party to disclose it (one of the three cases mentioned above) (Article 21 of the Law on Evidence in Commercial and Civil Provisions).

If the court orders disclosure and the requested party does not comply, the court can make any negative inferences that reasonably arise from this failure (Article 24 of the Law on Evidence in Commercial and Civil Provisions).

On the other hand, if the Egyptian Competition Authority issues a data-gathering request to a company, the recipient must disclose all information requested from it; otherwise, it will be subject to penalties under the Competition Law (Article 22bis of the Competition Law).

7.2 What rules on third-party disclosure apply in your jurisdiction?

Litigants may request an order from the court to oblige the other party – or even a third party – to disclose certain specific documents or information that the other party or third party may hold if it can be shown that the document in question is material and relevant to the dispute, and is necessary to decide on the disputed right with respect to the extent of its existence (Article 27 of the Law on Evidence in Commercial and Civil Provisions).

The court may reject the request if the third party possessing the documents or information has a legitimate interest in refraining from disclosure.

Further, the party requesting disclosure must pay the costs of such disclosure in advance. The judge might make disclosure subject to the provision of security to guarantee compensation of the party that has been requested to disclose for any damage that might be incurred as a result of disclosure (Article 27 of the Law on Evidence in Commercial and Civil Provisions).

7.3 What rules on privilege apply in your jurisdiction?

Lawyers' duties, including client-attorney privilege, are governed by Law 17/1983. Article 65 provides that a lawyer may not disclose facts or information that he or she became aware of through his or her attorney work if the source of the information has so requested, unless the lawyer received this information in relation to the commission of a felony or a misdemeanour.

Furthermore, Article 79 provides that a lawyer must keep confidential any information that a client tells him or her, unless the client requested such disclosure to defend its position in a case.

In addition, the Penal Code provides that anyone who discloses secrets that he or she obtained because of his or her profession shall be subject to a penalty of imprisonment for up to six months or a fine of up to EGP 500, unless this disclosure was obligatory by law.

8 Evidence

8.1 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

The main types of evidence permitted under Egyptian law are:

• documentary evidence;
• testimonial evidence;
• real or physical evidence;
• demonstrative evidence;
• acknowledgment evidence; and
• expert or inspection evidence.

Accordingly, expert evidence is accepted under Egyptian law. In this regard, a party – whether claimant or defendant – can appoint an expert to demonstrate technical points that it is making. Further, a party might request the court to appoint an expert to provide an opinion on technical points in dispute. The court might also decide to appoint an expert upon its own initiative.

In this regard, the court has complete discretion as to whether to adopt the position taken by any of the experts appointed by any of the parties or indeed by itself. It may also disregard any of these expert reports at its discretion.

8.2 What is the applicable standard of proof?

In a civil lawsuit, the claimant has the burden of proving its case through a preponderance of the evidence, which means that the claimant merely needs to show that the fact in dispute is more likely than not.

In a criminal lawsuit, the public prosecutor bears the burden of proving that the defendant is guilty of an anti-competitive agreement or practice beyond reasonable doubt. In other words, the prosecution must convince the court that no other reasonable explanation can result from the evidence collected by it and presented at trial.

8.3 On whom does the burden of proof rest?

In a civil lawsuit, the claimant bears the entire burden of proving the existence of fault, harm and causal link in order to be awarded compensation by the respondent. In a criminal lawsuit, the burden of proof falls on the public prosecutor, who must prove the elements necessary to establish the guilt of the defendant.

8.4 What defences are typically available in competition litigation?

In civil claims, there are several defences. These include defences based on the absence of fault – mainly because the element of breach according to the Competition Law does not exist. For example, for a claim of abuse of dominance, a defendant could argue that:

• no dominance exists; or
• there was no abuse of dominance.

In this respect, the defendant may argue that the relevant agreement or practice aimed to achieve economic efficiency by creating economic benefits for consumers that outweigh the effects of the restriction of competition.

Substantive defences also include defences based on:

• the absence of compensable damage;
• the interruption of a causality link due to force majeure; or
• the fault of the claimant or of a third party in causing the damage.

Defences also include the expiry of the limitation period.

In criminal actions, a defendant will first challenge the existence of the elements of the crime, including the actus reus and the mens rea. Regarding the actus reus, the defendant can argue that elements required by the Competition Law for the existence of a violation are not fulfilled. For example, as mentioned above, regarding abuse of dominance, a defendant might argue that:

• no dominance exists; or
• there was no abuse of dominance.

Further, a defendant might argue that there was no violation because of economic efficiencies achieved through the relevant act that offset its anti-competitive effects, as this constitutes grounds for an exemption in certain instances and under certain conditions.

9 Settlement

9.1 Can the proceedings be discontinued without a full trial? If so, how; and what are the implications?

Violations of the Competition Law can be settled with approval of the settlement by the Egyptian Competition Authority (ECA). If the settlement was concluded before a request by the ECA for the pubic prosecutor to file a criminal action, the minimum stipulated fine will be the maximum settlement amount.

However, if the settlement was made after the ECA's request for the filing of a criminal lawsuit but before the issuance of the final court judgment, an amount of between three times the minimum stipulated fine and half of its maximum will be paid as settlement. In this case, the settlement will be considered a waiver of the criminal lawsuit filing; while agreements that violate the Competition Law are deemed null and void for criminal purpose(s).

Where a civil lawsuit has been filed, under the Civil and Commercial Procedure Law, the defendant may reach a settlement with the plaintiff before the end of the court proceedings (without a full trial). Settlement in this case will be regarded as a waiver of the civil action.

9.2 In the case of collective actions, is collective settlement possible? If so, how; and what are the implications?

Not applicable.

10 Court proceedings

10.1 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Court proceedings are public, unless the court decides to make them private/confidential for reasons relating to public order or morality. Therefore, either party may ask the court to rule that the proceedings be private/confidential for reasons of public order or morality. It is within the discretion of the court to decide whether to grant this request, provided that the decision relates to one of these two reasons.

Only the parties and their lawyers have access to the court files. In all cases, the court's decision will be pronounced in public.

10.2 How do the court proceedings unfold in your jurisdiction?

Court proceedings in civil litigation can end with a judgment from the first-instance court admitting the proceedings in form and ordering compensation as requested, if the court finds that all formal requirements have been fulfilled and that the claim is factually and legally supported by the facts and law.

Court proceedings might also end up with the court admitting the case in form but rejecting it on the merits if the formal requirements have been fulfilled but the case has not been established on the merits. It may also end up dismissing the case in form before examining the merits if any of the formal requirements have not been fulfilled.

10.3 What is the typical timeframe for proceedings?

Claims in civil court may take between one and two years, depending on:

• the complexity of the case; and
• whether it is a standalone or a follow-on action (relating to a criminal lawsuit).

Actions following a judgment from a criminal court or a decision of the Egyptian Competition Authority (ECA) usually take less time than standalone actions (due to the binding nature of the decision of the criminal court).

10.4 What rules apply to the joinder of third parties?

The applicable rules on the joinder of third parties are Articles 117 to 122 of the Civil and Commercial Procedure Law.

According to these rules, the joinder of a third party is allowed if that third party could have been sued in the first place. This takes place by notifying the third party with a statement of joinder in the same way as a lawsuit is initiated. Further, the court itself might order the joinder of a third party.

10.5 To what extent do the decisions of national or foreign competition authorities influence the court's decision?

Normally, the courts largely take into account the ECA's findings. However, they retain the discretion to deviate from its decisions (Court of Cassation, Challenge 2898 JY 84, 25 November 2014).

Decisions of foreign competition authorities have little direct influence on the decisions of the Egyptian courts. However, they do have an impact on the decisions of the ECA, which in turn influence court decisions. Thus, it appears that decisions of foreign competition authorities indirectly affect the decisions of the Egyptian courts in competition-related cases

11 Remedies

11.1 What remedies are available in competition litigation in your jurisdiction?

The remedies provided in the Competition Law in case of criminal actions are primarily fines and nullification of the violating agreement.

With regard to civil actions, the available remedy is compensation for the damage incurred as a result of the breach. This compensation will include all incurred losses and forgone profits arising from the breach, as long as:

• they are a direct result of the breach; and
• they cannot be reasonably mitigated (Article 221 of the Civil Code).

In addition, the claimant can request invalidation of the violating clause/act.

11.2 Are punitive damages awarded in your jurisdiction?

No, punitive damages cannot be awarded under Egyptian law.

11.3 Will the courts consider any fines imposed by the competition authorities in deciding on the quantum of damages? What other factors will it consider in this regard?

As a matter of law, a civil claim is separate from a criminal action. The quantification of damages should not depend on the gravity of the fault committed or the penalty inflicted in the criminal action; it should depend solely on the extent of the damage incurred.

Other factors that may be considered by the court include the circumstances of the aggrieved party. In other words, the aggrieved party might have special circumstances, in light of its profession or status, that might aggravate the harm incurred as a result of the breach. These circumstances should be considered in quantifying the damages (Article 170 of the Civil Code). Further, the court will consider whether:

• the aggrieved party participated in causing the damage that it incurred; or
• the damage caused was due in part to an external unexpected event.

In such cases, the court might reduce the quantum of damages or might not award damages at all if this was the main cause of the damage.

12 Appeals

12.1 Can the decision of the court or tribunal be appealed? If so, on what grounds and what is the process?

If the value of the claim does not exceed EGP 500,000, the judgment issued by the first-instance circuit cannot be appealed.

If the value of the dispute is between EGP 500,000 and EGP 10 million, the judgment of the first-instance circuit can be challenged by way of appeal before the appeal circuits of the economic courts. The decision of the appeal circuit cannot be challenged before the Court of Cassation, except by the public prosecutor in limited cases.

If the value of the dispute is more than EGP 10 million, the judgment of the appeal circuits can be challenged before the Court of Cassation.

A challenge by way of appeal before appeal circuits can be based on an incorrect application of the law or an incorrect decision on the facts. The appeal circuits will reconsider the case in all respects, whether legal or factual.

However, a challenge before the Court of Cassation is limited to cases where:

• the challenged judgment violates, misapplies or misinterprets the law; or
• there is any cause for nullity in the judgment or in the procedures that led to it (Article 248 of the Civil and Commercial Procedures Law).

13 Costs, fees and funding

13.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

The costs and fees include:

• the fees paid to the court upon filing the lawsuit;
• the fees paid to obtain various papers and documents from the court;
• the fees paid to the court to serve various notices;
• the fees paid for experts appointed by court and fees paid for to facilitate the appearance of witnesses before the court; and
• other similar fees paid to the courts for services rendered in the proceedings.

These costs may be calculated as a percentage of the amount of dispute if this amount is known. If not, the fees are determined as a fixed amount (Article 1 of Law 90/1944 as amended).

The costs also include all other costs incurred by the parties, including the expenses of legal representation. These costs are quantified by the court by virtue of an order issued at the request of the interested party.

According to Article 184 of the Civil and Commercial Procedures Law, the court will allocate costs and fees to the losing party.

13.2 Are contingency fees and similar arrangements permitted in your jurisdiction?

Contingency fees are not regulated under Egyptian law. However, they are capped at a maximum limit of 20% of the value of the claim. They are usually charged as a fixed percentage of the damages recovered or as a fixed pre-agreed success fee.

13.3 Is third-party funding permitted in your jurisdiction?

Currently, Egyptian law contains no provisions that expressly allow third-party funding. Equally, however, it has no laws that explicitly prohibit it.

14 Trends and predictions

14.1 How would you describe the current competition litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

With respect to the current competition landscape and prevailing trends in Egypt, it is clear that the Egyptian Competition Authority (ECA) has become increasingly active in investigating potential anti-competitive agreements and practices. This is reflected in the increase in findings of violations in recent years. In addition, while the ECA previously used to intervene only in specific sectors/fields, it has recently been working on a broader scale which has seen it intervene in different sectors and wider fields (eg, electronics, chicken farms, school clothes, food and medicine).

In addition, the Competition Law does not yet provide for a pre-merger control regime. However, the ECA recently resorted to Article 6 of the Competition Law to apply such control. This article prohibits horizontal agreements (cartels). The ECA has used this provision to control mergers between competitors that may have a negative effect on competition in the market.

As regards proposed legislative reforms, the Egyptian government has submitted a draft amendment of the Competition Law to Parliament to establish a pre-merger control regime in Egypt. This regime would require notification and prior approval from the ECA for an economic concentration that might restrict or harm competition.

15 Tips and traps

15.1 What would be your recommendations to parties facing competition litigation in your jurisdiction and what potential pitfalls would you highlight?

The parties should investigate the market definition closely and hire experts to assess the market definition early on in the case. As the competition regime in Egypt is relatively new, the courts are still unfamiliar with its provisions and there is little precedent available. Therefore, the courts usually rely on opinions and reports issued by the Egyptian Competition Authority and by competition experts.

Aliaa Emara & Youssef Kandil contributed to this Guide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.