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.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
International Arbitration
1.
Legal framework
1.1
What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
Egypt

Answer ... Law 27/1994 on Arbitration in Civil and Commercial Matters (‘the Arbitration Law’) is the relevant law. In addition to arbitrability, the following requirements apply to arbitration in Egypt:

  • The arbitration agreement must be in writing.
  • Notwithstanding the requisite capacity to enter into an arbitration agreement, in administrative contracts a governmental entity cannot enter into an arbitration agreement without the prior approval of the competent minister (or other authorised person who assumes the minister’s powers with respect to public juridical persons).
  • Representation before arbitral tribunals requires a specific power of attorney explicitly granting counsel the powers to undertake all the necessary arbitral procedures (Civil Code).

For more information about this answer please contact: Samer Badran from Badran Law Office
1.2
Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
Egypt

Answer ... Generally, the Arbitration Law does not differentiate between domestic and international arbitration, except for a minor difference that concerns which national court shall have jurisdiction to decide on relevant arbitration matters. A clear reference to this court is made in the Arbitration Law to rule on:

  • external procedural matters; and
  • annulment of the arbitral award.

In terms of external procedural matters, the Arbitration Law designates the national court that will initially have jurisdiction over the dispute in the absence of an arbitration agreement to decide thereon. For annulment, the Arbitration Law designates the court of second degree of the former referenced court (ie, the court of appeal).

The national court differs in the case of domestic and international arbitration. In domestic arbitration, the above applies; however, in international arbitration, the Arbitration Law provides for the competence of the Cairo Court of Appeal in relation to the annulment of an international arbitration award. The Arbitration Law considers an arbitration to be international if it relates to a dispute in connection with international commerce, for example where:

  • the headquarters of the parties are located in two different countries at the time of the signing of the arbitration agreement;
  • the parties agree to resort to a permanent arbitral organisation or to an arbitration centre with its premises in Egypt or abroad;
  • the arbitration agreement is connected to more than one country/state; or
  • the headquarters of the parties are located in the same country at the time of entering into the arbitration agreement, but where any of the following is located outside the state:
    • the place where the arbitration will take place as determined by the arbitration agreement;
    • the place where a significant part of the obligations will be performed; or
    • the place that is most closely related to the dispute.

For more information about this answer please contact: Samer Badran from Badran Law Office
1.3
Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
Egypt

Answer ... Yes.

For more information about this answer please contact: Samer Badran from Badran Law Office
1.4
Are all provisions of the legislation in your jurisdiction mandatory?
Egypt

Answer ... No.

For more information about this answer please contact: Samer Badran from Badran Law Office
1.5
Are there any current plans to amend the arbitration legislation in your jurisdiction?
Egypt

Answer ... No, but there is a committee that has been formed to amend the Law, yet nothing has yet been decided, amendments would require the Legislative branch

For more information about this answer please contact: Samer Badran from Badran Law Office
1.6
Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
Egypt

Answer ... Egypt was among the very first states to become a signatory to the New York Convention on 9 March 1959.

For more information about this answer please contact: Samer Badran from Badran Law Office
1.7
Is your jurisdiction a signatory to any other treaties relevant to arbitration?
Egypt

Answer ... Egypt signed the ICSID Convention on 11 February 1972 and it entered into force as of 2 June 1972.

For more information about this answer please contact: Samer Badran from Badran Law Office
2.
Arbitrability and restrictions on arbitration
2.1
How is it determined whether a dispute is arbitrable in your jurisdiction?
Egypt

Answer ... Matters that are subject to marital/family, criminal or employment laws cannot be subject to arbitration. The Egyptian law also sets out a generic principle governing arbitrability, which provides that any matter that cannot be subject to reconciliation is not arbitrable.

For more information about this answer please contact: Samer Badran from Badran Law Office
2.2
Are there any restrictions on the choice of seat of arbitration for certain disputes?
Egypt

Answer ... The Arbitration Law respects party autonomy where the parties agree on the seat of arbitration with no specific restrictions or limitations.

For more information about this answer please contact: Samer Badran from Badran Law Office
3.
Arbitration agreement
3.1
What are the validity requirements for an arbitration agreement in your jurisdiction?
Egypt

Answer ... Pursuant to the Arbitration Law, an arbitration agreement must in all events be in writing. Nothing else is required to enter into an arbitration agreement if the dispute has not yet arisen (e.g where the parties agree on an arbitration clause that is embedded in their prime contract or agree on the same by reference). However, in the event of a submission agreement, in addition to being in writing, the Arbitration Law requires that it specify the matters that will be subject to arbitration; otherwise, the agreement will be void.

For more information about this answer please contact: Samer Badran from Badran Law Office
3.2
Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
Egypt

Answer ... The Arbitration Law explicitly refers to the notion of the separability of the arbitration agreement in Article 23.

For more information about this answer please contact: Samer Badran from Badran Law Office
3.3
Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
Egypt

Answer ... Seat: The Arbitration Law refers to the seat of arbitration in Article 28, which provides that the arbitral tribunal will have the power to determine the seat of arbitration taking into consideration the circumstances of the case and its convenience to the parties.

Language: The Arbitration Law in principle requires that the arbitration be:

  • in Arabic unless the parties agree otherwise; or:
  • in any another language or languages which may be determined by the arbitral tribunal (Article 29/1).

When deciding on the language, the tribunal will consider substantive criteria such as:

  • the language of the contract and the documents exchanged between the parties with respect to the dispute;
  • the language of the country selected by the parties as the seat; or
  • the language of the country in which the contract was concluded.

The arbitral tribunal’s decision in this regard is binding.

For more information about this answer please contact: Samer Badran from Badran Law Office
4.
Objections to jurisdiction
4.1
When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
Egypt

Answer ... The Arbitration Law imposes a time limit for making jurisdictional objections. Jurisdictional objections must be raised no later than the date fixed for submission of the respondent’s statement of defence. However, the arbitral tribunal may admit such a plea at a later stage if the relevant party submits justifiable reasons for the delay. Jurisdictional pleas may be submitted:

  • as an independent objection; or
  • as part of the respondent’s response to the request of arbitration or its statement of defence.

The arbitral tribunal may, on its own initiative or upon application by either party, decide:

  • to bifurcate the proceedings and rule on the jurisdictional pleas as a preliminary question before ruling on the merits; or
  • to adjoin the jurisdictional pleas to the merits and address all questions (of jurisdiction and substance) in the final award.

For more information about this answer please contact: Samer Badran from Badran Law Office
4.2
Can a tribunal rule on its own jurisdiction?
Egypt

Answer ... The principle of competence-competence is firmly established under the Arbitration Law. Article 22 explicitly empowers the arbitral tribunal to rule on objections related to its jurisdiction, including objections related to:

  • the existence, extinction or nullity of an arbitration agreement and
  • the scope of the arbitration agreement and whether it covers the subject matter in dispute.

Further, the Supreme Constitutional Court has upheld the validity of the competence-competence principle, ruling that this “is an application of the widely accepted rule that the judge who rules on the merits, shall rule on the procedures” (Supreme Constitutional Court, Challenges 50 and 66 for Judicial Year 22, 15 December 2002). However, the tribunal’s decision – including in relation to jurisdiction – will be subject to scrutiny by the competent annulment court if the final award is challenged based on jurisdictional grounds.

For more information about this answer please contact: Samer Badran from Badran Law Office
4.3
Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
Egypt

Answer ... In principle, the court of the seat does not decide on the jurisdiction of the tribunal. This is the direct result of the notion of competence-competence that is well established under the Arbitration Law, and which provides that the tribunal has exclusive authority to decide on its own jurisdiction. The court of the seat will declare such inadmissibility not at its own initiative, but at the request of either litigant; in which case the litigant must adhere to the jurisdiction of the tribunal and to the arbitration agreement. If a litigant fails to adhere to the arbitration agreement and discusses the merits of the case, that party will be deemed to have waived the arbitration agreement. Nonetheless, the court of the seat may have the chance to rule on the jurisdiction of the arbitral tribunal once the arbitral award has been issued if the latter is challenged based on jurisdictional grounds. Pursuant to Article 53 of the Arbitration Law, an arbitral award can be challenged or set aside for lack of jurisdiction. The court of the seat cannot avoid ruling on the challenge unless it rules on the jurisdiction of the tribunal.

For more information about this answer please contact: Samer Badran from Badran Law Office
5.
The parties
5.1
Are there any restrictions on who can be a party to an arbitration agreement?
Egypt

Answer ... Any natural or legal person with the required legal capacity (ie, the capacity to dispose of its rights) can enter into an arbitration agreement. However, a restriction applies with respect to administrative contracts: a governmental entity cannot enter into an arbitration agreement without the prior approval of the competent minister (or any other authorised person so delegated by the competent minister).

For more information about this answer please contact: Samer Badran from Badran Law Office
5.2
Are the parties under any duties in relation to the arbitration?
Egypt

Answer ... The parties must fully cooperate with the arbitral tribunal to conduct the arbitral proceedings in the most expeditious and cost-effective manner. The parties, for example, must:

  • refrain from any dilatory tactics designed to interrupt or hinder the progress of the proceedings or delay resolution of the dispute; and
  • demonstrate honesty, integrity and professionalism at all times during the proceedings.

Any ex parte communications with any members of the arbitral tribunal in relation to the arbitration is not permissible. These duties largely have their roots not in the Arbitration Law, but in the Civil Code, which dictates that contracting parties must act in accordance with the requirements of good faith. This is what the parties to the arbitration agreement must follow from a mere contractual perspective.

For more information about this answer please contact: Samer Badran from Badran Law Office
5.3
Are there any provisions of law which deal with multi-party disputes?
Egypt

Answer ... Although the Arbitration Law does not refer to multi-party arbitration, this is possible in practice. The Arbitration Law recognises the notion of the extension of arbitration agreement where multi-party proceedings are likely. The Arbitration Law explicitly recognises the existence of multi-party arbitrations, although it does not regulate (or address) them. In this respect, Article 4 of the Arbitration Law provides that the references to the ‘two’ parties to the arbitration in the law denotes all parties to the arbitration, irrespective of their number. Given the absence of specific provisions regulating multi-party arbitrations, the parties are greatly encouraged to give due regard to the drafting of the multi-party arbitration agreement, in which they should expressly determine the procedure to be followed – in particular, concerning the parties’ roles in the choice of arbitrators (ie, whether the parties will jointly appoint the arbitrators). They are encouraged to agree on arbitration institutional rules that clearly address and regulate multi-party proceedings.

For more information about this answer please contact: Samer Badran from Badran Law Office
6.
Applicable law issues
6.1
How is the law of the arbitration agreement determined in your jurisdiction?
Egypt

Answer ... In principle, the arbitration agreement is governed and regulated under the law applicable to the arbitration per se (the law of the seat – lex arbitri), under which the arbitration agreement (along with its requirements, validity, form etc) is defined. In this regard, pursuant to the Arbitration Law, the choice of applicable law is fully subject to party autonomy. Accordingly, there will be no issues where the parties agree on the law of the seat in advance of any dispute. However, if the parties do not agree on the applicable law, the arbitration agreement will be governed by the law of the seat of the arbitration. This principle has been upheld by the Court of Cassation, which has stated that in the absence of the parties’ agreement, the arbitration agreement will be governed by the law of the seat. However, this does not conflict with the requirements for capacity to enter into an arbitration agreement, which are ultimately governed by the Arbitration Law. In this regard, the requirements for capacity set out in the law governing the capacity of the contracting party will apply.

For more information about this answer please contact: Samer Badran from Badran Law Office
6.2
Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
Egypt

Answer ... Pursuant to the Arbitration Law, the arbitral tribunal must apply the substantive law of the dispute as chosen by the parties. However, there are certain exceptions whereby the tribunal either must or can decide not to uphold the agreed substantive law, as follows:

  • The elected substantive law contradicts Egyptian public policy. In this case, the tribunal should observe these public policy rules and give them precedence over the rules agreed by the parties. This is essential in order for the tribunal to obviate the risk of annulment of its award where the seat is Egypt.
  • The circumstances are such that Egyptian law per se requires that Egyptian law will be the governing substantive law. For example, the Commercial Code mandates that a transfer of technology contract must be governed by Egyptian law; otherwise the contract itself is void.
  • The parties empower the tribunal to act as amiable compositeur. In this case, the tribunal has the scope to apply the maxims of equity over the provisions of the agreed substantive law (Article 39/4 of the Arbitration Law).

Where the substantive law is unclear (eg, there is no agreement on same), the tribunal will apply those substantive rules which, in its opinion, are most closely connected to the dispute (Article 39/2 of the Arbitration Law).

For more information about this answer please contact: Samer Badran from Badran Law Office
7.
Consolidation and third parties
7.1
Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
Egypt

Answer ... Although the Arbitration Law does not regulate the consolidation of separate arbitrations, this is still possible in Egypt. As long as the parties to the arbitration have agreed on institutional rules that provide for such consolidation, consolidation per se will not constitute an issue. The Egyptian courts will not refuse to grant an exequatur to an arbitral award that has been rendered following the consolidation of separate arbitral proceedings.

However, consolidation could present a problem where the parties are involved in ad hoc proceedings and the seat is Egypt if the relevant governing provisions are missing. By and large, there are no conditions for consolidation set forth in the Arbitration Law, given the lack of provisions addressing this matter. Although consolidation is not explicitly restricted in ad hoc proceedings, it is unlikely to take place and any attempts at consolidation – especially with the parties’ disagreement – would likely be unsuccessful. Therefore, it is highly recommended to agree on institutional rules that govern the consolidation of separate arbitrations.

For more information about this answer please contact: Samer Badran from Badran Law Office
7.2
Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
Egypt

Answer ... As in the case of consolidation of arbitrations (see question 7.1), the Arbitration Law does not address the joinder of additional parties to an arbitration which has already commenced. Most importantly, arbitration is considered an exceptional recourse of adjudication and the Egyptian regime is thus sceptical towards the joinder of additional parties – especially those which are deemed third parties or which do not meet the conditions set forth for the extension of the arbitration agreement to non-signatories. While the Arbitration Law allows for multi-party arbitration, this applies exclusively to parties which have explicitly agreed to arbitrate (ie, the parties to the arbitration agreement). Pursuant to the Arbitration Law, a third party which is not a party to an arbitration agreement cannot be compelled to arbitrate (save in the cases referred to in question 7.3). By and large, the joinder of a third party without its consent is not possible under the Egyptian regime.

For more information about this answer please contact: Samer Badran from Badran Law Office
7.3
Does an arbitration agreement bind assignees or other third parties?
Egypt

Answer ... There are exceptions to the rule that the arbitration agreement is limited to the contracting parties only, and that a third party which is not a party to the arbitration agreement cannot be compelled to arbitrate. Almost all of these exceptions fall under the internationally recognised notion of ‘extension of the arbitration agreement to non-signatories’. This notion is permitted under the Egyptian arbitration regime, despite the absence of any express provisions addressing this issue in the Arbitration Law. The extension of the arbitration agreement to non-signatories is rooted in prominent legal tenets that have mostly been adopted in the same manner in different legal jurisdictions. The most common grounds for the extension of the arbitration agreement include succession, assignment, estoppel and group of companies (Court of Cassation, Challenges 2698, 3100 and 3299 of JY 86, 13 March 2018). These principles are grounded in Egyptian laws of a substantive nature.

From a legal standpoint, the grounds for the extension to the arbitration agreement have their origins in the law applicable on the merits. This is the law under which the parties’ transaction is governed, which determines and governs their rights and obligations, including performance, discharge, assignment and succession. All Egyptian laws allow for the extension of the arbitration agreement to non-signatories based on their consent to the arbitration agreement – for example, through involvement by assignment or through universal succession. Accordingly, the extension of an arbitration agreement to non-signatories permits the involvement of third parties, but differs from joinder per se. The former is triggered through a matter that is governed by and regulated under the applicable substantive law; while the latter – like consolidation – is normally of a procedural nature (litigatory action).

For more information about this answer please contact: Samer Badran from Badran Law Office
8.
The tribunal
8.1
How is the tribunal appointed?
Egypt

Answer ... Issues such as the constitution of the arbitral tribunal, the appointing authority and the timeframe for the appointment are subject to party autonomy. If the parties do not agree on how the arbitral tribunal is appointed, the provisions of the Arbitration Law will apply in this regard. On this note, if the arbitral tribunal is to be constituted by a sole arbitrator, the court of the seat will appoint the respective arbitrator at the request of either party. If the arbitral tribunal is to be constituted by three arbitrators, each party will appoint its co-arbitrator and the two appointed co-arbitrators will agree on the presiding arbitrator. If either party fails to appoint its co-arbitrator within 30 days of the date on which it is requested to do so, or if the two co-arbitrators fail to agree on the presiding arbitrator within 30 days of the date of the appointment of the co-arbitrators (whichever is later), the court of the seat, at the request of either party, will appoint the respective arbitrator (either the co-arbitrator or the presiding arbitrator). In making this appointment, the court will observe the conditions required by law. The decision by the court in this regard is not subject to appeal.

For more information about this answer please contact: Samer Badran from Badran Law Office
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
Egypt

Answer ... The Arbitration Law provides that the arbitral tribunal must be composed of an odd number of arbitrators; otherwise, the award will be void. In the absence of agreement between the parties, the default number of arbitrators is three. The Arbitration Law does not require that arbitrators hold certain qualifications. The parties are free to nominate whoever they see fit as an arbitrator (even if he or she is not from a legal background), as long as he or she meets the requirements set forth under the Arbitration Law – that is, he or she must not:

  • be a minor;
  • have been deprived from exercising his or her civil rights because of a felony or disgraceful misdemeanour; or
  • have been declared bankrupt or insolvent.

The arbitrator may be of any nationality, unless the parties have agreed otherwise.

For more information about this answer please contact: Samer Badran from Badran Law Office
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
Egypt

Answer ... Any member of the tribunal may be challenged under the Arbitration Law if there are facts or circumstances that may raise justifiable doubts as to his or her impartiality or independence. The challenge request must be made within 15 days of the date on which the challenging party becomes aware of the relevant facts or circumstances on which the challenge is based and must incorporate the reasons for such challenge.

For more information about this answer please contact: Samer Badran from Badran Law Office
8.4
If a challenge is successful, how is the arbitrator replaced?
Egypt

Answer ... If the challenge is accepted, a substitute arbitrator will be appointed to replace the original arbitrator under the same rules that apply to the appointment of arbitrators set out in Article 17 of the Arbitration Law (see question 8.1).

For more information about this answer please contact: Samer Badran from Badran Law Office
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
Egypt

Answer ... In Egypt, arbitrators assume the same duties as state judges when they adjudicate the dispute before them. Given the private nature of arbitration, the Arbitration Law refers to multiple duties of the arbitrators, including the following:

  • Impartiality and independence: The arbitrators must be and remain impartial and independent from the parties throughout the course of the arbitration. Successively, the arbitrators must accept their appointment in writing and disclose at the time of their appointment (or thereafter) any facts or circumstances which may raise justifiable doubts as to their independence or impartiality. They must also refrain from engaging in any ex parte communications with any of the parties to the arbitration.
  • Due process: The arbitrators must afford each party a full, adequate and reasonable opportunity to present its case. Further, the arbitrators must:
    • act fairly;
    • treat the parties equally; and
    • ensure that the fundamental judicial safeguards are duly preserved.
  • The arbitrators must endeavour to conduct the proceedings in an expeditious and cost-effective manner.
  • The arbitrators must abide by the timeframe set by the parties for the issuance of the arbitral award.

For more information about this answer please contact: Samer Badran from Badran Law Office
8.6
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?
Egypt

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

The parties to the arbitration are free to agree on the procedures to be followed by the arbitral tribunal, including the right to submit the proceedings to the rules prevailing under the auspices of any arbitral organisation or centre in Egypt or abroad.

In the absence of such agreement or in case of a gap in the applicable procedural rules, the arbitral tribunal may – without prejudice to the mandatory provisions of the Arbitration Law and basic principles of litigation – adopt or set out the procedures it considers appropriate. This is supported by the explicit wording of Article 25 of the Arbitration Law.

With respect to evidence, the parties are also entitled to choose the procedural rules of evidence that will govern the dispute. This is because the rules enshrined in the Law of Evidence (25/1968) do not constitute public policy and can thus be derogated from. If the parties fail to reach agreement, the arbitral tribunal will determine the rules of evidence it deems appropriate.

Although the Arbitration Law does not specify in detail the arbitrators’ powers in relation to evidence, it is unequivocally established that arbitrators enjoy wide discretionary powers in assessing the admissibility, relevance and probative value of the evidence submitted. In addition, arbitrators may order the parties to produce documents, exhibits or other evidence within such period as they deem appropriate. Further, the tribunal may order any evidentiary procedure it may deem necessary for the determination of the dispute, including the appointment of one or more experts to assist the tribunal with specific issues. It may also reverse any procedure it had previously ordered

(b) Interim relief?

According to Article 24 of the Arbitration Law, an arbitrator is empowered to order interim or conservatory relief, provided that this power is explicitly conferred upon him or her by the parties either in the arbitration agreement or thereafter. However, the Arbitration Law does not exclusively identify all interim measures that can be issued in respect of Egyptian-seated arbitral proceedings. Interim measures include:

  • orders to stay liquidation of letters of guarantee; and
  • orders that certain assets be placed under judicial wardship until issue of the final award.

Arbitral tribunals are also authorised to issue interim awards according to Article 42 of the Arbitration Law.

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

Unlike state judges, arbitral tribunals do not have the authority of compulsion because arbitrators, as private individuals, do not represent the authority of the state. Accordingly, arbitral tribunals may not, for example, impose penalties on witnesses who fail to attend the hearing or refuse to answer questions posed to them. Further, they cannot compel a party to produce documents in its possession.

The arbitral tribunal can, however, seek the support of national courts by applying to the president of the court referred to in Article 9 of the Arbitration Law to:

  • sanction any witness who refrains from attending before the tribunal or refuses to respond, by imposing the sanctions prescribed in Articles 78 and 80 of the Law of Evidence in Civil and Commercial Matters; or
  • order the parties to the arbitration or third parties to produce documents in their possession that are material to the outcome of the dispute.

The tribunal may also draw the necessary inferences from the parties’ failure to comply with its orders without providing sufficient reasons.

(d) Issuing partial final awards?

The Arbitration Law provides for the arbitral tribunal’s powers to issue partial award(s) disposing of one or more monetary or other substantive issues between the parties (Article 42). A partial award is deemed final in respect of the claims it addresses. Partial awards can be subject to challenge only after the issuance of the final award.

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

The award of remedies is a substantive issue that is subject to the applicable substantive law, in which the available remedies are provided and prescribed. There are no restrictions on the grant of remedies by the arbitral tribunal. However, the tribunal cannot grant the types of remedies that are exclusively exercised by the state courts – for example, any remedies to be granted under criminal, marital or employment law. By and large, the arbitral tribunal enjoys extensive powers to award any declaratory relief, specific performance, monetary compensation, interest and costs. Nevertheless, the arbitral tribunal is not entitled to award punitive damages and cannot grant any remedy that was not initially requested by one of the parties to the arbitration.

(f) Interest?

The award of interest is governed by the substantive law of the dispute. Accordingly, the powers of the tribunal to award interest will be grounded in the applicable substantive law. However, if the seat is Egypt and either the challenge of the award or its recognition and enforcement is sought, it is important to note that Egypt has public policy rules on the award of interest. Specifically, the contracting parties cannot agree on interest that exceeds 7% per annum; interest in excess of this will render the award void in part (ie, only in relation to the excess). This threshold applies to all contracts, save for:

  • banking transactions; and
  • commercial contracts under which one of the parties is financing the works of the other party, in which case they can agree on the lending rate announced by the Central Bank of Egypt (Article 50 of the Commercial Code).

For more information about this answer please contact: Samer Badran from Badran Law Office
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
Egypt

Answer ... Article 35 of the Arbitration Law explicitly refers to a party’s failure to participate in the arbitration (ex parte procedures). In such case, the arbitral tribunal may resume the proceedings and render an award based on the evidence produced before it, as long as it can be evidenced that the absent party was properly summoned and adequately served, and was given a full opportunity to present its case.

For more information about this answer please contact: Samer Badran from Badran Law Office
8.8
Are arbitrators immune from liability?
Egypt

Answer ... Pursuant to Egyptian law, immunity is granted only by virtue of an explicit provision of law. The Arbitration Law does not grant arbitrators any sort of immunity; however, the arbitrators do enjoy a wide-ranging limitation of liability in connection with the proceedings. This is due to the relationship between the parties and the arbitrators, which is purely contractual. Of note in this regard is a public policy rule which provides that the exclusion of liability arising from wilful misconduct, gross negligence or fraud is null and cannot survive. Although it is unlikely in practice, a tribunal could be held liable for these reasons or acts, irrespective of the magnitude of limitation set out in any institutional arbitration rules or agreed by the parties.

For more information about this answer please contact: Samer Badran from Badran Law Office
9.
The role of the court during an arbitration
9.1
Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
Egypt

Answer ... If the parties have signed an arbitration agreement but a dispute is subsequently brought before a court, the court will not stay the proceedings and refer the parties to arbitration on its own initiative. The court will rather continue the proceedings as normal, unless either party invokes the arbitration agreement. In the latter case, the court will rule the dispute inadmissible. The party that invokes the arbitration agreement before a state court must do so before submitting any claim or defence on the merits. If a litigant fails to invoke the arbitration agreement and discusses the merits of the case in court, it will be deemed to have waived the arbitration agreement (Article 13/1 of the Arbitration Law). The court will rule the case inadmissible – rather than ruling that it does not have jurisdiction – because under the Arbitration Law, the court is the body which initially has jurisdiction over the dispute.

For more information about this answer please contact: Samer Badran from Badran Law Office
9.2
Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
Egypt

Answer ... If the seat of the arbitration is Egypt, then pursuant to the Arbitration Law, the court of the seat has the power to rule on:

  • external procedural matters, such as:
    • the appointment of arbitrators in ad hoc proceedings;
    • interim relief;
    • a challenge to an arbitrator in ad hoc proceedings; or
    • termination of the arbitral proceedings at the request of either party because the arbitral award has not been rendered within the specified period (Article 45/2 of the Arbitration Law); and
  • the annulment of the arbitral award (Article 53/2 of the Arbitration Law).

If the seat of the arbitration is outside Egypt, the Egyptian courts will in principle assume the same powers as outlined above, but only if the parties have agreed on the application of the Arbitration Law even though the seat of the arbitration is outside Egypt. Otherwise, the powers of the court will be very limited. The court will be unable rule on any external procedural matters or on the annulment of the award (save for expedited proceedings). An Egyptian court will also be empowered to grant exequatur only if the application for recognition and enforcement of the award is submitted before it. The court granting the exequatur will check ahead that arbitral award:

  • does not contradict a national judgment that was previously rendered by a competent national court on the same subject matter;
  • does not violate Egyptian public policy; and
  • was properly served on the party against which it was rendered (Article 58 of the Arbitration Law).

This applies to arbitrations with their seat either in or outside Egypt.

For more information about this answer please contact: Samer Badran from Badran Law Office
9.3
Can the parties exclude the court's powers by agreement?
Egypt

Answer ... A general mandatory rule in Egyptian law is that the parties cannot agree to exclude a court’s power if that court has (or exercises) by law exclusive jurisdiction over the subject matter.

For more information about this answer please contact: Samer Badran from Badran Law Office
10.
Costs
10.1
How will the tribunal approach the issue of costs?
Egypt

Answer ... The Arbitration Law does not regulate the issue of arbitration costs. Unless otherwise agreed by the parties, it is left to the discretion of the arbitral tribunal to estimate and allocate the costs and expenses of the arbitration between the parties. Arbitral tribunals seated in Egypt generally adopt the ‘loser pays’ rule, whereby the costs of the arbitration are fully borne by the unsuccessful party. The tribunal may alternatively decide to split the costs and expenses of the arbitration equally between the parties. It may also decide to apportion the costs between the parties if it determines that this is reasonable taking into account the circumstances of the case, including:

  • the success of each party in its claims;
  • the use of dilatory tactics by one or both parties; and
  • the submission of claims that are deemed frivolous or dilatory.

If the parties agree to subject the arbitration to the rules of a certain institution or arbitration centre, the calculation and allocation of costs will be based on the specific provisions provided under the rules of that institution in relation to costs.

For more information about this answer please contact: Samer Badran from Badran Law Office
10.2
Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
Egypt

Answer ... No.

For more information about this answer please contact: Samer Badran from Badran Law Office
11.
Funding
11.1
Is third-party funding permitted for arbitrations seated in your jurisdiction?
Egypt

Answer ... Third-party funding is still not common in Egypt. No financial institutions or individuals grant funding for arbitration in Egypt. However, there are no restrictions against obtaining financing for arbitration, as there are no laws, regulations or provisions that regulate third-party funding.

For more information about this answer please contact: Samer Badran from Badran Law Office
12.
Award
12.1
What procedural and substantive requirements must be met by an award?
Egypt

Answer ... The arbitral award must:

  • be in writing;
  • be signed by the arbitrators; and
  • include the reasoning, unless the parties agree that this is not required.

The arbitral award must also include:

  • the names and addresses of the parties;
  • the names, addresses, nationalities and capacities of the arbitrators;
  • a copy of the arbitration agreement;
  • a summary of the parties’ claims, submissions and documents; and
  • the dispositive part of the award and the date and place of its issuance.

For more information about this answer please contact: Samer Badran from Badran Law Office
12.2
Must the award be produced within a certain timeframe?
Egypt

Answer ... Pursuant to the Arbitration Law, in principle, the timeframe within which the tribunal must render its award is subject to party autonomy. The arbitral award must be issued no later than the date agreed by the parties. In the absence of such agreement, the award must be issued within 12 months of the date on which the arbitral proceedings commenced. However, the arbitral tribunal may extend this timeframe by up to six months, unless the parties have agreed otherwise (Article 45 of the Arbitration Law). Additionally, the tribunal must deliver to each party a signed copy of the arbitral award within 30 days of the date of issuance (Article 44 of the Arbitration Law).

For more information about this answer please contact: Samer Badran from Badran Law Office
13.
Enforcement of awards
13.1
Are awards enforced in your jurisdiction? Under what procedure?
Egypt

Answer ... Egypt was among the very first contracting states to sign the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and it thus has the necessary legislative infrastructure to allow for the enforcement of foreign arbitral awards. Arbitral awards are enforced via order (ie, exequatur) issued by the competent national court. Any application for enforcement must be accompanied by:

  • an original copy of the award;
  • a copy of the arbitration agreement;
  • a certified Arabic translation of the award (if the award is rendered in any language other than Arabic); and
  • a copy of the procès-verbal attesting to the deposit of the award.

For more information about this answer please contact: Samer Badran from Badran Law Office
14.
Grounds for challenging an award
14.1
What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
Egypt

Answer ... Arbitral awards can only be subject to challenge or setting aside (ie, annulment of the arbitral award). The Arbitration Law does not allow for arbitral awards to be appealed on the merits. Article 52 explicitly states that the appeal procedures set out in the Civil and Commercial Procedural Law do not apply to arbitral awards. On the other hand, the grounds for challenging or setting aside awards are purely of a legal nature. As such, the Arbitration Law provides for an exhaustive list of grounds on which an arbitral award can be challenged or set aside, as follows:

  • There is no arbitration agreement, or the arbitration agreement is void or voidable, or has expired;
  • Either party to the arbitration agreement lacked the required capacity to enter into the agreement at the time of its conclusion (pursuant to its own laws governing such capacity);
  • Either party to the arbitration was unable to present its case because it was not properly served by the appointment of the arbitrator or by the arbitral procedures, or for any other reason beyond its control;
  • The arbitral award obviated the law agreed by the parties to be applied to the merits of their dispute;
  • The arbitral tribunal was constituted or the arbitrators were appointed in contradiction with the law or the parties’ agreement;
  • The arbitral award ruled on matters falling outside the scope of the arbitration agreement or exceeded the parameters of the agreement; or
  • There was a nullity in the arbitral award or the arbitral proceedings that was sufficient to affect the award.

The Arbitration Law further provides that the court may render the arbitral award null on its own initiative if the award contradicts Egyptian public policy. Finally, the Arbitration Law allows for the partial annulment of an arbitral award if the parts held to be null can be separated out from the award and do not affect the same in whole.

For more information about this answer please contact: Samer Badran from Badran Law Office
14.2
Are there are any time limits and/or other requirements to bring a challenge?
Egypt

Answer ... An arbitral award must be challenged no later than 90 days following the date on which the party is officially served with the arbitral award via court bailiff (Article 54 of the Arbitration Law).

For more information about this answer please contact: Samer Badran from Badran Law Office
14.3
Are parties permitted to exclude any rights of challenge or appeal?
Egypt

Answer ... As a rule, a party cannot waive or be precluded from exercising its right to challenge the arbitral award prior to the date on which this right is triggered. By and large, the parties are permitted to exclude any rights of challenge only after the arbitral award has been issued and the right to challenge has thus been triggered.

For more information about this answer please contact: Samer Badran from Badran Law Office
15.
Confidentiality
15.1
Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
Egypt

Answer ... According to the Arbitration Law, arbitral procedures and awards will be treated as private and confidential. Specifically, arbitral awards cannot be published without the parties’ prior consent (Article 44/2 of the Arbitration Law). By and large, the confidentiality in question is ultimately subject to party autonomy.

For more information about this answer please contact: Samer Badran from Badran Law Office
15.2
Are there any exceptions to confidentiality?
Egypt

Answer ... There are no exceptions to confidentiality, as long as the parties have not agreed on publication. Nonetheless, any reference to arbitral proceedings, or to the outcome of arbitration, that is made by a publicly listed company will not violate such confidentiality. The confidentiality of arbitral proceedings or awards is not compromised by disclosure made by a listed company; such disclosure is rather required by law due to investor relations.

Co-Authored by Esraa Salem and Amira Salem.

For more information about this answer please contact: Samer Badran from Badran Law Office
Contributors
Topic
International Arbitration
Article Author(s)
Egypt