Interim measures in Egyptian seated arbitrations – do they measure up?

This is an additional article in Clyde & Co’s international arbitration series covering the availability of interim measures. In this piece, associate Moamen Elwan from our Dubai office provides the Egyptian legal perspective.

The Egyptian Arbitration Law No. 27 of 1994 (the Arbitration Law) allows parties to agree to grant arbitral tribunals the power to issue interim measures upon the request of any of the parties. The Arbitration Law also grants the competent courts the power to issue interim measures before or during the arbitration proceedings.

Measures ordered by arbitral tribunals

Where the parties agree, Article (24) of the Arbitration Law allows the arbitral tribunal to “order, upon request of either party, interim or conservatory measures considered necessary in respect of the subject matter of the dispute.”[1] The parties’ agreement to confer this power can be made in the arbitration agreement itself, or at a later stage. It can also be inferred from the arbitration rules which the parties agree to apply. For example, the rules of the main arbitration institution in Egypt, the Cairo Regional Centre for International Commercial Arbitration (CRCICA Rules), authorise arbitral tribunals to issue interim and conservatory measures.[2] Therefore, parties’ agreement to resort to arbitration under CRCICA Rules would be considered as an agreement by the parties to confer power to the arbitral tribunal to issue these kinds of measures.

Once the request to issue a conservatory or interim measure is made, the arbitral tribunal is free to order any party to the arbitration proceedings to take the relevant measure without any restriction of such order to be directed to the party against which it was made. However, the arbitral tribunal cannot issue such an order on its own initiative (sua sponte). Even if the parties agree to grant the arbitral tribunal the necessary authority, one of the parties must submit a request.

Legal theory explains that, when considering whether or not to issue an interim or conservatory measure, a tribunal would consider whether each of the following conditions is fulfilled:[3]

1. The parties must explicitly agree to authorise the arbitral tribunal to issue interim or conservatory measures;
2. The arbitral proceedings must have commenced;
3. One of the parties must request that the arbitral tribunal issue the order;
4. The measure ordered should be an interim or conservatory measure;
5. The measure must be required by the nature of the dispute subject to arbitration;
6. The general conditions for the issuance of interim measures must be met.  In particular, there must be (i) a probability that the applicant is entitled to its claim; and (ii) an imminent danger that damage would be caused to the subject matter of the dispute if the interim measure were not issued.

If the arbitral tribunal is satisfied that all of these conditions for issuance are fulfilled, it will issue its decision in the form of an order which does not have to be supported by written reasons and which cannot be challenged or appealed and may not be subject to annulment (set aside) proceedings.[4] However, the tribunal may cancel (i.e. revoke, terminate or stop) the relevant measure at a later date, at its own discretion without explaining its reasoning.^[5]

The tribunal may order the party benefiting from the order to provide a guarantee in respect of the relevant measure if the parties have granted the arbitral tribunal this power. The guarantee can take the form of an amount of money to cover the costs, for example, or it might be a personal guarantee to compensate the other party for any damage it sustains. 

The kinds of interim or conservatory measures that a tribunal may order are not listed in the law.

There are several practical issues related to interim or conservatory measures resulting from arbitral tribunals’ lack of authority (the imperium which domestic courts possess) to (1) force the execution of measures if the party concerned refuses to enforce them; and (2) order interim or conservatory measures against third parties.

Measures of this kind should be enforced voluntarily. If they are not, the applicant may follow any necessary procedure to enforce them. It can claim damages for failure to enforce the measure or ask the court to issue an exequatur as specified in Article (9) of the Arbitration Law.[6] In this case, the court’s role would be limited to issuing the exequatur without reviewing the compatibility, or correctness of the measure issued by the arbitral tribunal.  This is because the court would be acting only as an annotating authority to the measure.[7]

The current trend is for Egyptian courts to agree to enforce interim measures, even where they are ordered by foreign seated arbitral tribunals. For example, the Egyptian Court of Appeal[8] has recently enforced an interim measure rendered by the International Chamber of Commerce (ICC) in an arbitration seated abroad. In that judgment, the Court of Appeal laid out the general requirements to be met where an interim measure has been issued by an arbitral tribunal is seated abroad:

• the measure must be final – it is considered final if it is rendered by a competent arbitral tribunal;
• the measure was ordered on the basis of a valid arbitration agreement;
• the parties had the opportunity to present their case; and
• the measure does not breach public policy.

Measures ordered by a court

Egyptian law recognises the principle of concurrent jurisdiction. A party to an arbitration agreement can, in addition to applying to the arbitral tribunal, apply to the court to request the issuance of an interim or conservatory measure before or during the arbitral proceedings.[9] Such application would not be considered as a waiver of the arbitration agreement and the parties can still bring their dispute before the arbitral tribunal.

The main, and most important, difference between an order issued by the courts and one issued by an arbitral tribunal is that the former has an imperium effect. In this respect, the court has the same power to make interim or conservatory orders related to arbitration proceedings as it does in litigation matters. The other difference is that a measure to be issued by the court must be requested by filing a lawsuit to be heard before the court.[10]  This would require hearing the other party and making submissions. (Enforcement of orders from arbitral tribunals could be made by a petition).

There is no limitation on the types of measures a court can take. These include any temporary, conservatory, or interim measures that aim to protect an “apparent right” without delving into the details of the application to issue such measure.[11] For instance the court may order:

• pre-award attachment.
• any security to ensure the implementation of an interim measure.
• attachment of assets.[12]

Until recently, it was not clear whether a court could suspend the liquidation of a letter of guarantee. The Cairo Court of Appeal has settled the matter by rendering a judgment suspending the liquidation of a letter of guarantee issued by a bank until an award is issued in the ongoing arbitration.[13]

Do they measure up?

The Arbitration Law provides an easier route to enforce interim and conservatory measures issued by arbitral tribunals as opposed to resorting directly to the competent court. Seeking such a measure from an arbitral tribunal (if not enforced voluntarily) is through making a fast-tracked petition, while seeking such a measure from the courts (without an order by the arbitral tribunal) is through commencing a lawsuit.

There is also no limitation on the types of measures the arbitral tribunals can issue as long as they are satisfied that the relevant conditions are met.

Although the Egyptian courts have taken positive steps to enforce interim measures issued by foreign-seated arbitral tribunals, it is still not clear whether the Egyptian courts would enforce an interim measure issued by an emergency arbitrator (whether seated in Egypt or abroad) since emergency arbitration is not regulated in Egypt.

However, there has been a recent effort by the Egyptian authorities to create an arbitration- friendly environment. To this end, the Egyptian Ministry of Justice set up a committee in early 2022, tasked with proposing amendments to the Arbitration Law. No proposals have been made to date.

Please find links to Clyde & Co’s other articles covering this topic below.