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22 January 2024
The Requirement to Formally Serve Your Award in Egypt – A Trigger to the Time Limit to Challenge the Award
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Legal Development 12 February 2024 12 February 2024
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Africa, Middle East
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Regulatory risk
When an arbitral tribunal issues its award, usually the arbitral institution administering the arbitration or the arbitral tribunal itself sends a copy of the award to the parties by email and/or by courier. A winning party considering enforcing an arbitration award in Egypt should consider whether the arbitration award was dully served on the opponents according to the requirements of Egyptian law.
A recent Court of Appeal judgment highlighted that the service or notification of the arbitration award on the opponents by email was not sufficient. The Court of Appeal clarified that the service should be according to the formal legal requirements of the laws.
In its judgment dated 24 January 2023, the Cairo Court of Appeal confirmed that the service of arbitration awards should comply with the formalities provided in the Egyptian Code of Civil and Commercial Procedures (Law No 13 of 1968), i.e., through court bailiff.
The ruling of the Cairo Court of Appeal impacts the enforcement of arbitration awards in Egypt and most importantly, the calculation of the time limit to challenge an arbitration award.
The general principle under the Egyptian Arbitration Law (Law No 27 of 1994) is that the right to seek the nullification of an arbitration award by the Egyptian courts (if Egypt is the selected seat of arbitration) must be within ninety days as of the date of notification of the award.
In its recent judgment, the Cairo Court of Appeal confirmed that the time limit of ninety days to seek the nullification of the award only starts once the award has been formally served on the opponents in accordance with the Egyptian Code of Civil and Commercial Procedures.
This means that the award must be served by a court bailiff, so that it triggers the time limit of the challenge. The Court disregarded the fact that the opponents were well aware of the award which had been sent to them by email. Accordingly, the arbitral institution’s email or courier, or the arbitral tribunal’s email or courier attaching the award are not sufficient to trigger the ninety-day time limit to challenge the arbitration award.
Hence, even if the opposing party has been notified with the award, it is crucial that the notification complies with the procedural formalities regarding service in Egypt and that the award is served by court bailiff.
Nevertheless, it is important to highlight that the Egyptian Arbitration Law provides for an exhaustive list of issues that may be ground of setting aside any award. This includes, inter alia, the absence of an arbitration agreement, the violation to due process, and the violation to a matter of Egyptian public policy (such as exceeding the maximum seven percent interest rate applicable in Egypt or the absence of the competent minister’s approval on arbitration clauses in administrative contracts).
It is also important to highlight that, while from a legal standpoint, challenging an arbitration award should not affect the enforcement process, per se; Egyptian local courts are in practice hesitant to issue an exequatur for an arbitration award that is being challenged before the local courts.
This article was first published in the Legal Industry Review (LIR) , edition no.4, January 2024.
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