Egypt is taking a pro-arbitration approach to promote investments

The Egyptian government is attempting to increase its foreign direct investments to support its economy and its developing plans. To promote such investments and address some of the concerns of investors, Egypt has adopted a pro-arbitration position to ensure an effective resolution mechanisms of disputes involving investors injecting funds in Egypt and has a positive track record of recognising and enforcing arbitration awards.

Arbitration is usually the preferred option of many foreign investors looking to resolve their disputes in Egypt since they are usually not familiar and often sceptical of the efficiency of the Egyptian courts to resolve their disputes. The Egyptian arbitration Law adopts features that that can comfort investors that an efficient mechanism is in place to resolve their disputes:

Efficient legal framework:

Egypt is one of the first countries in the region to issue a dedicated arbitration law (the Arbitration Law) which is based on the UNCITRAL Model Law on International Commercial Arbitration.

Freedom of the Parties:

The Arbitration Law grants the parties the freedom to agree to resort to arbitration to resolve their disputes, to designate the procedures for the arbitration and to choose the applicable law to govern the merits of the dispute.

Institutional proceedings:

The Arbitration Law confirms that parties may choose to apply any institutional rules to their proceedings, and the court must respect the party’s choice. The courts in many instances confirmed that the institutional rules shall prevail over the procedural law of the country, provided that such rules are not in conflict with the public policy. Egypt also hosts the oldest arbitration centre in the region (the Cairo Regional Centre for International Commercial Arbitration - CRCICA) the rules of which have been recently modernised, and a specialised arbitration centre (the Egyptian Center for Arbitration and Settlement of Non-Banking Financial Disputes - ECAS).

Confidently:

Arbitration proceedings and arbitration awards are confidential unless the parties agree otherwise. 

Appointment of Counsel and Arbitrators:

The Egyptian courts confirmed that parties are free to appoint whomever they wish to represent them and are free to agree on the mechanism of appointment of their arbitrator(s).

Efficiency and time sensitivity:

The Arbitration Law sets a time limit of twelve months for the arbitral tribunal to render its award, unless an agreement was reached to extend this time limit. This provision encourages arbitral tribunals and the parties to act in an efficient manner and avoid any unnecessary prolongations.

Language and accessibility:

The Arbitration Law allows that the arbitration proceedings be conducted in any language the parties agree on.

Discovery and document production:

This is a well-established practice in common law jurisdictions. Egypt, being a Civil law jurisdiction, narrowly enforces orders to produce documents. The Egyptian law of evidence provides however that a party may request the court to order the opposing party to disclose the documents under its possession that may assist to evidence the case. Further, in many instances, the Egyptian courts confirmed that parties may opt to apply the International Bar Association Rules on the Taking of Evidence in International Arbitration.

Enforcement of the Award:

Egypt is a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which gives parties involved in international arbitrations the comfort that their arbitration awards should in principle be recognised in Egypt. Recent Egyptian court decisions have established that Egypt adopts a position in favour of the enforcement of arbitration awards.

Egypt is therefore a pro-arbitration jurisdiction which should be factored to encourage investors to invest in Egypt.

This article was first published in the Egypt edition - Legal Industry Review (LIR), edition no.3, December 2024.