The oldest arbitration centre in the Middle East and Africa gets a makeover of its rules

The Cairo Regional Centre for International Commercial Arbitration or more commonly known as ‘CRCICA’ unveiled earlier this year draft new arbitration rules (the New Rules) which embrace modern features of arbitration and include provisions on consolidation of multiple arbitration proceedings, joinder of third parties, expedited proceedings, and emergency arbitration.

CRCICA has a long-established presence of over 40 years in the region. Operating from its headquarters in Zamalek, Cairo, it is the first arbitration centre in the Middle East and Africa. CRCICA’s rules were first based on the UNCITRAL Rules of 1976 and were first amended in 1998 then in 2000, 2002, 2007 and finally in 2011. After fierce competition in the Middle East and Africa between several modern arbitration institutions and the emergence of new tools and procedures for conducting arbitration proceedings, it became necessary for CRCICA to revise and update its rules.

CRCICA, before applying the New Rules has given the opportunity to arbitration practitioners to comment on the New Rules which has been a welcomed initiative that is proving to be effective in ensuring that these rules cater the needs of practitioners and are flexible and efficient.

CRCICA has now made available a new version of the New Rules taking into account the comments it received from arbitration practitioners. The New Rules are expected to enter into force in early 2024.

Enhance of transparency

UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration

To boost the efforts of CRCICA in investor-state arbitration, the New Rules provide that the parties can incorporate the UNCITRAL Rules on Transparency (Rules on Transparency) to their arbitration proceedings [1].  Although the New Rules merely include the option for the parties to apply the Rules on Transparency upon their agreement, it is a welcomed addition given that CRCICA is featured in many Egyptian bilateral investment treaties and in the Arab Investment Agreement. Such reform is set to position CRCICA as an institution of choice in the region with respect to investor-state arbitration.

Third Party Funding

The New Rules now require the reference to any funding agreement and the identity of any third-party funder in the notice of arbitration and in the response to the notice of arbitration. This is novel, especially for Egypt and the region as a whole, where third party funding is not common. Both the Egyptian Arbitration Law and the Civil and Commercial Procedures Law do not recognise thirty party funding. However, it is understood that the reference to third party funding is based on the role that is contemplated to be played by CRCICA in settlement of investor-state disputes.  

Enhance of efficiency

Notification by electronic means

Notifications by e-mails is now possible under the New Rules even in the absence of an agreement on such notification if such notification is delivered at the email address the recipient holds out to the public. Notifications are considered received on the day it reaches the e-mail address of the recipient. The New Rules do not explicitly deal with service by any other electronic means except emails. However, delivery is deemed to have been made if sent to the addressee through any means which provides a record of delivery.

Obligation of the parties not to delay the proceedings

The New Rules provide that parties shall act in good faith and shall also make every effort to cooperate towards the efficient conduct of the proceedings and to avoid unnecessary delays and costs. The parties undertake to comply with any order made by the arbitral tribunal without delay. However, the New Rules do not shed light on the sanction of a party intentionally delaying the proceedings. It is expected that this would be decided by arbitral tribunals on a case-by-case basis when determining the party bearing the costs of the arbitration (unless agreed otherwise).

Expedited Arbitration & Emergency Arbitrator

Similar to most leading institutions, the New Rules have introduced expedited arbitration and emergency arbitration which are now becoming a necessary tool to creditors attempting to secure payments owed to them.

The New Rules have also introduced specific rules that apply for expedited procedures and provide that the arbitral tribunal is obliged to issue its final award within 6 months from the constitution of the arbitral tribunal which is similar to the time frame adopted by the 2021 ICC rules.

Further, the New Rules grant arbitral tribunals the power to order interim measures if certain conditions are met.

Consolidation

Similar to the Dubai International Arbitration Centre’s (DIAC) approach to consolidation, the New Rules now introduce the possibility to consolidate the arbitration proceedings. This approach is aligned with the trend to try to minimise the risks of contradicting judgments/awards and reduce the costs of the parties involved. The introduction of such provisions enhances the efficiency and flexibility of the proceedings. This is a welcomed addition in the New Rules which is in line with the recent position taken by the Egyptian Court of Cassation [2] that considered that the arbitration agreement may exceptionally extend to non-signatory third parties in the case of group of companies, group of contracts and assignment agreements.

Early dismissal & Consultation after first round of submissions

Under the previous CRCICA rules, similar to the UNCITRAL Model Rules, CRCICA had the authority to dismiss arbitration proceedings in case CRCICA considered that it manifestly lacks jurisdiction over the dispute. The New Rules extends such power of early dismissal to the arbitral tribunal if the matter is manifestly without legal merit or the claim is manifestly outside the jurisdiction of the arbitral tribunal. This is an important protection from frivolous claims. 

As the principle of competence-competence is very well established in Egypt, the Egyptian Courts are likely to consider early dismissal by arbitral tribunals to be valid. 

Signature of the Award

The New Rules confirm that arbitration awards need to be signed by arbitral tribunals but that awards can be signed anywhere regardless of the seat of arbitration. This approach is the same adopted by the Egyptian Court of Cassation [3] that refused to annul an arbitral award signed outside of the place or the seat of arbitration. This revision is therefore consistent with the court’s approach and in line with the recognised concept of ‘delocalisation’ of arbitration which acknowledges that the legal seat is different from the venue of arbitration proceedings [4].

Flexibility and reference to new technologies

Representation by non-lawyers

The New Rules now provide that the parties “may be represented or assisted by one or more persons chosen by it regardless of the jurisdiction in which they are based or practicing.” This is in line with a recent Egyptian Court of Cassation judgment which confirmed that the parties in arbitration proceedings can be represented by non-lawyers and foreign lawyers [5].

New Technologies

The New Rules provide that the arbitral tribunal may, after inviting the parties to express their views and taking into account the circumstances of the case, use any technological means as it considers appropriate to conduct the proceedings.

The New Rules are however silent on whether the arbitration award may be signed electronically by the arbitral tribunal.

Virtual hearings

There is a growing number of hearings being held virtually at CRCICA. CRCICA reports shows that out of 129 hearings held in 2022, 15 hearing were held entirely via video conference and 3 hearings were held with in-person and remote attendance [6]. In response, the New Rules provide that an arbitral tribunal can decide to hold hearings remotely after consulting with the parties.

Costs

The New Rules include a revised schedule of fees and costs for arbitration. The arbitration fees and costs are slightly higher than the fees and costs of the previous rules but remain competitive in comparison to other arbitration centres in the region.

Conclusion

The introduction of the New Rules is a welcomed development that is expected to bring CRCICA as a leading arbitration centre in the region that is able to compete with major arbitral institutions in the region. The New Rules with the introduction of new modern tools are expected to meet the needs of the users and ensure the efficient and swift settlement of disputes.

It however remains to be seen how the Egyptian courts, and the courts of other jurisdictions the Middle East and Africa will enforce awards that incorporate modern tools such emergency arbitrators or interim measures. The Egyptian Courts have however already showed signs that they would be receptive to such modern tools.

_{[1] Available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/rules-on-transparency-e.pdf.}

_{[2] Court of Cassation, Challenge No. 2698 of 86 JY, session dated 13 March 2018.}

_{[3] Court of Cassation, Challenge 1394 of JY 86, dated 13 June 2017.}

_{[4] Court of Cassation, Challenge 18309 of JY89 dated 27 October 2020.}

_{[5] Court of Cassation, Challenge 18309 of JY89 dated 27 October 2020.}

_{[6] https://crcica.org/remote-and-virtual-hearings/#:~:text=CRCICA%20offers%20through%20its%20case,arbitral%20tribunal%20to%20do%20so.}