ARAB REPUBLIC OF EGYPT
LAW NO. 27 OF 1994
Issued on 18 April 1994 | Published on 21 April 1994
Official Gazette, Issue No. 16 (Supplement) | Effective as of 22 May 1994
ARBITRATION IN CIVIL AND COMMERCIAL MATTERS
Mohamed Hosni Mubarak — President of the Republic
PREAMBLE
The People’s Assembly has resolved the following law and we have promulgated it:
ENACTMENT PROVISIONS
Article 1 — Enactment
The provisions of the accompanying law shall apply to every arbitration that is pending at the time of its entry into force, or that commences after its entry into force, even if based on an arbitration agreement concluded before this Law entered into force.
Article 2 — Enactment
The Minister of Justice shall issue the decisions necessary for the implementation of the provisions of this Law and shall establish lists of arbitrators from among whom selection is made in accordance with the provisions of Article (17) of this Law.
Article 3 — Enactment
Articles 501 to 513 of Law No. 13 of 1968 promulgating the Code of Civil and Commercial Procedure are hereby repealed, as is any provision conflicting with the provisions of this Law.
Article 4 — Enactment
This Law shall be published in the Official Gazette and shall enter into force one month after the day following the date of its publication.
ARBITRATION IN CIVIL AND COMMERCIAL MATTERS PART ONE: GENERAL PROVISIONS
Article 1
[Final text as amended by Article 1 of Law No. 9 of 1997, issued 13 May 1997, published 15 May 1997 in the Official Gazette, Issue No. 20 (Supplement), effective as of 16 May 2011]
Without prejudice to the provisions of international conventions in force in the Arab Republic of Egypt, the provisions of this Law shall apply to every arbitration between parties who are subjects of public law or private law, whatever the nature of the legal relationship around which the dispute revolves, if such arbitration takes place in Egypt, or if it is international commercial arbitration taking place abroad and its parties have agreed to subject it to the provisions of this Law.
With respect to administrative contract disputes, the agreement to arbitrate shall require the approval of the competent minister or whoever assumes the minister’s authority in relation to public juridical persons. Delegation thereof is not permitted.
Article 2
Arbitration shall be deemed commercial under the provisions of this Law if a dispute arises from a legal relationship of an economic nature, whether contractual or non-contractual. This includes, by way of example, supply of goods or services, commercial agencies, construction contracts, engineering or technical expertise, grant of industrial and tourist licences and others, transfer of technology, investment, development contracts, banking operations, insurance, transport, exploration and extraction of natural resources, energy supply, laying of gas or oil pipelines, construction of roads and tunnels, agricultural land reclamation, environmental protection, and establishment of nuclear reactors.
Article 3
Arbitration shall be deemed international under the provisions of this Law if its subject matter involves a dispute relating to international commerce, in the following cases:
First: If the principal place of business of each of the arbitrating parties is located in two different states at the time of the conclusion of the arbitration agreement. If one of the parties has several places of business, the one most closely connected to the subject of the arbitration agreement shall be the relevant place of business. If a party to the arbitration has no place of business, the reference shall be to that party’s habitual place of residence.
Second: If the two parties to the arbitration have agreed to resort to a permanent arbitration organization or centre whose seat is located inside or outside the Arab Republic of Egypt.
Third: If the subject matter of the dispute covered by the arbitration agreement is connected to more than one state.
Fourth: If the principal place of business of each of the two parties to the arbitration is located in the same state at the time of the conclusion of the arbitration agreement, and one of the following places is located outside that state:
(a) The place of conducting the arbitration as specified by the arbitration agreement or as indicated in the agreement as to the manner of its determination.
(b) The place of performance of a substantial part of the obligations arising from the commercial relationship between the parties.
(c) The place most closely connected to the subject matter of the dispute.
Article 4
[Final text as amended by Article 1 of the 1995 Corrigendum, published 10 August 1995 in the Egyptian Gazette, Issue No. 32]
(1) The term ‘arbitration’ under this Law refers to arbitration agreed upon by the two parties to the dispute of their own free will, whether the entity conducting the arbitration proceedings is a permanent arbitration organization or centre or not, pursuant to the agreement of the parties.
(2) The expression ‘arbitral tribunal’ refers to the tribunal composed of one or more arbitrators for the purpose of deciding the dispute referred to arbitration. The term ‘court’ refers to the court forming part of the State’s judicial system.
(3) The expression ‘parties to the arbitration’ in this Law refers to the parties to the arbitration even if they are more than two in number.
Article 5
In cases where this Law permits the parties to the arbitration to choose the procedure to be followed in a particular matter, this includes their right to authorize a third party to choose such procedure. In this regard, every arbitration organization or centre inside or outside the Arab Republic of Egypt is considered a third party.
Article 6
If the parties to the arbitration have agreed to subject their legal relationship to the provisions of a standard contract, an international convention, or any other document, the provisions of such document shall apply, including any provisions relating to arbitration contained therein.
Article 7
(1) Unless there is a specific agreement between the parties to the arbitration, any communication or notice shall be delivered to the addressee in person, or at the addressee’s place of business, or at the addressee’s habitual place of residence, or at the postal address known to both parties or specified in the arbitration submission, or in the document governing the relationship to which the arbitration relates.
(2) If none of these addresses can be ascertained after making the necessary inquiries, delivery shall be deemed to have taken place if the notice was sent by registered mail to the last known place of business, habitual place of residence, or postal address of the addressee.
(3) The provisions of this Article shall not apply to judicial notifications before courts.
Article 8
If one of the parties to the dispute continues in the arbitration proceedings with knowledge of a violation of a condition in the arbitration agreement or of a provision of this Law that may be waived by agreement, and fails to raise an objection to such violation within the agreed time limit, or within a reasonable time when no time limit is agreed, that shall be deemed a waiver of the right to object.
Article 9
(1) Jurisdiction over arbitration matters that this Law refers to the Egyptian judiciary shall vest in the court originally competent to hear the dispute. However, if the arbitration is international commercial arbitration — whether conducted in Egypt or abroad — jurisdiction shall vest in the Cairo Court of Appeal, unless the parties agree on the jurisdiction of another court of appeal in Egypt.
(2) The court with jurisdiction pursuant to the preceding paragraph shall remain exclusively competent until all arbitration proceedings have concluded.
PART TWO: THE ARBITRATION AGREEMENT
Article 10
(1) An arbitration agreement is an agreement between the parties to resort to arbitration for the settlement of all or certain disputes that have arisen or may arise between them in connection with a specific legal relationship, whether contractual or non-contractual.
(2) An arbitration agreement may be concluded prior to the existence of a dispute, whether as an independent agreement or as an arbitration clause contained in a specific contract regarding all or some disputes that may arise between the parties. In such case, the subject matter of the dispute must be specified in the statement of claim referred to in paragraph (1) of Article (30) of this Law. An arbitration agreement may also be concluded after the dispute arises, even if court proceedings have already been initiated in connection with the dispute. In such case, the agreement must specify the matters it covers; otherwise the agreement shall be null and void.
(3) Any reference in a contract to a document containing an arbitration clause shall be deemed an agreement to arbitrate, if the reference is clear in treating that clause as part of the contract.
Article 11
An arbitration agreement may only be concluded by a natural or juridical person having the capacity to dispose of rights. Arbitration is not permitted in matters that do not permit settlement by compromise.
Article 12
An arbitration agreement must be in writing, failing which it shall be null and void. An arbitration agreement shall be in writing if it is contained in a document signed by the parties, or if it is contained in an exchange of letters, telegrams, or other written means of communication between the parties.
Article 13
(1) A court before which a dispute is brought that is subject to an arbitration agreement must rule the case inadmissible if the defendant raises such a plea before submitting any request or defence in the case.
(2) The institution of the proceedings referred to in the preceding paragraph shall not prevent the commencement or continuation of arbitration proceedings or the issuance of an arbitral award.
Article 14
The court referred to in Article (9) of this Law may, upon the request of either party to the arbitration, order provisional or interim measures, whether before the commencement of arbitration proceedings or during their course.
PART THREE: THE ARBITRAL TRIBUNAL
Article 15
(1) The arbitral tribunal shall be composed by agreement of the parties of one or more arbitrators. If they fail to agree on the number of arbitrators, the number shall be three.
(2) If the arbitrators are more than one, their number must be odd, failing which the arbitration shall be null and void.
Article 16
(1) An arbitrator may not be a minor, a person under guardianship, a person deprived of civil rights by reason of conviction of a felony or of a misdemeanour involving dishonour, or by reason of being declared bankrupt, unless the arbitrator has been restored to full legal standing.
(2) An arbitrator is not required to be of any particular sex or nationality unless the parties to the arbitration have agreed otherwise or the law provides otherwise.
(3) Acceptance by the arbitrator of the mission shall be in writing, and the arbitrator shall be required to disclose upon acceptance any circumstances likely to give rise to doubts as to the arbitrator’s independence or impartiality.
Article 17
(1) The parties to the arbitration may agree on the selection of arbitrators and on the manner and timing of their selection. If no such agreement exists, the following shall apply:
(a) If the arbitral tribunal is composed of a single arbitrator, the court referred to in Article (9) of this Law shall appoint the arbitrator upon the request of either party.
(b) If the arbitral tribunal is composed of three arbitrators, each party shall appoint one arbitrator, and the two arbitrators so appointed shall then agree on the appointment of the third arbitrator. If one of the parties fails to appoint an arbitrator within thirty days following receipt of a request to do so from the other party, or if the two appointed arbitrators fail to agree on the choice of the third arbitrator within thirty days following the date of the appointment of the last of them, the court referred to in Article (9) of this Law shall make the appointment upon the request of either party. The arbitrator chosen by the two appointed arbitrators, or by the court, shall chair the arbitral tribunal. These provisions apply in the case of the constitution of an arbitral tribunal composed of more than three arbitrators.
(2) If either party fails to follow the agreed procedures for the selection of arbitrators, or if the two appointed arbitrators fail to agree on a matter that requires their agreement, or if a third party fails to perform a function entrusted to it in this regard, the court referred to in Article (9) of this Law shall, upon the request of either party, perform the required procedure or action, unless the agreement provides for another manner of completing such procedure or action.
(3) The court shall take into account, with regard to the arbitrator it selects, the conditions required by this Law and those agreed upon by the parties. The court shall issue its decision on the selection of the arbitrator expeditiously. Without prejudice to the provisions of Articles 18 and 19 of this Law, this decision shall not be subject to challenge by any means of challenge.
Article 18
(1) An arbitrator may not be challenged except where circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.
(2) Neither party to the arbitration may challenge an arbitrator appointed by that party or in whose appointment that party participated, except for a reason that came to the party’s knowledge after the appointment was made.
Article 19
[Final text as amended by Article 1 of Law No. 8 of 2000, issued 4 April 2000, published 4 April 2000, effective as of 5 April 2000]
- A challenge request shall be submitted in writing to the arbitral tribunal, stating the grounds for challenge, within fifteen days from the date on which the challenging party learns of the constitution of this tribunal or of the circumstances justifying the challenge. If the challenged arbitrator does not recuse within fifteen days from the date of submission of the request, the request shall be referred without fees to the court referred to in Article (9) of this Law for a final, unappealable decision.
- A challenge request shall not be accepted from a person who has previously submitted a request for the challenge of the same arbitrator in the same arbitration.
- The submission of a challenge request shall not result in the suspension of arbitration proceedings. If the arbitrator is ordered to be challenged, all arbitration proceedings that have taken place, including any arbitral award, shall be deemed as if they had not occurred.
Article 20
If an arbitrator becomes unable to perform the mission, or fails to undertake it, or ceases performing it in a manner that causes unjustified delay in the arbitration proceedings, and does not recuse and the parties do not agree on removing the arbitrator, the court referred to in Article (9) of this Law may, upon the request of either party, order the termination of the arbitrator’s mission.
Article 21
If an arbitrator’s mission ends by reason of a ruling for the arbitrator’s challenge or removal, or by recusal, or for any other reason, a replacement shall be appointed in accordance with the procedures that apply to the appointment of the arbitrator whose mission has ended.
Article 22
(1) The arbitral tribunal shall decide on pleas relating to its lack of jurisdiction, including pleas based on the absence of an arbitration agreement, its lapse or nullity, or its failure to cover the subject matter of the dispute.
(2) Such pleas must be raised no later than the deadline for submitting the respondent’s statement of defence referred to in paragraph (2) of Article (30) of this Law. The appointment or participation in the appointment of an arbitrator by either party shall not result in the forfeiture of that party’s right to submit any such plea. A plea that the arbitration agreement does not cover matters raised by the other party during the hearing of the dispute must be raised immediately, failing which the right thereto shall be forfeited. In all cases, the arbitral tribunal may accept a late plea if it considers that the delay was due to an acceptable reason.
(3) The arbitral tribunal shall decide on the pleas referred to in paragraph (1) of this Article prior to deciding on the merits, or may join them to the merits and decide on both together. If the tribunal rejects the plea, it may not be invoked again except through an action to nullify the final arbitral award terminating the entire dispute, in accordance with Article (53) of this Law.
Article 23
An arbitration clause shall be deemed an agreement independent of the other clauses of the contract. The nullity, rescission, or termination of the contract shall have no effect on the arbitration clause contained therein, if such clause is valid in itself.
Article 24
(1) The parties to the arbitration may agree that the arbitral tribunal shall have the power, upon the request of either of them, to order either of them to take such provisional or interim measures as the tribunal deems appropriate given the nature of the dispute, and to require the provision of adequate security to cover the costs of the measure ordered.
(2) If the person against whom the order is directed fails to comply, the arbitral tribunal may, upon the request of the other party, authorize that party to take the necessary measures to enforce it, without prejudice to that party’s right to request the President of the court referred to in Article (9) of this Law to order enforcement.
PART FOUR: ARBITRATION PROCEEDINGS
Article 25
The parties to the arbitration may agree on the procedures to be followed by the arbitral tribunal, including their right to subject such procedures to the rules in force in any arbitration organization or centre inside or outside Egypt. If no such agreement exists, the arbitral tribunal may, with due regard to the provisions of this Law, choose such arbitration procedures as it deems appropriate.
Article 26
The parties to the arbitration shall be treated equally, and each shall be given an equal and full opportunity to present the party’s case.
Article 27
Arbitration proceedings shall commence on the day on which the respondent receives the arbitration request from the claimant, unless the parties agree on another date.
Article 28
The parties to the arbitration may agree on the place of arbitration, whether in Egypt or abroad. If no agreement exists, the arbitral tribunal shall determine the place of arbitration having regard to the circumstances of the case and the suitability of the place for the parties. This shall not affect the power of the arbitral tribunal to convene at any place it deems appropriate for conducting any arbitration procedure, such as hearing the parties to the dispute, witnesses, or experts, examining documents, inspecting goods or other assets, conducting deliberations among its members, and the like.
Article 29
(1) Arbitration shall be conducted in the Arabic language unless the parties agree or the arbitral tribunal determines to use another language or languages. The agreement or decision shall apply to written statements and memorials, oral pleadings, and to every decision, communication, or award issued or sent by the tribunal, unless the agreement of the parties or the decision of the arbitral tribunal provides otherwise.
(2) The arbitral tribunal may decide that all or some written documents submitted in the proceedings shall be accompanied by a translation into the language or languages used in the arbitration. In the case of multiple languages, the translation may be limited to some of them.
Article 30
(1) The claimant shall send, within the time limit agreed between the parties or set by the arbitral tribunal, to the respondent and to each of the arbitrators a written statement of claim containing the claimant’s name and address, the name and address of the respondent, a description of the facts of the case, identification of the matters in dispute, the claimant’s requests, and any other matter that the parties’ agreement requires to be mentioned in this statement.
(2) The respondent shall send, within the time limit agreed between the parties or set by the arbitral tribunal, to the claimant and to each of the arbitrators a written statement of defence responding to the contents of the statement of claim. The respondent may include in this statement any counterclaims connected to the subject matter of the dispute, or may invoke a right arising from it for the purpose of raising a set-off defence, and may do so at a later stage in the proceedings if the arbitral tribunal considers that the circumstances justify the delay.
(3) Each party may attach to the statement of claim or to the statement of defence, as applicable, copies of the documents relied upon, and may refer to all or some of the documents and evidence the party intends to submit. This shall not prejudice the right of the arbitral tribunal, at any stage of the proceedings, to request the submission of originals of documents or papers relied upon by either party.
Article 31
A copy of any memorials, documents, or other papers submitted by either party to the arbitral tribunal shall be sent to the other party, and a copy of every expert report, document, and other evidence submitted to the tribunal shall be sent to each of the parties.
Article 32
Either party to the arbitration may amend or supplement the requests or defences during the arbitration proceedings, unless the arbitral tribunal decides not to accept this so as to prevent the delay of the resolution of the dispute.
Article 33
(1) The arbitral tribunal shall hold hearings to enable each party to explain the subject of the case and present arguments and evidence. The tribunal may limit itself to written memorials and documents, unless the parties agree otherwise.
(2) The parties to the arbitration shall be notified of the dates of sessions and meetings that the arbitral tribunal decides to hold, sufficiently in advance of the date set therefor, as determined by the tribunal according to the circumstances.
(3) A summary of the proceedings of each session held by the arbitral tribunal shall be recorded in minutes, a copy of which shall be delivered to each party, unless the parties agree otherwise.
(4) The hearing of witnesses and experts shall be without taking an oath.
Article 34
(1) If the claimant fails, without acceptable excuse, to submit a written statement of claim in accordance with paragraph (1) of Article (30), the arbitral tribunal shall order the termination of the arbitration proceedings, unless the parties have agreed otherwise.
(2) If the respondent fails to submit a statement of defence in accordance with paragraph (2) of Article (30) of this Law, the arbitral tribunal shall continue the arbitration proceedings without treating such failure as, in itself, an admission by the respondent of the claimant’s claims, unless the parties have agreed otherwise.
Article 35
If either party fails to attend a session or fails to submit documents requested from it, the arbitral tribunal may continue the arbitration proceedings and issue an award in the dispute based on the evidence before it.
Article 36
(1) The arbitral tribunal may appoint one or more experts to submit a written or oral report to be recorded in the session minutes on specific matters it determines. The tribunal shall send a copy of its decision defining the expert’s terms of reference to each of the parties.
(2) Each party shall provide the expert with information related to the dispute and shall allow the expert to inspect and examine documents, goods, or other assets connected to the dispute that the expert requests. The arbitral tribunal shall decide on any dispute arising between the expert and either party in this regard.
(3) As soon as the expert’s report is filed, the arbitral tribunal shall send a copy to each of the parties and give each the opportunity to express views on it. Each party shall have the right to inspect and examine the documents relied upon by the expert in the report.
(4) After the submission of the expert’s report, the arbitral tribunal may, on its own motion or upon the request of either party to the arbitration, decide to hold a session to hear the expert’s statements, giving the parties the opportunity to hear and question the expert regarding the contents of the report. Each party may present one or more independent experts at this session to express views on the matters covered by the report of the expert appointed by the arbitral tribunal, unless the parties to the arbitration have agreed otherwise.
Article 37
The President of the court referred to in Article (9) of this Law shall have jurisdiction, upon the request of the arbitral tribunal, to:
(a) Impose on witnesses who fail to attend or who refuse to testify the penalties prescribed in Articles 78 and 80 of the Law of Evidence in Civil and Commercial Matters.
(b) Issue a commission for judicial examination.
Article 38
Suspension of proceedings before the arbitral tribunal shall occur in the circumstances and in accordance with the conditions prescribed for such purpose in the Code of Civil and Commercial Procedure. Such suspension shall give rise to the effects prescribed in that Code.
PART FIVE: THE ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS
Article 39
(1) The arbitral tribunal shall apply to the merits of the dispute the legal rules agreed upon by the parties. If they agree on the application of the law of a specific state, the substantive rules of that law shall be followed, excluding conflict of laws rules, unless otherwise agreed.
(2) If the parties fail to agree on the legal rules applicable to the merits of the dispute, the arbitral tribunal shall apply the substantive rules of the law it considers most closely connected to the dispute.
(3) The arbitral tribunal shall, when deciding on the merits of the dispute, take into account the terms of the contract in dispute and the usages prevailing in the type of transaction.
(4) The arbitral tribunal may — if the parties to the arbitration have expressly agreed to vest it with the power of conciliation — decide on the merits of the dispute in accordance with the rules of justice and equity without being bound by the provisions of the law.
Article 40
Awards of an arbitral tribunal composed of more than one arbitrator shall be issued by a majority of views, following deliberations conducted in the manner determined by the arbitral tribunal, unless the parties to the arbitration have agreed otherwise.
Article 41
If the parties settle the dispute during the arbitration proceedings, they may request that the settlement terms be recorded before the arbitral tribunal, which shall in such case be required to issue a decision that incorporates the settlement terms and terminates the proceedings. Such decision shall have the same force as an arbitral award with respect to enforcement.
Article 42
The arbitral tribunal may issue interim awards or awards on part of the requests prior to issuing the award that terminates the entire dispute.
Article 43
(1) An arbitral award shall be issued in writing and signed by the arbitrators. In the case of an arbitral tribunal composed of more than one arbitrator, the signatures of the majority of arbitrators shall suffice, provided that the reasons for the absence of the minority’s signatures are stated in the award.
(2) An arbitral award shall be reasoned unless the parties to the arbitration have agreed otherwise, or unless the law applicable to the arbitration proceedings does not require a statement of reasons.
(3) An arbitral award shall 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’ requests, statements, and documents, the operative part of the award, the date and place of its issuance, and the reasons therefor if their statement is required.
Article 44
(1) The arbitral tribunal shall deliver to each party a copy of the arbitral award signed by the arbitrators who approved it, within thirty days of the date of its issuance.
(2) The arbitral award or parts thereof may not be published without the consent of both parties to the arbitration.
Article 45
(1) The arbitral tribunal shall issue the award terminating the entire dispute within the time limit agreed upon by the parties. If no agreement exists, the award must be issued within twelve months from the date of commencement of the arbitration proceedings. In all cases, the arbitral tribunal may decide to extend the time limit, provided the extension does not exceed six months, unless the parties agree on a longer period.
(2) If the arbitral award is not issued within the time limit referred to in the preceding paragraph, either party to the arbitration may request the President of the court referred to in Article (9) of this Law to issue an order setting an additional time limit or terminating the arbitration proceedings. Either party may then bring the case before the court originally competent to hear it.
Article 46
If, during the arbitration proceedings, a matter arises that falls outside the jurisdiction of the arbitral tribunal, or if forgery of a document submitted to it is alleged or criminal proceedings have been initiated concerning the forgery or another criminal act, the arbitral tribunal may continue hearing the merits of the dispute if it considers that deciding on that matter or on the forgery of the document or the other criminal act is not essential for the resolution of the dispute. Otherwise, the tribunal shall suspend the proceedings until a final judgment is rendered on that matter, and the suspension of the time limit set for the issuance of the arbitral award shall result accordingly.
Article 47
The party in whose favour the arbitral award is rendered shall be required to deposit the original award or a signed copy thereof in the language in which it was issued, or an Arabic translation certified by an accredited authority if the award was issued in a foreign language, at the registry of the court referred to in Article (9) of this Law.
The court registry officer shall draw up a report of this deposit and either party to the arbitration may request a copy of such report.
Article 48
(1) Arbitration proceedings shall end upon the issuance of the award terminating the entire dispute, or upon the issuance of an order terminating the arbitration proceedings in accordance with paragraph (2) of Article (45) of this Law. Proceedings shall also end upon the issuance of a decision by the arbitral tribunal to terminate the proceedings in the following cases:
(a) If the parties agree to terminate the arbitration.
(b) If the claimant abandons the arbitration proceedings, unless the arbitral tribunal decides, upon the request of the respondent, that the respondent has a genuine interest in the continuation of the proceedings until the dispute is resolved.
(c) If the arbitral tribunal considers, for any other reason, the continuation of the arbitration proceedings to be futile or impossible.
(2) Subject to the provisions of Articles 49, 50, and 51 of this Law, the mission of the arbitral tribunal ends upon the termination of the arbitration proceedings.
Post-Award Procedures
Article 49
(1) Either party to the arbitration may request the arbitral tribunal, within thirty days following receipt of the arbitral award, to interpret any ambiguity in the operative part of the award. The requesting party shall notify the other party of this request before submitting it to the arbitral tribunal.
(2) The interpretation shall be issued in writing within thirty days following the date of submission of the interpretation request to the arbitral tribunal. The tribunal may extend this period by a further thirty days if it deems this necessary.
(3) The decision issued by way of interpretation shall be deemed supplementary to the arbitral award it interprets, and the provisions thereof shall apply to it.
Article 50
(1) The arbitral tribunal shall correct any purely material errors, whether in writing or calculation, in its award, by a decision issued on its own motion or upon the request of either party. The arbitral tribunal shall carry out the correction without a hearing within thirty days following the date of issuance of the award or of the deposit of the correction request, as applicable. The tribunal may extend this period by a further thirty days if it deems this necessary.
(2) The correction decision shall be issued in writing by the arbitral tribunal and notified to the two parties within thirty days of its issuance. If the arbitral tribunal exceeds its authority in the correction, the nullity of this decision may be invoked through a nullity action to which the provisions of Articles (53) and (54) of this Law apply.
Article 51
(1) Either party to the arbitration, even after the expiry of the arbitration period, may request the arbitral tribunal within thirty days following receipt of the arbitral award to issue a supplementary arbitral award on requests that were submitted during the proceedings but were overlooked by the arbitral award. Such request shall be notified to the other party before submission.
(2) The arbitral tribunal shall issue its award within sixty days from the date of submission of the request, and may extend this period by a further thirty days if it deems this necessary.
PART SIX: NULLITY OF THE ARBITRAL AWARD
Article 52
(1) Arbitral awards issued in accordance with the provisions of this Law shall not be subject to challenge by any means of challenge prescribed in the Code of Civil and Commercial Procedure.
(2) An action for nullity of an arbitral award may be brought in accordance with the provisions set out in the two following articles.
Article 53
(1) An action for nullity of an arbitral award shall only be admissible in the following cases:
(a) If there is no arbitration agreement, or such agreement is null and void, or voidable, or has lapsed through the expiry of its term.
(b) If either party to the arbitration agreement lacked legal capacity or was under a legal incapacity at the time of its conclusion, pursuant to the law governing that party’s legal capacity.
(c) If either party to the arbitration was unable to present the party’s defence due to failure to be duly notified of the appointment of an arbitrator or of the arbitration proceedings, or for any other reason beyond the party’s control.
(d) If the arbitral award excludes the application of the law agreed upon by the parties for application to the merits of the dispute.
(e) If the arbitral tribunal was constituted or the arbitrators were appointed in a manner contrary to the law or to the agreement of the parties.
(f) If the arbitral award decides on matters not covered by the arbitration agreement or goes beyond the scope of that agreement. However, if parts of the award relating to matters subject to arbitration can be separated from parts relating to matters not subject thereto, nullity shall only apply to the latter parts.
(g) If there is a nullity in the arbitral award, or if the arbitration proceedings are null in a manner that has affected the award.
(2) The court hearing the nullity action shall, on its own motion, declare the arbitral award null and void if it contains provisions contrary to public policy in the Arab Republic of Egypt.
Article 54
(1) An action for nullity of an arbitral award shall be filed within ninety days following the date of notification of the arbitral award to the party against whom it was rendered. The fact that the nullity claimant waived the right to bring such an action prior to the issuance of the arbitral award shall not prevent the action from being admitted.
(2) Jurisdiction over nullity actions in international commercial arbitration shall vest in the court referred to in Article (9) of this Law. In matters other than international commercial arbitration, jurisdiction shall vest in the second-instance court to which the court originally competent to hear the dispute belongs.
PART SEVEN: RES JUDICATA EFFECT AND ENFORCEMENT OF ARBITRAL AWARDS
Article 55
Arbitral awards issued in accordance with this Law shall have the force of res judicata and shall be enforceable, subject to the provisions set out in this Law.
Article 56
The President of the court referred to in Article (9) of this Law, or a judge delegated by the President, shall have jurisdiction to issue an order for the enforcement of arbitral awards. An application for enforcement shall be submitted accompanied by the following:
- The original award or a signed copy thereof.
- A copy of the arbitration agreement.
- A certified Arabic translation of the arbitral award from an accredited authority, if the award was not issued in Arabic.
- A copy of the record evidencing the deposit of the award in accordance with Article (47) of this Law.
Article 57
The filing of a nullity action shall not entail the suspension of enforcement of the arbitral award. However, the court may order the suspension of enforcement if the claimant requests this in the statement of claim and the request is based on serious grounds. The court shall decide on the suspension request within sixty days of the date of the first session scheduled for its hearing. If the court orders the suspension of enforcement, it may also order the provision of a bond or financial security. If the court orders suspension of enforcement, it shall decide on the nullity action within six months of the date of issuance of such order.
Article 58
[Final text as amended following the Supreme Constitutional Court ruling in Case No. 92 of Judicial Year 21, issued 6 January 2001, published 18 January 2001, holding unconstitutional item (3) of Article (58) to the extent it provided that an order for enforcement of an arbitral award may not be challenged]
(1) An application for the enforcement of an arbitral award shall not be admitted if the time limit for filing a nullity action against the award has not yet expired.
(2) An order for the enforcement of an arbitral award in accordance with this Law shall not be issued except after verifying the following:
(a) That it does not conflict with a judgment previously rendered by the Egyptian courts on the subject matter of the dispute.
(b) That it does not contain any provisions contrary to public policy in the Arab Republic of Egypt.
(c) That the award has been duly notified to the party against whom it was rendered.
(3) An order issued for the enforcement of an arbitral award may not be challenged.* However, an order rejecting enforcement may be challenged before the competent court pursuant to Article (9) of this Law within thirty days from the date of its issuance.
* The Supreme Constitutional Court, in Case No. 92 of Judicial Year 21 (Constitutional), session of 6/1/2001, held unconstitutional the provisions of item (3) of Article (58) of Law No. 27 of 1994 insofar as they provide that the order issued for the enforcement of an arbitral award may not be challenged.
JOINT COMMITTEE REPORT Explanatory Memorandum
Joint Committee Report
Report of the Joint Committee of the Constitutional and Legislative Affairs Committee and the Bureau of the Economic Affairs Committee on the Bill on International Commercial Arbitration — Law No. 27 of 1994
The Assembly, at its session held on 10 May 1993, referred to a joint committee of the Constitutional and Legislative Affairs Committee and the Bureau of the Economic Affairs Committee a bill on international arbitration. The committee held three meetings to consider it.
The first meeting was held on 15 May 1993, attended by Professor Dr. Ahmed Fathi Surur, President of the Assembly. The second meeting was held on 16 May 1993 in the afternoon. The third meeting was held on the same evening.
All three meetings were attended by: Counsellor Farouk Seif El-Nasr, Minister of Justice; Professor Dr. Mohsen Shafik, Professor of Commercial Law; Counsellor Ahmed Fathi Mursi, Chairman of the Constitutional and Legislative Affairs Committee of the Shura Council; Professor Dr. Samir El-Sharkawy, Professor of Commercial Law, Cairo University; Dr. Mohamed Abu El-Einein, Counsellor, Supreme Constitutional Court; Dr. Fathi Naguib, Assistant Minister of Justice for Legislative Affairs.
The committee examined the bill and its explanatory memorandum and reviewed the Constitution, the Civil Code (Law No. 131 of 1948), the Code of Civil and Commercial Procedure (Law No. 13 of 1968), the Law of Evidence in Civil and Commercial Matters (Law No. 25 of 1968), the Administrative Judiciary Organization Law (Law No. 47 of 1972), the Investment Law (Law No. 230 of 1989), and the Public Business Sector Companies Law (Law No. 203 of 1991).
In light of the discussions in the committee’s meetings and the government’s explanations, the committee prepared a report that could not be presented to the Assembly.
At the beginning of the fourth regular session, the bill was referred back to the committee. The committee held six meetings on 2, 5, 9, 10, 23, and 31 January 1994.
In light of the discussions in the committee’s meetings and the government’s explanations, the committee found that the bill had taken approximately eight years to prepare following Egypt’s accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 8 June 1959 — the convention adopted by the United Nations Conference on International Commercial Arbitration held in New York from 20 May to 10 June 1958. The International Commercial Arbitration Law Bill was in keeping with the great efforts being made by the state to create a favourable investment climate, consistent with the economic reform policy. The state had come a long way in this regard in attracting investment, particularly after it became clear that the laws enacted in the field of investment were not alone sufficient to achieve the goal of increasing investment — among them the Investment Law (Law No. 230 of 1989) and the Decree-Law No. 205 of 1990 on the Confidentiality of Bank Accounts.
The arbitration system is conducive to the swift resolution of disputes arising from international commercial relationships and gives investors assurance and confidence, as it is consistent with internationally applicable rules. It also aims to overcome the slowness of court proceedings that generally impedes commercial activity, noting that the arbitration rules in the Code of Civil and Commercial Procedure were designed for domestic arbitration and therefore do not adequately serve international commercial arbitration given its special nature.
The committee found that, from a legislative policy perspective, it was preferable to have a general arbitration law in civil and commercial matters applicable to both domestic and international arbitration, rather than having two sets of arbitration rules — domestic arbitration covered by Articles 501 to 513 of Law No. 13 of 1968, and international arbitration covered by the bill before the committee. From this standpoint, the bill’s text was amended and its title changed to the ‘Arbitration in Civil and Commercial Matters Law,’ so that its provisions apply to arbitration whether domestic or international.
This required the repeal of Articles 501 to 513 of the Code of Civil and Commercial Procedure.
The committee, while approving the bill, requests the honourable Assembly to adopt it as amended in the appended text.
Explanatory Memorandum for the International Commercial Arbitration Law Bill
- At the outset of the 1980s, a fundamental change occurred in Egypt’s economic policy when it resolved to emerge from the isolation imposed upon it by the prevailing political and social conditions into a fruitful openness aimed at attracting Arab and foreign capital to participate in development projects in the country. Egypt inaugurated this new policy by issuing investment laws containing privileges, incentives, and elements of confidence to create a safe and profitable economic climate for incoming capital.
- It became apparent from the outset that the Investment Law alone could not achieve the objective unless accompanied by other legislation to complement it and affirm the advantages it offered. Laws and legislative amendments were accordingly enacted regarding exchange controls, bank secrecy, and other areas. The subject of resolving disputes arising between an investor and a partner or client in the investment remained unregulated, despite the particular importance attached to this matter by foreign investors, who are concerned and reassured to find, when a dispute arises, an adjudicative system operating on the rules and principles that have become established in international commercial transactions. Since arbitration is the prevailing method in international commercial transactions, the government gave it special attention, particularly after noting the shortcomings in the arbitration rules in the Code of Civil and Commercial Procedure, which were designed specifically for domestic arbitration without taking into account the nature of international commercial disputes and the requirements for their resolution.
- First: Following international modern trends regarding commercial arbitration. In 1985, the United Nations Commission on International Trade Law (UNCITRAL) prepared a Model Law on International Commercial Arbitration and invited states to incorporate it into their national legislation, recommending that the incorporation be as faithful to the original as possible, both in substance and form, to achieve legislative unification at the international level — a stated objective of the United Nations. A number of states responded, and the Model Law became globally recognized. The technical committee drew substantially from the substantive provisions of the Model Law and followed the structure of its chapters and distribution of its articles, while making certain minor drafting adjustments to accord with national legislative traditions.
- Second: Confining the application of the bill to arbitration in international commercial transactions, which would leave the arbitration provisions of the Code of Civil and Commercial Procedure in place, though their application would thereafter be limited to domestic arbitration alone. This made it necessary for the bill to define with precision and clarity the boundaries between the two types of arbitration.
- The internationality of arbitration addressed by the bill does not conflict with the internationality referred to in the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Egypt acceded on 9 March 1959. Under the Convention, ‘internationality’ has a specific meaning of ‘foreignness’ — that the arbitral award was rendered in a state other than the state in which enforcement is sought. In the bill, ‘internationality’ has another meaning defined in Article 3, within which an arbitral award may be rendered in Egypt and still be considered ‘international’ if one of the internationality conditions specified in the article is satisfied.
- Third: Respecting the will of the parties to the arbitration by giving them the freedom to organize it in the manner that suits them. This freedom is the cornerstone of the arbitration system; without it, the system loses its identity. The bill is based on this fundamental principle, leaving the parties free to agree on the manner of appointing and naming arbitrators, choosing the rules governing procedures and those applicable to the merits of the dispute, designating the place of arbitration, and selecting the language used. The bill has provided default rules for all these freedoms, to apply when no agreement exists.
- Fourth: Independence of the arbitral tribunal. Independence means viewing the arbitral tribunal as a consensual judiciary specifically chosen by the parties to resolve the dispute arising between them, upon which no authority should be imposed except that agreed upon by the parties. Among the manifestations of this independence in the bill are the tribunal’s competence to hear challenges against its members, its competence to decide on pleas relating to its lack of jurisdiction, and the prohibition on challenging its awards by the methods prescribed in the Code of Civil and Commercial Procedure. However, this independence should not reach the point of complete separation from state judiciary; there are matters for which the arbitral tribunal inevitably needs the assistance of state courts — such as ordering provisional and interim measures, and imposing penalties on witnesses who fail to appear or refuse to testify. There are also matters in which state court supervision over the arbitral tribunal is unavoidable, such as hearing nullity challenges against the award and issuing an enforcement order.
- Fifth: Speed in concluding proceedings for the issuance of the arbitral award. This speed is one of the hallmarks of the arbitration system that has made it favoured by merchants and business people. It is the legislator’s duty to preserve it by removing formal obstacles, abbreviating procedural time limits, and being parsimonious in permitting challenges to arbitral tribunal decisions. The provision that stands out most in this regard is Article (45), which sets an upper time limit for the issuance of the arbitral award, after the expiry of which either party may request the termination of proceedings and authorization to bring the dispute before the court with original jurisdiction.
- The bill comprises seven parts containing fifty-eight articles. Part One contains general provisions dealing with various subjects, foremost of which is the determination of the scope of application of the bill’s provisions. Article 1 provides that the provisions apply to all international commercial arbitration conducted in Egypt, whether between parties who are subjects of public or private law, regardless of the nature of the legal relationship involved. This resolves doubts that had arisen concerning the extent to which certain types of contracts having a public entity as one of their parties were subject to arbitration. Paragraph (2) of Article 1 grants parties to domestic commercial transactions the right to agree to subject their transactions to the bill’s provisions.
- Part Two addresses the arbitration agreement — defining it, permitting its conclusion before and after the dispute arises, requiring it to be in writing, and explaining what is meant by ‘in writing.’ Perhaps the most important provision in this Part is Article (12), which affirms the principle of recognition of the arbitration agreement as entailing the parties’ waiver of their right to resort to ordinary courts. Courts to which a dispute covered by an arbitration agreement is referred are required to rule it inadmissible, provided the respondent raises this plea before submitting any request or defence.
- Part Three addresses the organization of the arbitral tribunal — how it is constituted, how arbitrators are appointed, the conditions that must be met by arbitrators, and the procedures for their challenge. The bill leaves extensive room for the parties’ agreement on all such matters, but establishes the court of appeal mentioned earlier to fill gaps arising from the absence of agreement or its non-implementation. The most important provisions in this Part are the affirmation of two fundamental principles of arbitration: first, the competence of the arbitral tribunal to decide on pleas relating to its lack of jurisdiction — known in arbitration doctrine as ‘compétence-compétence’ (Article 22); second, the independence of the arbitration clause, as a part of a contract, from the other clauses of that contract, so that the clause is not affected by any rescission or grounds for nullity that may affect the contract (Article 23).
- Part Four on arbitration proceedings opens with a fundamental rule: the parties’ freedom to choose the rules of procedure, subject to due process, including the equality of the parties and the provision of a full and equal opportunity for each to present the case. Default rules follow for situations where the parties do not agree on procedural rules, and in these rules considerable freedom is left to the arbitral tribunal to choose the most suitable procedures.
- The proceedings culminate in the issuance of the arbitral award. Part Five addresses the award, beginning with the law applicable to the merits of the dispute, providing that it is the law chosen by the parties. If they fail to agree, the arbitral tribunal shall choose the most appropriate law for the dispute (Article 39). This Part contains several key rules, including: permission to agree that the arbitral tribunal may decide in accordance with the rules of justice without being bound by any law (Article 35, paragraph 2); permission to issue an award incorporating agreed settlement terms (Article 41); permission to exempt the tribunal from the requirement to give reasons (Article 43, paragraph 2); prohibition on publishing the award without the consent of both parties (Article 44, paragraph 2) — affirming the principle of confidentiality in arbitration; and permission to request the issuance of a supplementary award on claims submitted during proceedings that were overlooked by the award (Article 51).
- After the award is issued, two subjects arise that are addressed in Parts Six and Seven: nullity of the arbitral award and enforcement of the arbitral award. Although the award may not be challenged by the means prescribed in the Code of Civil and Commercial Procedure, it is subject to a nullity challenge in the cases exhaustively enumerated in Article 53 — and in their formulation these cases were made to correspond to the nullity cases in Article 5 of the New York Convention, to achieve legislative unity. Article (54) provides that a nullity action shall be filed within ninety days of the award’s issuance, so that awards are not left indefinitely subject to challenge.
- Part Seven on enforcement establishes the res judicata effect of the award in Egypt (Article 55) and the right of the successful party to apply for enforcement following the expiry of the ninety-day period for bringing a nullity action. Articles 57 and 58 deal with enforcement procedures — the former specifying the competent court and the required documents, the latter setting out the conditions for granting the enforcement order and providing that the order, if granted, shall not be subject to challenge; only an order refusing enforcement may be challenged within thirty days of its issuance.
— End of Law No. 27 of 1994 —
Arbitration in Civil and Commercial Matters
Official Gazette, Issue No. 16 (Supplement), 21 April 1994 | As amended by Laws No. 9 of 1997, No. 8 of 2000, and the 1995 Corrigendum
