Key points
- An arbitration agreement must be in writing, or it is void.
- Only matters that can be settled by agreement can go to arbitration.
- Awards cannot be appealed, only challenged by an annulment action on limited grounds.
- Egypt is party to the 1958 New York Convention, which helps enforcement across borders.
What is commercial arbitration?
Arbitration is a private way to resolve a dispute. The parties agree to take the dispute away from the state courts and give it to one or more arbitrators. The arbitrators hear both sides and issue an award that binds the parties.
In Egypt, arbitration is governed by the Arbitration Law No. 27 of 1994. The law applies to arbitration that takes place in Egypt. It also applies to international commercial arbitration held abroad when the parties agree to apply it.
What makes an arbitration agreement valid?
The agreement must be in writing, or it is void. It can be a clause in the main contract, agreed before any dispute arises. It can also be a separate agreement made after a dispute has started. In that case it should set out the issues that go to arbitration.
Only matters that can be settled by agreement can go to arbitration. Personal status and criminal liability, for example, cannot. Disputes over administrative contracts with the state need special approval under rules set by law.
If one party goes to court despite a valid arbitration agreement, the other party must raise the agreement before making any other request or defence in the case. If it does, the court will not hear the merits.
When does arbitration make sense?
Enforcement abroad is often the deciding point. Egypt is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This helps awards made in Egypt to be enforced in other member states. It also allows foreign awards to be enforced in Egypt, subject to the Convention's conditions and Egyptian procedure. For cross border contracts, this is often the main reason to choose arbitration over a national court.
Arbitration also tends to suit disputes where one or more of these points applies:
- The parties are from different countries and neither wants the other's courts
- The dispute is technical, for example in construction, engineering or complex supply, and needs an arbitrator with that background
- Confidentiality matters to the business or the relationship
- The parties want to choose the language, the place and the procedure
- The award may need to be enforced in another country
When might court be the better choice?
Arbitration is not always the right tool. Court may suit you better when:
- The amount is small, and arbitrator and centre fees would take a large share of it
- You need a judgment that binds people who did not sign the arbitration agreement
- The other side is unlikely to cooperate, and you will need the court's powers at many stages
- You want the option of an appeal on the merits
How are awards challenged and enforced?
An arbitral award cannot be appealed. It can only be challenged by an action for annulment, on limited grounds set by law and within a strict time limit. The court in that action does not review whether the arbitrators got the facts or the law right.
To enforce an award in Egypt, you apply for an enforcement order. For international commercial arbitration, the competent court is the Cairo Court of Appeal, unless the parties agreed on another Court of Appeal in Egypt. For domestic arbitration, it is the court that would have heard the dispute. The order is generally not granted until the time for an annulment action has passed. The judge checks set conditions: that the award does not conflict with an earlier Egyptian judgment on the same subject, does not violate public order, and was properly notified. The judge does not rehear the case.
What should a good arbitration clause say?
A vague clause invites a fight about the clause itself before the real dispute begins. A clear clause covers:
- Whether the arbitration is institutional, for example under the rules of the Cairo Regional Centre for International Commercial Arbitration, or ad hoc
- The number of arbitrators, which must be odd, and how they are chosen; if the parties do not agree on a number, the law sets it at three
- The seat of arbitration and the language
- The law that governs the contract
- Whether the tribunal may order interim measures
When to speak to a lawyer
The best time is when you draft the contract, not when the dispute arrives. Al-Amthal Law Firm advises on arbitration clauses and on disputes under them, and on related proceedings before the Egyptian courts.
This article is general information, not legal advice. Procedures and deadlines change, so get advice on your own case.
Common questions
Can an arbitral award in Egypt be appealed?
No. Under the Arbitration Law, an award cannot be appealed on the merits. A party can bring an action for annulment, but only on limited grounds set by law and within a strict time limit. The court does not decide whether the arbitrators were right on the facts or the law.
Is arbitration always faster than court?
Often, but not always. Speed depends on the parties, the tribunal and the clause. Delay in appointing arbitrators, challenges to the clause, and later annulment or enforcement proceedings can all add time. A clear clause and an institution's rules help keep the process moving.
Can a foreign arbitral award be enforced in Egypt?
Generally yes. Egypt is a party to the 1958 New York Convention, so awards made in other member states can be enforced in Egypt, subject to the Convention's conditions and Egyptian procedure. The court checks those conditions and does not rehear the dispute.
This guide gives general information about Egyptian law. It is not legal advice, and procedures and deadlines change. Speak to a lawyer about your own case.