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Legal framework

National arbitration laws
What legislation applies to arbitration in your jurisdiction?

Law 27/1994 on Civil and Commercial Arbitration (the Arbitration Act) is the primary legislation regulating arbitration in Egypt. It applies to both domestic and international arbitrations seated in Egypt and those which the parties have chosen to subject to the act. Several provisions of Law 13/1968 on Civil and Commercial Procedures and Law 25/1968 on Evidence in Civil and Commercial Matters may also be relevant to arbitration. In addition, Egypt has ratified the New York Convention and incorporated its terms into the Egyptian legal system by virtue of the Decree of the Minister of Foreign Affairs 19/1959.

Mandatory laws
Are there any mandatory laws?

Some of the provisions of the Arbitration Act are mandatory – for example, Article 11 on non-arbitrable matters and Article 15 on the number of arbitrators. Further, mandatory provisions from other laws may impact arbitration.

New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?

Egypt is a signatory of the New York Convention. The convention came into force on June 8 1959, as provided in Decree 19/1959.

Are there any reservations to the general obligations of the convention?

No.

Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?

Egypt is party to a number of bilateral and multilateral treaties which are relevant to arbitration, including:

  • the Washington Convention on the Settlement of Investment Disputes;
  • the Convention of the Arab League on the Enforcement of Judgments and Arbitral Awards;
  • the Unified Agreement for the Investment of Arab Capital in the Arab States, which established the Arab Investment Court;
  • a large number of bilateral investment treaties; and
  • several bilateral treaties on judicial cooperation.

UNCITRAL
Has your jurisdiction adopted the UNCITRAL Model Law?

Egypt has adopted the UNCITRAL Model Law to a large extent.

Reform
Are there any impending plans to reform the arbitration laws in your jurisdiction?

In August 2015 the Egyptian Council of Ministers reportedly discussed amending the Arbitration Act, but no bill has been officially adopted.

Arbitration agreements

Validity
What are the validity requirements for an arbitration agreement?

Pursuant to Article 10 of the Arbitration Act, an arbitration agreement may be concluded either before the emergence of a dispute or thereafter. If the arbitration agreement is concluded after the dispute has arisen, it must provide for the matters that are to be referred to arbitration in order to be valid. Article 10 further provides that an arbitration agreement may also be included in a contract by way of reference to another document containing that arbitration agreement, provided that this reference is explicit in considering the arbitration agreement part of the contract.

Article 11 states that arbitration agreements may be concluded only by persons (natural or legal) that have the legal capacity to dispose of their rights.

Article 12 requires arbitration agreements to be in writing and states that an arbitration agreement is considered to be in writing if its content is recorded in a document signed by the parties or in any other form of written communication.

However, Article 1 of the Arbitration Act states that arbitration agreements in administrative contracts must be approved by the relevant minister or official assuming his or her powers.

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

Arbitration agreements are enforced in accordance with Article 13 of the Arbitration Act, which provides that a domestic court seized of a claim which is subject to an arbitration agreement must dismiss the claim as inadmissible.

Article 2 of Decree 19/1959 also incorporates Article 2 of the New York Convention on the enforceability of arbitration agreements into Egyptian law. 

Consolidation
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

The Arbitration Act contains no specific provisions on the consolidation of separate arbitral proceedings.

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Article 39 of the Arbitration Act provides that the arbitral tribunal must apply the rules chosen by the parties to the substance of the dispute. If the parties agree on the applicability of the law of a given state, only its substantive rules will be applied, to the exclusion of any conflict of law rules, unless otherwise agreed.

If the parties have not agreed on the legal rules to be applied, the arbitral tribunal will apply the substantive rules of the law that it considers most closely connected to the dispute.

Article 39 further provides that when adjudicating the merits of the dispute, the arbitral tribunal must observe the terms of the contract and the applicable customs. It also adds that the arbitral tribunal may act as an amiable compositeur (ie, decide the dispute on the basis of equity and fairness) on the express authorisation of the parties.

Separability
Are there any provisions on the separability of arbitration agreements?

Article 23 of the Arbitration Act provides for the separability of arbitration agreements and expressly states that the nullity, rescission or termination of a contract will not affect the arbitration agreement, provided that the arbitration agreement is itself valid.

Multiparty agreements
Are multiparty agreements recognised?

Article 4 of the Arbitration Act defines ‘the two parties to the arbitration’ as referring to “the parties to the arbitration, whatever their number may be”.

Arbitral tribunal

Criteria for arbitrators
Are there any restrictions?

Article 16 provides that the arbitrator cannot be:

  • a minor;
  • a person placed under curatorship or guardianship;
  • a person deprived of their civil rights as a result of certain criminal convictions; or
  • a person under bankruptcy, unless discharged.

Contractual stipulations
What can be stipulated about the tribunal in the agreement?

Article 15 of the Arbitration Act provides that the parties may decide whether the tribunal will be composed of a sole arbitrator or several members, provided that there is an odd number of arbitrators.

Article 16 provides that the parties may also agree on the sex or nationality of the arbitrator(s).

Article 17 further provides that the parties may agree on the arbitrators to be appointed and on the procedure and timing for appointment.

Default requirements
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?

Article 15(1) of the Arbitration Act provides that the default number of arbitrators is three, unless otherwise agreed by the parties.

Article 17 provides that if the parties disagree on the arbitrators to be appointed, the domestic court – determined by Article 9 to be the Cairo Court of Appeal by default unless otherwise agreed by the parties – will appoint the sole arbitrator or intervene as necessary to appoint all or some of the arbitrators.

Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

Article 18 of the Arbitration Act provides for the possibility of challenging an arbitrator if circumstances put in serious doubt his or her impartiality or independence. However, the party that appointed the arbitrator cannot later challenge his or her appointment, unless the reason for the challenge was discovered after the appointment.

Article 19 sets out the procedure for challenging an arbitrator. A challenge must be:

  • made in writing;
  • provide the reasons therefor; and
  • presented to the arbitral tribunal within 15 days from the date on which the requesting party became aware of the appointment or of the circumstances underlying the challenge.

If the challenged arbitrator does not recuse him or herself within 15 days of the date of the request, the challenge is then brought before the Cairo Court of Appeal (or any other appeal court agreed by the parties). The court’s decision is not subject to appeal. The request to challenge an arbitrator does not suspend the arbitral proceeding. However, if the challenge is accepted, all procedures followed and decisions taken are considered null and void.

Jurisdictional objections
How should an objection to jurisdiction be raised?

Article 22 of the Arbitration Act provides that an objection to jurisdiction should be raised by the respondent no later than with its statement of defence, failing which the right to object may be considered to have been waived. The arbitral tribunal may nevertheless accept a late objection if it deems that the delay was justified. The arbitral tribunal may decide to adjudicate jurisdictional objections separately or to join them to its decision on the merits.

Replacement of an arbitrator
Why and how can an arbitrator be replaced?

According to Article 21 of the Arbitration Act, arbitrators can be replaced if they are recused or discharged or if they resign from their mandate for any other reason. The replacing arbitrator is appointed pursuant to the same procedures followed for the appointment of the arbitrator being replaced. 

Powers and obligations
What powers and obligations do arbitrators have?

Arbitrators have the powers which are necessary for them to fulfil their mandate by adjudicating the merits of the dispute, including deciding on:

  • their own jurisdiction;
  • the validity and scope of the arbitration agreement;
  • any procedural matter that may arise in the course of the proceedings;
  • interim measures, if so empowered by the parties;
  • the substantive law applicable to the merits of the dispute;
  • the appointment of experts; and
  • the correction of errors in the award.

Their obligations include applying and respecting the parties’ agreement and the applicable law, both with respect to matters of procedure and merits.

The Arbitration Act also mandates the arbitral tribunal to respect and ensure the parties’ rights to due process, the time period for the issuance of the award and the confidentiality of the award.

Liability of arbitrators
Are arbitrators immune from liability?

The Arbitration Act contains no specific provisions protecting arbitrators from liability. Further, Article 217/2 of the Egyptian Civil Code precludes the exclusion of liability in case of fraud or gross negligence.

Communicating with the tribunal
How do the parties communicate with the tribunal?

The parties may communicate with the tribunal in the manner:

  • agreed by them;
  • provided in the applicable arbitration rules (if any); or
  • determined by the arbitral tribunal.

Reaching decisions
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

Article 40 of the Arbitration Act provides that a majority decision suffices to issue an award, unless otherwise agreed by the parties.

Article 43 also provides that the signature of the award by the majority of the arbitral tribunal’s members suffices, provided that the reason for which the minority arbitrator(s) has not signed the award is set out therein.

Arbitrability
Are there any disputes incapable of being referred to arbitration?

Article 11 of the Arbitration Act provides that matters which may not be subject to amicable conciliation cannot be arbitrated – for example, matters of family and criminal law.

Can the arbitrability of a dispute be challenged?

The arbitrability of a dispute could be challenged before the arbitral tribunal (Article 22 of the Arbitration Act) or indirectly before the domestic court having jurisdiction (Article 13).

The arbitrability of a dispute can also be challenged after an award has been issued through a setting-aside proceeding, on the basis of Article 53 of the Arbitration Act.

Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

Article 22 of the Arbitration Act implements the principle of competence-competence by providing that “the arbitral tribunal is competent to rule on the objections related to its lack of jurisdiction, including objections which are based on the non-existence of an arbitration agreement or its extinction, on its nullity, or on the claim that it does not cover the subject matter of the dispute”.

Article 13 further provides that a domestic court seized of a dispute regarding which an arbitration agreement exists must dismiss the claim as inadmissible. The Arbitration Act further provides that the arbitral process may continue despite the initiation of such an action before the domestic courts.

Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Article 27 of the Arbitration Act provides that the arbitration proceeding starts on the day of receipt of the request for arbitration by the respondent, unless the parties agree otherwise.

Limitation periods
Are there any limitation periods for the commencement of arbitration?

Without prejudice to any applicable substantive or procedural rules providing for limitation periods, the Arbitration Act does not provide for limitation periods for the commencement of arbitration.

Procedural rules
Are there any procedural rules that arbitrators must follow?

Article 25 of the Arbitration Act provides that the parties may designate the procedural rules to be followed, failing which the arbitral tribunal will apply the procedural rules it deems suitable.

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

Arbitral awards need not be unanimous under the Arbitration Act. However, the act neither specifically provides for nor prohibits dissenting opinions.

Judicial assistance
Can local courts intervene in proceedings?

Local courts may assist the arbitral process in many respects, including by:

  • granting interim measures (Article 14);
  • appointing arbitrators (Article 17);
  • deciding on challenges to arbitrators (Article 19); and
  • deciding whether to extend the time limit to issue the award or terminate the arbitral proceedings (Article 45).

Can the local courts assist in choosing arbitrators?

Article 17 of the Arbitration Act provides that if the parties disagree on one or more of the arbitrators to be appointed, the domestic court – determined by Article 9 to be the Cairo Court of Appeal by default unless otherwise agreed by the parties – will appoint the sole arbitrator or intervene as necessary to appoint all or some of the arbitrators.

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Article 34 of the Arbitration Act provides that if the claimant fails to submit its statement of claim in accordance with Article 30 of the Arbitration Act without a valid reason for such failure, the arbitral tribunal must end the arbitration, unless otherwise agreed by the parties. However, if the respondent is the party which fails to submit its statement of defence, then in accordance with Article 34, the arbitral tribunal must proceed with the arbitration, unless otherwise agreed by the parties.

Article 35 further provides that if a party fails to attend a hearing or submit requested documents, the arbitral tribunal may proceed with the arbitration and decide based on the evidence available to it.

Finally, Article 37 empowers local courts, on request from the arbitral tribunal, to penalise witnesses who refuse to appear or provide answers.

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

The Arbitration Act does not specify the instances in which third parties may be bound by an arbitration agreement or award; therefore, this matter depends on the applicable law.

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

Article 28 of the Arbitration Act provides that the seat of arbitration is determined by the arbitral tribunal in the absence of an agreement between the parties. However, the tribunal may convene at any location it deems appropriate.

Arabic is the default language, as provided in Article 29.

Gathering evidence
How is evidence obtained by the tribunal?

The Arbitration Act contains few provisions on evidence, given that it grants the parties and, in the absence of their agreement, the arbitral tribunal, the power to decide on the procedural rules that will govern the arbitral process (Article 25 of the Arbitration Act).

Article 30 provides that the parties may enclose evidence supporting their claims in their submissions.

Article 33 further provides that the arbitral tribunal may hold hearings to provide all parties with an opportunity to:

  • explain the subject matter of the dispute;
  • present their arguments and evidence; and
  • hear experts and witnesses (without administering an oath).

According to Article 36, the arbitral tribunal may also appoint experts to provide written or oral reports on specific matters.

Finally, under Article 37, the applicable domestic court may assist the arbitral tribunal in obtaining evidence through rogatory commissions.

What kinds of evidence are acceptable?

The Arbitration Act refers to witnesses (Article 33), experts (Articles 31 and 36), documentary evidence (Articles 30 and 31) and “other evidence” (Article 31).

Confidentiality
Is confidentiality ensured?

Article 44 of the Arbitration Act ensures the confidentiality of the award, stating that it may not be disclosed in whole or in part unless agreed by the parties. The act does not specifically address the confidentiality of the proceedings.

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

The Arbitration Act contains no specific ethical rules or professional standards. Legal literature considers that commonly accepted ethical codes will nevertheless apply to arbitral tribunals seated in Egypt. Counsel who are members of the Egyptian Bar are bound by the rules set out in the Law 17/1983 on the Legal Profession.

Costs

Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?

The Arbitration Act contains no provision on costs. The relevant arbitration rules may direct the tribunal to follow a certain procedure with regard to the estimation and allocation of costs. Articles 184 to 189 of the Law on Civil and Commercial Procedures relating to costs may also apply.

Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?

The Arbitration Act does not specifically empower arbitral tribunals and domestic courts to order security for costs. However, security for costs may be ordered as part of the domestic court’s general power to grant interim measures in support of the arbitral process under Article 14 of the Arbitration Act. Similarly, Article 24.1 of the act allows the parties to empower the arbitral tribunal to grant any interim relief it deems appropriate, which may arguably include security for costs.

The award

Requirements
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

In accordance with Article 43 of the Arbitration Act, the award must:

  • be issued in writing;
  • be signed by the majority of the arbitrators and set out the reasons for non-signature by the minority; and
  • set out:
    • the names of the parties and their addresses;
    • the names of the arbitrators, their nationalities and their titles;
    • the arbitration agreement;
    • a summary of the parties’ claims, testimonies and written evidence;
    • a dispositive section;
    • the date and place of its issuance; and
    • the reasons underlying the decision, unless otherwise agreed by the parties or if not required by the applicable law.

Timeframe for delivery
Are there any time limits on delivery of the award?

Article 45 of the Arbitration Act provides that the award must be issued by the date agreed by the parties. In the absence of an agreed date, the award must be issued within 12 months of the start of the proceedings. This period can be extended by the arbitral tribunal by a maximum of six months, unless the parties agree on a longer period. If the award is not issued within the time limit, any of the parties may bring the matter before the domestic court with jurisdiction pursuant to Article 9 of the Arbitration Act, which may extend the time limit or terminate the arbitral proceedings, in which case the parties would be entitled to bring their claims before the court which would have had jurisdiction absent an arbitration agreement.

The award must be notified to the parties within 30 days of the date of its issuance (Article 44 of the Arbitration Act).

Remedies
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The Arbitration Act does not regulate the available remedies. However, as with most civilian systems, some remedies such as punitive damages are likely to be considered contrary to public policy under Egyptian law.

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

Article 24 of the Arbitration Act provides that the parties may empower the arbitral tribunal to order any interim or conservatory measures that it deems necessary based on the nature of the dispute.

Article 14 of the Arbitration Act further provides that the domestic court may, on request by one of the parties, issue interim measures before or during the arbitral proceedings.

Interest
Can interest be awarded?

The Arbitration Act contains no provisions on interest; this matter is governed by the law applicable to the dispute.

Finality
Is the award final and binding?

Article 55 of the Arbitration Act provides that arbitral awards have res judicata effect and are enforceable. 

What if there are any mistakes?

Article 50 of the Arbitration Act provides that the arbitral tribunal may correct purely material typographical or arithmetical errors, either on its own initiative or on the request of one of the parties. The decision on a correction must be issued within 30 days of the date on which the award was issued or from the party’s request, as the case may be. This deadline may be extended by the arbitral tribunal if necessary. The correction decision must be issued in writing and notified to the parties within 30 days of its issuance. 

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Pursuant to the Arbitration Act, arbitral awards cannot be appealed. As for setting aside, Article 54 of the act provides that a waiver by a party of its right to set aside the award does not preclude the setting-aside application, if the waiver was made before the award was issued.

Appeal
What is the procedure for challenging awards?

Article 54 of the Arbitration Act provides that a setting-aside action must be brought within 90 days of the date on which the award was notified to the losing party. The setting-aside action must be brought before the domestic court with jurisdiction.

On what grounds can parties appeal an award?

The Arbitration Act does not provide for the possibility to appeal awards. Article 52 further provides that the appeal procedures set out in the Law on Civil Procedures do not apply to arbitral awards.

However, parties can seek the setting aside of an award. Article 53 of the Arbitration Act lists the grounds on which parties can base their setting-aside request:

“a) If there was no arbitration agreement, or if that agreement was void, voidable or its duration had elapsed;

b) If either party to the arbitration agreement was at the time of its conclusion fully or partially under incapacity according to the law governing its legal capacity;

c) If either party to the arbitration was unable to present its case either because it was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or for any other reason beyond its control;

d) If the arbitral award failed to apply the law agreed upon by the parties to govern the subject-matter of the dispute;

e) If the composition of the arbitral tribunal or the appointment of the arbitrators was in conflict with the law or the parties' agreement;

f) If the arbitral award dealt with matters not falling within the scope of the arbitration agreement or exceeding the limits of this agreement. However, in the case where matters falling within the scope of the arbitration can be separated from the part of the award which contains matters not included within the scope of the arbitration, the nullity affects the latter parts only;

g) If there was a nullity in the arbitral award itself or in the arbitration procedures in a manner that affected the award.”

Article 53 further provides that the domestic court must set aside the award ex officio if it breaches Egyptian public policy.

Enforcement
What steps can be taken to enforce the award if there is a failure to comply?

Arbitral awards are enforced through an enforcement order to be issued by the applicable domestic court. Article 56 of the Arbitration Act provides that the president of the Cairo Court of Appeal (or any other court of appeal agreed by the parties) has jurisdiction to issue enforcement orders. 

How enforceable is the award internationally?

Awards are enforced internationally by application of the New York Convention, where applicable and pursuant to the law of each enforcement jurisdiction.

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Egyptian law recognises the international law rules on sovereign immunities, including sovereign immunity from enforcement.

Are there any other bases on which an award may be challenged, and if so, by what?

In addition to requests for correction and requests for setting aside, the parties may file a request for interpretation (Article 49 of the Arbitration Act) and/or a request for an additional arbitral award in respect of claims which were left unanswered by the arbitral tribunal (Article 51 of the Arbitration Act).

How enforceable are foreign arbitral awards in your jurisdiction?

The enforcement of foreign arbitral awards in Egypt is governed by the New York Convention, to which Egypt is a party.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Egyptian law does not make provision for the recognition of awards that were set aside in the seat of arbitration.

Third-party funding

Rules and restrictions
Are there rules or restrictions on third-party funders?

The Arbitration Act contains no rules on third-party funders.

Class-action or group arbitration

Concept
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

As in most civilian systems, Egyptian law does not provide for the possibility of class-action or group arbitration. However, multiparty arbitration is possible.

Hot topics

Emerging trends
Are there any hot topics or trends emerging in arbitration in your jurisdiction?

Egypt is reportedly considering revisiting the terms under which it provides its consent to arbitration in the vast network of bilateral investment treaties to which it is a party. While this development would affect only investment arbitration, it would nevertheless be a significant evolution should it ever come to pass.