EGYPT Law and Practice Contributed by: Muhammad Ussama and Adam El Shalakany, Shalakany Law Office
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods In Egypt, while there are many dispute resolution methods available for users, arbitration and litigation are the most frequently used. This stems from the preference of commercial players to opt for mecha- nisms that can lead to final, binding and enforceable rulings or awards. Opting for such mechanisms is also sometimes used for signalling purposes; the claimant’s purpose is to communicate to the respondent that the former is both serious and willing to invest in a somewhat lengthy process that would ultimately lead to a final, binding and enforceable outcome. In some cases, the respondent is incentivised to explore an amicable settlement that could lead to a commercially sensi- ble outcome and, simultaneously, avoid unnecessary expenses. Other dispute resolution methods available but not frequently used in Egypt include mediation and con- ciliation. 1.2 Choice of Dispute Resolution Method Arbitration comes first for complex, technical disputes. For instance, in construction disputes, arbitration is the preferred dispute resolution mechanism because it offers the parties an expert-friendly avenue for resolving their dispute. In addition to party-appointed experts, arbitral tribunals can, if needed, appoint their own experts to aid in reaching findings concerning technical matters. The choice of arbitrators can be heavily influenced by the nature of the dispute and the sector within which the dispute arises. However, the costs associated with arbitration can sometimes stand in the way of a party who wishes to pursue a claim, especially when that party is not in a position to finance costly arbitration proceedings. In some instances, when working on construction arbitration in the UAE involving high-quantum, technically com- plex claims and counterclaims, the authors have seen clients feeling exhausted at the end of the arbitration proceedings and thus not being mentally/psychologi- cally open to other similar arbitrations. This is espe- cially so if disputing parties reach a settlement after
years and years of battling claims and counterclaims in arbitration. After arbitration, litigation is the next choice. This is especially so for parties who do not have technically complex claims to pursue and argue, and/or who are not willing or able to finance and invest in lengthy, expensive arbitration proceedings. Concerning litiga- tion, the main con, in the authors’ opinion, is the qual- ity-divergent performance of different court circuits. For many decades there has been a lack of consist- ency regarding the quality of judges. Further, at times there has been a divergence in the position taken by different court circuits in relation to both procedural and substantive legal issues. This causes a lack of confidence in the choice of litigation as it considerably minimises the ability to predict the outcome prior to launching a court case. Party-to-party settlement negotiations come in at third place. These could take place with or without the involvement of counsel. Disputes have been resolved as a result of direct settlement negotiations, and there are other situations where, as a result of the consid- erable deterioration of the relationship between the disputing parties, the involvement of counsel led to positive conclusion of the relevant disputes. 1.3 Key Dispute Resolution Trends Disputing parties are acting more reasonably. This could be the result of the desire to reach a swift con- clusion to the underlying dispute, as well as the keen- ness to avoid unnecessary expenses. Arbitration is also being used not only in relation to highly technical matters in fields such as oil and gas, construction and infrastructure, but also in distribution and general trade matters. At the same time, large companies are expressing a strong desire to avoid lengthy, expensive arbitration proceedings in favour of relatively faster litigation pro- ceedings. In some cases, such a desire has played a considerable role in the shaping of legal strategies to be adopted whether in pursuing a claim or defending one. For example, acting out of the desire to avoid lengthy, expensive arbitration proceedings, some cli- ents make the informed decision to waive an arbi-
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