EGYPT Law and Practice Contributed by: Muhammad Ussama and Adam El Shalakany, Shalakany Law Office
2.7 Final Relief Specific performance is a key final relief available to a litigant in commercial litigation. However, specific performance is not always available and/or granted and therefore compensation becomes the real type of final relief that is commonly targeted by litigants. Further, if specific performance is not the number one priority, a litigant could want to seek termina- tion or rescission of the contract from which the dis- pute stems. Pursuant to Egyptian law, terminating or rescinding a contract does not prevent a litigant from claiming compensation. Hence, unless there exist strategic legal reasons that would call for a different claims formulation and strategy, it is common in prac- tice for a claimant to seek termination or rescission of the underlying contract, coupled with a compensation claim. 2.8 Damages Pursuant to Egyptian law, compensation extends in scope to cover both incurred losses and foregone profits. It also extends to cover material and moral damages. Egyptian courts assess damages by exam- ining the evidence submitted by the disputing parties and, with the aid of expert evidence/input (if neces- sary), proceed to reach a finding on the quantum that mirrors incurred losses and foregone profits. In prac- tice, disputing parties face the greater difficulty in sub- stantiating foregone profits. Some disputing parties and/or their counsel are not at the required level of sophistication that enables them to advise their clients on the required evidence and/or to guide their clients in the process of locating and safeguarding available evidence and submitting it in a form that is accessible by court.
ties and the lack of liquidity to be invested in lengthy, expensive arbitration proceedings. Disputes stemming from construction contracts, transfer of technology agreements, and share pur- chase agreements are commonly referred to arbitra- tion in Egypt. There is also a growing preference for arbitration in straightforward commercial dealings, such as procurement, distribution and the like. 3.2 Restrictions on Use of Arbitration In Egypt, certain types of disputes cannot be referred to arbitration. These disputes include criminal matters, personal status matters and employment matters. As such, lawyers involved in the drafting of arbitration agreements, whether these are drafted as arbitration clauses embedded within an underlying contract or as stand-alone agreements that refer to a certain legal relationship, must always be cautious of the issue of arbitrability so that the contracting parties are well informed, at the time of drafting and conclusion of the relevant arbitration agreement, of the actual prospects of having a valid, enforceable arbitration agreement that they can act upon and utilise if a dispute arises in the future. Further, Egyptian law provides for some scattered statutory restrictions on the use of arbitration. These include, for instance, the requirement that agreements to arbitrate disputes arising from administrative con- tracts, in order to be valid, must be approved by the competent minister. Another example is the statutory restriction on the use of arbitration in the context of disputes stemming from transfer of technology agree- ments; Egyptian law requires that such arbitrations be seated in Egypt and are resolved by the application of Egyptian law to the merits of the dispute. 3.3 Advantages of Arbitration In Egypt, the use of arbitration is perceived as highly advantageous in situations where disputes involve a high level of technicality in relation to the substance/ merits of the dispute. The considerably wider space for the utilisation of expert evidence in arbitrations is evidently a real advantage to arbitration. Disputing parties have the ability to engage highly specialised experts to provide expert evidence, and the arbitral tri- bunal itself has the discretion to resort to the appoint-
3. Arbitration 3.1 Prevalence
Arbitration as a dispute resolution mechanism is quite common in Egypt. In particular, parties dealing with technically complex matters tend to favour arbitration as it allows them to more readily present expert evi- dence and testimony. However, at times of economic depression, parties tend to avoid arbitration and/or to treat it as a last resort. This is due to financial priori-
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