EGYPT Trends and Developments Contributed by: Muhammad Ussama and Adam El Shalakany, Shalakany Law Office
by the main contractor for the performance of some or all of the works. Such sub-contractors are certainly not going to sit idle and not seek to take legal action to recover any financial entitlements that the main con- tractor may owe them for actually performed works. Hence, it is quite common for the overall picture to be additionally complicated with such sub-contractors pursuing their own claims against the employer and/ or applying for the attachment of monies and rights held by the employer for the main contractor (wheth- er through precautionary attachment court order or through court execution orders). In this respect, the following are arguments that the employer may opt to raise in defence of a claim advanced against the employer by the bank. • Akin to court judgments, court orders of all sorts (including court execution orders) must be respect- ed and enforced. Egyptian and UAE courts have, in their rulings, emphasised the necessity and importance of honouring and complying with court orders. In one ruling, UAE courts have emphasised that: “Whereas it has been established to this Court that the three respondent banks violated the order of the Execution Court, having permitted the First Respond- ent to withdraw from its accounts; indeed, those very banks themselves carried out withdrawals and transfers on the accounts of the First Respondent, justifying such actions on the basis that the accounts were indebted due to facilities granted by the three respondent banks. However, such justification does not entitle them to dispose of the accounts held with them, as judicial orders must be respected. Courts must assert their authority and the authority of the judiciary, and must take firm action against any party that manipulates or circumvents court orders, particu- larly banks that have become accustomed to disre- garding such orders and evading their enforcement. In light of the foregoing, banks are required to execute court orders without delay or hesitation. Should there be any serious matter, they must seek the permission of the issuing court before taking any action or effect- ing withdrawals from accounts that have been subject to attachment.
Accordingly, the court upholds the conclusions reached by the appointed expert in his second report, which confirmed that the Third, Fourth, and Fifth Respondents carried out withdrawals from the accounts of the First Respondent despite those accounts being subject to attachment, and that such withdrawals occurred after the date of the attachment. This caused damage to the Appellant and prevented it from recovering the execution amount from the accounts of the First Respondent. As such, those banks have violated Article 259 (1) of the Civil Procedures Law, and the elements of tortious liability – fault, damage, and causation – are thereby established. The Court therefore orders the Third, Fourth, and Fifth Respondents, jointly and severally, to pay the Appellant compensation in the amount of...” – see Dubai Cassation Ruling issued on 23 April 2025 in Cassation Challenges No 241, 213 and 272 of 2025. • Hence, any argument to the effect that the employ- er did not have to comply with the relevant court (execution) orders (by depositing the relevant amounts with court) must be deemed false and, therefore, rejected by court. • Further, had the employer not complied with the relevant court (execution) orders, the employer would have rendered itself exposed to potential civil and/or criminal liability. • Hence, the employer found itself in a considerably complex legal situation; namely, being a party that entered into one construction contract with a main contactor, but found itself dealing with (i) claims pursued under the construction contract by the main contractor; (ii) claims pursued and/or court orders issued in favour of sub-contractors which the main contractor had not paid for their work on the project (while considering that such claims and/or court orders target the same monies that the main contractor was trying to pursue for itself in its own proceedings against the employer); and (iii) claims pursued by a third party (ie, the bank) against the employer for monies that the bank argues the main contractor is entitled to vis-à-vis the employer under the construction contract. • The aforementioned complex legal position that the employer had found itself in was not and is not caused by the employer’s acts. Instead, the
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