EGYPT Law and Practice Contributed by: Inji Fathalla, Salma Nasreldine, Haya El Samra and Ismaël Sedky, Shahid Law Firm
1. Overview 1.1 National Position
• The Investment Agreement for the Common Mar- ket for Eastern and Southern Africa (COMESA) – establishing a free trade area among its members with the aim of facilitating foreign direct invest- ment. 1.3 Prevalence of Investor–State Arbitration Investor–state arbitration is the prevailing method in Egypt for the resolution of disputes. The Egyptian Arbitration Law No 27 of 1994 (EAL), together with Egypt’s membership in various bilateral and multilat- eral conventions, and its continuous development of its legal framework – which has resulted in a con- siderable increase in foreign investments in recent years across multiple sectors – makes investor–state dispute resolution through arbitration the most com- mon mechanism, particularly in the context of large government contracts with the state of Egypt. However, arbitration is not necessarily the sole method, the applicable method of dispute resolution depends on the provisions of each treaty. Some may offer alternatives to arbitration, such as allowing a choice between resolving a potential dispute through arbitration or alternatively before domestic courts. In such cases, it is for the investor in particular to select the most suitable alternative in light of its needs, bearing in mind that resorting to domestic courts is generally far less costly, though the process may prove more cumbersome. The choice will thus depend on the investor’s resourc- es and the scale of the investment. Given that the majority of investments in Egypt are of large scale, both investors and the Egyptian govern- ment tend to favour arbitration. 1.4 Key Industries Egypt is currently experiencing exponential develop- ment, marked by the implementation of mega projects involving the building materials, construction, energy, infrastructure, and industrial sectors in general. These sectors entail complex and high-value financial trans- actions and are, consequently, the most affected by investor–state arbitration.
Egypt is recognised as an arbitration-friendly jurisdic- tion. Having registered more than 1,400 arbitrations (according to UNCTAD), Egypt may be regarded as a jurisdiction that welcomes arbitral proceedings. As a general rule, Egypt has no history of refusing or showing reluctance to enter into Bilateral Investment Treaties (BITs); on the contrary, Egypt is a party to 73 BITs currently in force, all of which contain arbitration provisions. Since 2000, Egypt has not terminated any of its BITs. This stability thus reflects a commitment to safeguard- ing foreign investments – a guarantee consistent with Egypt’s current policy. In furtherance of this policy, Egypt has no intention of terminating its BITs; it is actively engaged in reviewing and developing them. The new BIT with the Kingdom of Saudi Arabia (KSA) bears witness to Egypt’s initia- tive to develop its international instruments. 1.2 Arbitration Conventions Egypt is a state party to 23 multilateral conventions relating to investment and its development (according to UNCTAD), including the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) and the ICSID Convention. Egypt is also a member of other major conventions, all containing arbitration as a dispute resolution mecha- nism, such as the following. • The OIC Investment Agreement – a regional and multilateral convention aimed at promoting and encouraging economic co-operation among its member states. • The Euro–Mediterranean Agreement – a multilateral convention between Egypt and the member states of the EU. Its purpose is to foster Egypt’s econom- ic and social development, enabling nationals of its member states to invest in each other’s territories, thereby opening the door to European investors.
50 CHAMBERS.COM
Powered by FlippingBook