EGYPT Law and Practice Contributed by: Inji Fathalla, Salma Nasreldine, Haya El Samra and Ismaël Sedky, Shahid Law Firm
out of that contract. The protection is therefore limited to the rights and obligations established between the parties under the contract. By contrast, BITs provide a much wider framework of protection, allowing an investor to bring claims from breaches of the BIT itself, claims that naturally extend beyond the contractual terms. Thus, contract-based claims and treaty-based claims are distinct, and a breach of contract is not considered in itself a breach of a BIT. However, some BITs include an “umbrella clause”, which affords investors an additional layer of protec- tion. This clause requires the state to comply with obligations it has entered into with respect to invest- ments. Consequently, such a clause may potentially elevate and extend a contractual breach to a breach of the BIT itself. This additional layer of protection may not be nec- essary in the BITs concluded by Egypt, since under the EIL, Egypt and its entities are already under an obligation to respect and perform their contractual obligations. As the law applicable to such contracts is necessarily Egyptian law, the latter takes the lead by imposing this obligation directly on the state. Furthermore, the EIL already reflects most of the pro- tections provided in BITs. Therefore, even without bringing a treaty claim, an investor may simply rely on the application of the law governing the contract.
in its sovereign capacity, has taken its property or seized its investments. • Fair and equitable treatment – in this case, the investor alleges that the state acted in an arbitrary and discriminatory manner against the investor. This principle remains very broad and encompass- es many other principles such as due process and protection against denial of justice. • National treatment – in this case, an investor alleges that it did not receive treatment equal to that of local investors. • Most-favoured nation – unlike national treatment, in this case the investor alleges that it did not receive treatment equal to that of an investor from a third state, who, under its BIT, benefits from more favourable treatment than the claimant investor. These claims are made on the basis of the treaty itself, of the obligations that the state has towards investors and the rights that investors hold against the state. However, an investor may also bring a claim on the basis of a contract. In this case, the investor alleges that the state breached one of its contractual obliga- tions. Egypt includes in its BITs, and in particular in its model BIT, protections for investors such as expropriation, fair and equitable treatment, as well as most-favoured nation. This inclusion by Egypt thus reflects the most frequent claims made by investors against a state and, in order to address such complaints, Egypt includes these protections in its BITs.
3. Substantive Protections and Breaches 3.1 Common Complaints
4. The Arbitral Tribunal 4.1 Limits on Selection
The most frequent claims made by investors against states in investor–state arbitration are naturally based on the obligations that states owe to investors and, by analogy, the rights that investors hold against states. In general terms, the most frequent claims are made on the basis of the following. • Expropriation – in this case, the investor alleges that the state in which it has its investments, acting
There are no limitations on arbitrator selection in Egypt (aside from requirements of independence and impar- tiality). The EAL, for instance, does not limit the parties’ autonomy in their selection of arbitrators; quite the contrary, Article 15 of the EAL provides that the tri- bunal is constituted by agreement of the parties – the parties are free to agree on the number of arbitrators.
54 CHAMBERS.COM
Powered by FlippingBook