EGYPT Law and Practice Contributed by: Inji Fathalla, Salma Nasreldine, Haya El Samra and Ismaël Sedky, Shahid Law Firm
9.3 Asset Tracing and Recovery Under Article 87 of the ECC, state assets allocated for public benefit are considered public funds and may not be disposed of, seized, or acquired by prescrip- tion, hence cannot be subject to enforcement. Accordingly, only state assets in the private domain – ie, used for commercial purposes – can be enforced against, following the ordinary enforcement procedure prescribed under the EAL (see 9.1 Enforcement Pro- cedure ). In terms of identification of assets, the authors note that, although not a formal requirement under the EAL, it is established in Cairo Court of Appeal case law that the admissibility of enforcement proceedings is con- ditional upon the availability of assets for attachment within the Egyptian territory ( Cairo Court of Appeal, Challenge No 10 JY122 , session dated 30 May 2005). Separately, while the corporate veil piercing doctrine is not formally recognised by Egyptian courts, the award creditor may initiate a fraudulent conveyance action (or “Pauline action”) to obtain the annulment of the transaction undertaken by the award debtor to dissipate their assets, under Articles 237 and 238 of the ECC. By seeking a judgment of non-enforceability of the fraudulent transaction undertaken by the award debtor, the award creditor may seek enforcement against the former’s dissipated assets.
CCCP enforcement regime, particularly Article 298 which explicitly requires the award to have a res judi- cata effect at the seat in order for it to be enforced in Egypt. As such, the existence of set-aside proceedings at the seat may constitute serious grounds for challeng- ing the exequatur, and at the least, mandate a stay of enforcement pending the annulment court’s ruling. Finally, state entities are not immune to enforcement of arbitral awards, provided that the concerned entity has validly consented to arbitration and has obtained necessary prior approvals in this regard (namely, under Article 1 of the EAL, an arbitration agreement within an administrative contract is valid only if approved by the competent minister or their authorised delegate), and that the matter in dispute is arbitrable. 9.2 Approach of the Courts In practice, arbitral awards are generally enforced in Egypt; however, courts in Egypt are reluctant to rec- ognise and enforce foreign awards that were set aside or nullified at the place or seat. Separately, with respect to sovereign immunity, as previously explained, state entities may not invoke sovereign immunity to avoid enforcement, if they have validly consented to arbitration and if the matter in dispute is arbitrable. In the absence of court prec- edents on the matter, it is ultimately left to the courts’ discretion, in light of the specific facts of each case.
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