EGYPT Law and Practice Contributed by: Mohamed Osama, Hana Elbarbary and Hamza Shehata, Shehata & Partners
not grant a higher compensation, unless the creditor proves the debtor’s fraud or grave error. In this case, the rules of tort liability will apply to compensation as well; • regarding tort liability, there are no maximum limits for compensation, as it is estimated by the judge within the limits of the requests. In this regard, compensation includes the loss incurred and the lost profit by the creditor; and • regarding interest, the total interest received by the creditor cannot exceed the original amount. This is without prejudice to trade practices and rules, since in banking opera- tions and other instances, the interest may exceed the original debt. 9.3 Pre-judgment and Post-judgment Interest In respect of delay interest, which is compensa- tion for the delay in performing a duty if the sub- ject matter of the obligation is a sum of money of a determined amount that has become due, the legal interest limit is then 4% annually in civil matters and 5% annually in commercial matters. In case the parties agreed otherwise, this inter- est rate cannot exceed 7% annually. It should also be noted that, as an exception to this gen- eral principle, it is permissible to agree on higher interest rates in banking operations and in some other instances, without being bound by the lim- its provided by the Civil Code. Interests are effective from the date of the judi- cial claim unless provided otherwise by the trade practice or by the party’s agreement. The Trade Law No 17 of 1999 (the “Trade Law”) stipulates another triggering date for the interest, which is since the day when the obligation became due. Therefore, interest is due in the pre-judgment phase, whether from the date of the claim or
from the due date of the obligation itself. Howev- er, in order for the interest to become due before the judgment is issued, the obligation must con- sist of a payment of a determined amount that has become due. The creditor can also request the interest for the post-judgment phase and until the payment, provided that the total inter- est does not exceed the original debt. However, in banking operations and some other instances, the interest can exceed the original debt. 9.4 Enforcement Mechanisms of a Domestic Judgment Egyptian law recognises many mechanisms for enforcing a domestic judgment as follows. Enforcement is accomplished based on a final judgment with the exequatur appended to it, and after notifying the losing party. Later on, a file regarding this execution will be opened in the execution department of the competent court; ie, in the territory in which the subject of execu- tion is located. The execution is then supervised by the execu- tive counsellor, who sets the execution dates and ensures that there are no objections regard- ing the execution from the losing party. If the los- ing party does not pay voluntarily, their property (if any) will be seized and sold in order for the creditor to recover their rights. 9.5 Enforcement of a Judgment From a Foreign Country Judgments issued in a foreign country may be enforced under the same conditions provided by the law of this country regarding the enforce- ment of Egyptian judgments and orders therein. This is called reciprocity. Further, unless there are treaties concluded between the Arab Republic of Egypt and other countries, then the procedures of enforcement provided in those treaties shall
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