An overview of the Egyptian judicial system

Shalakany focus on dispute resolution mechanisms in Egypt

Overview of the Egyptian legal system
The Egyptian legal system is a civil law system influenced by the Napoleonic code. The Egyptian legal system constitutes a source of influence to other laws in the MENA region.

When regulating civil and commercial transactions, the Egyptian legislator left some room for the parties to regulate their own affairs in an agreed manner and, thus, the legal principle pacta sunt servanda plays an active role within the application of private laws. Beyond that circle of party autonomy, the Egyptian legislator laid out mandatory legal norms from which subjects cannot deviate through their agreements. Contrary to private law, administrative law is a hybrid of civil and common law elements as administrative court rulings enjoy the power of creating law in case of a lacuna in the applicable law.

The Egyptian legal system is comprised of various legislations of differing hierarchy. The highest source of legal norms is the Egyptian Constitution. Statutes come immediately after the Constitution, among which, one must mention the Civil Code of 1948 (as amended), the Procedural Law no.13 of 1968 (as amended), the Commercial Code no. 17 of 1999 (as amended), and the Companies Law no. 159 of 1981 (as amended).

Judicial authority
Judicial rulings have no binding power in Egypt. Nonetheless, the principles and rulings of the Supreme Administrative Court and the Court of Cassation have persuasive powers and are expected to be upheld by courts both practically and morally.

The Egyptian judiciary is the third autonomous authority of the Egyptian state and is comprised of (1) the Supreme Constitutional Court, which is the only court with the authority to rule on issues pertaining to the validity of laws and rules as well as conflicts of jurisdiction; (2) the State Council, which is comprised of (a) a judicial department (which includes administrative courts), (b) a legislative department (which provides opinion in relation to draft laws), and (c) an advisory department (which provides advice to administrative authorities, entities and bodies in relation to legal issues referred to said department by the body requesting advice; and (3) ordinary courts (including criminal courts, civil and commercial courts, economic courts, personal status and family courts, labour courts).

The Egyptian judicial system is comprised of several tiers: (a) the Court of First Instance; (b) the Court of Appeal; and (c) the Court of Cassation.

Jurisdictional issues and cases involving foreign entities
The Procedural Law has set out the cases where Egyptian courts have jurisdiction. In relation to cases involving a foreign respondent, Egyptian courts ensure first that the foreign respondent was notified of the case writ. Such notification is done through diplomatic channels. The Cassation Court has recently confirmed that the dispatch of the notice, is insufficient and that proof of delivery is a requisite for the validity of the notice.

In terms of the recognition and enforcement of foreign judgments, Egyptian courts ensure that the following requirements are met: (a) the foreign court that rendered the judgment has jurisdiction under its own rules; (b) the parties were duly informed and properly represented before said court; (c) the judgment is final and binding under the rules that apply to the foreign court’s law; and (d) the foreign judgment is not in conflict with an earlier judgment rendered by Egyptian courts or against public policy.

Dispute resolution mechanisms
In Egypt, the legally recognised dispute resolution mechanism are as follows:

Mediation and conciliation: In practice, seeing that neither mediation nor conciliation leads to an enforceable outcome in the absence of the disputing parties’ conclusion of a binding settlement agreement, we do not often see disputes being referred to either mechanism. On the contrary, disputing parties seem to give more weight to direct settlement negotiations that are conducted with the aid of counsel. In Egypt, court-related mediation programmes usually involve matters that are reviewed by familial or economic courts. Outside the court system, there exist mediation centres, including: (1) the Center for Arab Mediation (AMC); (2) the Investors Dispute Resolution Center (associated with the General Authority for Investment and Free Zones); and (3) the Cairo Regional Centre for International Commercial Arbitration (CRCICA).

Litigation:Several initiatives are being undertaken to raise the Egyptian legal system’s efficiency. For instance, The Egyptian legislator has considered the prospect of digitising many of the litigation processes in a proposed bill amending the Procedural Law. Further, the Cairo Economic Courts were established in 2008 with the intention of permitting the resolution of particular kinds of conflicts in front of judges who possess specialised business knowledge and experience. The process for filing a claim commences by filing a case writ with the competent court accompanied with supporting documents. The court bailiff is required to provide the respondent with a copy of the claim and notify the latter. Among the basic principles that govern the litigation process are due process, equal treatment of the disputing parties, and confrontation.

Arbitration:Arbitration is regulated under (1) the Arbitration Act no. 27 of 1994 (which is influenced by the UNCITRAL Model Law on International Commercial Arbitration (1985)); and (2) the New York Convention (to which Egypt is a signatory). Egyptian courts have repeatedly confirmed that preference be given to the arbitration rules agreed on by the parties provided that there is no breach of a mandatory provision of the Arbitration Act or of Egyptian public order and morals. Egyptian courts have shown a steady tendency of respecting the legal effects of arbitration agreement and therefore issuing a ruling of inadmissibility provided that the arbitration agreement is not proven to have been (explicitly or implicitly) waived by the respondent after court proceedings are initiated by the claimant. The requirements for enforcement of awards include the following: (a) the subject-matter of the award must not have been the subject of a previous Egyptian ruling; (b) there must be no violation of Egyptian public policy considerations; and (c) the award must be validly notified.

Legal fees
In litigation cases, legal costs are governed under Law no. 90 of 1944 (as amended). The associated legal fees are usually a percentage of the value of the claim. If, however, the value of the claim is not determined, then the court fees would be a set amount, determined according to the nature of the claim. Moreover, there are legal costs associated with all procedures pertaining to a legal claim, rather than just the review of such claim by the court, meaning a party would bear legal costs for the notification of the parties, and for the enforcement of the judgement. Moreover, the losing party is the party that bears the court fees.

Documentary and evidence rules
Parties are permitted to provide evidence while filing a claim or defence. In this context, a party is not required to present any evidence that will strengthen the case of his opponent. Under Egyptian Law, parties to a litigation should submit original documents as any photocopies are dismissed if challenged by opposing parties.