Egypt - Arbitration Law and Practice in the Middle East

Before the promulgation of its new laws, the system of arbitration in Egypt followed the provisions of Islamic Shari’a according to the Hanafi doctrine, which sanctioned arbitration. Disputes at the time were usually resolved by conciliation as favored by Muslim scholars. The Egyptian legislator began laying down an integrated arbitration system when it was decided to modernize Egyptian laws. Thus, the Code of Civil and Commercial Procedure, issued by a Supreme Porte edict dated 13 November 1883, included, in Chapter 6 of Part X, provisions governing arbitration under the title “On the Arbitration of Arbitrators” in Articles 702 to 727. In these articles, the legislator established a developed and comprehensive system for arbitration, which provided that arbitration is contractual and that the arbitration clause must be evidenced in writing, specified the method of appointing arbitrators and set forth the modalities of challenging arbitral awards.

This system remained in force until the said Code was repealed and replaced by the Code of Civil and Commercial Procedure No. 77 of 1949, which addressed the issue of arbitration in Part 3 of Book III in Articles 818 to 850. Despite the availability of an advanced legal system for arbitration as a convenient dispute resolution method since 1883, the importance of arbitration at the practical level remained negligible. Litigation remained the rule and arbitration the exception.

With the promulgation of the nationalization laws of 1961 and the establishment of a public sector that encompassed all public economic activities, the need for arbitration as a legal system based on the freedom of the contracting parties disappeared, and a new and entirely different need arose, namely, the need to resolve disputes between units of the public sector through arbitration.