Egypt - Part A - Arbitration in the MENA
Originally from Arbitration in the MENA
The Arab Republic of Egypt (“Egypt”) is one of the first countries in the region to take substantial steps towards implementing arbitration into its legal system as a dispute resolution mechanism. Egypt was one of the very early signatories of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Egypt also signed the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “Washington Convention”) on 11 February 1972, which entered into force in Egypt on 2 June 1972. The different successive regimes in Egypt considered arbitration an effective means to attract foreign investment, which necessitated successive amendments to the Egyptian Investment Law No. 156 of 1953. As a result, the Egyptian Investment Law was amended three times during the 1970s to provide the necessary legal framework for investment under the then nationwide open door policy.
In 1986 Egypt began to experience serious macroeconomic imbalances and a dramatic fall in economic growth. Serious fiscal and productivity consequences were characterized by budget deficits of up to 17% of the GDP and a very high balance of payment deficits. It then became necessary to implement an economic reform program, and accordingly in 1991, the government started the Economic Reform and Structural Adjustment Program in concert with significant financial support from international donors, with one of its essential components being privatization. Defining a more liberal investment environment became inevitable, and thus, a new investment law was issued in 1989. It remained in force for eight years until the current “Investment Guarantees and Incentives Law No. 8 of 1997” was issued.