The author dedicates this article to the memory of the late Professor Philippe Fouchard.

With a view to modernizing arbitration procedure and in an effort to attract foreign investment, Egypt adopted a new arbitration statute in 1994.1 Although the statute confirms Egypt's espousal of modern trends in arbitration, in particular as reflected in the UNCITRAL Model Law on International Commercial Arbitration, most of the basic rules for international arbitration had already been affirmed by the Egyptian Court of Cassation.2 This fact has an important bearing on the application and interpretation of the statute. Furthermore, it may be assumed that the solutions adopted by the Court of Cassation and incorporated in the new law will have an impact on arbitration laws elsewhere in the Arab world, especially in those countries that have followed the Egyptian model.3 It would therefore be appropriate to start this article by describing the main characteristics of the 1994 statute. Consideration will then be given to specific matters that have led to litigation in the Egyptian Supreme Constitutional Court, some of which have already caused the original version of the 1994 statute to be amended, while others are awaiting legislative amendment. These matters include controversies surrounding administrative contracts, challenges to arbitrators and enforcement of arbitral awards.

General principles of the 1994 arbitration statute

Party autonomy

The main characteristic of the new law is that it respects the freedom of the parties to define the procedure, the applicable law and the language and place of the arbitration. It is only when parties remain silent on these matters that the new law allows them to be decided by the arbitral tribunal. If we take the question of applicable law, for example, Article 39(2) states:

If the parties fail to agree on the legal rules to be applied to the subject matter of the dispute, the Arbitral Tribunal shall apply the substantive rules of the law it deems most closely connected to the dispute.4

It is worth noting that the reference here to the substantive rules of the law to be applied implies the rejection of the doctrine of renvoi . Article 39(1) likewise states:

If they [the parties] agree to apply the law of a specific state, then the substantive rules of that law, not those governing conflict of laws, shall prevail unless the parties otherwise agree.

Reference should also be made to Article 25, which reads:

The parties to the arbitration have the right to agree on the procedures to be followed by the arbitral tribunal, including the right to subject such procedure to the provisions in [Page14:] force at any arbitral organization or centre in Egypt or abroad. In the absence of such agreement, the arbitral tribunal may, while taking into consideration the provisions of the present law, adopt the arbitration procedures it deems suitable.5

Under Article 28 of the statute, the parties to the arbitration have the right to decide where it will be held, failing which the decision will be made by the arbitral tribunal.6 A similar principle applies to the language of the arbitration, which, under Article 29(1) of the statute, shall be Arabic, unless the parties agree on another language or languages, or, failing this, the tribunal decides otherwise.

It is clear from these various provisions that party autonomy is the overriding rule. Indeed, party autonomy in arbitration has even been elevated to a constitutional principle. The Supreme Constitutional Court considers that the freedom of parties to agree on arbitration is a principle that the legislature must take into account when enacting laws relating to arbitration. The case of the Faisal Islamic Bank triggered a series of constitutional decisions declaring provisions made in certain specific laws to be unconstitutional. Article 18 of the law establishing the bank provided that disputes between the bank and its clients, stockholders and even the government would be resolved by arbitration alone. The Supreme Constitutional Court cancelled this provision, declaring that, as arbitration should be the result of the free will of the parties, any system of mandatory arbitration was unconstitutional.7

The most important application of such ruling was the decision declaring the capital market arbitration system unconstitutional, because the capital market statute imposed such a system over all capital market disputes and the Minister of Justice was authorized to appoint the chairman of the arbitral tribunal in all cases.8 For similar reasons, the provisions on arbitration in the laws on customs duties9 and sales tax10 were declared unconstitutional.

Kompetenz-Kompetenz

The 1994 statute gives arbitral tribunals almost exclusive power to determine their own jurisdiction and the existence, validity, scope and expiration of the arbitration agreement. This observation is based on a combination of three provisions:

- Article 22(1), which states:

The Arbitral Tribunal is empowered to rule on motions concerning lack of jurisdiction, including motions predicated on the absence, expiry or nullity of the arbitration agreement or the fact that it does not cover the subject matter of the dispute.

- Article 13, which states:

1. A court of law seized of a dispute in respect of which an arbitral agreement exists must rule the case inadmissible if the defendant raises an objection before pleading or arguing on the merits.

2. The bringing of an action in a court of law, as referred to in the preceding paragraph, shall not prevent the arbitral proceedings from being commenced or continued or the arbitral award from being rendered.11[Page15:]

- Article 23, which states:

The arbitration clause is deemed to be an agreement that is independent of the other clauses of the contract. The nullity, rescission or termination of the contract shall not affect the arbitration clause therein, provided such clause is valid per se .

These three articles help to accelerate proceedings by making certain delaying tactics impossible.12

In practice, this means that if there is a motion to declare the arbitration agreement invalid, no longer operative, or for any other reason ineffective, the arbitral tribunal may give its ruling immediately or decide on the matter at the same time as the merits. If a preliminary decision or award is issued, no immediate recourse against such preliminary award is available: it is necessary to wait until the final award has been issued and then bring an action for annulment (Article 22(3)).

It should be noted that, to be admissible, objections to the jurisdiction of the arbitral tribunal or the validity of the arbitration clause must be made no later than when the statement of defence is submitted. This is set forth in Article 22(2), which adds that if it is contended that the matters raised by the other party lie outside the scope of the arbitration clause, the objection must be made immediately. Failing this, the right to make such an objection will lapse, unless the arbitral tribunal considers that there is an acceptable explanation for the delay. Also according to Article 22(2), the fact that a party has appointed or participated in the appointment of an arbitrator does not prevent such party from bringing any of the actions described above.

Article 24 allows parties to give the arbitral tribunal the power to order provisional or conservatory measures, if necessary accompanied by adequate guarantees. If the party ordered to do so fails to comply, the arbitral tribunal may, at the request of the other party, allow that party to take the necessary steps to enforce the arbitral tribunal's order. This could be realized via the powers given by Article 24 to the law courts specified in Article 9.13

Finality of awards subject to annulment on specific, limited grounds

Annulment is the only form of judicial review under the 1994 arbitration statute. Prior to its enactment, the Egyptian Court of Cassation had already held that under the 1968 Code of Civil and Commercial Procedure the only recourse available against arbitral awards was that of annulment, that awards could be set aside only on specific and limited grounds, and that courts could not review the merits of the case. 14 The 1994 statute did not innovate in this field: Article 52 provides that arbitral awards cannot be challenged using the means listed in the Code of Civil and Commercial Procedure, and that annulment may be sought only within the limits of Articles 53 and 54. Article 53 lists the following grounds for setting aside an arbitral award:

a) if there is no agreement to arbitrate, or if the arbitration agreement is void, voidable, or has expired;

b) if one of the parties to the arbitration agreement lacked capacity pursuant to the law governing such party's capacity;

c) if one of the parties to the arbitration was unable to present its case;

[Page16:]

d) if the arbitral award fails to apply the law agreed upon by the parties;

e) if the arbitral tribunal has been constituted in a manner contrary to the law or the agreement between the parties;

f) if the arbitral award rules on matters not included in the arbitration agreement or oversteps the limits of such agreement;

if the arbitral award is itself void or is voidable due to a defect in the arbitral proceedings.15

These grounds could be grouped under three main headings, the first combining a) and b), the second d) and f), and the third c), e) and g).

<i>1. The existence and validity of the arbitration agreement</i> - The arbitration agreement must be valid with respect to form and substance. It must be in writing. Under Article 12, letters, cables and other means of written communication exchanged between the parties shall be sufficient. Article 10(3) states that any reference in the main contract to a document containing an arbitration clause is deemed to be an arbitration agreement provided that the reference expressly considers that such clause is an integral part of the contract.16 The arbitration agreement should also satisfy all substantive conditions for its validity, especially with respect to the each party's capacity to make such an agreement. 17

<i>2. The arbitrator exceeds his mission</i> - This ground covers cases where the arbitrator rules on matters not included in the arbitration agreement or fails to apply the law agreed upon by the parties. The former is illustrated by a recent case in which an award was set aside because the arbitration agreement referred to indemnification for breach of contract whereas the arbitrator based his decision on tort.18 As far as the latter is concerned, a reversal of the position adopted by the Cairo Court of Appeal in the Chromalloy case may now be observed. The Chromalloy award applied the Egyptian Civil Code to a contract between an American corporation and the Egyptian Ministry of Defence that was subject to Egyptian law. This award was set aside by the Cairo Court of Appeal on 5 December 1995 on the ground that the arbitrators should have applied Egyptian administrative law instead of the Civil Code.19 The same position was taken in 1999 in a case between an Italian company and an Egyptian public entity.20 In the last two years, however, this position has been abandoned by Section 91 of the Court of Appeal on a number of occasions. These include cases in which it was unsuccessfully argued that the arbitrator should have applied rent control laws instead of the civil law,21 or the new Commercial Code instead of the Civil Code.22 The new trend is welcome. It better reflects the rationale behind the move to allow [Page17:] arbitral awards to be set aside if arbitrators have failed to apply the law agreed upon by the parties23 and safeguards against the risk of arbitrators following the line taken in the 1951 Sheikh of Abu Dhabi award .24

<i>3. Due process and respect for the arbitration procedure </i> - There are many decisions relating to the proper constitution of the arbitral tribunal and compliance with procedural requirements. For instance, the Cairo Court of Appeal has held that it, the competent court, and not the president of the Court, is the proper authority to appoint the second arbitrator or the chairman of the arbitral tribunal.25 In another decision, the Court of Appeal held that the director of the Cairo Regional Arbitration Centre does not have jurisdiction to appoint an arbitrator in the absence of a specific agreement.26 The Cairo Court of Appeal set aside an award in a recent case where there were four arbitrators, given that arbitral tribunals had to comprise an odd number of arbitrators and this requirement was a matter of public policy.27 It is an essential condition for the validity of an award that the arbitrators deliberate between or amongst themselves. When it comes to signing the award, Egyptian law requires the signatures of the majority of arbitrators and an explanation of why the minority did not sign. The Cairo Court of Appeal has held that it is not a requirement under Egyptian law that the minority arbitrator should write a dissenting opinion.28

Also, an award risks being set aside if it does not include the reasons on which it is based, unless the parties have agreed that the reasons need not be given. If reasons are required, inconsistencies between them are not sufficient grounds for setting aside the award.29 The court cannot discuss the merits of the case and the arbitration agreement must be interpreted strictly.30

To conclude this section, it may be noted that Article 54 determines jurisdiction over actions for the setting aside of arbitral awards. For awards rendered in a matter of international commercial arbitration, jurisdiction lies with the Cairo Court of Appeal unless the parties agree on another court of appeal. For awards in other matters, jurisdiction lies with the court of appeal to which decisions of the court with original jurisdiction over the dispute are referred. In a decision of 27 November 2002, the Cairo Court of Appeal addressed the question of the timing of an action to set aside an award. According to Article 54, such actions must be brought within ninety days following the date on which the arbitral award is notified to the party against which it was rendered. The Court indicated that there were no other conditions to be satisfied, once the notification had been made. It pointed out that depositing the original award or a copy thereof with the clerk of the court referred to in Article 9 is not a condition for admission of the motion to set aside, but simply a condition for enforcement of the award.31[Page18:]

Specific problem areas

Administrative contracts

The drafters of the 1994 arbitration law were conscious of the controversy that was raging in the early nineties over the arbitrability of disputes relating to administrative contracts. At that time, the Egyptian Council of State did not speak with one voice: whilst the Consultative Section admitted that disputes relating to administrative contracts could be subject to arbitration,32 the Supreme Administrative Court took the opposite view, holding that administrative courts must resolve all administrative disputes and that arbitration clauses in administrative contracts must be declared null and void.33

The 1994 statute sought to resolve this divergence by stating clearly in Article 1 that arbitration could be used to resolve administrative disputes relating to administrative contracts:

The provisions of this law, shall apply to all arbitrations between public law or private law persons, whatever the nature of the legal relationship in connection with which the dispute has arisen.

This was also borne out in the report of the legislative committee of the People's Assembly.

The wording of the statute did not put an end to the controversy, however. Taking a position contrary to that which it had taken before the enactment of the 1994 statute, the Consultative Section of the Council of State this time objected to the arbitrability of disputes relating to administrative contracts.34 Thereupon, the government introduced an amendment35 to Article 1 of the arbitration statute, adding a new paragraph to the effect that for disputes concerning administrative contracts, the competent minister, or the person having ministerial authority over public entities, must approve the arbitration agreement, and that the power to grant such approval could not be delegated. The controversy would thus appear to have been resolved, leaving it clear that disputes over administrative contracts may be settled by arbitration,36 providing the relevant minister or person having ministerial power has expressly approved the contract containing the arbitration clause, or the arbitration agreement itself, if made separately.37[Page19:]

Challenge of arbitrators

The question of challenging arbitrators was raised during the discussion of the statute by the People's Assembly.38 Certain members proposed that the application challenging an arbitrator be presented directly to the Court of Appeal and not be left to the arbitrators themselves. This proposal was not accepted and Article 19 was adopted as proposed by the government.39 The application must therefore be sent to the arbitral tribunal within fifteen days of the applicant's becoming aware of the composition of such tribunal or of the circumstances justifying the challenge.

Article 19(1) went on to state that if the arbitrator who is the subject of the challenge does not step down, the arbitral tribunal decides on the application. This provision was successfully challenged in the Supreme Constitutional Court, which held that it would be contrary to due process to allow the arbitrators themselves to rule on the challenges to which they were subject.40 The Supreme Constitutional Court rejected the argument that this provision was taken almost verbatim from the UNCITRAL Model Law on International Commercial Arbitration. Maintaining that the Egyptian Constitution had its own imperatives, the Court affirmed that the independence and the neutrality of arbitrators is like that of judges and that it would go against the constitutional principle of an equitable judicial process to allow arbitrators to rule on the challenges to which they are themselves subject. The Court requested the legislature to intervene, as a result of which an amendment redrafting Article 19 was presented to the People's Assembly. The law was thus modified in 200041 to read as follows:

1. The challenge shall be made by written application to the arbitral tribunal, giving reasons, within fifteen days following the date on which the applicant becomes aware of the composition of such tribunal or the circumstances justifying the challenge. If the arbitrator who is the subject of the challenge fails to step down within fifteen days from the submission of the application, the application shall be referred, without cost, to the court indicated in Article 9 of this law, which shall decide on the matter by a judgment not open to appeal.

2. A person that has already made a challenge may not make the same application again against the same arbitrator in the same arbitration.

3. The submission of an application challenging an arbitrator shall not entail the suspension of the arbitration proceedings. If the challenge is accepted, the arbitration proceedings already conducted, including the arbitral award, will accordingly be regarded as null and void.

When ruling on challenges in the past, the Cairo Court of Appeal has had occasion to affirm that arbitrators should maintain their independence and their neutrality.42[Page20:]

Some practitioners thought that the 2000 amendment to Article 19 of the 1994 statute meant that challenges should be addressed directly to the Cairo Court of Appeal in international arbitration cases. However, the Court has made it clear that applications should be made in the first instance to the arbitral tribunal and only if the challenged arbitrator does not step down within fifteen days will the file then go to the Court of Appeal for a final and irrevocable decision.43

The Cairo Court of Appeal has also had occasion to rule that a challenge of an arbitrator is premature if presented before the arbitral tribunal has been constituted and would in that case be inadmissible.44

Enforcement of arbitral awards

The final articles (55 to 58) of the 1994 statute concern the enforcement of arbitral awards. In this regard, a distinction needs to be made between international awards and foreign awards. Foreign awards are those awards issued outside Egypt; they are not subject to the 1994 statute. International awards are those awards which satisfy the conditions set forth in Article 3 of the 1994 statute,45 when issued in Egypt or, if issued abroad, when subject to the 1994 statute. Consideration will first be given to the enforcement of domestic and international awards and then to that of foreign awards.

Domestic and international awards

Article 55 states that arbitral awards rendered in accordance with the provisions of the statute shall have res judicata authority and shall be enforceable in conformity with the provisions of the statute. Article 56 assigns the power to issue enforcement orders:

Jurisdiction to issue an order of exequatur with respect to an arbitral award lies with the president of the court referred to in Article 9 hereof or with any of the judges of such court to whom the president may delegate such power.

Article 58(3) states:

The order granting leave for enforcement is not subject to appeal. However, the order refusing to grant enforcement may be subject to a petition lodged, within thirty days from the date thereof, before the competent court referred to in Article 9 of the present statute.

Thus, an order refusing enforcement was open to review but not the enforcement order itself. The Supreme Constitutional Court found such discrimination unacceptable and in 2001 issued a landmark decision declaring Article 58(3) unconstitutional to the extent that it ruled out the possibility of reviewing enforcement orders. The Supreme Constitutional Court referred to Articles 40 and 68 of the Egyptian Constitution which affirm equality before the law and the right of access to the courts. It found no reason to discriminate between an order for enforcement and an order refusing enforcement and invited the legislature to enact the necessary legislation to ensure equality and fairness in the judicial process.

Unfortunately, no text is as yet forthcoming. Pending an amendment, orders granting exequatur and those refusing it have been treated in the same manner. However, a [Page21:] new trend has emerged affirming that, since an order concerning exequatur is issued by the president of the Cairo Court of Appeal or the person to whom the president has delegated power for this purpose, it is to be considered as an urgent decision taken on an ex-parte basis and as such could be reviewed (or withdrawn) by the judge who issued it or by the whole Court.46 As will be seen below, this practice could have an impact on the enforcement of foreign awards.

Foreign Awards

It appears from the introductory note to the 1994 arbitration statute that foreign awards to be enforced in Egypt are subject to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).47 This explains why no specific rules concerning the enforcement of foreign awards were included in the 1994 statute, leaving enforcement of such awards to the rules contained in the 1968 Code of Civil and Commercial Procedure.48 The approach followed by the code is to give precedence to international treaties and conventions between Egypt and other states (Article 301).

The Egyptian Court of Cassation laid down some important principles to serve as guidance for the enforcement of foreign awards. In 1990, in a case involving the enforcement of an ICC award in London,49 the Court of Cassation applied the New York Convention notwithstanding any variance between the rules it contained and those of the Egyptian Code of Civil and Commercial Procedure. The Court stated that the New York Convention had become part of the Egyptian legal system and, according to Article 301 of the Code of Civil and Commercial Procedure, should be applied even when it derogates from the rules contained in that code. In this particular instance, the Court cited the provisions of Article V of the New York Convention as the only grounds for refusing recognition and enforcement of foreign awards. The Court of Cassation confirmed this ruling by a decision dated 23 December 1991 relating to an award made in a case where the place of arbitration was Gothenburg, Sweden.50

Following the enactment of the 1994 statute, Egyptian courts upheld the position taken by the Court of Cassation and reaffirmed it with force. As recently as 29 September 2003, the Cairo Court of Appeal held that the enforcement of foreign awards could be prevented only by proving one of the grounds specified in Article V of the New York Convention and that Egyptian courts could not rule on the setting aside of foreign awards.51 Several other recent decisions have confirmed this trend.52 In one decision the Court dismissed the application to set aside on its own initiative, stating that to do so was part of its inherent jurisdiction.53 The Cairo Court of Appeal has even gone so far as to fine applicants for asking for a foreign award to be set aside.

Recently, Section 91 of the Cairo Court of Appeal has ruled that applications for the enforcement of foreign awards should be decided ex parte by the president of the Cairo Court of Appeal and that there is no need to follow the normal procedure of issuing a writ and commencing a law suit.54 The Court based its decision on Article III of the New York Convention55 and considered that the more lenient procedure under the 1994 statute should be applied to the enforcement of foreign awards. The case concerned an award issued in Bucharest. An ex-parte application for enforcement was [Page22:] made to the president of the Cairo Court of Appeal, who delegated the matter to the president of Section 91 of the Court. An order for enforcement was issued, whereupon a request for the order to be withdrawn was made before the full composition of Section 91 of the Court, presided by the same judge who had ordered enforcement. The decision to enforce foreign awards according to Article III of the New York Convention was upheld, which confirms the existence of a trend to enforce foreign awards by obtaining an order from the president of the Cairo Court of Appeal. There is a need for this matter to be clarified through legislation streamlining enforcement procedures, whether for domestic, international or foreign awards.

1
Enacted on 18 April 1994, the statute was published in the Official Gazette, issue no. 16, on 21 April 1994 and came into force a month later, on 22 May 1994. English and French translations of the statute were published by the Ministry of Justice in 1995 with (in Arabic) a digest of the preparatory work and the records of the People's Assembly, prefaced by Farouk Seif El-Nasr, Minister of Justice.

2
See below.

3
e.g. Oman and Jordan.

4
The quotations from the 1994 Egyptian arbitration statute that appear in this article are generally based on the translation prepared by the Ministry of Justice referred to supra note 1.

5
In a recent case, the Cairo Court of Appeal applied the UNCITRAL Arbitration Rules chosen by the parties, which did not fix a time limit for the issuance of the arbitral award (Cairo Court of Appeal, Section 91, 27 October 2003).

6
The law allows the arbitrators to convene in any place deemed suitable. The Court of Cassation has confirmed the validity of an ICC award bearing the stamp of the Secretariat of the ICC International Court of Arbitration in Paris, and authenticated by the Egyptian Consulate in Paris, while the award was made in London, designated as the place of the arbitration in the arbitration agreement, as permitted by the ICC Rules of Arbitration.

7
Supreme Constitutional Court, 17 December 1994 (Official Gazette, 12 January 1995).

8
Supreme Constitutional Court, 13 January 2003 (Official Gazette, 24 January 2002) and 25 August 2002 (Official Gazette 26 September 2002). Articles 10 and 52-62 of Law 95/1992 and the corresponding articles of the executive regulation were declared unconstitutional.

9
Supreme Constitutional Court, 2 July 1999 (Official Gazette, 15 July 1999).

10
Supreme Constitutional Court, 6 January 2001 (Official Gazette, 18 January 2001).

11
The constitutionality of Article 13 has recently been upheld by the Supreme Constitutional Court, 6 November 1999 (Official Gazette, 18 November 1999), 13 January 2002 (Official Gazette, 24 January 2002), 2 November 2003 (Official Gazette, 13 November 2003).

12
It may be of interest to note that the text of Article 13 as approved in its first reading by the People's Assembly contained an additional provision indirectly giving law courts the power to decide on the validity and existence of arbitral clauses. When deliberating on the statute for the third and last time, the government asked for this provision to be removed. See the record of the People's Assembly, 28 March 1994. This would imply that law courts cannot rule on the validity of arbitration clauses. The matter should be referred to the arbitral tribunal and, once an award has been delivered, application could be made to the courts for the award to be set aside.

13
Article 9 of the 1994 statute reads: 'Jurisdiction to review arbitral matters referred by the present law to the Egyptian judiciary lies with the court having jurisdiction over the dispute. However, in the case of international commercial arbitration, whether conducted in Egypt or abroad, jurisdiction lies with the Cairo Court of Appeal unless the parties agree on the jurisdiction of another appellate court in Egypt.' It should be noted that Article 14 of the statute gives the court referred to in Article 9 the power to order provisional or conservatory measures, whether before the commencement of the arbitral proceedings or while they are in progress.

14
See Court of Cassation, 3 December 1986 (Court Bulletin, 37th year, part 2, 926).

15
Article 53(2) adds that a court seized of an action to set aside an arbitral award, shall, on its own initiative, declare the award null and void if its contents violate public policy in Egypt.

16
This had been accepted by the Court of Cassation even before the 1994 statute.

17
See B. Atallah, 'The Arbitration Agreement under the 1994 Arbitration Law' (2000) 2 Journal of Arab Arbitration 14.

18
Cairo Court of Appeal, Section 91, 27 July 2003; Court of Cassation, Commercial Section, 26 November 2002.

19
French translation: [1998] Rev. arb. 723 (Annot. P. Leboulanger). I respectfully submit that the Chromalloy case was inadequately handled in both Egyptian and French courts, but this is not the place to discuss the matter.

20
Cairo Court of Appeal, Section 7, 7 September 1999.

21
Cairo Court of Appeal, 26 February 2003.

22
Cairo Court of Appeal, 29 January 2003.

23
During discussions before the legislative committee of the People's Assembly prior to the adoption of the 1994 statute, at which the author was present, a committee member proposed that an error in the application of the law should be a ground for setting aside an award. The author objected that such a proposal was misguided. According to other committee members, the concern was that some foreign arbitrators were unwilling to apply Islamic law or laws whose sources lay in the Islamic Shari'ah. By way of compromise, it was decided that if arbitrators do not apply the law agreed upon by the parties, this would be a ground for setting aside the award. The matter was raised again during the plenary session, which, while accepting the new formulation, made a reservation according to which applying the law agreed by the parties in such a way as to denature such law would be regarded as not applying that law. In the author's view, the term law in the compromise solution should be understood widely as a legal system and not a specific law forming part of that legal system. In all events, only very outrageous cases of disregard of the legal system chosen by the parties should lead to the setting aside of an award.

24
Petroleum Development (Trucial Coast) Ltd v. The Sheikh of Abu Dhabi, (1952) 1 I.C.L.Q. 247, 250. See A. Redfern & M. Hunter, Law and Practice of International Commercial Arbitration, 3rd ed. (London: Sweet & Maxwell, 1999) at 113ff. In that award, the arbitrator stated as follows: 'This is a contract made in Abu Dhabi and wholly to be performed in that country. If any municipal system of law were applicable, it would prima facie be that of Abu Dhabi. But no such law can reasonably be said to exist. The sheikh administers a purely discretionary justice with the assistance of the Koran; and it would be fanciful to suggest that in this very primitive region there is any settled body of legal principles applicable to the construction of modern commercial instruments. Nor can I see any basis on which the municipal law of England could apply. On the contrary, clause 17 of the Agreement . . . repels the notion that the municipal law of any country, as such, could be appropriate. The terms of that clause invite, indeed prescribe, the application of principles rooted in the good sense and common practice of the generality of civilized nations - a sort of "modern law of nature".'

25
Cairo Court of Appeal, 26 February 2003. See also Cairo Court of Appeal, 27 November 2002, rightly affirming a court decision appointing a third arbitrator to be final and not open to appeal.

26
Cairo Court of Appeal, Section 91, 29 January 2003. However, the court refused to set aside the award because the issue should have been raised at the outset.

27
Cairo Court of Appeal, Section 91, 27 July 2003.

28
Cairo Court of Appeal, Section 91, 27 November 2002.

29
Cairo Court of Appeal, Section 91, 29 June 2003.

30
Cairo Court of Appeal, Section 91, 27 July 2003.

31
Cairo Court of Appeal, Section 91, 27 November 2002.

32
General assembly of the Consultative Section, opinions of 17 May 1989 and 7 March1993.

33
Supreme Administrative Court, 13 March 1990; Court of Administrative Disputes, 9 December 1990 and 30 January 1991.

34
Opinion of 18 December 1996, published in a selection of opinions over fifty years (Cairo, 1997) at 789.

35
Law No. 9/1997.

36
See opinion of 11 January 1998, State Litigation Journal, 2000, No. 2, 192.

37
See M. Sidhom's article, in Arabic, on the permissibility of arbitration in disputes relating to administrative contracts following the entry into force of Law No. 9 of 1997, State Litigation Journal, 2002, No. 4, 3-15, where the non-retrospective nature of the amendment made to Law No. 27/1994 by Law No. 9/1997 is discussed.

38
People's Assembly Record, 7 March 1994 at 244.

39
In the form in which they were originally approved by the Egyptian Parliament, Articles 18 and 19 read as follows. Article 18: '1. An arbitrator may not be challenged unless circumstances arise which cast serious doubts on the arbitrator's neutrality or independence. 2. Neither party may challenge the arbitrator it appointed or in whose appointment it participated except for reasons it discovers after making such appointment.' Article 19: '1. The challenge shall be made by written application to the arbitral tribunal, giving reasons, within fifteen days following the date on which the applicant becomes aware of the composition of such tribunal or the circumstances justifying the challenge. If the arbitrator who is the subject of the challenge fails to step down, the arbitral tribunal shall issue a decision on the application. 2. A person that has already made a challenge may not make the same application again against the same arbitrator in the same arbitration. 3. The party making the challenge may appeal against the decision refusing its application, within thirty days of being notified thereof, in the court referred to in Article 9, whose judgment shall not be open to appeal. 4. Neither the submission of an application challenging an arbitrator nor an appeal against the arbitral tribunal's decision rejecting such application shall entail the suspension of the arbitration proceedings. If the challenge is accepted, whether by the arbitral tribunal or the court in which the appeal is made, the arbitration proceedings already conducted, including the arbitral award, will accordingly be regarded as null and void.'

40
Supreme Constitutional Court, 6 November 1999 (Official Gazette, 18 November 1999).

41
By Law No. 8/2000.

42
In a case where the losing party discovered, only when the award was being enforced, that the arbitrator chosen by the other party was in fact that party's lawyer, this was a sufficient ground for setting aside the award. Cairo Court of Appeal, 25 November 1998. In another case where the losing party knew from the very beginning that the arbitrator worked as a lawyer for the winning party, the court refused to annul the award. According to the court, the losing party should have raised this issue at the very beginning of the procedure. Cairo Court of Appeal, 30 April 1998.

43
Cairo Court of Appeal, Section 91, 29 June 2003.

44
Cairo Court of Appeal, Section 91, 26 June 2002.

45
Article 3 reads: 'Arbitration is international within the meaning of this statute when it concerns a dispute relating to international trade, which will be so in the following cases: 1. If the respective head offices of the parties to the arbitration are situated in two different countries at the time the arbitration agreement is signed. If either of the two parties has more than one business centre, the one most closely linked to the subject matter of the arbitration agreement shall be taken into account. Should either of the two parties not have a business centre, then that party's usual place of abode shall be taken into account. 2. If both parties to the arbitration have agreed to resort to a permanent arbitration organization or an arbitration centre having its headquarters in Egypt or abroad. 3. If the subject matter of the dispute covered by the arbitration agreement is linked to more than one state. 4. If the respective head offices of the parties to the arbitration are located in the same country at the time the arbitration agreement is signed, and one of the places listed hereinunder is located outside such country: a) the place designated as the seat of arbitration in the arbitration agreement, or whose manner of designation is referred to therein; b) the place in which an essential component of the obligations arising from the commercial relationship between the parties is to be performed; c) the place most closely linked to the subject matter of the dispute.'

46
See Cairo Court of Appeal, 30 March 2002.

47
See Ministry of Justice, Legislation Section, Law No. 27 of 1994 promulgating the law on arbitration in civil and commercial matters (Cairo, 1995) at 51.

48
For a brief overview of the 1968 Code of Civil and Commercial Procedure, see B. Atallah, 'Le Code de procedure civile et commerciale de 1968 de la R.A.U.' [1969] R.I.D.C. 584 at 586. (R.A.U. is the old name for the Arab Republic of Egypt.)

49
Court of Cassation, 16 July 1990 (Court Bulletin, 41st year, 434) concerning enforcement of an ICC award (ICC case 4035, award of 28 February 1983).

50
Court Bulletin, 42nd year, vol. 2, 1954.

51
Cairo Court of Appeal, Section 91. This decision could be considered as a departure from an earlier decision rendered by Section 64 of the same Court on 30 July 2001, setting aside an ICC award (made in ICC case 9928).

52
e.g. decisions of 26 March 2003 concerning a Korean award, and 29 September 2003 concerning an ICC award.

53
Cairo Court of Appeal, Section 91, 29 January 2003 (made in ICC case 11294).

54
It should be noted that the procedure for the enforcement of foreign awards defined in Articles 297 and 299 of the Code of Civil and Commercial Procedure consists in bringing an action in the ordinary way, in the court of first instance at the place where enforcement is sought.

55
New York Convention, Article III: 'There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.'