The Egyptian legal system is greatly influenced by the French Civil Code System. The main comprehensive code in Egypt is the Civil Code No. 131 for the year 1948 that covers vast types of transactions between individuals including personal rights, contracts, obligations and torts.
However, the previously mentioned Code is supplemented with other codes that regulate certain types of transactions as the Commercial Code No. 17 for the year 1999, the Code of Civil and Commercial Procedures No. 13 for the year 1986, the Companies’ Code No.159 for the year 1981, and the Penal Code No. 58 for the year 1937, etc.
It should be mentioned that the Egyptian Administrative Law has a distinct court system that deals with governmental and public bodies’ transactions entered into for public benefit and not for private benefits of individuals.
Despite the tendency of parties of serious commercial disputes to settle their disputes through arbitration according to Arbitration in Civil and Commercial Matters Law (No. 27 for the year 1994), they may choose to settle their disputes through the common method of dispute resolution which is the litigation method.
According to the Code of Civil and Commercial Procedures No. 13 for the year 1986 and its amendments, the jurisdiction of courts in civil and commercial cases are as follows:
Article 42: The District Court shall have primary jurisdiction in civil and commercial cases not exceeding the value of forty thousand pounds. The judgment shall be final if the value of the case does not exceed five thousand pounds.
Article 47: The Court of First Instance shall be competent in all civil and commercial cases which do not fall within the jurisdiction of the District Court and its judgment shall be final if the value of the case does not exceed forty thousand pounds.
It is also competent to adjudicate in appeal cases upon judgments rendered initially by the District Court or by the judge of summary proceedings.
Article 48: The Court of Appeal shall have the power to adjudicate in appeal cases upon judgments rendered initially by the courts of first instance as well as the judgments rendered by the district courts in the cases stipulated in paragraph 6 of Article 43 of this law.
Article 49: The competent court shall be that with local jurisdiction over the place of the defendant’s domicile unless the law provides otherwise.
Article 55: In commercial matters, the competent court shall be the court where the domicile of the defendant lies or the court in the place where the agreement has been entered into and executed wholly or partially or the court in the place where the agreement must be executed.
Article 56: In disputes relating to the supply, construction, rent of houses, wages of workers and manufacturers, the competent court shall be the court where the domicile of the defendant lies or the court in the place where the agreement has been entered into and executed provided that it is the same as that of the plaintiff’s domicile.
It should be noted that by the end of 2008, special economic courts took up certain types of activities related to commercial disputes as commercial agencies, intellectual property and other matters (Law No. 120 of 2008).
Rights of audience
Lawyers in Egypt can only practice the legal profession through obtaining a license to be admitted before courts. This license is obtained through the Egyptian Bar Association after full filing its requirements such as holding a law degree from a reputable Egyptian university and being of Egyptian nationality. In Egypt, each court level requires certain experience in the Lawyer in order to admit him before it.
Foreign lawyers may be admitted before Egyptian courts only if there exists a treaty of reciprocity between Egypt and the foreign country.
The time limits for bringing civil claims are stated in the Civil Code No. 131 for the year 1948 and its amendments, while time limits for bringing commercial claims are stated in the Commercial Code No. 17 for the year 1999 and its amendments.
- The general limitation stated in the Civil Code is the expiration of right after 15 years from the date on which such right arose subject to some exceptions stated as follows:
- Civil Code Article 375: The right to sums recurring periodically such as rent, interest, periodical payments, salaries, wages and pensions expire after five years, even if the debt is admitted by the debtor. However, debt sums recurring periodically in respect of bad faith debtor expire after 15 years.
- Civil Code Article 376: The fees of physicians, pharmacists, lawyers, engineers, experts, trustees in bankruptcy, brokers, professors or teachers expire after five years, provided that such fees are due as remuneration for work conducted within the scope of their professions or in payment of expenses incurred by them.
- Civil Code Article 140: The right to annul a contract expires within three years from the date on which a party becomes entitled to annul such contract.
- Civil Code Article 434: The right of a purchaser to request a reduction in the price/the excess paid, or cancellation of contract in respect of deficient sold items expires one year from the date of actual delivery of the item sold.
- Civil Code Article 452: Breach of warranty claims expire one year from the date of delivery of the sold item, even if the purchaser discovers the defect after the expiration of this period, unless the seller agrees to be bound by the warranty for a longer period
- Claims related to an administrative decision issued by the Government expire 60 days from the date of the decision.
- Upon termination of a commercial agency, an agent must start an action within 90 days.
Commercial Code Article 190-1 The compensation court action referred to in the previous articles shall abate with the lapse of ninety days from the time of deed termination.
- All other actions resulting from the contract agency deeds shall abate with the lapse of two years from termination of the contractual relation.
- Claims relating to sellers’ warranties on hidden defects must be brought within one year of delivery.
Commercial Code Article 254-1: All court action arising from an object-transporting contract shall become subject to prescription with the lapse of one year from the date of delivering the transported object to the consignee, or to customs, or to the trustee appointed by the judge, in order to store the transported object. In case of total destruction of the object, the period shall begin from the lapse of the time prescribed in clause-2 of article (240) of this law.
- In construction contracts, the employer must start an action based on decennial liability within three years of the defect becoming apparent or the collapse occurring.
- Various periods apply to actions on commercial instruments.
- Tort liability is generally subject to a three-year limitation period, from the date of knowledge of the damage and the identity of the person responsible for it.
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 184: The court, upon awarding the judgment ending the dispute, shall decide on its own behalf the expenses of the case and these expenses shall be paid by the convicted opponent and the lawyer fees shall be included therein.
Consequently, the litigation fees are not a fixed amount and lawyers feel free to set their own fees which may be apart from the success fees.
Success fees have a maximum limit of 20% of the value of the claim and are usually charged as a fixed percentage of the damages recovered or as a fixed pre-agreed success fee.
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 101: The pleading shall be public unless the court decides, on its own initiative or at the request of one of the litigants, to conduct it in secret in order to preserve the public order or to observe the ethics or the family privacy.
However, only the parties and their lawyers can access court files.
Commencement of proceedings
In commercial or contractual claims, the claimant may file their claim with the competent court but only after he serves a notice to the defendant and allows him a grace period to fulfill his obligations amicably. In case the defendant insists on breaching his obligations, the claim is filed by registering a statement with the court clerk and the court bailiff must deliver a copy of the claim to the defendant and inform him or her of the time and date of the hearing.
After the defendant receives the statement of claim, the case progresses with adjournments in order to allow the parties to submit their arguments. They may take a few weeks or several months.
The court may rely on experts regarding technical matters.
Litigation process timetable
The Code of Civil and Commercial Procedures No. 13 for the year 1986 determines the procedural timetable which the parties may not interfere in. However, parties may use tactics which deliberately slow down the process.
The court process is usually slow and complex. First instance proceedings usually take two to three years. Appeals could take up to two years. In commercial and civil matters, a further appeal may be made on errors of law to the Court of Cassation.
The process timetable depends mainly upon the nature of the case and the judge.
Since 2008, the formation of Economic Courts has reduced the period that courts may take in reviewing cases to determine their jurisdiction upon it.
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 82: If the plaintiff or the defendant do not attend the hearing, the court shall issue a judgment in the case if it is valid for judgment or else it is dismissed. If sixty days have elapsed and neither of the litigants have demanded to proceed or attended after proceeding with the case, it is considered as null and void from the beginning.
This can have serious consequences if limitation periods apply, as the right of claim may be lost.
The Code of Civil and Commercial Procedures No. 13 for the year 1986 allows the parties to provide their evidence when filing the claim or defense; however, it is delayed until the trial where parties present both the oral and documentary evidence on which they rely. There is no requirement for a party to provide evidence which may assist his opponent’s case.
Any party can request the court to order disclosure of a specific document on two conditions which are identifying the document in reasonable detail and showing how material and relevant it is to the case.
Examination of witnesses
Egyptian Evidence Law No. 25 for the year 1968 as amended by the Law No. 23 for the years 1992 and the Law No. 18 for the year 1999 – Article 87: The questions shall be directed to the witness by the court or the judge. The witness shall answer the questions of the opponent who claimed his testimony first and then the questions of the other opponent without any of the opponents interrupting one another or the witness at the time of the testimony.
Appointment of experts
Egyptian Evidence Law No. 25 for the year 1968 and its amendments – Article 135 provides for the Court’s ability to appoint one or three experts upon necessity.
The court may, upon its own discretion or upon any of the parties’ request, appoint experts. However, parties can also submit expert evidence.
Experts appointed by the court rely on the court while experts’ evidence submitted by the parties are considered as representatives of the parties’ interests.
Experts’ reports can be challenged. Upon such challenge, the court may refer issues back to the same experts or re-assign them to different experts.
The party who requests the appointment of experts usually pays the experts’ fees while in case the court appoints the experts on its own initiative, experts’ fees are divided among parties equally.
Court structure and grounds for appeal
- Judgments of the Court of First Instance are appealed through the Court of Appeal. Appeals can be based on errors of fact or errors of law.
- Judgments of the Court of Appeal are further appealed through the Court of Cassation. Appeals can be based on errors of law only.
- Judgments of the Administrative Court are appealed through the High Administrative Court.
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 227: The appeal shall take place within forty days after the judgment was rendered unless the law provides otherwise.
The appeal shall take place within fifteen days after the judgment was rendered in the summary proceedings, whatever the court that rendered the judgment.
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 252: The appeal through the Cassation Court shall take place within sixty days after the judgment was rendered.
The court obliges the unsuccessful party to pay court fees which are a certain percentage of the final judgment including the lawyer’s fees.
It should be mentioned that in order to prevent frivolous actions, the Ministry of Justice raised court fees in 2009.
Enforcement of a local judgment
Code of Civil and Commercial Procedures No. 13 for the year 1986 – Article 279: The court bailiffs shall carry out enforcement and they shall be bound to act upon a request from an enforcement judge once the writ of enforcement has been delivered to the authority responsible for the enforcement of judgments.
One of the method of delaying execution is a contestation case for stopping execution for a period of time.
Choice of law provisions in Egypt
The choice of law provisions are applied by Egyptian courts. However, there are certain statutory provisions that require the mandatory application of the Egyptian law on the subject matter such as rights of commercial agents upon termination or refusal to renew the agency for unjustified reasons to demand compensation as well as technology transfer agreements which are subject to the mandatory application of the Egyptian law.
Enforcement of a foreign judgment
Egypt is a party to a number of bilateral treaties and multilateral treaties concerning judicial enforcement. For a foreign court judgment to be enforced in Egypt, the court issuing it should have a valid jurisdiction upon the case and there should exist a treaty of reciprocity between Egypt and the country where the foreign court that rendered the judgment lies.
Direct enforcement is not allowed and a court case must be filed in order to obtain an enforcement judgment, however, this requirement may not be needed if there exists a treaty of direct enforcement between Egypt and the other country.
Alternative dispute resolution
Arbitration is the most recognized method of dispute resolution in Egypt other than the long common litigation process. It is becoming an increasingly important method of settling commercial and investment disputes. Arbitration in Egypt is regulated by a distinct law which is the Law No. 27 for the year 1994 concerning Arbitration in Civil and Commercial Matters. Article 1 of this law determines its scope of applicability that includes both local and international arbitrations stating the following:
Subject to the provisions of international conventions applicable in the Arab Republic of Egypt, the provisions of this Law shall apply to all arbitrations between public or private law persons, whatever the nature of the legal relationship around which the dispute revolves, when such an arbitration is conducted in Egypt, or when an international commercial arbitration is conducted abroad and its parties agree to submit it to the provisions of this Law.
Moreover, this law provides a comprehensive framework for the arbitration process in the country. However, the Egyptian statutes do not recognize other ADR methods.
Despite the existence of rules regarding other ADR methods including mediation and conciliation in the Cairo Regional Centre for International Commercial Arbitration (CRCICA), these rules have no mandatory nature.
The Egyptian law does not require the parties to consider ADR methods; however, the parties may agree according to their own will to submit to these methods by way of contract.
The main arbitration institution in Egypt is the Cairo Regional Centre for International Commercial Arbitration (CRCICA) which offers arbitration, mediation and conciliation services and has adopted rules to regulate their procedures.