EGYPT: An Overview of the Arbitration Market and Recent Trends

Egypt: An Overview of the Arbitration Market and Recent Trends

This article provides a bird’s eye view of the profound changes that the Egyptian arbitration market has witnessed over the last ten years.

Egypt has a rich and long-standing arbitration tradition: in 1959, it became the first Arab country to accede to the New York Convention, before acceding to the ICSID Convention in 1972. Its Arbitration Law, promulgated in 1994, largely inspired many Arab arbitration regimes thereafter. But the Arab Spring uprisings were a transformational force that propelled Egyptian arbitration to previously unimagined heights – into a vibrant era shaped by a new generation of cosmopolitan practitioners. Egyptian arbitration today is young, cosmopolitan and increasingly inclusive. Its resilience and adaptability, first demonstrated in the aftermath of the Arab Spring, are now once again being put to the test in the wake of the COVID-19 pandemic and the 'new normal.'

Overview: How Egypt Aced the Test of the Arab Spring

If the past ten years have demonstrated anything, it is that Egypt aced the test of the Arab Spring. The uprisings erupted at a time when foreign investment into the country was sky-high. In their wake, Egypt faced a flood of investment treaty claims. Between March and December 2011, four claims were registered against the Egyptian state at ICSID. Between 2011 and 2014, the Egyptian Government faced 37 international and domestic arbitration cases, worth USD14.3 billion, in comparison with approximately two cases per year prior to the uprising.

This challenge proved a positive chapter for the Egyptian arbitration landscape. First, it is important to note that this volume of claims arose from the fact that Egypt had – and still has – the largest number of bilateral investment treaties (BITs) of any Arab country, having signed 115 BITs to date. Second, Egypt handled these claims with ample sophistication, by maintaining all its international commitments in relation to foreign investor protection, largely adopting a policy in favour of settlement, and maintaining all of its BITs. Furthermore, Egypt resisted the urge to withdraw from the ICSID Convention, and in turn, saw its arbitration community flourish.

Since 2011, Cairo has firmly established itself as a regional arbitration hotspot and has been the seat of multiple billion-dollar claims. The Cairo Regional Centre for International Commercial Arbitration (CRCICA), established in 1979, is the oldest arbitration centre in the Middle East and Africa. In the more than three decades from 1979 to 2011, it administered a total of 792 cases. In the years since the uprisings, this number has risen to over 1,500 cases – nearly double the number of cases administered in the previous 30 years – many with international elements.

The rankings further attest to the transformational impact of the Arab Spring. Of the nine Egyptian arbitration firms ranked in the Chambers Global Guide, two are boutique firms established after the Arab Spring, while the remaining seven saw the growth of well-regarded arbitration practices after 2011. What the rankings also demonstrate is that a generational shift has occurred in the structure of this growing arbitration community: Egyptian arbitration has become increasingly inclusive of young practitioners. Both Star Individuals are in their forties, most other individuals ranked in the guide are in their forties and fifties, while the up-and-coming individuals are both in their mid-thirties.

Another critical step forward for Egyptian arbitration is the growing role of women, who are prominent in particular in the Foreign Practitioners rankings. However, Egyptian arbitration still has a way to go in terms of women’s inclusion, and the author hopes to see more women ascend to leadership positions in the coming years.  

Latest Trends: COVID-19, challenges and advances

As with the test of the Arab Spring, Egypt has proven able to stand up to the challenge of COVID-19. In response to the obstacles brought forth by the pandemic, the CRCICA swiftly undertook to offer guidance notes to arbitration users regarding the conduct of new and ongoing proceedings. Namely, arbitration users were encouraged to file notices of arbitration, written submissions and exhibits online via email. Hearings are also, to the greatest extent possible, conducted virtually, in line with Articles 17.1 and 28.4 of the CRCICA Arbitration Rules.

From 1 April to 31 December 2020, a total of 56 hearings were held at the CRCICA, of which nearly 50% were fully or partially remote, and the remainder were held with minimal in-person attendance. The positive impact of these procedural measures was swiftly reflected in the number of cases administered by CRCICA in 2021: in the first quarter of 2021, 32 new cases were filed compared with 16 new cases filed in the first quarter of 2020. By the second quarter of 2021, this number rose to 56 cases, a record high for the Centre.

My concluding thought is that if this was the state of Egyptian arbitration, what remains to be done is for law firms to allow bigger roles for younger practitioners and women and let them occupy more leadership roles within arbitration practices. By way of general thought, the changes that the Egyptian arbitration scene has witnessed are irreversible. There is a new dawn and we, as Egyptian practitioners, should all march in its direction.