Post-judgment and Post-award Enforcement Issues in Egypt

This article will discuss enforcement-related issues in Egypt. The main focus is to highlight the challenges in practice in connection with enforcing a favourable decision, whether in litigation or arbitration proceedings. In this regard, the focus of this article is on the events superseding the obtaining of an exequatur and how collecting the due amount from the judgment/award debtor may still be a conundrum.

The article will be threefold. The first part will discuss the enforcement of court judgments in litigation proceedings. This part will give an insight into the matter of debt collection and outline how to deal with this issue. The second part will discuss the challenges in connection with the enforcement of arbitral awards in Egypt. These challenges include the attachments of assets, their differences and the judicial fees that may be incurred when enforcing an arbitral award in Egypt after obtaining the exequatur. Finally, the third part will cover the issue of the costs of enforcement in Egypt.

While collecting a debt in Egypt, a creditor may face various challenges that must be taken into consideration. Among these challenges are the following.

In light of the above, in order to guarantee the collection of the debt resulting from a contractual relation, it is advisable to obtain commercial paper (either bank cheques or promissory notes) as a guarantee mechanism alongside the contract itself.

The main issue that may face the claimant when enforcing arbitral awards is their eligibility for the attachment of assets.

The provisions for attachments of assets, whether provisional or executive, are the same for arbitration and litigation under Egyptian law. In this regard, the Code of Civil and Commercial Procedures (CCCP) did not distinguish between arbitration and litigation or impose any special requirements for attachments in arbitration cases. Furthermore, the lack of provisions on the attachment of assets in the Egyptian Arbitration Law (EAL) provides that the same principles are applied in both litigation and arbitration.

A creditor who fears that the debtor will dispose of their assets may submit a petition for a provisional attachment of assets if the creditor has yet to obtain a final arbitral award. Moreover, if the claimant already possesses a final arbitral award along with the exequatur, then the claimant may resort to a provisional or an executive attachment of assets to secure its right from the respondent.

In a Court of Cassation case, the court acknowledged that the claimant had affected a provisional attachment of assets to secure its rights by virtue of a foreign arbitral award, as the claimant had already obtained an exequatur and an attachment order. However, it must be noted that if the claimant obtains an arbitral award and intends to initiate an attachment of assets with respect to the respondent’s assets without obtaining an exequatur, certain complications may arise.

In a 2019 judgment, an Egyptian court highlighted an important issue concerning the provisional attachment of assets in arbitration. The court found that the creditor initiated the attachment process without obtaining an attachment order from the enforcement court, which rendered the attachment procedures invalid as the arbitral award in question was not granted an exequatur. Thus, the court held that, in arbitration, the claimant can initiate the provisional attachment of assets process by obtaining an attachment order from the enforcement court, without the need for a final arbitral award. However, to initiate the provisional attachment process without an attachment order, the claimant must possess a final arbitral award and an exequatur. This judgment seems to place arbitration at a disadvantage when compared with litigation, as it effectively closes the door to file for provisional attachment of assets before the issuance of an exequatur, which gives the debtor plenty of time to dispose of its own assets.

Nevertheless, filing for attachment of assets does not guarantee that the claimant will obtain it; the respondent may still challenge the validity of the order and may, in some cases, claim to nullify the attachment altogether. 

Judicial fees are fees that the parties may still be obliged to pay in addition to the arbitration fees. These fees may be due either to a party filing an enforcing claim in order to obtain an exequatur or to the other party filing for an annulment of the arbitral award.

Judicial fees are usually a percentage calculated based on the value of the claim itself. However, in some rare cases, a claim may be deemed unquantifiable, and a fixed fee will be determined.

In enforcement claims, and after the Court of Cassation issues its decision, the losing party will bear the judicial fees for the enforcement claim. The losing party may try to challenge the exequatur on which the other party based their enforcement claim; however, this will also lead to additional judicial fees.

Moving onto the annulment claims (ie, claims tackling the validity of the procedures), the losing party in this case will also bear the judicial fees. An issue that may face the parties is identifying whether the claim is a quantifiable claim, as this will indicate whether to apply a variable fee.

As for the challenging of the judicial fees order, the eligibility of the order to be challenged and the time limit for challenging it must be considered. The eligibility of the order shall be based on the same criteria as the annulment judgment excluding the amount of the judicial fees. It must be noted that the time limit for challenging such orders is eight days from the day of notification; outside this limit, it will be deemed inadmissible.

Another main issue concerning enforcement is that it shall be subject to a proportional judicial fee amounting to 5% of the value of the dispute, as stated in Articles 1 and 43 of the law No 90 of 1944 concerning the Judicial Fees for Civil Claims, whenever this value exceeds USD200. An insignificant portion of the proportional fee is paid by the claimant, and the rest of it is incurred by the party who loses the case, whether that is the claimant or the respondent.

Whatever the type of the exequatur (ie, for a court judgement or an arbitral award), recourse to the Egyptian judiciary to request the enforcement will eventually be necessary.

Enforcing a judgment or an arbitral award in Egypt is subject to certain fees, including the following.

Thus far, this article should have provided an understanding of the difference between the enforcement issues in litigation and arbitration. The issues in litigation are mainly the lengthy period of time the procedures take and how, even after asserting the creditors right to the debt, in most cases the creditor may still face other issues when trying to collect the debt, such as issues locating the debtor or difficulties arising from the debtor not having sufficient money or assets to pay off their debt. As for arbitration, the main issue is the eligibility of attachment of assets, where the claimant will lose their right to collect the debt if this is missing.

Finally, before commencing either litigation or arbitration procedures, it is best to take any necessary steps to ensure the smoothness of the collection of debts by ensuring that the debtor's has sufficient assets that can be located, and that an attachment order is obtained from the relevant enforcement court in arbitration cases.