Egypt / 26 February 2003 / Cairo Court of Appeal / Cairo for Real Estate Company v. Abdel Rahman Hassan Sharbatly / 23/119
| Country | Egypt |
| Court | Egypt, Cairo Court of Appeal |
| Date | 26 February 2003 |
| Parties | Cairo for Real Estate Company v. Abdel Rahman Hassan Sharbatly |
| Case number | 23/119 |
| Applicable NYC Provisions | V | I | III | V(1)(e) |
| Languages | English |
| Summary | On 7 March 1977, Cairo for Real Estate Company (“CREC”) and Abdel Rahman Hassan Sharbatly (“Mr. Sharbatly”) concluded a contract for the establishment of the Egyptian Saudi Company for Real Estate. Article 33 of the contract provided that all disputes arising from the contract’s interpretation or application shall be settled by arbitration and that the arbitral tribunal shall determine the rules and procedures which are to be followed when settling the dispute in accordance with the laws and regulations applicable in the Kingdom of Saudi Arabia. After a dispute arose between the Parties, they concluded a further arbitration agreement on 12 March 1988 providing that hearings shall be held in Jeddah, Saudi Arabia and that the Saudi Arbitration Law shall apply. On 6 January 1999, an arbitral award was issued in favor of Mr. Sharbatly. CREC challenged the award before the Board of Grievances in the Jeddah / Mecca Region which, in a decision of 27 November 2000, cancelled part of the arbitral award and granted enforcement to the remaining part. CREC filed a lawsuit before the Cairo Court of Appeal, requesting the suspension of the enforcement of the award and its setting aside. Mr. Sharbatly objected to the jurisdiction of the Cairo Court of Appeal given that the Egyptian Arbitration Law is not applicable to the dispute. The Court accepted Mr. Sharbatly’s jurisdictional objection. It concluded that, as the Parties agreed that Saudi Arabia would be the place of arbitration and that Saudi Arbitration Law would apply, the arbitration between the Parties was not subject to the Egyptian Arbitration Law and Egyptian Courts lacked jurisdiction to rule on requests for the setting aside of the award. The Court added that it is a general principle that the jurisdiction of State Courts is limited to requests for the setting aside of arbitral awards which are issued in its territory and that, as Egypt acceded to the NYC by Presidential Decree No. 171/1959, the NYC is applicable as is any other law of the Egyptian State even when it contradicts the Egyptian Code of Civil and Commercial Procedure or Arbitration Law. The Court deducted from Articles I, III and V(1)(e) NYC that foreign arbitral awards are linked to the legal regime of the State where they were issued and that, therefore, only the Courts of the place of arbitration have jurisdiction to rule on requests for setting aside. Accordingly, the Cairo Court of Appeal decided that it lacked jurisdiction to rule on CREC’s challenge. |
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