Egypt / 29 September 2003 / Cairo Court of Appeal / Engineering Industries Company & Sobhi A. Farid Institute v. Roadstar Management & Roadstar International / 22/119
| Country | Egypt |
| Court | Egypt, Cairo Court of Appeal |
| Date | 29 September 2003 |
| Parties | Engineering Industries Company & Sobhi A. Farid Institute v. Roadstar Management & Roadstar International |
| Case number | 22/119 |
| Applicable NYC Provisions | V | III | V(1)(e) |
| Languages | English |
| Summary | On 1 April 1996, a contract for the transfer of know-how was concluded and contained an arbitration agreement providing for arbitration in Lugano, Switzerland according to the Rules of the International Chamber of Commerce (the “ICC Rules”). On 4 February 2002, an arbitral award was rendered by a sole arbitrator applying Swiss Law and ordered Engineering Industries Company and Sobhi A. Farid Institute to pay damages to Roadstar Management and Roadstar International who then requested enforcement of the award before the North Cairo Court of First Instance. On 9 April 2003, Engineering Industries Company and Sobhi A. Farid Institute (“the Claimants”) filed a lawsuit before the Cairo Court of Appeal, requesting the suspension of the enforcement of the award and its setting aside. Roadstar Management and Roadstar International (“the Respondents”) objected to the jurisdiction of the Cairo Court of Appeal on the basis of Article 1 of the Egyptian Arbitration Law and Article V NYC, claiming that the Egyptian Arbitration Law is not applicable to the dispute given that the arbitration was held in Lugano and the Parties did not agree on submitting it to the Egyptian Arbitration Law. The Court accepted the Respondents’ jurisdictional objection. It noted that the application of the Egyptian Arbitration Law is limited by its Article 1 to arbitration proceedings held in Egypt and international arbitration proceedings which the Parties agreed to submit to the Egyptian Arbitration Law and that this position corresponds to Egypt’s commitment under the NYC to recognize and enforce foreign arbitral awards, as well as to the Parties’ agreement to hold arbitration proceedings outside of Egypt without submitting them to the Egyptian Arbitration Law, which entails that they agreed that their dispute should escape the jurisdiction of the Egyptian Courts. The Court deducted from Articles III and V(1)(e) NYC that only the Courts of the State where the award was issued have jurisdiction to rule on requests for its setting aside. As Egypt acceded to the NYC by Presidential Decree No. 171/1959, the provisions of the NYC are applicable even when in contradiction with the Egyptian Code of Civil and Commercial Procedure and Arbitration Law. The rule that Egyptian Courts lack jurisdiction to rule on requests for the setting aside of foreign arbitral awards is a rule relating to jurisdiction and may be applied by the Court sua sponte. Since the arbitral award challenged by the Claimants was issued in Lugano, Switzerland and no evidence suggested that the Parties agreed on the application of the Egyptian Arbitration Law, this law does not apply to the arbitral award and Egyptian Courts lacked jurisdiction to rule on the request for its setting aside. Accordingly, the Court of Appeal decided that it lacked jurisdiction to rule on the Claimants’ challenge. |
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