Author: Malak Yasser
In a significant development for international commercial arbitration in Egypt, the Cairo Regional Centre for International Commercial Arbitration (herein referred to as the “CRCICA” or the “Center”) has recently adopted its revised Arbitration Rules, which entered into force as of the 15th of January of 2024 (the “New Arbitration Rules”).
Following their adoption by the Center’s Board of Trustees on the 20th of December 2023, the New Arbitration Rules mark the realization of a significant development within the international commercial arbitration community.
With over 1,600 registered cases as of December of 2022, CRCICA’s adoption of the New Arbitration Rules reflects the Center commitment to adapting to the ever-evolving needs of the arbitration community in Egypt and in the MENA Region. This update is particularly important as the Center’s previous rules, established in 2011, had been in place for over a decade.
Noteworthy is that both the previous CRCICA arbitration rules of 2011 as well as the New Arbitration Rules are adopted based on the arbitration rules of the United Nations Commission on International Trade Law (the “UNCITRAL Model Arbitration Rules”).
Now that the New Arbitration Rules have come into effect, this article aims to dive into the key additions and enhancements introduced by such rules. In this regard, the New Arbitration Rules notably include the following:
1. Online Filing of Cases:
Articles 3(6) and 4(4) of the New Arbitration Rules provide the arbitration parties with the possibility of filing a notice of arbitration (the “NoA”) and a response to the notice of arbitration (the “RNoA”) in an online format via completing a pre-prepared form available on CRCICA’s website.
As currently available on CRCICA’s website, the online filing procedure permits claimant(s) to obtain a temporary application code serving as reference number until the case is effectively registered with a permanent case number.
Throughout the course of the online filing procedure, CRCICA emails the parties, respectively, with either a confirmation that the required information and documents have been satisfied or requesting a prompt completion of any missing requirements.
However, it should be noted that this online filing does not absolutely preclude any physical communication of documents. After the respective confirmation of both submissions, CRCICA shall require both parties to communicate hard copies for the previously electronically submitted documents.
2. Tech-Oriented Arbitration Procedures:
A progressive approach is clearly shown through Article 28(2) of the New Arbitration Rules which provides that hearings may be held in person, remotely by videoconference or via a hybrid format or any other appropriate means.
Further, the New Arbitration Rules provide in its Article 17(3) that the arbitral tribunal may utilize any technological means it deems appropriate to conduct the arbitration proceedings.
3. Disclosure of Third-Party Funding:
The New Arbitration Rules require, in its Articles 3(3)(i) and 4(1)(d), the identification of funding agreements and the identity of any third-party funder (if any) in the NoA and the RNoA.
This particular addition clearly showcases CRCICA’s efforts to adapt to the practical reality whereby in recent years numerous problems regarding the non-disclosure of third-party funders identities in arbitration proceedings have been witnessed. This requirement is further provided and emphasized on under Article 53 of the New Arbitration Rules. The said addition particularly voices CRCICA’s efforts in taking into account provisions of other leading arbitration rules such as the International Chamber of Commerce (the “ICC”) arbitration rules.
4. Early Dismissal of Claims:
Article 52 of the New Arbitration Rules grants the arbitral tribunal, the power to decide upon the early dismissal of one or more points whereby it deems that it is manifestly without legal merit.
5. The Center’s Decision Not to Proceed with the Nomination of a Failing Arbitrator’s Appointment:
Article 12(3) of the New Arbitration Rules provides a remarkable addition to the provisions pertaining to the appointment of arbitrators. This provision grants the Center, upon the approval of its Advisory Committee, the right to decide not to proceed with the appointment of an arbitrator chosen by either party whereby it deems that this arbitrator has shown past failure(s) to comply with his/her duties under the Rules. This addition, therefore, marks a disciplinary sanction posed on failing arbitrators who are not committed enough to their duty as arbitrators.
6. The Repetition of Hearings in the event of the Replacement of an Arbitrator
While retaining the core of the previous Article 15 of the 2011 arbitration rules, Article 16 of the New Arbitration Rules has provided a minor addition that, however, provides great improvements in comparison to the previous rules.
In this regard, Article 16 of the New Arbitration Rules allows the arbitral tribunal to consult with the parties in order to decide whether and to what extent the hearings are to be repeated after the appointment of a substitute arbitrator. Adding further that, unless otherwise agreed upon by the parties, at least one hearing shall be held in the presence of the substitute arbitrator.
This amendment holds a particular significance in light of the established Egyptian judicial precedent on this front. In this regard, the Cairo Court of Appeal, challenges No. 123 and 124 of the Judicial Year 121, affirmed by the Court of Cassation’s ruling on challenge No. 4083 of the Judicial Year 77, laid out a public policy rule entailing the nullity of arbitral awards rendered without scheduling any hearings in which the substitute arbitrator is present. The Egyptian Courts have based their findings upon article (167) of the Civil and Commercial Procedure Code which invalidates judgments made by judges who were not present during deliberations.
Therefore, this minor addition should allows the parties to consent to the validation of the arbitral hearings already concluded after the said replacement is made, offering thus an efficient solution to avoid possible disruptions and delays to the arbitration procedure as well as future annulments of arbitral awards in the event of non-repetition of the hearings without validation from the parties.
7. Joinder and Consolidation
Considerable attention should be paid to Article 17 of the New Arbitration Rules as it introduces the joinder and inclusion of one or more third parties in the arbitration proceeding, subject to specific conditions. In this regard, the New Arbitration Rules provide that in the event of a joinder, the latter should not prejudice any other third party as well as not affect the constitution of the arbitral tribunal.
Moreover, the New Arbitration Rules introduce in its Article 50 the possibility for a party to request the consolidation of two or more pending arbitrations under the CRCICA Rules into a single arbitration, subject to specific conditions that include for instance that all parties should agree in writing to such a consolidation.
8. Emergency Arbitrator:
Complying with the practical actuality and other leading Arbitration Rules such as the ICC rules, Article 26 and Annex (2) of the New Arbitration Rules introduce the mechanism of the emergency arbitrator.
The emergency arbitrator mechanism is one that allows the prompt remedy of emergency situations in which a party is not able to wait for the constitution of an arbitral tribunal in order to be granted urgent interim measures. In this regard, an emergency arbitrator will be able to issue temporary protective measures. The purpose of the emergency arbitrator procedure is to preserve the effectiveness of the award that will be rendered later by the arbitral tribunal by temporarily protecting rights that may be irreparably affected.
The New Arbitration Rules provide that the recourse to an emergency arbitrator shall be made through an application submitted by the concerned party to the Center, after which the Center should appoint an emergency arbitrator normally within two (2) days after the Center’s acceptance of the said application.
Previously, before the addition of the emergency arbitrator mechanism, concerned parties wishing to obtain emergency interim measures were required to have recourse to normal courts of the country chosen as the seat of arbitration. Noteworthy is that the inclusion of the emergency arbitrator mechanism does not prevent the party seeking the urgent measures to concurrently have recourse to a competent judicial authority.
Further, it should be noted that an appointed emergency arbitrator is bound by the same independence, impartiality and disclosure obligations to which the arbitral tribunal is bound by and may thus be challenged by any of the concerned parties.
9. Expedited Arbitration:
One of the most significant additions of the New Arbitration Rules is the introduction of an expedited procedure’s rules in its Annex 3 (the “Expedited Rules”). This expedited procedure is a streamlined procedure that aims for the effective and speedy resolution of arbitral claims.
Articles 1 and 2 of the New Arbitration Rules, offer the parties the option to agree to resolve their dispute(s) in accordance with the Expedited Rules. However, this choice is not irrevocable, as the parties maintain the right to opt-out of the Expedited Rules, by mutual agreement. If the parties so agree, then the rest of their dispute’s proceedings shall be governed in accordance with the New Arbitration Rules.
The major distinctions to underline between the expedited arbitration proceedings and the normal arbitration proceedings are:
- Where the parties fail to agree on the number of arbitrators; there shall be one (1) arbitrator instead of three (3) arbitrators.
- The parties’ nomination of arbitrators as well as the possible challenge of the arbitrators shall be made within shorter periods.
- The award shall be made within a period of six (6) months from the date of the constitution of the arbitral tribunal unless otherwise agreed upon by the parties or upon a reasoned request from the arbitral tribunal or upon the Center’s own initiative if deemed necessary.
10. Updated costs arbitration costs and arbitrators’ fees
Registration fee
The New Arbitration Rules now impose, by virtue of its Article 43, a tiered registration fee structure determined in light of the disputed sum instead of providing a standard fee for all disputes.
In that regard, a registration fee of 500 US dollars shall be due where the disputed amount is less than one million US dollars. On the other hand, this registration shall be an amount of 1,000 US dollars where the disputed amount is or exceeds one million US dollars. Further specifying that where the claimed amount is not quantified, a flat fee of 1,000 US dollars applies.
The New Arbitration Rules include an updated table of administrative fees in its Annex (1). In addition, Articles 44(2) and 46 of the New Arbitration Rules offer more flexible administrative fees for the parties as it gives the Center the possibility of fixing separate costs for the claims and the counterclaims as needed.
Administrative fees
Moreover, the New Arbitration Rules have adjusted the maximum amount of the administrative fees to be of 100,000 (one hundred thousand) US dollars instead of 50,000 (fifty thousand) US dollars. Lastly, the New Arbitration Rules has specified a fundholding fee of the Center for ad hoc arbitrations.
S&P Insights:
The New Arbitration Rules reflect CRCICA’s continuous notable efforts in keeping pace with the evolving international commercial arbitration community as they aim at achieving greater procedural efficiency all while aligning with contemporaneous and well-recognized arbitration rules.
S&P currently represents various clients in arbitrations conducted under the CRCICA Arbitration Rules. If you wish to retain our services or any legal support, please don’t hesitate to contact S&P.
