There were attempts to define Arbitration universally except that with different national legal systems, there are multi arbitration processes and multi different ways of applying it subject to the different jurisdictions.

However the core definitive principles that are necessary to be found in almost all arbitration agreements are:

  • the arbitration agreement itself for without it we do not have an arbitration process,
  • a defined dispute; and
  • a reference to a third party (the arbitrator) for the determination of the outcome of the dispute in an award.[1]

Arbitration Awards are supposed to be final and binding as to the matters it is decided upon and in principle, it is usual that the award is to be voluntarily complied with by all parties.

However, the law that determines if the agreement had become binding is the law applicable to the agreement which stipulates that a judicial enforcement is required and the seat of the tribunal if different. [2]

In many countries the award becomes binding when it is issued and declared. In other countries the award will become binding after registration or after certain formalities have been completed.[3]

Almost all parties to contracts find Arbitration Awards’ effective conclusiveness appealing, but only when it is adequately enforced and the successful claimant is ensured to recover awarded damages.

However the right to challenge an award is considered by to be ‘a fundamental part of the arbitral process because it provides a system of checks and balances against corruption, arbitrariness and biases.[4]

The main concerns of parties are related to where an award is issued and secondly the law of the country that governs the award.

Using The English Act (1996) and The Egyptian Arbitration Law (1994) to draw comparisons:

The principle in the English common law after the Arbitration Act is that, in the absence of the parties’ agreement, the seat of the arbitration is treated as the place where the award is made thus ascertaining the country in which to challenge the award.[5]

In Egypt the same principal applies, where the Egyptian Arbitration Law applies to arbitral proceedings if the seat of arbitration is in Egypt.[6]

However, the only recourse against an award in Egypt is in a nullity action brought before an Egyptian Court of appeal.

Hence, the parties have no choice but to apply the Egyptian law when attempting to challenge an arbitral award.[7]

Although not intended, but for cultural differences and unfamiliarity with foreign legislations, international investors find statutory systems in the Western hemisphere more trustworthy and engaging than local legislations in countries such as in the Middle East.

This stems from the simple fact that the main concerns for parties to arbitration are about the possibility of awards that may be of questionable decisiveness or irregular (corrupt) environment and being able to appeal such awards to trustworthy arbitrators of superior standing tribunals. [8]

On the other hand it is fair to mention that some philosophies as well as short sighted political views of some national judicial systems, that attempted to help the evolvement of ADR’s nationally, are not necessarily addressing the needs of prospects to arbitration nor are these efforts directly beneficial to uniformity and/or solid solutions to international arbitration. [9]

The reason in our opinion is that different national systems do not always share the same views and they will mostly conclude a different solution for the same problem although the core concept of Arbitration is very similar in most cases.[10]

[1] Fouchard, Gaillard & Goldman, Traite’ de l’arbitrage commercial international, Paris, Litec, (1996).

[2] Inter-Arab Investment Guarantee Corp v. Banque Arabe et Internationale d’Investesments, Cour de Cassation, 5th June 1998, Journal des Tribunaux (1998).

[3] Egyptian Arbitration Law 27/1994 Article 47

[4] Kerr, Arbitration and the Courts: The UNCITRAL Model Law (1985) 34 ICLQ1 15, as cited by A. & K. Tweeddale, Arbitration of Commercial Disputes, Oxford (2007) p.372

[5] English Arbitration Act 1996 S.53

[6][6] Egyptian Arbitration Law 27 for 1994, Article (1).

[7] Egyptian Arbitration Law, Article (53). Discussed in Ch.5

[8] Arthur J. Gemmell, Commercial Arbitration in the Islamic Middle East, 5 Santa Clara J. International (2006)

[9] Pieter Sanders, A Twenty Years’ Review of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 13 INT’L LAW. 269, 280 (1979).

[10] Lovells, Client: Dispute Resolution in the Middle East: Arbitration and Enforcement, (Lovells 2006)

Posted by: Mohamed Raffa, LLM, FCIArb