|
EGYPT LAUNCHES ECONOMIC COURTS
BY ABDEL AZIZ NOSSEIR
After four years of debate, the Egyptian parliament finally approved the new economic courts law on May 18, 2008. The goal behind the establishment of the courts is to create a specialized jurisdiction able to look into economic and commercial disputes. As per Law 120 of 2008, the economic courts will commence hearing business dispute cases and criminal trials on the first of this month.
The Egyptian judicial system has always suffered from delays in litigation procedures, often lasting for years. The new legislation aims to overcome this chronic problem through the newly created entity. “The economic courts law is about granting a specialized court jurisdiction over certain economic disputes, whether commercial or criminal in nature,” says Girgis Abdel Shahid, attorney at Sarwat A. Shahid Law Firm. He explains that the jurisdiction granted to these courts includes the handling of all disputes related to certain economic laws, such as the Capital Market Law, the Companies Law, the Investment Law and the Intellectual Property Rights Law.
Abdel Shahid argues that having a well-trained judge with expertise in economic matters is the major advantage of the new legislation. “The motive for issuing the law is to create a pool of judges specialized in the legal affairs referred to such courts, such that any economic disputes are treated in a more professional manner and hopefully judgements are rendered quicker,” he says.
Opponents of the new law argue that its purpose is generally vague and that it was planned and executed within a very short span of time. Until this moment, there has been no practical application of the economic courts law; therefore legal experts base their opinions only on its text. “The law is definitely unclear, and hopefully the decree to be issued by the minister of justice for the execution of the provisions of the law will make it clearer,” says Abdel Shahid.
But he disagrees with those who argue that the new law will entice foreign investors into the country. “Foreign investors will still prefer resorting to arbitration, so the new law will not lure them. Foreign investors will be enticed into the country by the expedient enforcement of judgements, not by the creation of new laws,” he contends. He goes on to explain that in commercial matters “international arbitration will never be replaced by the economic courts,” and that it will remain the favored means of dispute settlement. “Parties may still decide to refer disputes that might be governed by the specialized economic laws that fall within the framework of the new economic courts to arbitration.”
Mostafa Tamer Ibrahim, head of the legal department of Ahli United Bank, agrees with this opinion and contends that the judges of the new economic courts, according to the articles of the law, should be no less than either presidents of courts of first instance or chief appellate courts. “The new law stipulates that the judges of the economic courts be qualified and have a higher level of expertise,” he says. Ibrahim expects that those judges will receive specialized training on the technical aspects of economic and financial matters. “Also, after some time of work at the economic courts, the judges will acquire accumulated expertise in financial disputes.”
He explains that there are two degrees of economic courts: the court of first instance, which works on cases that involve disputes of less than LE 5 million, and the court of appeal, which works on disputes involving larger amounts. At this point, Ibrahim voices concern about unconstitutionality. “The judicial system in Egypt works on two degrees as a guarantee of justice. Usually, when you have a verdict that you think is not satisfactory you can go for the appeal. But this is not the case with the economic courts. When the dispute exceeds LE 5 million, it is directly dealt with at the second degree, which is the appeal court, and the case ends there. Therefore, there is no higher level for you to appeal the verdict,” he says.
Ibrahim also makes mention of possible legal overlapping in the application of the new law. The Egyptian legislator introduced the original jurisdiction of the economic courts to include disputes related to a list of business laws. The situation is potentially complicated if a case touches multiple courts’ jurisdictions, Ibrahim says. “If there is a lawsuit involving debts, and part of the debt is in the form of stocks at the stock exchange, then this is related to the Capital Market Law, which falls under the umbrella of the economic courts. But let’s say that another part of the debt is in the form of other collaterals, then this relates to the regular courts. The question begs itself: to which court does this case belong, the regular court or the economic court?” he inquires.
Ahmed Abou Ali, partner at Hassouna & Abou Ali Law Offices, explains that the economic courts have two domains of operation. The first is the criminal proceedings arising from the crimes set forth in 17 laws. Second are the civil proceedings arising from disputes set forth in 13 laws. The 17 crimes that fall within the criminal domain of the court include bankruptcy crimes in the penal code, crimes contained in the real estate finance law and crimes listed in the Consumer Protection Act. As for the 13 laws that fall within the civil domain of the court, these include the Intellectual Property Protection Act, the Telecommunications Regulatory Act and the Law of the Central Bank.
Abou Ali explains that the effect of the new law will not be noticed before the second half of 2009. “The new law should be in effect starting October 1, but until now the formation of the circles of the economic courts has not been announced,” he says. Under the new legislation, ongoing cases in regular courts are supposed to be transferred to the economic courts if they fall within the latter’s domain. This, however, may result in delays, he believes. “When these cases reach the economic courts, they will be postponed because the judge at the economic court will need to study them,” he says. Abou Ali believes that if a case is reserved for a verdict, it will likely receive one and will not be transferred.
While having a specialized and trained judge is considered to be one of the main advantages of the new law, Abou Ali voices fear that the rotation of the judges from court to court and city to city may mar this advantage. “In a similar experience, some Egyptian judges were trained on issues related to the stock exchange. But after training in a program at Harvard University the rotation of the judges led to them being distributed to other courts,” he says.
Another issue that concerns Abou Ali is the geographical proximity of the economic courts. According to the new law, an economic court will be established in the district of each appeal court. “In Egypt, we have nine appeal courts located in nine governorates; therefore we will have only nine economic courts. This will prove to be difficult for some people because they are used to taking their disputes to the courts of first instance, which are located in all governorates,” he says.
Abou Ali concludes that establishing the new economic courts will not necessarily result in expediting the judicial process. “The judges of the economic courts will apply the same laws that were used before, and the question is: are the texts of those laws all perfect to begin with? From an objective point of view these laws might be the problem in itself,” he argues. “It can be likened to buying a very fast car to solve the traffic problem while all the streets are blocked. The car won’t help; you need to fix the streets first.”
The new economic courts law will be put into effect this month. However, many experts agree that until ministerial decrees are issued to regulate the execution of the new law, having only the legal text is insufficient to develop a proper understanding of it and the impact of its application. “If the law is implemented to achieve the goal behind creating it, this would be beneficial to everybody, and the text is clearly endorsing that,” says Ibrahim.
Submit
your comment
Top
|
