Following months of discussions and lobbying with the Egyptian government by the DFIs/lenders and sponsors, the Egyptian Electricity Holding Company (EEHC) has now finally announced that the seat of arbitration under Round 2 of the Feed-In Tariff (FIT) Programme would be outside Egypt (without determining the exact place) while the venue of the arbitration will remain in Cairo, Egypt, at the Cairo Regional Centre for International Commercial Arbitration (CRCICA).
The distinction between the seat and venue of arbitration is a question that has captivated the jurisprudence for a long time. It has however been widely recognised that the seat of arbitration is what determines the court having jurisdiction over the nullity claim of an award, while the venue is the physical location where the arbitration hearings or deliberations are held.
Egyptian Law seems to recognise the distinction between seat and venue and its effect on the jurisdiction of Egyptian courts. For instance, according to Article 28 of the Egyptian Arbitration Law no. 27/1994, the choice of the seat of arbitration does not necessarily mean that all arbitral procedures have to take place within the geographic scope of this seat. The “location of arbitration” (or commonly used term “venue”) is a matter of appropriateness that can either be determined by the parties or the arbitral tribunal.
Similarly, the distinction is seemingly recognised by the CRCICA Arbitration Rules in Article 18, which provides that the arbitral award is deemed made at place of arbitration that is determined by the parties or by the arbitral tribunal if not previously agreed upon by the parties (the “seat”). The Rules further provide that the arbitral tribunal may meet at any location it considers appropriate for deliberations or hearings, unless otherwise agreed by the parties (the “venue”).
In a most recent judgment rendered in December 2015, the Cairo Court of Appeal also seems to have recognised the distinction between the seat and venue of arbitration. In its reasoning, the Court acknowledged that:
- The seat of arbitration is the basis of establishing a number of legal relationships between the arbitration process in question and the procedural order/legal regime governing the seat. The arbitral award is always considered rendered at the seat of arbitration, not the geographic location where the arbitral hearings have been held; and
- If the arbitral tribunal decided to render its award in a place other than the seat of arbitration, this is considered a change in location or venue only, and not of the seat of arbitration agreed upon by the parties. The courts of the seat remain solely competent to decide over matters related to the validity or annulment of the arbitral award.
The question remains though whether the Cairo Court of Appeal would maintain this position where the seat of arbitration is outside Egypt while the venue is in Egypt, as would be the case under an FIT dispute in Round 2!
For more details on the distinction between seat and venue, and its impact on any disputes under the FIT Programme and the associated risks, please contact Girgis Abd El-Shahid. For other questions regarding the FIT Programme, you may also contact Donia El-Mazghouny.