On 28/7/2020, an appeal in cassation was filed against the judgment of the Cairo Court of Appeals’ (“CAA”) rendered on 3/6/2020 in appeal No. 39 of JY 130, by a statement of claim in which the Appellant sought a judgment that would endorse the validity and the admissibility of the appeal, and overrule the aforementioned judgment.
On the session of 25/3/2021, the case was presented before the Counselling Chamber of the Court of cassation, which decided its worthiness to be examined, and therefore determined a session on 24/6/2021, during which the claim was heard before the aforementioned Circuit, as proved in its minutes; whereas the lawyers representing the Appellant, the Appellee and the Cassation Prosecution adhered to their respective positions stated in their respective memorials, the Court decided to render its judgment in the same session.
Whereas the facts – as they appear from the judgment appealed against in cassation and all the records of the case – are, in summary, that the First Appellees filed the case No. 39 of JY 130 against the Appellant before the Cairo Court of Appeal, requesting the annulment of the arbitral award, the subject matter of the case, rendered on 22/3/2013 in an ad hoc arbitration process, which had its venue at the Cairo Regional Center for International Arbitration (CRCICA). The award specified the amounts and interests to be paid by the First Appellees, who said that the Appellant resorted to arbitration in accordance with the provisions of the Unified Agreement for the Investment of Arab Capitals for the Arab Countries, pursuant to the condition contained in clause 29 of the contract concluded between them on 8/6/2006, and that under this contract the First Appellees entrusted the Appellant with the execution of a tourism investment project in Tripoli, Libya. Afterwards, decree 203 of 2010 was issued to cancel the project and a dispute arose between them, therefore the Appellant resorted to arbitration. Whereas the aforementioned award was rendered in favor of the Appellant, the First Appellees filed a lawsuit. Further, on 5/2/2014, the Cairo Court of Appeal rejected the case on the grounds that it is not permissible to appeal against the award. In this regard, the First Appellees filed their appeal in cassation No. 6065 of JY 84 against this judgment; on 4/11/2015 the Court of Cassation overturned the judgment. Later on, the First Appellees proceeded before the Cairo Court of Appeal, the Second Appellee intervened with a request to firstly confirm the validity of its joinder alongside the First Appellees, and secondly to uphold the First Appellees’ claims stated in the statement of claim, on the grounds that on 13/5/2013, the president of the Paris First Instance Court issued an order to seize the funds in the possession of the First Appellees, Société Générale Bank (S.A.) and Arab International Bank (AIB), and as the seizure order had been executed, the Second Appellee’s joinder got approved. On 6/8/2018, the Cairo Court of Appeal ruled that it had no international jurisdiction to examine the invalidity of the arbitral award in question; the First Appellees filed their appeal in cassation No. 18615 of JY 88 against this judgment; on 10/12/2019, the Court of Cassation overturned the judgment. The First Appellees proceeded before the Cairo Court of Appeal, which ruled on 3/6/2020 that the arbitration award rendered on 22/3/2013 is invalid. The Appellant filed the current appeal in cassation against this judgment, and the Cassation Prosecution filed a memorial in which it expressed its opinion approving the cassation of the contested judgment. The appeal was presented to the current Court before a Counseling Chamber that determined a session to examine the case, in which the Cassation Prosecution adhered to its opinion.
Whereas, the Appellant denounces the contested judgment on the grounds of violation of law and its erroneous application. As it was established on the grounds of the overestimation of the amount of compensation and its disproportionality to the damage, although the filed claim requesting the annulment of the arbitral award did not examine such a claim and does not extend to evaluating the arbitrators’ award. This is because article 53 of the Arbitration Law No. 27 of 1994 exhaustively listed the grounds upon which an arbitral award may be annulled, excluding the overestimation of the damages, which in turn defects the contested judgment and therefore it has to be overruled.
Whereas this argument is sound, as it is established – in the precedents of this Court – that even if Law No. 27 of 1994 regarding arbitration in civil and commercial matters permitted to appeal against the validity of the arbitrators’ award, it limited the grounds of annulment to certain cases exhaustively listed by article 53 of the Arbitration Law. Accordingly, the judge examining the action for annulment is not entitled to review the arbitral award on the merits or to monitor the grounds of the arbitrators’ evaluation, whether the arbitrators’ assessment, correctly or incorrectly, characterized the contract or estimated the damages. As even if they erred, their error does not constitute enough grounds to invalidate their award, given that an action for annulment differs from an ordinary appeal. Therefore, and since the contested judgment annulled the arbitral award on the grounds that the damages were grossly calculated beyond reason and purpose, which is not among the valid grounds for an action for annulment, exhaustively listed by article 53 of the Arbitration Law, as this matter is usually left to the arbitral tribunal’s discretion. Hence, it cannot be covered by the scope of this claim; therefore, the contested judgment violated the Arbitration Law and erroneously applied it, which requires its quashing, without the need to examine the rest of the defenses of the current appeal in cassation.
Whereas the subject matter is valid for adjudication, and based on the above-mentioned and what the documents presented, it is clear that the grounds of the claiming parties in case No. 39 of JY 130 before the CAA, is not listed by the aforementioned article 53 of the Arbitration Law, which requires the dismissal of the claim.
The Court of Cassation decided to quash the contested judgment, orders the Appellees to bear the expenses and an amount of two hundred Egyptian pounds as attorney expenses, and rejects the subject matter of the appeal No. 39 of JY 130 before the CAA, and orders the claiming parties to bear the expenses and the amount of one hundred Egyptian pounds as attorney expenses.
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