This month we bring you a special focus on a continent that boasts the world’s largest free trade area, a diverse economic make-up and increasing political stability. The latest edition of Law Update focuses on Africa, a territory that continues to be an attractive business and investment destination.
Like the rest of the world, Africa is still re-building from the impact of COVID-19, however, there continues to be an optimistic view of the opportunities the continent presents. An example of the appetite for investment into Africa was captured in a report we commissioned, titled Legal Leaders in MENA. Our survey of legal leaders revealed a resounding desire to expand into new territories, with 81% naming Africa as their investment destination of choice.Read the full edition
Conservatory arrest procedure under Egyptian Law
A creditor has the right to apply before the Chief of the Court of First Instance in his capacity as a judge of urgent matters (Competent Judge) for an order to arrest a vessel for security, if such claim is considered to be a ’Maritime Claim’.
The creditor’s application should contain a brief explanation of the debt and reasons why he is applying for security. Furthermore, he must prove that the liabilities giving rise to the claim come within the definition of ’Maritime Claims‘ as defined in the Egyptian Maritime Law and the 1952 Brussels Convention. To do so, the applicant must support his application with sufficient documents to validate his claim.
’Maritime Claims‘ are defined in the Egyptian Maritime law by Article 60, which stipulates that no conservatory arrests may take place unless for settlement of a marine debt. The debt is to be considered as a marine debt if it arises out of one or more of the following reasons:
This enumeration, as mentioned in the law, is made on an exclusive and exhaustive basis, and appears to be modelled closely on the list of maritime debts set out in the 1952 Brussels Convention.
The Court’s decision and its effect
The Competent Judge who is reviewing the application and its accompanying documents has the right to carry out a brief investigation into the grounds upon which the application is made. At his own discretion, he is entitled to allow or reject the order without specifying reasons for his decision.
If the application is accepted
No counter-security is required. The applicant is entitled to enforce the conservatory arrest order by arresting the debtor’s assets/vessel as specified in the court order and he is required to file a substantive case within 8 days from affirmation of the conservatory arrest order, otherwise the order will be considered null and void.
In response to an arrest, the debtor shipowner may take the following action:
If the application is rejected
The applicant would be entitled to proceed as follows:
This procedure follows the normal procedures of filing a lawsuit, namely that the judgment rendered from the Court of First Instance is subject to appeal before the Court of Appeal and before the Court of Cassation.
Legally speaking, the application for an arrest order is heard by the Competent Judge in the absence of the parties and the decision is given on the documents. The question of whether to accept or reject the application is left to the discretion of the Competent Judge and no reasons are required to be given in either case.
Consequently, and according to our experience before the Egyptian courts, an application to obtain an arrest order should be supported with sufficient documents, which must be original and official; otherwise the chances of success in obtaining an arrest order will be low.