Committee for the Settlement of Investment Contracts Disputes
Since March of this year, several important legislative developments affecting the investment sector have been witnessed. This was clearly tied to the Economic Conference that took place in March, in the city of Sharm El Sheikh, during which a significant amendment of the Investment Law was issued.[1] The amendment (practically a new investment law) faced various criticisms that the Cabinet of Ministers attempted to resolve by issuing an addendum published in the Official Gazette.[2] Later on, the Cabinet of Ministers issued various significant decisions concerning the formation of a Committee for the Resolution of Investment Disputes (the “CRID”),[3] as well as its technical secretariat,[4] which were covered in previous issues of the Egypt Legal Update. Most recently, the Cabinet of Ministers issued a decision stipulating the formation of the Committee for the Settlement of Investment Contracts Disputes (the “CSICD”) in mid-June 2015.[5]
The Committee for the Settlement of Investment Contracts Disputes
In the later sections of the new Investment Law, several provisions are dedicated to the formation of an Appeals Committee, the CRID, and the CSICD, with a chapter dedicated to each committee. While the Law included clear specifications of the nature and responsibilities of each committee, mandating the Prime Minister with forming them, the decisions specific to each committee still repeated many of the provisions included in the Law.
At start, it might be difficult to differentiate between the CRID and the CSICD, not the least because of the resemblance of their labels. The difference, however, is significant: each committee has a unique responsibility, aim, and structure. A close look at the CSICD reveals that it was established to resolve problems with privatization contracts that were made with several investors, and that were the subject of many controversies and legal disputes especially in the wake of the 25 January 2011 revolution.
| A close look at the CSICD reveals that it was established to resolve problems with privatization contracts that were the subject of many controversies and legal disputes. |
The CSICD dedicates itself to the settlement of, and research around the investment disputes it comes across, which are derived from investment contracts involving the state (either through one of its agencies or through a public sector or private sector entity related to the state). The committee attempts this with the aim of reaching an amicable settlement that achieves a better economic result, with the consent of the parties and without affecting their rights to seek judicial remedies.
The prime minister heads the CSICD, whilst the minister of justice and other ministers and officials in charge of economic affairs are also members of the Committee. The most recent decision added the Minister of Finance, the Minister of International Cooperation, and a deputy of the president of the state council to the formation of the Committee. The decision also removed the membership of some of the Committee’s previous members. It is to be noted that it is prohibited for any member to delegate representatives to attend the committee’s meetings, which is a safeguard to ensure confidentiality. The decision also stipulated a number of other provisions related to the procedures of the Committee’s meetings and decision-making mechanisms, as well as its mandate, which includes the possibility of extending the periods specified in a privatization contract, rescheduling financial obligations, and rectifying pre-contract procedures. Finally, the settlement becomes compulsory to the administrative authorities following approval by the Cabinet of Ministers.
Conclusion
Recent decisions have attempted to make the process of solving disputes simpler and to minimize procedures and lessen the need for legal proceedings.
Investment Law No.17, issued mid-March 2015, emphasized the need for issuing a decision from the prime minister to formulate the committee, which was made in mid-June 2015. The recent decision for the formation of the CSICD has only mentioned the committee’s technical secretariat in passing: “the Minister of International Cooperation (the rapporteur and chairman of the Technical Secretariat)”. The formation and responsibilities were not specified in the current document, although the former decision on the formation of the committee in 2014 had specified the rulings related to the Technical Secretariat of the aforementioned committee. Furthermore, the previous issues of the Official Gazette had included the formation of the CRID as well as the formation and mandate of its technical secretariat.
Interestingly, the chairman of the CRID is the Minister of International Cooperation, although the Minister of Investment may have been better suited for the position, since all investment related issues are within the domain of his ministry. This highlights the need for a unified structure and system for the distribution of responsibilities to various governmental agencies.
While the recent decision stipulating the formation of CSICD includes many details that were previously mentioned in the Investment Law, it fails to elucidate other fundamental issues. This includes the time during which disputes should be settled, as well as post-settlement procedures such as appeals or grievances.
[1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (cont.), 12 March 2015
[2] Cabinet of Ministers' Addendum to the Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 18 (bis) (b), 5 May 2015.
[3] Prime Minister's Decree No. 1272/2015 forming the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.
[4] Prime Minister's Decree No. 1273/2015 on the
Technical Secretariat of the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.
[5] Prime Minister's Decree No. 1299/2015 forming the Committee for the Settlement of Investment Contracts Disputes, the Official Gazette, Issue No. 25, 18 June 2015.
Since March of this year, several important legislative developments affecting the investment sector have been witnessed. This was clearly tied to the Economic Conference that took place in March, in the city of Sharm El Sheikh, during which a significant amendment of the Investment Law was issued.[1] The amendment (practically a new investment law) faced various criticisms that the Cabinet of Ministers attempted to resolve by issuing an addendum published in the Official Gazette.[2] Later on, the Cabinet of Ministers issued various significant decisions concerning the formation of a Committee for the Resolution of Investment Disputes (the “CRID”),[3] as well as its technical secretariat,[4] which were covered in previous issues of the Egypt Legal Update. Most recently, the Cabinet of Ministers issued a decision stipulating the formation of the Committee for the Settlement of Investment Contracts Disputes (the “CSICD”) in mid-June 2015.[5]
The Committee for the Settlement of Investment Contracts Disputes
In the later sections of the new Investment Law, several provisions are dedicated to the formation of an Appeals Committee, the CRID, and the CSICD, with a chapter dedicated to each committee. While the Law included clear specifications of the nature and responsibilities of each committee, mandating the Prime Minister with forming them, the decisions specific to each committee still repeated many of the provisions included in the Law.
At start, it might be difficult to differentiate between the CRID and the CSICD, not the least because of the resemblance of their labels. The difference, however, is significant: each committee has a unique responsibility, aim, and structure. A close look at the CSICD reveals that it was established to resolve problems with privatization contracts that were made with several investors, and that were the subject of many controversies and legal disputes especially in the wake of the 25 January 2011 revolution.
| A close look at the CSICD reveals that it was established to resolve problems with privatization contracts that were the subject of many controversies and legal disputes. |
The CSICD dedicates itself to the settlement of, and research around the investment disputes it comes across, which are derived from investment contracts involving the state (either through one of its agencies or through a public sector or private sector entity related to the state). The committee attempts this with the aim of reaching an amicable settlement that achieves a better economic result, with the consent of the parties and without affecting their rights to seek judicial remedies.
The prime minister heads the CSICD, whilst the minister of justice and other ministers and officials in charge of economic affairs are also members of the Committee. The most recent decision added the Minister of Finance, the Minister of International Cooperation, and a deputy of the president of the state council to the formation of the Committee. The decision also removed the membership of some of the Committee’s previous members. It is to be noted that it is prohibited for any member to delegate representatives to attend the committee’s meetings, which is a safeguard to ensure confidentiality. The decision also stipulated a number of other provisions related to the procedures of the Committee’s meetings and decision-making mechanisms, as well as its mandate, which includes the possibility of extending the periods specified in a privatization contract, rescheduling financial obligations, and rectifying pre-contract procedures. Finally, the settlement becomes compulsory to the administrative authorities following approval by the Cabinet of Ministers.
Conclusion
Recent decisions have attempted to make the process of solving disputes simpler and to minimize procedures and lessen the need for legal proceedings.
Investment Law No.17, issued mid-March 2015, emphasized the need for issuing a decision from the prime minister to formulate the committee, which was made in mid-June 2015. The recent decision for the formation of the CSICD has only mentioned the committee’s technical secretariat in passing: “the Minister of International Cooperation (the rapporteur and chairman of the Technical Secretariat)”. The formation and responsibilities were not specified in the current document, although the former decision on the formation of the committee in 2014 had specified the rulings related to the Technical Secretariat of the aforementioned committee. Furthermore, the previous issues of the Official Gazette had included the formation of the CRID as well as the formation and mandate of its technical secretariat.
Interestingly, the chairman of the CRID is the Minister of International Cooperation, although the Minister of Investment may have been better suited for the position, since all investment related issues are within the domain of his ministry. This highlights the need for a unified structure and system for the distribution of responsibilities to various governmental agencies.
While the recent decision stipulating the formation of CSICD includes many details that were previously mentioned in the Investment Law, it fails to elucidate other fundamental issues. This includes the time during which disputes should be settled, as well as post-settlement procedures such as appeals or grievances.
[1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (cont.), 12 March 2015
[2] Cabinet of Ministers' Addendum to the Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 18 (bis) (b), 5 May 2015.
[3] Prime Minister's Decree No. 1272/2015 forming the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.
[4] Prime Minister's Decree No. 1273/2015 on the
Technical Secretariat of the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.
[5] Prime Minister's Decree No. 1299/2015 forming the Committee for the Settlement of Investment Contracts Disputes, the Official Gazette, Issue No. 25, 18 June 2015.