All’s Well That Ends Well? Looking at the Future of the Unified Arab Agreement in Light of the Al-Kharafi v Libya Decisions by the Egyptian Courts

Abstract

I say to him, ‘It is a bull’ and he responds ‘Milk it’Arabic proverb5 The June 2021 decision by the Egyptian Court of Cassation has finally settled the controversial Al-Kharafi v Libya decision, by reversing the June 2020 decision by the Cairo Court of Appeal.6 In its decision, the Cairo Court of Appeal had annulled the first arbitral award issued under the auspices of the Unified Agreement for the Investment of Arab Capital in the Arab States (‘Unified Arab Agreement’),7 on the grounds that the Tribunal had violated the principle of proportionality when it came to awarding compensation and this was a fundamental principle that could not be derogated from.8 A fundamental question before the Egyptian courts was whether the Unified Arab Agreement should be considered as a closed self-contained regime for resolving Arab investment disputes similar to the ICSID regime. This fundamental question invites two additional issues that warrant careful analysis and are the focus of this case comment, namely: (i) the status of the seat under the Unified Arab Agreement; and (ii) the status of annulment of arbitral awards under the Unified Arab Agreement. The ICSID Convention has a specialized regime for both these provisions and the question that this note purports to analyse is whether the Unified Arab Agreement also creates a special regime akin to the ICSID Convention.