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Republican Decree establishing an Arbitration Center to settle disputes arising from non-banking financial transactions - Tuesday 16/7/2019

• Dr. Omran: Welcomes the republican decree to establish an Arbitration Center which he describes as a prompt method to settle disputes and save time
• Dr. Omran:  After 10 years from promulgating Law No. 10 of 2009 on regulating non-banking financial markets and instruments, we expect that the Arbitration Center will achieve maximum protection for those dealing in non-banking financial  markets

Dr. Mohammed Omran FRA’s Chairman announced the establishment of an Arbitration Center which will settle disputes arising from applying laws in connection with non-banking financial transactions pursuant to Republican Decree No. 335 of 2019. He added that the said Decree was issued to activate Article 10 of Law No. 10 of 2009 on regulating non-banking financial markets and instruments, which included the establishment of  an Arbitration Center. This Article allowed those dealing in non-banking financial markets to resort to Arbitration Center if they agreed to settle disputes through arbitration. In this respect, investors may resort to mechanisms granted for them through legislations governing non-banking financial markets, where these mechanisms are efficient, effective and prompt to settle and resolve disputes arising from service providers.

 FRA’s Chairman appreciated the step and explained that the State is aware of the importance of accompanying the issuance of legislations and rules governing economic activities with the importance of finding means of settling disputes, as it is one of the most important elements of a comprehensive investment climate. He noted that investors will not be attracted to the ease of procedures upon establishing and licensing, unless there is an effective legal mechanism that settles any dispute and preserves their rights.

Dr. Omran said that the legislator was keen to establish an Arbitration Center that would take into account the nature of the required specialization and the expertise required to settle these disputes, that is besides the depth and understanding of technical matters related to the details of such transactions. The Republican Decree called the arbitration center "Egyptian Centre for Optional Arbitration and Settlement of Non-banking Financial Disputes" and granting it independent legal personality.  FRA shall provide the appropriate premises for the Center and the needed equipment and tools.

Dr. Omran added that establishing an Arbitration Center comes within the framework of implementing the sixth axis of FRA’s comprehensive strategy for non-banking financial activities, which is concerned with strengthening regulatory capabilities and protecting investors’ rights. He noted that this  was preceded by issuing " Investors’ Protection Guide" which was a message of awareness and informed  prospective investors of the five basic principles of protection - transparency, fair treatment, risk reduction, dispute settlement, complaints resolution and trust enhancement - in all its details for each non-banking financial activity.

Dr. Omran emphasized that the Arbitration Center will be managed through a Board of Trustees consisting of seven members, including four experts and specialists in the field of arbitration and dispute resolution. Members shall be appointed in accordance with FRA’s BOD decision. FRA’s Chairman shall nominate the members for a period of four years renewable for one time. The Board shall develop public policies, set the Center's work plan, and adopt the rules of registration of experts who may undertake mediation or dispute settlement. Also, the Board shall adopt rules governing conflicts of interest for arbitrators, experts, administrators or employees of the Center. In addition, the Board will contribute to the dissemination of culture and awareness of the importance of arbitration and consensual means of settling disputes, especially in the field of non-banking financial activities through holding conferences, seminars and training courses and issuing specialized publications.

The Center shall have a full-time Executive Director from experts and specialists in the field of arbitration and dispute resolution, preferably those with experience in non-banking financial activities. The Executive Director shall follow the day-to-day operation of the Center. A decision by the Board of Trustees shall be issued regarding his appointment and financial treatment.

 Dr. Omran revealed that the Center is concerned with the arbitration and settlement of disputes arising from applying  laws related to non-banking  financial transactions, especially among partners, shareholders or members of companies and entities operating in the field of non-banking financial markets, whether among them or among these companies and entities. As well as disputes of investors or beneficiaries of non-banking financial activities, taking into account the provisions of the Egyptian laws governing arbitration and settlement of disputes.

The Center will not consider any dispute unless the parties to the dispute agree to resort to it, either before or after the occurrence of the dispute.

Moreover, the Center shall use mediation, conciliation or other consensual settlement methods before using arbitral proceedings, taking into account cases in which the parties to the dispute expressly agree that the dispute shall be settled exclusively by arbitration. On the other hand, judgments of the Arbitration Center shall be issued in accordance with arbitration in civil & commercial matters (Egyptian Arbitration Law).