CAIRO: A set of new courts, which opened on Oct. 1 after more than three years of planning, have taken on economic cases formerly handled by the traditional judiciary, said officials involved in the new courts’ planning.
The new courts review cases falling under a collection of 18 laws, which regulate commercial and financial matters including bankruptcy, consumer protection, capital markets, real estate financing, dumping, intellectual property, insurance and telecommunications.
A lack of mediation specific to finance and business cases in Egypt had worried foreign investors for some time, even hindering free trade zone talks with the United States three years ago, said Shoura Council member Youmna El-Hamaki.
Before this month, traditional court systems handled commercial and financial litigation, leaving some cases mired in bureaucratic procedures for years.
“This was affecting the investor environment to a large extent, El-Hamaki said.
Officials hope the economic courts will lend fresh legitimacy to the Egyptian economy and judicial system as investor confidence dims across the globe and lenders grow less inclined to risk their cash in poorly-regulated and opaque markets.
“We think that personal investors need more specialized quality of arbitrators suitable to the nature of investments and trade mechanism and to act more effectively and efficiently in terms of time-saving and quality, Ahmed Hassan, deputy chairman of the State Council, said in an email to Daily News Egypt. “This is the philosophy of forming this type of economic court.
“Our challenge is to sustain development rates of 7 percent, El-Hamaki said. “Of course this will help, because it will improve the investment climate and encourage investors whether they are Arabs, Egyptians or foreigners.
Earlier this year a number of economists and academics vocally opposed the new law, saying it violates “guarantees of judiciary independence and is aimed at segregating the rights of businesspeople from those of poorer citizens, according to the Egyptian Organization for Human Rights (EOHR).
Mahmoud El Wali, an economic affairs editor at Al-Ahram newspaper, condemned the law at a conference in June because it grants the Minister of Justice too much power, including the right to appoint the head of the courts and determine the headquarters for “first instance and appeal circles, according to a report published by EOHR.
Law 120/2008 will make “an exceptional judiciary which distinguishes a particular category of the population despite laws that prohibit this, the report quoted El Wali as saying.
Both El Wali and Dr Samir El Sharkawy, professor of commercial law at Cairo University, said the law was not processed appropriately and violated several regulations. The state did not consult any chambers of commerce, industries federations, businessmen associations or law experts while drafting the law, El Wali said.
“It [the law] includes several legal and constitutional defects as it violates the right of the complainant to appeal against decisions issued by first instance circles of the economic courts. This is considered a clear violation for citizens’ rights to resort to high degree of courts, El Sharkway was quoted as saying. “This law will confound the judiciary system in Egypt.
The new courts handle both civil and criminal economic cases and are divided into two bodies, one which arbitrates between the state and private citizens and another which handles matters between private citizens, said Hassan. Under the new law, each governorate must have its own court, making for 29 including the recently-inducted Sixth of October and Helwan governorates.
Officials have talked of establishing these courts since 2001, said Khaled Serry Sayem, vice president of the Capital Markets Authority (CMA). It took about three years to draft the law, he said.
The CMA trained between 30 and 50 judges over the past three months to handle cases relating to capital markets, said Sayem. Other bodies, like the Central Bank, have run similar programs to train judges relating to those fields, he said.
