CAIRO: When resolving legal disputes, most companies prefer to avoid high-profile court cases, for the sake of both their image and their finances.
Why have your name dragged through the mud – whether you were at fault or not – when you can resolve your problems behind closed doors? You could even come to an agreement over lunch or a round of golf.
This is the reasoning behind arbitration, a legal process whereby disputing parties find a resolution to their disagreement outside the courts. Each party nominates their own arbitrator – a private judge from an accredited arbitration center – who, in addition to a neutral third arbitrator, hears both sides of the story. The disputing parties agree in writing before the arbitration process to be bound by their joint ruling.
Nasri Marco, a lawyer who specializes in corporate law at his Alexandria-based firm Marco & Partners, is the president of the recently opened Sharm El-Sheikh International Arbitration Center (Shiac).
There s just something about Sharm. It is becoming known as the city of peace with the Middle East peace process there. People need space and oxygen to reach agreements. Sharm provides that, said Marco.
Beginning with his great-grandfather, Marco s family has long represented foreign embassies and companies in Egypt, and has litigated between them and Egyptian companies as well as ministries.
We found that most people want to come to amicable agreements, Marco said, and after doing so many of these cases, my partners and I thought: Why not set up an arbitration center?
Arbitration allows the disputing parties to choose the law of jurisdiction, or, in other words, agree on what legal system they would like to govern the procedure. This means an arbitration center based in Egypt, adhering to the overarching UN international commercial law, can rule in French, German or British law.
More often than not, Marco says, multinational corporations will opt for a foreign code of law rather than go with the unfamiliar Egyptian system.
A process resembling arbitration is believed to have occurred in Egypt in ancient times. But it was the growth of international trade, particularly in the last century, that popularized and led to the development of the process. According to Marco, Egypt is the most advanced of the Arab countries when it comes to arbitration.
Centers already exist in Cairo and Alexandria, but Marco felt that Sharm El-Sheikh, with its year-round warmth and recreational facilities, provided the ideal environment for resolving disputes.
He also hopes it will lead to more instances of successful “mediation, where parties reach an agreement before even getting to the arbitration process. They can arrange meetings to try and resolve their dispute, and the beauty of it, says Marco, is that this can happen anywhere they choose.
They can go for a meal or play golf if they like. When you have space to talk, you have space to mediate, space to reach an agreement, which you don’t have in normal common law. About 50 percent of cases are resolved in this way.
Apart from major foreign and multinational corporations, Marco expects Shiac to serve the local tourist industry in Sharm as well. With the nearest court in a town called El-Tor 150 km away, the centrally located Shiac will allow the resort s 600 hotels and many other establishments to resolve their disputes without the need to travel.
But the principle of negotiation over winner-takes-all remains the same.
Whoever it is, arbitration will give them a better chance of reaching an agreement because it gives each party a chance to hear his opponent and mediate with him. You just don’t have that with the average legal procedure.
