Deliberation and Signing of the Arbitral Award

The stage of deliberation and signing of the arbitral award is one of the most precise and important stages in any arbitral dispute; it is the decisive moment when the arbitral tribunal’s convictions and discussions are transformed into a binding legal document that constitutes evidence against the parties.

For local and international companies, investors, and commercial entities operating in Egypt, any procedural defect at this stage is not limited in effect to the legal aspect alone, but may extend to exposing the entire arbitral award to the risk of annulment. The result may be a waste of time, effort, and substantial litigation costs.

This article aims to provide a precise and practical analysis of the rules governing deliberation and signing, helping to ensure the stability of the parties’ legal and commercial positions.

The Legal and Procedural Concept of the Deliberation and Award-Signing Stage

Understanding the mechanism through which the final decision is reached is of paramount importance to executives and corporate legal advisers (In-house Counsel).

Deliberation (Deliberation): This is the confidential and closed discussion that takes place among the members of the arbitral tribunal, where it is composed of more than one arbitrator, after the proceedings have been closed. During this process, the evidence is reviewed, legal and technical arguments are discussed, and the final conviction upon which the operative part of the award will be based is formed.
Signing the Arbitral Award (Signing the Award): This is the formal and substantive procedure that gives the draft award its official status. The signature is the tangible evidence that the award rendered genuinely reflects the will of the arbitrators and that it was issued in accordance with the agreed procedures.

The Egyptian Legal Framework Governing Deliberation and Signing

In the Egyptian market, commercial arbitration, whether domestic or international with Egypt as its seat, is governed by Arbitration Law No. 27 of 1994 on Arbitration in Civil and Commercial Matters. This law establishes specific rules concerning this stage to ensure the impartiality and integrity of the arbitral process.

According to the established principles of Egyptian law:

Deliberations must be confidential, and what takes place during them may not be disclosed.
Awards of an arbitral tribunal composed of more than one arbitrator are rendered by majority vote.
The award must be issued in writing and signed by the arbitrators.

Practical Conditions and Procedures for the Validity of Deliberation and Signing

To safeguard the arbitral award against future challenges, the arbitral tribunal must comply with a number of fundamental procedural requirements.

1. Confidentiality of Deliberations

The confidentiality of deliberations is regarded as a principle of arbitral public policy. Accordingly, neither the parties nor their representatives nor any person external to the arbitral tribunal may attend the deliberations.

The purpose of this requirement is to provide the arbitrators with an environment in which they can freely express their views and discuss the case without external pressure or influence from the parties.

2. Rendering the Award by Majority

If the arbitral tribunal consists of three arbitrators, or otherwise comprises an odd number of arbitrators, the award is rendered by majority vote following deliberation. Unanimity among the arbitrators is not required; it is sufficient for the majority of members to agree on the reasons and operative part of the award.

If a majority cannot be achieved and the opinions are divided, certain institutional rules grant the chair of the arbitral tribunal authority to render the award alone, unless the parties have agreed otherwise.

3. Form and Requirements of the Signature

Written form: The award must be in writing; there is no such thing as an oral arbitral award.
Signature by the majority: The award must bear the signatures of the arbitrators. If one arbitrator refuses to sign, which may occur in some cases with the arbitrator appointed by the losing party, Egyptian law requires, for the validity of the award, that it be signed by the majority of the arbitrators, provided that the reasons for the refusing arbitrator’s failure to sign are expressly stated in the award.
Mandatory particulars: The award must state the date and place of its issuance (the seat of arbitration), as these particulars play a decisive role in determining the court competent to hear an annulment action and the law applicable to the proceedings.

Legal Risks Arising from Defects in Deliberation and Signing

Failure to exercise due care in the procedures governing deliberation and the signing of the arbitral award may expose the award to serious legal risks, most notably:

Action for annulment of the arbitral award: If the reason for an arbitrator’s refusal to sign is not stated, or if it is established that the deliberations were not confidential, this may constitute a fundamental formal defect leading to annulment of the award pursuant to Article 53 of the Egyptian Arbitration Law.
Refusal of enforcement (Exequatur): Egyptian courts may refuse to grant enforcement to arbitral awards affected by serious formal defects, thereby preventing compulsory enforcement of the award.
Loss of res judicata effect: A defect in the signature may deprive the award of its binding authority as an instrument for resolving the dispute, potentially forcing the parties to commence new litigation or arbitration proceedings from the beginning.

Commercial and Operational Implications for Companies and Investors

From an investment and commercial perspective, these details are not merely legal formalities. They have direct implications for corporate budgets and operational stability.

Freezing of assets and cash flows: Prolongation of the dispute due to an annulment challenge based on signing defects may result in financial receivables remaining frozen for extended periods, affecting corporate liquidity (Cash Flow).
Contingent liabilities (Contingent Liabilities): Uncertainty surrounding the arbitral award forces companies to maintain financial provisions in their accounts to address the possibility of the award being set aside or the dispute being reheard.
Damage to commercial reputation: Protracted disputes and delays in enforcing awards may adversely affect relationships with suppliers, subcontractors, and international business partners.

Specific Considerations for International Clients and Foreign Companies

For multinational companies and foreign clients, or international law firms seeking Local Counsel in Egypt, there are critical considerations that should be taken into account.

Law of the seat (Lex Arbitri): If the seat of arbitration is in Egypt, Egyptian Arbitration Law governs the procedures for deliberation and signing, regardless of the substantive law governing the contract concluded between the parties.
The 1958 New York Convention: Where a foreign client seeks to enforce an arbitral award issued in Egypt in another state, the courts of that state may refuse enforcement if it is established that the procedures for issuing and signing the award violated the law of the seat, namely Egypt.
Electronic signatures and remote deliberation: With the increasing reliance on virtual arbitration hearings, it is necessary to ensure that remote deliberations and electronic signatures comply with the requirements of the Egyptian Electronic Signature Law and the Arbitration Law, in order to avoid formal challenges.

Common Mistakes at This Stage

Failure to state the reason for the minority arbitrator’s refusal to sign: This is one of the most common and serious mistakes affecting an arbitral award, where the tribunal may rely solely on the signatures of the majority without recording the fact that the other arbitrator refused to sign and the reasons for that refusal, if known.
Lack of clarity regarding the place and date of the award: A discrepancy between the actual place of signing and the agreed seat of arbitration may give rise to issues concerning the nationality of the award and the competent court.
Breach of confidentiality of deliberations: Allowing unauthorised tribunal secretaries or technical experts to attend the final deliberations without the express consent of the parties.
Signing by circulation without genuine deliberation: Arbitrators signing the draft by email without evidence of genuine exchange and consideration of views, particularly in complex cases.

Practical Best Practices for Safeguarding the Arbitral Award

To avoid the risks outlined above, a number of practical measures should be observed during the final stage of arbitration.

Careful drafting of the record of deliberation: Clearly record that the deliberation took place, together with its date and place, in the introductory section of the award.
Proactive management of a refusing arbitrator: Where there are indications that an arbitrator may refuse to sign, the chair of the tribunal should document the correspondence inviting that arbitrator to sign and expressly record the refusal in the operative part of the award.
Linguistic and legal review (Proofreading & Scrutiny): Carefully review the draft award through local counsel to ensure that it is free from any formal defects inconsistent with Egyptian public policy before final issuance.

When Is the Involvement of a Specialist Lawyer or Local Counsel in Egypt Required?

The need for the involvement of a lawyer specialising in arbitration in Egypt becomes greater in a number of circumstances, particularly as the dispute approaches its final stage.

When issuance of the award is approaching: To review the final procedures and submit additional briefs where necessary, ensuring that all formal requirements have been satisfied.
For foreign companies and international law firms: To understand the approach of Egyptian courts, including the Court of Cassation and Courts of Appeal, to interpreting the requirements of deliberation and signing and to avoid precedents leading to annulment.
Where there is a dissenting opinion (Dissenting Opinion): To ensure that it is attached or otherwise handled in accordance with procedures that do not affect the validity of the majority’s signatures on the original award.

How Can Specialist Legal Support Assist?

At El Rouby Law Firm, we provide comprehensive and institutional support aimed at protecting our clients’ investments and legal positions throughout the various stages of arbitration, particularly the complex final stage.

Regulatory compliance: We ensure that all deliberation and award-signing procedures comply with the mandatory rules of Egyptian Arbitration Law to safeguard the validity and integrity of the award.
Risk management: We assess annulment risks arising from any procedural gaps during and after the award-issuance stage and develop strategies to rectify or address them.
Contract drafting (arbitration clause): We draft precise arbitration clauses that clearly define award-issuance mechanisms and the treatment of electronic arbitration and digital signatures in line with technological developments.
Dispute prevention: We provide proactive advice to arbitral tribunals, acting as legal secretariat where applicable, or to the parties, to help ensure that the award is issued in a manner that prevents the losing party from abusing annulment proceedings.
Negotiation, settlement, litigation, and arbitration: We professionally represent our clients in actions for annulment of arbitral awards, whether defending the validity of an award or challenging it where it is affected by a fundamental defect in signing or deliberation.
Representation before Egyptian authorities: We handle the obtaining of enforcement orders from the competent Egyptian courts and represent international entities in enforcing arbitral awards efficiently and promptly.

Conclusion

The issuance and signing of an arbitral award is not merely the end of a dispute; it marks the beginning of recovering rights and transforming a written decision into a tangible reality that protects commercial operations. Precision in the procedures governing deliberation and signing is the fundamental safeguard against wasting the time and money invested in the arbitration process.

Frequently Asked Questions

May the parties or their representatives attend the deliberation session?

No. Deliberations in arbitration are entirely confidential under Egyptian law, and the attendance of any person who is not a member of the arbitral tribunal results in annulment of the award.

What happens if one of the arbitrators refuses to sign the arbitral award?

The award remains valid if signed by the majority of the arbitrators, but the law strictly requires that the reasons for the refusing arbitrator’s failure to sign be expressly stated in the award.

Must an arbitral award be in writing?

Yes. Egyptian Arbitration Law requires that the award be issued in writing, and oral awards are not recognised.

Does an arbitral award require unanimity among the arbitrators?

No. Unanimity is not required; rather, the award is rendered by a majority of the members of the arbitral tribunal unless the parties agree on different rules.

What are the essential particulars that must be included in the signature and final draft?

In addition to the arbitrators’ signatures, the award must include its date of issuance, place of issuance (the seat of arbitration), and the reasons upon which it is based, unless the parties agree to exempt the tribunal from stating reasons.

References

Egyptian Arbitration Law on Arbitration in Civil and Commercial Matters: Law No. 27 of 1994 (the provisions governing the issuance of arbitral awards and deliberations).
The 1958 New York Convention: on the Recognition and Enforcement of Foreign Arbitral Awards (in relation to grounds for refusal of enforcement connected with formal procedural requirements).
Cairo Regional Centre for International Commercial Arbitration (CRCICA): procedural rules governing the closing of proceedings and issuance of awards.