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1
Positive Rules of Conflict of Laws1
Introduction
The Egyptian conflict of la rules can be found in the
Egyptian Civil Code. However, there are other conflict of laws
rules, which can be found in other different statutes such as
the Commercial Code no. 17 /1999 and the Arbitration Code
no. 27 /1994. These rules of conflict of laws are therefore
qualified as positive rules.
The Egyptian Positive rules for the conflict of laws
cover two main categories of relations. The first category
includes matters relating to persons while the second category
is concerned with pecuniary transactions. It is to be noted that
formality is governed by a single conflict of laws rule.
Therefore, this chapter will contain the following three
sections:
Section One : Conflict of laws in Formality.
Section Two: Conflict of laws in Personal Status
Section Three: Conflict of laws in Assets.
Section One : Conflict of Laws in Formality.
1-Introduction
Formality is a term that generally refers to
"procedure" in contrast to "substance". The majority of
modern legal systems have been settled on adopting the
"Locus Regit Actum" rule in regards to matters of formality.
This rule means that "...when a legal transaction complies with
the formalities required by the law of the state where the
transaction is made, it is also valid in the state where it is to be
1 This part is an update and an addition to a previous treaties on private international
law published by Prof. Dr. Hisham A. Sadek, Prof.Dr Ibrahim N. Saad, Prof. Dr.
Hafiza E. Al Haddad, Dr. Nader M. Ibrahim, Private International Law: Selective
Basics Under Egyptian Law, 1st edition, Alexandria 2000/2001. I thank them all for
allowing me to perform the update and addition to their valuable work and I would
like to express my gratitude for their permission.
2
given effect although by the law of that state other formalities
are required..."2
The Egyptian law adopted the above-mentioned rule in
Art (20) of the Civil Code. However, the transaction will be
held as a valid if it complies with the law of the state in which
the transaction was concluded, the law applicable to the
matters of substance, i.e. Lex Causae, the law of the parties’
common domicile or the law of the parties’ common
nationality.
Art (20) of the Civil Code provides that: "Contracts
between living persons are governed as regards their
formalities by law of the state in which the contracts are
concluded. They may also be governed by the law regulating
the substantive issues of a contract, by the law of the common
domicile of the parties or their common law of nationality"
2- Historical Background
Questions of conflict of laws first appeared in the
middle ages within the context of business relations among the
northern cities of Italy. Therefore, the first solution devised
for conflict of laws can be traced back to the Glossoe of the
old Roman law doctrine (Glossators). In the 12th and 13th
century, those lawyers subjected all transactions to the law of
the place where they have been made. However, these early
glossators did not differentiate between "substance" and
"formality". The distinction did not take place until the times
of the roman glossator, Curtius, in the later 15th century.
Curtuis is considered to be the first lawyer to
differentiate between "substance" and "formality" in
transaction. This accidently took place by when he explained
the application of the "Locus Regit Actum" rule to the
substance of the transaction. He founded the application of
that rule upon the implied will of the parties. This
interpretation opened the path for the party autonomy rule that
2 See BLACKS LAW DICTIONARY (6th ed.1990) 941.
3
was advocated by the French lawyer, Dumoulin, in the 16th
Century. Dumoulin, argued for the recognition of the
contracting parties authority to subject their contract to law
other than the law of the place of contract. I.e. Lex Loci
Contractus. His argument was that the parties’ express should
prevail over an implied will.
At the 16th century it was settled the "Locus Regit
Actum" rule was applicable only to the formal aspects of
transactions. The substantive aspect of transactions was
governed by another law at that time. It is worthy to mention
that the the "Locus Regit Actum" rule disappeared temporarily
in the era of the domination of the territorial school which
prevailed in the 16th century. Under the territorial school,
conflict of laws was solved by analyzing the laws themselves
and not by analyzing the transactions and since that most of
the laws were considered territorial the transaction's formality
became subject to the law of the where the transaction was
created.
The the "Locus Regit Actum" rule reemerged in modern
times for practical reasons. These reasons aimed at facilitating
the creation of transactions. They took into consideration that
the concerned parties may face difficulty in knowing
beforehand the details of formalities in other laws beside that
of the place where the transaction was created. In addition,
some types of formalities cannot be satisfied in any place. E.g.
interference of a public notary.
3- Is the "Locus Regit Actum" rule Facultative?
Those who explained the application of the "Locus
Regit Actum" rule through the territorial application of law
have, logically, reached the conclusion that this rule is a
mandatory one. However, such conclusion does not suit the
modern philosophy for the "Locus Regit Actum" rule which is
the facilitation. This philosophy directs towards considering
the "Locus Regit Actum" rule as a facultative rule.
4
The Egyptian legislator opted for the modern
philosophy. The Egyptian judge has the choice to apply the
law which applicable to the substance, or the law applicable to
the common domicile of the contracting parties, or their law of
common nationality, which ever validates the transaction, i.e.
Lex Validatus. Therefore, this conflict of law rule is not
neutral as its’ counterparts in the Egyptian Civil Code. It is
rather of a material objective.
4- What is meant by the concept of formality?
The distinction between "substance" and "formality"
can be of no importance when the contracting parties satisfy
the formality requirements as mandated under the law
applicable to "substance". However, the applicable law to
"substance" can different than that which is applicable to
"formality", hence it is useful to highlight the criterion by
which distinction is made between these different matters.
(a) Matters excluded from formalities
i- Matters of procedure.
The dominant doctrine differentiates between the
concept of "formality" and "matters of procedure". Matters of
procedure refers to the required procedures for filing a lawsuit
before the court. These procedures relates to the judicial
authority of the state while formality is concerned with the
activities of the individuals. Although both formality and
procedure may eventually be subject to the same law, i.e. the
law which is applicable at the place of the procedure and the
law applicable at the place where the transaction is created,
only formality can be subject to another applicable law. The
"Locus Regit Actum" rule is facultative rule but procedure
cannot be subject to other law other than that of the place of
procedure., i.e. the Lex Fori, because it is mandatory to follow
that law in all matters relating to the filing a lawsuit before the
court.
5
ii-Matters of Publicity
By the same token, matters of publicity are different
than matters of formality. Publicity is required sometimes for
the creation of rights such as the case with principal in rem
rights (e.g. ownership) and sometimes publicity is required for
the enforcement of the right against third parties as in the case
with accessory in rem rights (e.g. pledge). However, matters
can be subject to the same law i.e. the applicable law at the
place of publicity (publicity) and law at the place of the
creation of the transaction (formality). Only formality can be
subject to another applicable law, because it is subject to a
facultative rule. Nevertheless, publicity cannot be subject
other law that the applicable law at the place of publicity,
because this is a public rule of a territorial application.
(b) Matters that fall into the concept for formality.
Formality is the means by which the will is expressed to
the external world. Such means can be required for the
creation of the transaction or its evidence.
(i) Formality for Creation
The law in some states may require the satisfaction of
certain formalities for the creation of certain transactions such
as in the case of the contract of donation of an immovable
property and the contract of pledge. According to some
scholars, the decision of determining whether the formability
is necessary for the creation of the transaction or as evidence
should be left to the Lex Causae. Such interpretation finds
support in Egypt in the explanatory memorandum of the Civil
Code.
The explanatory memorandum of the Civil Code said
that "... it should be take into consideration that the scope of
the law applicable to formality.... covers only elements of
external formality, however, essential mattes of formality, and
determining the essential elements for creation of the
transaction as in authentication and security-pledge are
6
subject to nothing but the law applicable to the settlement of
the transactions in substance.."3
Therefore, recourse has to be made to the law
applicable to matters of "substance" in order to decide whether
authentication is required for the creation of the transaction or
not. If such authentication is required it should be satisfied
even if it is not required by the law at the place of creation of
the transaction. However, the place of creation of the
transaction will decide the way according to which
authentication should be satisfied. As a result, the concept of
formality will be restricted to a narrow concept to contain
what the explanatory memorandum called "essential matters",
i.e. the question whether formality is required for the creation
of the transaction or not.
Nevertheless, the above mentioned doctrine is criticized
by some Egyptian scholars who argue for full recourse to the
law applicable at the place of the creation of the transaction
for determining whether authentication is an essential element
for creating the transaction or not. Their arguments are based
upon the philosophy of facilitation which constitutes the
modern background for the place of creation of the
transaction. First, why should we burden the parties with
authentication required by the law of substance while the law
at the place of the creation of the transaction does not require
such element?
Second, the parties may be ignorant of the rules of
formality under the applicable law to the "substance" while
they are aware only of the formality requirements at the law of
the place of transaction. Third, the former doctrine will render
the "Locus Regit Actum" rule idle, because if we restrict the
parties conflict of law to the application of the formalities
provided by the law of "substance" what shall be left to the
place of creation of the transaction? Fourth, what if the law of
3 See Collection of Act Préparatoires, Part I , 269
7
"substance" required a particular formality which cannot be
satisfied in places other than the place of that law e.g.
interference of a particular official clerk? Does not this lead to
an impossible creation of the transaction at places other than
the place to which the law "substance" pertains?
Consequently, adopting a wide concept of formality fits
the requirements of "Locus Regit Actum" rule’s aim of
facilitation, which is vital for international transactions.
Hence, if the law of "substance" requires an authentic
formality but the law at the place of the creation of the
transaction does not require more than the existence of a
customary formality then satisfaction of the latter law will
suffice.
(ii) Formality for evidence
The majority of the Egyptian scholars agree to the
application of the "Locus Regit Actum" rule to the question of
whether documentary evidence is required for the proof of the
existence of a certain transaction, and the probative authority
of the different means of evidence. Therefore, if the law at the
place of the transaction does not require documentary
evidence while the applicable substantive law requires such
evidence then the transaction can be proved by testimonial
evidence.
Some Egyptian scholars argue for releasing the parties
form the required documentary evidence if the applicable law
at the place of creation of the transaction, the Lex Loci, does
not require such type of evidence. Those scholars relay on the
modern philosophy behind the "Locus Regit Actum" rule
which is facilitation of transactions.
Section Two : Conflict of Laws in Personal Status
1- Introduction
The treatment of the Egyptian statutory rules for
conflict of laws in matters related to persons requires the
discussion of the following: the preliminary topics, marriage,
8
capacity, heritage and will. We shall devote to each of these
topics a distinct subsection.
2-Plan
Subsection One : Introductory issues
Subsection Two: Marriage
Subsection Three: Capacity
Subsection Four: Inheritance and Will
Subsection One: Introductory Issues
1-The Egyptian Quest to Independence & the
Abolishment of Foreign Capitulations
Before examining the conflict of law rules on Personal
Status it is important for us to understand the historical
background of those rules to highlight some of the above
rules' unique aspects. During the period from the sixteenth
century up to the nineteenth century the Mamluk and the
Ottoman Empire resorted to signing trade treaties with
European and other Western powers to facilitate trade and
entry of foreigner into Egypt and the adjourning provinces.
This was a part of development strategy that aimed at
encouraging foreign investment.
Nonetheless, the European and other Western powers
were interested in establishing a foothold in the region through
the direct presence of their subjects and direct engagement of
foreign firms in the day to day economic activity. Knowing
that the Ottoman Empire was already facing dare economic
situations, hence it was called "Europe's Sick Man", the
Western powers demanded that their subjects receive
preferential treatment vis-a-vis the local government. The
foreigners were not subject to local law nor local courts but
they were accountable only to consular courts established by
their states. This preferential treatment included the
establishment of a system known as "Foreign Capitulations".
In Egypt, foreign capitulations were inherited from the
Ottoman Empire. However, after the British Invasion of Egypt
9
in 1882 there were fears among other European States that the
British will move to abolish the foreign capitulations enjoyed
by their subjects as a part of a British plan to consolidate their
power in Egypt. Using their influence through their subjects,
who were the creditors of Egypt's sovereign debt, the
European powers succeeded in establishing the Mixed Courts
System in align with the National Court System.
The Mixed Court System was in fact a judicial body
composed of several courts organized in a hierarchy. The
panels in those courts consisted only of foreigner judges. The
Mixed Court was competent to hear cases where the plaintiff
was a foreigner and applied the Mixed Civil Code that did not
contain conflict of law rules. On the other hand, the National
Courts were only competent to hear a case when both parties
are Egyptians and applied only the National Civil Code.
Therefore, under the dual court system conflict of law
situations were only possible before the Mixed Courts. The
Mixed Court's Council later on issued a set of procedural
rules, known as the "Règlement d'organisation judiciaire
mixte " which contained, ironically, the conflict of law rules to
be used by the Mixed Courts.
This state of affairs was not acceptable to the patriotic
forces in Egypt and foreign capitulations, especially the Dual
Court System, was a daily reminder to all Egyptians that their
country was not independent and it is subject to foreign
dominance. Thus, it was a shared view among all political
powers around the political spectrum in Egypt that the foreign
capitulations must come to an end.
It was not until 1936 when the United Kingdom sought
to reach an agreement with the Patriotic Egyptian forces in
order to answer some of their demands. The United Kingdom
wanted to assure its position in Egypt ahead of an escalating
military confrontation with Nazi Germany. As a result, both
parties signed the Anglo-Egyptian Friendship treaty that
10
explicitly called upon the abolishment of the Foreign
Capitulations.
The United Kingdom mobilized its diplomacy to set out
a conference held at Montreux, Switzerland in 1937. In that
conference, the foreign states that enjoyed foreign
capitulations expressed their concerns for the future welfare of
their citizens after the planned abolishment of the Mixed
Courts System. In particular, the above states sought to have
assurances that their subjects will not be governed by Islamic
Shariah when an Egyptian Court faces conflict of law situation
involving a foreign party.
In order, to easy their worries the Egyptian Government
did give the following assurances. First, as a general rule it
was agreed that the concept of "Personal Status" as defined in
Article 28 of the Règlement d'organisation judiciaire mixte
will be retained. This allowed the application of foreign
personal law to issues that are generally not considered a part
of the "Personal Status" as it is understood under most
Western conflict of law doctrines such as inheritance, wills
and other dispositions mortis causa.
Second, the Egyptian Government has agreed to retain
the same conflict of law rules that were included in Article 29
of the Règlement d'organisation judiciaire mixte4 through
incorporating the same conflict of law rules into the New
Egyptian Civil Code promulgated in 19485. The Egyptian
4 Art 10 of Montreux Convention 1937 stated that " In matters of personal status, the
state which is competent shall be determined by the law to be applied. The expression
"personal status" refers to the matters specified in Article 28 of the Règlement
d'organisation judiciaire mixte. The law to be applied shall be ascertained in
conformity with the rules set out in Articles 29 and 30 of the said Règlement". 5 Art 29 of the Reglement stated the following Conflict of law rules:
The status and capacity of persons shall be governed by their national laws.
The fundamental conditions of the validity of marriage shall be governed by the
national law of each of the parties thereto.
In matters concerning relations between the husband and wife, including separation,
divorce and repudiation and the effects thereof upon their property, the law to be
11
government even agreed to express state the rejection of the
Renvoi in order to prevent the Egyptian Courts form using the
foreign choice of rules that uses the domicile as a connecting
factor for personal status conflict of law rules as a means to
apply Islamic Sharia law on lawsuits involving foreigners6.
Thus, the will be no change in the foreigners' legal status
before or after the abolishment of the Mixed Courts because
the same issues governed by their personal law will continue
to be governed by the same law in the future.
The third assurance given by the Egyptian government
is the adoption the "personal law" as a connecting factor for
all future legislations that affect the personal status of the
foreigners. This continuous assurance was meant to address
the foreign states' concern that the Egyptian Government
might seize the opportunity after the abolishment of the
foreign capitulations and enact new conflict of law rules that
might lead to the application of the Islamic Shariah on
foreigners7.
applied shall be the national law of the husband at the time of the celebration of the
marriage.
Reciprocal rights and duties as between parents and children shall be governed by the
national law of the father.
The duty of support shall be governed by the national law of the party sought to be
charged therewith.
Matters relating to legitimacy, legitimisation, and the recognition and repudiation of
paternity shall be governed by the national law of the father.
Questions relating to the validity of adoption shall be governed by the national law of
the adopting party as well as by that of the adopted person. The effects of adoption
shall be governed by the national law of the adopting party.
Guardianship, curatorship and emancipation shall be governed by the national law of
the person under the incapacity.
Inheritance and wills shall be governed by the national law of the deceased or of the
testator.
Gifts shall be governed by the national law of the donor at the time of the gift. The
rules of the present Article shall not affect provisions relating to the legal position of
immovable property in Egypt. 6 This was done by incorporating Art 31 of the Reglement "The term "national law"
shall be understood to mean the municipal law of the country in question to the
exclusion of its provisions of private international law " into the Egyptian Civil Code. 7 DECLARATION BY THE ROYAL EGYPTIAN GOVERNMENT
12
2- The Concept of " Personal Status "
As we have seen earlier, the concept of "Personal Status"
under Egyptian conflict of law rules is an enlarged concept
unlike that adopted under other conflict of law rules.
According to the Article 28 of the Règlement d'organisation
judiciaire mixte Personal Status include" suits and matters
relating to the status and capacity of persons, legal relations
between members of a family, more particularly betrothal,
marriage, the reciprocal rights and duties of husband and wife,
dowry and their rights of property during marriage, divorce,
repudiation, separation, legitimacy, recognition and repudiation
of paternity, the relation between ascendants and descendants,
the duty of support as between relatives by blood or marriage,
legitimization, adoption, guardianship, curatorship, interdiction,
emancipation and also gifts, inheritance, wills and other
dispositions mortis causa, absence and the presumption of
death."
This enlarged definition of "Personal Status" drove
some scholars to suggest replacing the term "Personal Status"
with "Personal Status" in order to reflect the true meaning of
the concept. Personally, I find that such alteration is not
necessary since as we have seen earlier on the characterization
of any concept used in the Egyptian conflict of law rules is
done according to the Egyptian law.
"The undersigned, acting in virtue of their full powers, make the following
declaration:...............
3. PERSONAL STATUS
The Royal Egyptian Government, having already, and more particularly in the
Establishment Treaties which it has concluded with Iran and Turkey, spontaneously
adopted the principle that, in matters of personal status, the personal law should apply,
intends to adopt the same principle with regard thereto in the future.
As regards the rules of procedure, which the Royal Egyptian Government intends to
enact for cases of personal status, these will be applied provided that no substantive
rule of the foreign national law prevents their application."
13
3- Applicable Law to "Personal Status "
Personal Status is governed by the personal law ( Lex
Personae). In most Common Law states Lex Personae is the
law of domicile (Lex Domicilii) while in most of the Civil
Law states it is the law of nationality (Lex Patriae). The
domicile is the place in which a person has voluntarily fixed
his residence while nationality is the individual's allegiance to
a particular state.
As we have seen, the concept of Personal Status is
defined under Egyptian Law according to the Montreux
Convention 1937. This same thing applies to the selection of
personal law as a connecting factor for the conflict of law
rules used in the Egyptian Civil Code.
3-An Appraisal of the Lex Patriae
As we have seen earlier, the foreign states agreed with
the Egyptian Government to use Lex Patriae as a conflict of
law criterion. This in turn, drives us to evaluate how suitable
was the choice of Lex Patriae as a conflict of law criterion.
(a) The Advantages of Lex Patriae
Lex Patriae as a conflict of law rule’s connecting factor
has two main advantages: First, it is easily ascertainable
because a person's nationality is usually officially documented
either through the person's possession of a passport or other
equivalent documents such as birth certificates, school
records,..etc. The Judge does not have to conduct an extensive
investigation, which is usually needed to determine a person's
domicile, to determine a person's nationality. This saves the
Court time and effort allowing it to deal with the issue swiftly
before examining the substantive aspects of the dispute.
Second, a change of nationality is usually well
evidenced since a person normally cannot change his
nationality without recourse to a set of official procedures that
will produce official documents to verify the occurrence of a
change of person’s nationality.
14
Nonetheless, the application of Lex Partriae can be
criticized for the following: First, because of increase social
mobility it is now uncommon to find persons who hold dual
nationalities. This could be the outcome of deliberate
immigration form one state to another or the person himself
was the product of a mixed marriage. In the latter case, the
child may receive two nationalities, his mother's nationality
and his father's nationality8. In addition, if the person is born
in state that encourages immigration he will receive that state's
nationality as well.
Second, it is possible that the person in question
belongs to a state that contains several distinct legal units and
the test of nationality may not, by itself, give us an answer.
Some states follow a federal system which leaves some areas
of the law for the federal units to regulate such as family law
in the United States. Using Lex Partriae will cause the Court
to conduct an extensive search over the applicable law.
However, the Egyptian Legislator has provided us with a
solution which is to delegate the matter to the internal conflict
of law rules in that State.
The third, as is all too obvious today a person may be
stateless either as a result of being a member of a society that
does not adopt documentation as a means for recording data or
being an illegal alien who deliberately concealed his identity.
(b) Difficulties in Ascertaining Nationality
Resort to Lex Partriae can be difficult. This takes place
in cases of multinational persons, stateless persons and
persons without a know nationality.
(i) Multinational Persons
In case that the person in question has the Egyptian
nationality among other nationalities that he pertains, then the
Egyptian nationality will prevail over those nationalities 8 This is now possible under the Egyptian Nationality Law which gives the right to pass
the Egyptian nationality to the children of an Egyptian parent whether that parent is the
child's mother or father. See Law no 154/2004.
15
according to Art 25 (2) of the Civil Code. However, if the
Egyptian nationality is not among other nationalities that a
person pertains then we will resort to the de facto nationality.
This is the solution adopted by the International Court of
Justice (April 6, 1955).
A de facto nationality can be ascertained through
several elements such as the person's domicile, financial
interests, social relations, his participation in public affairs and
his intentions. The explanatory memorandum of the Egyptian
Civil Code supports such solution. The determination of the
de facto nationality is a fact left to the court to decide (trial
courts and the appellate courts). However, we support
granting the Court of Cassation the authority to review the
lower court's findings on the de facto nationality.
(ii) Stateless Persons and Persons without Known
Nationality.
If the person in question is stateless, i.e. he does not
enjoy a nationality of a state or his nationality is unknown,
then his personal law will be the law of the place to which the
person has the closest connection. This usually turns out to be
the law of domicile. If it was difficult to determine the
person's domicile, recourse will be made to his place of
residence. This solution finds support in the explanatory
memorandum of the Civil Code.
Subsection Two Marriage:
1- Introduction
Marriage is a status conferred by the law upon a union
between a man and a woman whereby they assume certain
rights and duties. Treatment of conflict of laws in matters of
marriage requires determination of the applicable law to the
marriage's conclusion, effects, nullity and dissolution. In
addition, the treatment of the exceptional application of the
Egyptian law to the marriage contract will be relevant.
Therefore, this subsection will be divided into
i- The Validity of the Contract of Marriage
16
ii-Effects of Marriage
iii- Nullity of Marriage
iv-Dissolution of Marriage
v-Exceptional application of the Egyptian Law
i- The Validity of the Contract of Marriage
(a) Formal Validity
According to Egyptian law the formal aspects of
marriage are like any other transaction is governed by Art(20)
of the Civil Code. Therefore, the contract of marriage’s formal
validity is determined by any of the following laws: the law of
the state in which the contract was concluded, the law
applicable to matters of substance, the law of the common
domicile of the contracting parties or the law of their common
nationality. Nonetheless, since that the substantive aspects of
the marriage are governed by the law of the common
nationality of the spouses. As a result, the connecting factors
for the formal aspects of the marriage are: place of conclusion,
common nationality of the spouses and common domicile.
i-The Place of Conclusion ( Lex Loci Celebrationis)
Marriage is formally valid if it is made according to the
formality requirements at the place where the marriage was
concluded. In this case, the marriage had satisfied the local
formality. The Egyptian law recognizes many types of
formally valid marriages.
The first type is the official contract of marriage and it
is concluded through the interference of a public official. Here
we have several different forms for the marriage depending on
the spouses' nationality and their faith. In case of marriage
between Egyptian Muslims the public official is the Mazoon,
while in the case of Egyptian Non-Muslims sharing the same
sect and denomination the official clerk is the deputized
authenticator. Foreigners and Egyptian Non-Muslims who do
not share the same sect and denomination satisfy the official
formality by recourse by the public notary.
17
The second type of formally valid contract of marriage
is the Islamic customary contract of marriage. However,
satisfaction of the Islamic customary formality is still
disadvantageous since that is does not proved the spouses with
the same rights and duties as in the formal marriage.
Therefore, marriage between foreigners in Egypt is
formally valid as long as it is made in accordance with the
official or the customary types of formality for marriage in
Egypt. By the same token marriage between Egyptians taking
place abroad is formally valid if it is made in accordance with
the formality requirements at the place of the marriage.
However, purely non-Muslim and religious formality is not
valid in case of a marriage between Muslim spouses or in case
the husband is Muslim.
ii- Common Nationality
In addition to the local formality, the marriage can be
formally valid if it satisfies the formality requirements under
the law of the common nationality of the spouses. If the
spouses do not share the same nationality then the formality
requirements of the nationality laws of both spouses must be
satisfied.
Diplomatic or consular formality is considered among
the national forms. As a result, the marriage made by
foreigners in Egypt or by Egyptians abroad is valid when it is
made at their authorized embassy or consulate. If one of the
spouses is Egyptian the consular formality by the Egyptian
consulate abroad prerequisites permission by the Foreign
Minister ( Art (16) of the Decree by law 8/5/1925). The
Egyptian Consular service is available to all Egyptians
regardless of their faith.
iii-Common Domicile
The contract of marriage is formally valid if it satisfies
the legal requirements stated by the law of the spouses'
common domicile. Therefore, foreigners domiciled in Egypt
can validly conclude marriage in accordance with the
18
Egyptian official form or the Islamic customary form even if
they were accidently residing outside Egypt.
(b) Legal Category of the Contract of Marriage Formal
Validity
The Lex Fori determines what constitutes formality in
the contract of marriage because it is a matter of
characterization. According to the dominate view among
Egyptian scholars, the Egyptian Law, the Lex Fori, will
decide what constitute a formal aspects of the contract of
marriage. This means deferring to Islamic law because it is the
common law in matters of marriage.
According to our general legal rules formality is
whatever affects the expression of the person's will to the
external world. It is worth to remind the reader that we have
previously supported leaving the determination of formality as
necessary prerequisite for the creation of the transaction to the
law applicable to the formal aspects of the transaction.
Consequently, the witness requirement is a formal
aspect of the marriage because it not related to the consent to
enter into the marriage but it is related to the publicity of the
ceremony. Also, due to the civil aspect of marriage under
Islamic Sharia the applicable law in Egypt the religious
ceremony is considered among the formal aspects of the
marriage.
However, the requirement of the parent's consent to
their minors' marriage is a substantive issue because it
completes the minor's consent. The evidence of marriage is
subject to the law applicable to the formal aspects of the
marriage. Namely, this law will be applicable to the required
means of evidence for establishing the existence of the
marriage and it will determine the probative power of each
means of proof.
(c) Substantive Validity of the Contract of Marriage
i-The Connecting Factor
19
The validity of the substantive aspects of the marriage is
left to the spouses' law of the common nationality. There will
be no problem for the application of this rule of law in case
both spouses enjoy the same nationality. The problem is when
the spouses do not share the same nationality. Shall the
spouse' law of common nationality mean that the court should
apply the laws of both spouses cumulatively? or shall the
court resort to distributive application of the spouses laws by
applying the requirements of each spouse's law to that spouse
only?
Cumulative application was suggested as a means for
protecting the martial relation. However, modern doctrine
supports distributive application; this avoids the application of
a combination of the legal requirements that may end up by
being more severe than those of any of the spouses' laws. We
support the modern doctrine; however we should confess that
sometimes the distributive application will not be possible as
in the case for the prohibitions and other forms of negative
requirements which is usually called 'martial forbiddances".
For example, observance of a prohibition against marriage
between spouses of different creeds in one spouse's personal
law requires its application to the other spouse even if the
other spouse's law does not recognize such negative
requirement.
ii-Legal Category
What is considered as a substantive aspect is a question
left to the law applicable to matters of characterization the Lex
Fori. As we have suggested before, the Egyptian law will be
the which determines what is considered a formal aspect of
the marriage and what is considered a substantive aspect of
the marriage. We have to remember that we have reached the
conclusion that requiring the presence of witnesses and
conducting a religious ceremony to be among the formal
aspects of the marriage. However, the essential elements for
20
the contract of marriage are left to the concept of matters of
substance.
iii-Effects of the Public Policy
When the applicable foreign law is against the Egyptian
public policy then the Egyptian judge will not apply it.
Foreign laws applicable to the substantive aspects of marriage
are the most vulnerable laws to such alienation due to the high
probability that it’s articles will conflict with Islamic Sharia
which constitutes the basics of the public policy in Egypt. As
an example, our mandatory Islamic law rules does not allow a
female Muslim to marry a non-Muslim male.
It is to be noted that public policy is operative only
when either spouse is a foreign Muslims or an Egyptian
Muslim who got nationalized after marriage. According to the
Egyptian conflict of law rules, Art 14 as we shall see later on,
if one of the spouses is an Egyptian at the time the marriage
was concluded that the substantive aspects of that marriage
will be governed by the Egyptian law.
Subsection Two : The Effects of Marriage
i-Connecting Factor
According to Egyptian law Art13 "... the effects of
marriage, including its effects upon the property of the
spouses, are regulated by the law of the country to which the
husband belongs at the time of the conclusion of the
marriage...". Therefore, the connecting factor for the effects of
the marriage is the nationality of the husband at the time when
the marriage was concluded. This means that we have adopted
one law to govern the effects of the marriage to avoid the
problematic consequences of the distributive and cumulative
application of the spouse's personal laws.
The national law of the husband is supported by the fact
that the husband is the master of the family. It is worth to
mention that the Egyptian legislator has adopted the
application of the national law of the husband at the time of
the conclusion of the marriage. In choosing such a moment for
21
determining the applicable law the Egyptian legislator
conclusively solved the problem of the mobile conflict which
takes place when the husband changes his nationality at the
time he files a lawsuit.
The positive solution that the Egyptian legislator
adopted here was found unconstitutional in other countries. In
Germany, such solution was ruled to be in violation with the
principle of equality between women and men. Other
suggested connecting factor is the application of the law of the
matrimonial domicile.
ii-Legal Category
The legal category of effects of marriage includes two
different groups, the personal and pecuniary effects of the
marriage.
a) Personal Effects of Marriage
Personal effects of marriage may be purely personal and
may include certain pecuniary aspects. Purely personal effects
of marriage include the wife's obligation to obey her husband,
stay at home and to provide domestic service to husband and
children. It also include the husband's duty to act justly among
his wives, if polygamous marriages were permitted, and the
wife's right to hold the family name of her husband.
However, the personal effects that contain some
pecuniary aspects include the right of the wife to her dower,
and the right of each spouse to matrimonial alimony. They
also include the payment of damages to the other spouse to the
other spouse in case of breach of the contract of marriage.
Nevertheless, the alimony pendete lite paid to the wife
is subject to the Lex Fori. An alimony pendete lite is a
temporary alimony, which a husband , by a court order, pays
his wife for maintenance while the spouses are pending a suit
for divorce. Such alimony is established for the conservation
of public safety and order in the community, and therefore its
rules are directly applicable regardless to the connected
22
foreign laws to marriage. In Fact, such rules belong to the
mandatory rules of law.
According to the dominant doctrine, the wife's lack of
capacity subsequent to her marriage is considered as an effect
of marriage. This characterization is based on the fact that
such lack of capacity is not established for the protection of
the wife but rather for the protection of the family. Therefore,
the above lack of capacity will be subject to the law of the
family's master, the husband. Nevertheless, the Egyptian trade
law 17/1999 adopted the wife's law of nationality to determine
her capacity to trade. According to Art 14 "... the law of state
to which a married woman belongs by her nationality shall
regulate her capacity to trade.."
Nevertheless, in order protect bona fide persons trading
with foreign married businesswomen Art 14 (2) of the
Egyptian Commercial code provides that "A Foreign wife
exercising trade as a profession shall be assumed to be
exercising it with her husband's permission. If the applicable
law allows the husband to object to her exercise of trade as a
profession, or withdrawals his previous permission then that
permission shall be recorded in the register of trade and shall
be published in the register's journal. The objection or
withdrawal of permission shall have no effect except form the
date of completing such publication..."Besides, ".. The
objection or withdrawal of the permission shall not affect the
acquired rights by the bona fide party...."
b) Pecuniary Effects of the Marriage
We mean with 'pecuniary effects of the marriage', the
matrimonial regime recognized by certain legal systems, as in
the French system of régime matrimonial. By virtue of this
legal concept, the spouses will arrange the system by which
their matrimonial estate will be organized, before, through and
after marriage. The matrimonial regime is unknown to the
Egyptian law (whether the law applicable to Muslims or non-
23
Muslims in Egypt). This explain the Egyptian legislator's
adoption of a legislative qualification for such a concept.
According to Egyptian law, in principle, the
matrimonial regime is subject to the law applicable to the
effects of marriage, i.e. the national law of the husband at the
conclusion of the marriage. However, the above-mentioned
rule is restricted by the obligatory respect of the law of the
place of the property, the Lex Rei Sitae. The Lex Rei Sitae is
applicable to possession, ownership and other rights in rem on
the matrimonial regime regardless of the husband's national
law.
In addition, bona fide third parties should not be harmed
by the application of the husband's law to the matrimonial
regime. In this context art 15 (1) of the Egyptian trade code
provides that " ....A foreign wife practicing trade shall be
presumed to have got married according to a the system of
separation of estates unless otherwise stipulated by the terms
of the pecuniary agreement between both spouses...".In order
to support the publication of the peculiar aspects of the
matrimonial regime art 15 (2) provides that ".... the terms of
pecuniary agreement between the two spouses shall not be
invoked against third parties except after its notarization by
recording it in the register of trade and publishing its summary
in the register's journal.."
However, the bona fide third party should not be
harmed by the fact of not publishing a suitable matrimonial
regime to his interests. Therefore, the Egyptian trade code
provides that "...in case of neglecting the publication of the
pecuniary terms of agreement between the two spouses, the
third party may prove that the marriage had taken place
according to a matrimonial regime more suited to his interests
than the system of separation of estates". Also, according to
art 15 (4) "...a court ruling pronounced abroad concerning the
separation of estates shall not be invoked except from the date
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of recording it in the register of trade and publishing its
summary in the register's journal.."
c) Contracts between Spouses
Besides the matrimonial regime which is subject to the
applicable law to the effects of marriage, there are other
pecuniary transactions between the spouses and which may
take the form of sales, hire, donation and matrimonial
companies i.e. contracts between spouses. Some of the
scholars supports subjecting the contracts between spouses to
the law of autonomy as in the case with any other contractual
relationship. Nonetheless, we support applying the law
governing the matrimonial regime to those contracts
especially when such law imposes restrictions on contracts
between spouses. These restrictions should be observed
because they were laid down for protecting the matrimonial
relationship.
Subsection Three Nullity of Marriage
1-Applicable Law
It happens that a formal or a substantive requirement for
the marriage may not be satisfied and subsequently the
marriage will be considered null and void. The question is
which law shall decide the effects of such nullity? The
majority of the Egyptian scholars agree that the nullity of the
marriage is subject to the law whose requirements were not
fulfilled. Therefore, in order for a marriage to be considered
as a null under the Egyptian private international law it must
not fulfill the requirements of either the law governing the
formality of the marriage or the law governing the substance
of the marriage , which called the essential elements in
English law.
2-Effects of the Nullity of Marriage and Matrimonium
Putativum
In principle when a marriage is judicially declared null
it will be considered as if it did not exist. However, some legal
systems do not apply the nullity effect retroactively and they
25
do tolerate some of the legal effects generated by the null
marriage. Such toleration is required to protect the good faith
of one of the spouses and the rights of the children resulted
from the null marriage. In such a case, the null marriage will
be considered as a valid marriage in the period preceding the
declaration of nullity. This is known as Matrimonium
Putativum. Nevertheless, the question is to what law will
govern the Matrimonium Putativum?
According to the dominant doctrine Matrimonium
Putativum is governed by the same law that led to the nullity
of the marriage because Matrimonium Putativum is an effect
of nullity. However, the logical base of the above mentioned
doctrine is not sufficient to overcome the practical obstacles
such as in case if the nullity of the marriage was caused by the
national law of both spouses who do not share a common
nationality. Therefore, we prefer to characterize the concept of
Matrimonium Putativum as a matter related to the effects of
marriage and apply the husband's national law at the time the
marriage was concluded. It is worthy to mention that the
concept Matrimonium Putativum is regarded as a matter of
public policy and if the husband's national law does not
recognize such a concept then that law will be substituted with
the forum's law.
Subsection Four : Dissolution of Marriage
1-Connecting Factor
According to art 13 (2) of the Egyptian Civil Code :
"...Repudiation of the marriage is governed by the law of the
state to which the husband belongs at the time of repudiation,
whereas divorce and separation are governed by the law of the
state to with the husband belongs to at the date of initiating the
proceedings...". Dissolution of the marriage is recognized by
the Egyptian legal system and it may take one of the following
forms: repudiation, divorce, separation.
Repudiation is the voluntary dissolution of the marriage
and it is non-judicial because it is made by an informal
26
procedure conducted outside the courts. Under Islamic shaira
a husband may be able to divorce his wife by uttering the
word "talaq" with the intention of dissolving the marriage.
However, divorce or more particularly divorce by decree is a
dissolution of the marriage after a judicial interference.
Separation or divorce a mensa et thoro is the dissolution
of the marriage by which the spouses are separated and
forbidden to live and cohabit together, without affecting the
marriage itself. This is why such type of dissolution is
sometimes qualified as being a divorce for bed and bread.
The applicable law to the marriage's dissolution is the
law of the husband, and unlike the effects of the marriage it is
the law of the husband at the moment of repudiation and it is
his law at the time of lodging his lawsuit in case of divorce or
separation unlike the effects of the marriage. The above-
mentioned connecting factor has been criticized for allowing
the wife to be taken by surprise due to the husband's change of
nationality at the time of the repudiation or at the time of
lodging the lawsuit in case of divorce or separation.
It is true that the change of the connecting factors with
the intention to curtail illegal the applicable law is considered
fraud upon law and it is punished but such fraud is sometimes
difficult to prove. In addition, the above-mentioned
connecting factor does not observe the principle of equality
between women and men. Therefore, some legal systems
adopted other connecting factors such as the German legal
system which adopted the place of matrimonial domicile.
2- Legal Category
The Legal Category of dissolving the marriage includes:
conditions for dissolution, its consequences and procedure.
i-Conditions of Dissolution
The legal category of the dissolution of marriage
includes its legal conditions e.g. who can seek the dissolution,
the grounds for dissolution, the burden of proof, the means of
proof and its probative power. However, the procedure for
27
presenting the proof before the court is subject to the forum's
law because it is a matter of procedure. In addition,
determining what constitute a repudiation, divorce or
separation is governed by forum's law because it is a matter of
characterization
ii-Consequences of Dissolution
The legal category of the marriage's dissolution also
includes the consequences of the dissolution and namely its’
personal consequences. The personal consequences of the
marriage dissolution include the divorced wife's alimony , the
divorced wife's domicile, the preceding period of separation
which is converted into divorce, the divorced wife's right to
keep her ex-husband's family name and the right to receive
damages for breach of contract of marriage.
However, the pecuniary consequences of the marriage
dissolution, the matrimonial regime, are excluded from the
effects of the dissolution and they belong to the pecuniary
effects of the marriage which is governed by the husband's
law of nationality at the time of concluding the marriage.
iii-Procedures for Dissolution
The procedural matters are governed by the forum's
law, the Egyptian law, according to art (22) of the Egyptian
Civil Code which states that "... all questions of procedure are
governed by the law of the state in which the lawsuit is
brought or in the state in with the proceedings are taken
place..." However, some laws requires religious or legislative
interference in order to obtain divorce. Though
characterization of such matter is left to the forum's law the
modern doctrine characterize such interference as procedures
subject to the forum's law.
Sometimes interlocutory procedures takes place during
the divorce or separation lawsuit such as temporarily alimony
, alimony pendete lite, residence of with and her receipt of
daily support property. These matters are directly subject to
28
the forum's law because they fall into the scope of the forum's
law mandatory rules.
iv-Effects of Public Policy on Dissolution of Marriage
The applicable foreign laws in matters of dissolving the
marriage which contradicts with the Islamic sharia are not
necessarily against the public policy in Egypt. This is a normal
consequence of the Egyptian recognition for the application of
other religious rules to matter of persons. However, Islamic
sharia as an ingredient of the Egyptian public policy may be
engaged if the applicable foreign law does not recognize the
foreign Muslim right to divorce under the Islamic sharia.
Therefore, a foreign Muslim husband enjoys in Egypt the right
of informal repudiation , Talaq, even if he does not have that
right under his own personal law because in this case his
personal law will contradict with the Islamic sharia.
Subsection Five : The Exceptional Application of the
Egyptian Law
1-Legal Provision
After establishing the rules of the conflict of laws in
matters of conclusion, effects and dissolution of the marriage,
Art 12; 13;14 of the Egyptian Civil Code, the Egyptian
legislator declared a general exception by which the Egyptian
law will be applicable if one the spouses happens to be an
Egyptian when the marriage was concluded. Art 14 provides
that ".... if in the dispute one of the spouses was an Egyptian at
the time of concluding the marriage then the Egyptian law
alone shall apply except as regards to the legal capacity to
marry...."
2- The Exception To Substantive Aspects of the
marriage
According to the Egyptian rule of the conflict of laws in
substantive aspects of the contract of marriage is the national
law of both spouses. This exception means that if one of the
spouses was Egyptian when the marriage was concluded then
the Egyptian law will be the only applicable law. The
29
preparatory works of the Egyptian Civil code revealed that
there was a concern about the nullity of a marriage concluded
between an Egyptian husband and a foreign non-Muslim wife
if the latter denied the validity of that marriage.
The above mentioned precaution is criticized for
providing an unnecessary protective mechanism. The
protection provided by the public policy defense is sufficient
because it will allow the Egyptian court to disregard the
foreign non-Muslim wife's personal law if it contradicts the
Islamic Sharia. Additionally, the exception does not protect all
Egyptians. It protects only those who enjoy the Egyptian
nationality before concluding the marriage but not those who
acquired the Egyptian nationality after concluding the
marriage. Ironically, this exception provides protections to
those who enjoyed the Egyptian nationality at the time their
marriage was concluded and lost it subsequently!!!
Needless to say that the application of the Egyptian law
does not necessarily mean that the Islamic sharia will be
applied. The Egyptian legal system recognizes the application
of the religious rules of non-Muslim spouse if either one
enjoys the Egyptian nationality and both shared the same sect
and denomination.
3-The Exception to the Effects of the Marriage
The effects of the marriage is governed according to Art
13 (1) by the husband's personal law at the time the marriage
was concluded. As a result, the exception is not applicable
unless the wife was an Egyptian when the marriage was
concluded. The rasion d' etre behind this exception was to
unify the laws that governs the marriage substantive aspect
and effects. However, this exception is criticized because
wives who acquired the Egyptian nationality after the
conclusion of their marriage will not be eligible to use this
exception
4- The Exception to the Dissolution of the Marriage
30
This exception means that the application of the
Egyptian law will be applied if either spouse was an Egyptian
when the marriage was concluded regardless of their
nationality when the repudiation or the dissolution
proceedings were initiated
Section Three: Capacity
1-Legal Provision
According to Art 11 of the Egyptian Civil Code: "... the
status and the capacity of persons are governed by the law of
the state to which they belong by reason of their nationality.
However, if one of the parties in a transaction of a pecuniary
nature, which is concluded and has effect in Egypt was a
foreigner lacking capacity due to a reason that is not apparent
and which cannot be easily detected by the other party than
this reason will have no effect on the foreigner's capacity...."
2-Connecting Factor
Capacity is subject to the national law of the person in
question. The application of the national law is justified by the
need to protect that person. The national law in question is the
person's law at the time the transaction was created.
3- The Concept of "Capacity"
i- Excluded Matters
The following matters are excluded from the category
of capacity:
a- Capacity to enjoy: which is the ability to acquire
rights and assume obligations and it is subject to the law
applicable to the right in question e.g. Lex Causae.
b- Forbiddance from disposition: or special incapability
is subject to the law applicable to the transaction concerned
with that forbiddance. e.g. forbidding judges and doctors from
exercising certain transactions.
ii-Included Matters
The included mattes among the concept of capacity are
those, which are related to the idea of capacity to exercise
31
which is the ability to exercise rights and assume obligations.
Therefore, these matters will include:
a-Age of majority
b-Extent of the capacity of the incapable
c-Incidents of incapacity such insanity, feeble
mindedness, prodigality and imbecile.
d-Obstacles to capacity such as absence, double or
serious disability, conviction of a felony.
A remark should be made to the fact that incidents and
obstacles of capacity are required to be declared by court
decisions. Therefore, such court decisions should be
recognizable and enforceable in Egypt so that it could be
given effect.
4-The Lizardi Exception
This is the exception was developed by the French
Lizardi case. Lizardi was a twenty-three years old Mexican
who bought jewelry from a French merchant in France. The
French merchant accepted a promissory note as a payment for
the jewelry that Lizardi bought from him. However, when the
note became due Lizardi refused to pay it and he used his
incapacity under the Mexican law , the age of majority was 25
years under the Mexican law at that time, as a defense against
the merchant's claim for the unpaid price. The French Cour de
Cassation recognized that it should disregard the Mexican law
because it was not acceptable to assume that a French citizen
will be aware of all the law of the world. The court concluded
that the contract of sale should remain valid as long as it was
not made recklessly. The Lizardi case laid down a principle
that protects parties with good faith who rely on ostensible
situations in order to secure the stability of transactions in
national markets.
The Lizardi case principle was adopted in Art 11 that
states "... however, if one the parties in a transaction of a
pecuniary nature, concluded and have effects in Egypt is a
foreigner without legal capacity and such lack of capacity is
32
due to a reason that is not apparent one which cannot be easily
detected by the other party then that reason shall have no
effect on that foreigner's legal capacity..."
in order to use the above exception there should be the
following :
a- A pecuniary transaction
b- The transaction is concluded and produces its effects
in Egypt
c- Lack of capacity is due to an obscure reason
d-the other contracting party was acting in good faith
If the requirements for the exception was fulfilled then
the foreign national law will be disregarded and will be
substituted with the Egyptian law.
5-Particularity of Capacity to Trade
The capacity to trade is determined under Egyptian law
according to Art 11 of the law 17/1999 which provides : "...1-
The following, whether Egyptian or foreigner, shall be
qualified and eligible for the exercise of trade:
a-Once he completes twenty one years of age even
though the law of the state to which he belongs by his
nationality considers him as a minor at that age
b-Whoever reaches the age of eighteen years under the
conditions prescribed in that law of the state to which he
belongs by his nationality after obtaining the permission of the
competent Egyptian court.
2- A person who is less than eighteen years old shall not
exercise the profession of trade in Egypt even though the law
of the state to which he belongs to by his nationality considers
him a major or allows him to exercise trade
3- A minor who is authorized to trade shall have the
complete legal capacity to fulfill all legal disposition required
by his trade ...."
It is an opportunity to remember that the married
foreign females’ capacity to trade is determined by their
national law according to Art 14 of the trade law 17/1999
33
Section Four Inheritance and Will
1- Legal Provision
Art 17 (1) of the Civil Code states that “.... inheritance,
wills and other depositions taking effect after death are
governed by the national law of the ancestor, the testator or
the person disposing of property at death...”
2- Inheritance
a- Connecting Factor
The Egyptian law adopts a wide concept of personal
status, which includes inheritance and will among items of
that concept so that it could be governed by the person's
nationality law. This attitude is justified by the need for
applying a single law to all matters of succession regardless of
the type of property within the estate i.e. whether the property
is a movable or an immovable.
b- Concept of Inheritance
The protection of the rights of creditors and third parties
attached to the assets of the estate belongs to the concept of
the property status, and procedure for inheritance is subject to
the forum's law.
c- Included Matters
Matter of Inheritance include :
a) conditions for inheritance: Death of the ancestor, lost
persons, life of the heir, unborn children.
b) persons eligible for receiving inheritance, their status
and shares. This also include the case of forbiddance
from inheritance such as murder, different faiths, Hagb,
Rad and Owl
c) The nature of the succession process whether it was
obligator or compulsory.
d- Matters Related to the Status of Property
There are certain matters which are not included in the
legal category of inheritance and they are subject to Lex Rei
Sitae. These matters are
34
i. the ancestor's creditors rights on the property
under succession
ii. Publication of the right to inherit
iii. Co-ownership between heirs.
e-Vacant Succession
The determination of the vacant succession is left for
the forum's law because it is a matter of characterization.
Under the Egyptian law, vacant successions exists when no
one makes a claim against the property of the ancestor as a
heir or when all the eligible heirs have renounced the estate.
According to Islamic sharia the ownerships of the assets
within a vacant successions transfers to the public treasury and
this rule is applied because there are not any heirs not because
it is a matter of inheritance.
3-Will
The will is a transaction by which a person express his
wish to dispose his property in a certain way after his death.
This transaction is made by the testator's unilateral will and it
is not compulsory because it can be revoked during the
testator's life.
a-Connecting Factor
The will is governed by the testator's national law at the
moment of his death. However, some issues require a special
treatment.
b-Substantive Validity of the Will
There are two types of substantive issues in the will.
The first type relates to the concept of succession while the
second type relates to the concept of the will as a transaction.
Issues of will that relate to the concept of succession includes
the testator's discretion, determining the possible will-
successors, cases of forbiddance from enjoying a right under
the will and the legal effects of the will.
Substantive issues that are not included in this conflict
of law rule are the capacity to exercise the will and vices of
consent. Some scholars support the application of the testator's
35
national law at the time of death to these issues. However, we
support another opinion. We believe that the testator's capacity
to exercise the will should be governed by both the law of the
testator at the moment of making the will and the testator's
national law at the time of death. In regards to the vices of
consent, we support applying the testator's national law when
he drew the will.
c-Issues Related to the Status of Property
The law of the property's site will govern the
publication of the will and the creditor's rights in the property.
That law will also govern the co-ownership between the heirs
and will-successors.
d-Formal Validity of the Will
The required formality for the will shall be determined
according to Art 17 (2) of the Egyptian Civil Law which states
that ".... the national law of the testator at the time the will was
made.. The same law will govern the form of other
dispositions taking effect after death..."
e-Effects of the Public Policy on the Applicable Law on
Inheritance & Will
Foreign laws applicable to inheritance and wills can be
disregarded if they violate the public policy. This can take
place is the following situations:
i. Denial of inheritance due to sexual or racial
discrimination
ii. Allowing heirs who had deliberately killed their
ancestor to inherit
iii. Allowing illegitimate children to inherit
iv. Allowing inheritance between a Muslim and non-
Muslim
v. Denying females the right to inherit
vi. Favoring the elder son.
36
Section Three Conflict of law rules in Pecuniary Rights
1- Introduction
Pecuniary rights are those that have a monetary value or
forms the person's wealth. Usually, private international law
scholars in Egypt treat this topic under the heading of
"obligations". Here the concept of obligations is used with its
widest sense i.e. the concept covers both topics of personal
and real rights. The topic of personal rights is usually treated
under the heading "the applicable law to obligations".
However, since that obligations are divided according to their
sources into contractual and non-contractual sources the
dominant doctrine in Egypt teats the conflict of laws in three
different sub headings which are the applicable law to
contractual obligations, the applicable law to non-contractual
obligations and the applicable law to the status of property
2- Plan
This section will contain the following :
Subsection One: The applicable law to contractual
obligations
Subsection Two : The applicable law to non-contractual
obligations
Subsection Three: The applicable law to status of
property
Subsection One : The Applicable Law to Contractual
Obligations
1- Introduction
Most of the international business transactions are
conducted through international contracts which produce
contractual obligations. As a result, the proliferation of the
free market concept has increased the likelihood of conflict of
law issues raised by international contracts.
2- Positive Provision
The determination of the applicable law to international
contracts will vary according to the forum that sits to hear the
37
dispute whether it was a court or an arbitration panel. We will
concentrate first on determining the applicable law to an
international contract before a court. According to Art 19 of
the Egyptian Civil Code "...the contractual obligations are
governed by the law of the domicile when such domicile is
common to the contracting parties, and in the absence of a
common domicile by the law of the place where the contract
was concluded. These provisions are applicable unless the
parties agree, or the circumstances indicate that it is intended
to apply another law. However, contracts relating to
immovable are governed by the law of the place in which the
immovable in situated..."
We will start our analysis of this article by pointing to
its correct construction since that it is, unfortunately, poorly
drafted. Art 19 clearly adopts the party autonomy conflict of
law rule for contracts. According to this rule that parties are
free , within certain limits, to choose any law to govern their
contract whether their choice was express, in the form of a
conflict of law clause within the contract in question, or a tacit
conflict of law that can be inferred from the circumstances
surrounding the conclusion of the contract itself.
However, if the parties were not able to reach an
agreement on the law governing the contract the Egyptian
Judge should revert to any of the alternative conflict of law
rules contained in Art 19 which are , the contracting parties
place of common domicile, the law of the place where the
contract is concluded respectively9.
9 Under Rome I Regulation on the Law Applicable to Contractual Obligations No
593/2008 of 17 June 2008 Article 3 "..1. A contract shall be governed by the law
chosen by the parties. The choice shall be made expressly or clearly demonstrated by
the terms of the contract or the circumstances of the case. By their choice the parties
can select the law applicable to the whole or to part only of the contract..."
38
3- Connecting Factor
According to the Art 19 a distinction must be made between
two possibilities : First, the existence of a choice of law,
express or tacit and second the absence of an agreement on
choice of law.
A) An Existing choice of law
The correct construction of Art 19 direct us to search
for the parties' express conflict of law before searching for the
parties' implied conflict of law through conducting an
examination of the circumstances surrounding the contract.
i-Express Choice
The Egyptian legislator, like most modern legislators,
gave the parties the right to choose the law governing their
contract. This freedom of choice is based on the parties’
freedom to tailor their contract specifically for their needs10. In
addition, an express conflict of law for the contract has its
advantages. First, the parties will be able to determine
beforehand the rules applicable to their contract. This
eliminates the uncertainty about the applicable law to the
contract11. Second, express conflict of law is more efficient in
terms of costs and time when a dispute arises between the
parties before the Court or the Arbitration panel. The Judge, or
Arbitrator, will focus on applying the chosen law and not on
finding the law applicable to the contract which the parties'
tacit consent was inclined to choose.
ii-Extent of Freedom of Choice.
The extent of the parties’ freedom to choose the law
governing their contract is an issue which is heavily debated
between conflict of law scholars. Some scholars champion the
notion of giving the parties completely freedom of choice
while other scholars prefer setting some restraints on the
10 Peter M. North, "General Course on Private International Law", Receuil Des Cours,
Volume 220, Year 1990, page 153 11 Ibid
39
parties’ freedom of choice such as selecting the law of a state
that has a genuine connection to the contract..,etc.
What makes this debate relevant under Art19 is that
there is no limits imposed by the wording of the article on the
parties' freedom of choice. Therefore, it is acceptable to say
that once the parties choose a foreign law that law becomes
incorporated into the contract as a contractual stipulation.
Consequently, the parties may adopt certain rules and leave
others. The parties my adopt rules form several different
foreign laws , depecage, and they may even detach their
contract from the ambit of any national law, contract sans loi .
Some modern legislations on contractual conflict of law
adopts that view12.
However, the conflict of law scholars those who believe
that the parties’ freedom in choosing the law of their contract
is not absolute. They restrict the parties’ freedom of choice by
requiring that the chosen law should be connected to the
international contract in question. Otherwise, all choice of
unconnected laws will be disregarded13. The same applies to
the parties’ choice of international customs and rules known
as Lex Mercatoria14 or the parties attempt to freeze the rules
chosen by inserting a "Gel de Droit" clause15.
In my opinion, it does not matter whether the parties
have absolute freedom to choose the law of contract or if we
12 Recital 13 of the Rome I Regulation stated that " This Regulation does not preclude
parties from incorporating by reference a non-state body of law or an international
convention”. 13 subsection 2 § 187 of the Restatement (Second) of Conflict of Laws (1971) states
that ".... The law of the state chosen by the parties to govern their contractual rights
and duties will be applied, even if the particular issue is one which the parties could not
have resolved by an explicit provision in their agreement directed to that issue, unless
either
(a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties' choice,..." 14 Peter M North, Supra note (10 ) at 162. 15 Pierre Mayer et Vicent Heuzé, " Droit International Privé", 7e edition, Montchrestien,
2001 page 481.
40
restrict their freedom by certain requirements. The real issue
at stake is the parties' ability to bypass the application of
certain mandatory rules of a connected state or to enforce an
agreement, which is intrinsically against the public policy of
that state. If we reach an agreement that none of the above will
be allowed, then the debate about the parties' scope of freedom
will lose its relevance.
This is currently the view adopted by the Rome I
regulation. In subsection four, article three of the regulation
there is an express statement that " Where all other elements
relevant to the situation at the time of choice are located in
one or more Member States, the parties' choice of applicable
law other than that of a Member State shall not prejudice the
application of provisions of Community law, where
appropriate as implemented in the Member State forum,
which cannot be derogated form by agreement.." This means
that under Rome I regulation the parties can choose whatever
rules they want to govern their contract with two main
exception. First, the mandatory rules of a connected Member
State. Second, the European Union Regulations and
Directives that are applicable in the Member State where the
dispute concerning the contract itself is being adjudicated.
Here the parties’ freedom of choice is checked by preventing
them from evading the mandatory rules.
iii-The Timing of Express Choice
The parties may choose the law governing their
contract when the contract concluded or afterwards provided
that the contract is valid from the outset according to one the
connecting factors included in Art 19. However, floating
conflict of law clauses where the conflict of law is dependent
upon the occurrence of a certain event such as a clause stating
that "the ownership of the goods shall be determined by the
law of the place where it exists during maritime shipping" are
not allowed.
41
Floating conflict of law clauses may not provide us with
an answer as to which law is applicable. Furthermore, floating
conflict of law clauses will give rise to the following problem:
Which law should determine if the conflict of law event has
occurred?
iv-Validity of the Conflict of law Clause
The conflict of law clause, as any other clause in the
contract, must be valid in order to produce the required legal
effect, which is submitting the contract to the rules of the
applicable law. Although Art 19 did not state when should we
consider the conflict of law valid we can at least deduct from
the general principles of law the following requirements:_
1) The conflict of law must be clear. A conflict of law
clause in a contract must be clear in indicating which law
should govern the contract. If the clause is not clear then we
might face a situation where the Judge will resort to applying
a law according to the implicit choice made by the parties or
to resort to the alternative connecting factors in Art 19. This
lack of clarity will virtually render the conflict of law useless.
2) The conflict of law must be made in Bona Fide. If the
conflict of law clause was made in bad faith , either through
use of misrepresentation, mistake, undue influence,...etc. then
the clause will have no effect and it will be vitiated by the
Court. The conflict of law clause, as any other clause, is the
product of the parties’s mutual consent so it comes to no
surprise that a defective consent cannot produce a valid
conflict of law clause.
3) The conflict of law must be legal. The conflict of law
clause as any other clause in the contract should not be used to
attain illicit gains such as evading mandatory rules or to
bypass the public policy of a certain state16. As I have
mentioned before, the parties' scope of freedom to choose the
law for their contract is does not allow them to choose a law
16 Peter M North, Supra note (10 ) at 165
42
solely for the purpose of avoiding certain rules in order to give
the parties to the contract the opportunity to maximize their
gains17. Mandatory rules and the public policy will always
have an overriding effect over the law of contract chosen by
the parties18.
B) An Existing Implied Choice of Law
According to Art 19 the conflict of law may be express
or implied although this poses a challenge for the Judge to
ascertain the law chosen by the parties to govern their
contract. This a de facto issue that is left to the trial court's full
discretion as a fact finder and escapes the review by the court
of cassation. Nonetheless we can give examples of
circumstances that may lead to the deduction of an implied
conflict of law such as:
a-choice of the forum may indicate the choice of that
forum's law because the choice of forum might reflect the
parties' wish to entrust the resolution of any future disputes
concerning the contract to the forum's law as it is applied by
the forum.
b-The parties' usage of a certain terminology belonging
to a certain law may indicate the parties’ intention to choose
that law. In this case, it is reasonable to expect that the parties’
17 Article 9 of Rome I Regulation states that Article 9
"1. Overriding mandatory provisions are provisions the respect for which is regarded as
crucial by a country for safeguarding its public interests, such as its political, social or
economic organization, to such an extent that they are applicable to any situation falling
within their scope, irrespective of the law otherwise applicable to the contract under
this Regulation.
2. Nothing in this Regulation shall restrict the application of the overriding mandatory
provisions of the law of the forum.
3. Effect may be given to the overriding mandatory provisions of the law of the country
where the obligations arising out of the contract have to be or have been performed, in
so far as those overriding mandatory provisions render the performance of the contract
unlawful. In considering whether to give effect to those provisions, regard shall be had
to their nature and purpose and to the consequences of their application or non-
application." 18 Frank Vischer, "General Course on Private International Law", Recueil Des Cours,
Volume 232, Year 1992. page 154
43
willful use of certain terms that has a certain legal connotation
of a certain law could indicate their desire to choose that law
to govern their contract.
c-The recourse to the authentication in a certain state
may indicate the choice of that state's law because
authentication is a requirement to render a certain type of
transactions effective vis-a-vis third parties. Usually, the
parties to a contract will not burden themselves to authenticate
their contract unless they wished to render it effective under
the law of the place where the authentication took place. This
in turn, leads us to conclude that the parties wish to have their
contract governed by that law.
d- The parties' use of model contract which is drafted
according to a certain state's law19 such as maritime insurance
model contracts drafted by the Lloyd’s syndicates based on
English law or grain future contracts prepared by Chicago
Board of Trade based on the law of the state of Illinois.
C) Criticism
The doctrine of implied conflict of law is criticized for
allowing the court to conclude the parties’ choice form
silence. The Judge's conclusions is, at best, second-guessing
the parties’ real intention without asserting his findings on
credible evidence. Indeed, some conflict of law scholars point
that the absence of an express conflict of law is an evidence
on the absence of choice of law. However, this criticism
cannot be positively supported by the law in Egypt because
the implied conflict of law is clearly adopted within the
wording of Art 19 of the Civil Code.
D) Clear Absence of Conflict of law
If there was no choice of law, express or implied, then
we can resort to certain legislative localizations for the
international contract. According to Art 19 the court will be
19 Bernard Audit, "Droit International Privé", 3e edition, Economica, Paris, 2000, page
680.
44
obliged to apply the law of the parties common domicile and
if there was not a common domicile then the court will apply
the law of the place where the contract was made, Lex Loci
Contratus
The legislative localization is praised for protecting the
justified expectations of the contracting parties since they will
know beforehand that the applicable law if they did not make
a choice of law. Nevertheless, the above localization is
criticized for making it easy for the court to apply a law that
may not reflect the international contract's center of gravity.
This goes against the philosophy of private international law.
As a result, a substantial number of Egyptian conflict of laws
scholars suggested alternative judicial localizations.
One of the solutions adopted by modern conflict of law
legislation is the application of the law of the place where the
habitual residence of the party required to effect the
characteristic performance of the contract. For instance, in
contracts of sale it is the seller's habitual residence because his
duty to deliver the goods and transfer ownership is the
characteristic performance to be made under the contract of
sale while in the contract of services it is the service
provider's habitual residence..and so on20. 20 article 4 of Rome I Regulation Article 4
".....1. To the extent that the law applicable to the contract has not been chosen in
accordance with Article 3 and without prejudice to Articles 5 to 8, the law governing
the contract shall be determined as follows:
(a) a contract for the sale of goods shall be governed by the law of the country where
the seller has his habitual residence;
(b) a contract for the provision of services shall be governed by the law of the country
where the service provider has his habitual residence;
(c) a contract relating to a right in rem in immovable property or to a tenancy of
immovable property shall be governed by the law of the country where the property is
situated;
(d) notwithstanding point (c), a tenancy of immovable property concluded for
temporary private use for a period of no more than six consecutive months shall be
governed by the law of the country where the landlord has his habitual residence,
provided that the tenant is a natural person and has his habitual residence in the same
country;
45
This will help us achieve certainty when there is no
conflict of law made by the parties. The applicable law will be
determined according to an objective criteria and it will be
fixed according to the specific nature of the contract in
question so that all contracts of sale will be governed by the
law of the seller's habitual residence...etc. The Judge will no
longer indulge in second-guessing the parties’ true intentions
and by time uniformity will be established so that a series of
default conflict of law rules can be created to face the parties'
lack of choice.
This solution can be supported under Art 24 of the
Egyptian Civil Code since that Art 19 address the situations
where
4- Included Matters.
i-Formation of Contract
Art 19 did not define which legal issues are to be
addressed by the law of contract. Nonetheless, the Egyptian
conflict of law scholars general agree that the following issues
(e) a franchise contract shall be governed by the law of the country where the
franchisee has his habitual residence;
(f) a distribution contract shall be governed by the law of the country where the
distributor has his habitual residence;
(g) a contract for the sale of goods by auction shall be governed by the law of the
country where the auction takes place, if such a place can be determined;
(h) a contract concluded within a multilateral system which brings together or
facilitates the bringing together of multiple third-party buying and selling interests in
financial instruments, as defined by Article 4(1), point (17) of Directive 2004/39/EC, in
accordance with non-discretionary rules and governed by a single law, shall be
governed by that law.
2. Where the contract is not covered by paragraph 1 or where the elements of the
contract would be covered by more than one of points (a) to (h) of paragraph 1, the
contract shall be governed by the law of the country where the party required to effect
the characteristic performance of the contract has his habitual residence.
3. Where it is clear from all the circumstances of the case that the contract is manifestly
more closely connected with a country other than that indicated in paragraphs 1 or 2,
the law of that other country shall apply.
4. Where the law applicable cannot be determined pursuant to paragraphs 1 or 2, the
contract shall be governed by the law of the country with which it is most closely
connected..".
46
fall under the scope of Art 19. The formation of the contract,
Consent, Expression of will and vices of the contract;
1. interpretation;
2. performance;
3. The consequences of a total or partial breach of
obligations, including the assessment of damages as far
as it is governed by rules of chosen law.
4. the various ways of extinguishing obligations, and
prescription and limitation of actions;
5. The consequences of nullity of the contract..
6. Personal effects : which include defining the contracting
parties, beneficiaries, unilateral contracts
7. Objective effects: which include content of obligations,
interpretation, performance, necessity of summons,
validity of penal clauses, legal compensation,
contractual liability, defense of non-performance,
characteristics of obligations and transmission of
obligations.
ii-Excluded Matters
Certain legal issues are not included despite their close
relevance to contracts. These issues are excluded because
according to the Egyptian Legislator they are dealt with other
conflict of law rules such as the capacity to contract and
formality of contracts. In addition, among other things the
following contracts are excluded: contract of marriage,
contract of adoption, contract of succession and contracts
concerning an immovable according to paragraph two of Art
19.
5-Particular Contracts
Some contract have a distinctive legal nature which
merits devising special conflict of law rules either because
the formation of those contracts are affected by a statutory
mandate or because the Egyptian judiciary believed that the
standard conflict of law rule embodied in Art 24 will do
47
violence to the administration of justice in absence of a
statutory mandate.
1. The Applicable law to International Contracts of
Labor
Contracts of labor require special treatment under the
conflict of laws because it is generally accepted that the
parties to labor contracts do not have full freedom to choose
the law governing their contract. Labor law is characterized by
the unmistaken presence of mandatory rules that interfere with
every aspect of the contract of labor. Form the formation of
the contract to the determination of the wage and finally the
termination of the labor relation is almost governed solely by
mandatory rules.
The draft for the Egyptian Civil Code contained a
special conflict of law rule for international contracts of labor
which was "...the law of the place of the central management
of the labor..." that rule was later on omitted in favor of
leaving the matter to be resolved through judicial
improvisation. The majority of scholars in Egypt favored
another rule according to which the international contract of
labor was governed by the law of the place where the labor is
performed. Nonetheless, the Egyptian cassation court adopted
the rule contained in the Egyptian Civil Code in one of its
rulings in 1967.
Some scholars see that a distinction must be made
between the regulatory aspects of the contract of labor, such as
minimum wages, maximum hours...et which is governed by
the mandatory rules, and the non-regulatory aspects of the
contract of labor, which is not governed by the police rules
and could ,therefore, be governed by the law chosen by the
parties.
2. The Applicable Law for Transfer of Technology
Contracts
The Egyptian trade law defines in Art 72 the transfer of
technology contract as "... an agreement in which the supplier
48
of the technology undertakes to transfer technical know-how
to the importer of technology against payment to be used in a
special technical manner of production or development of a
certain commodity, the installation or operation of machinery
or equipment or for the provision of services. The mere sale,
purchase, leas or rental of commodities shall not be
considered a transfer of technology. Nor shall the mere sale of
trademarks, patents or licensing agreements be considered a
transfer of technology unless it was set forth as a part of or in
connection to a transfer of technology...."
If such a contract was to be enforced in Egypt then it is
subject only to the Egyptian law event when it is Egyptian.
This contract will be governed by the Arts 72 - 87 and in case
of lack of legislative provisions the court will resort to the
general principles of Egyptian law. This is a prime example of
using material rules to govern what should have been an
international contract. In the case of transfer of technology
contracts only the Egyptian law is applicable and there is no
room for the parties to choose a law to govern their contract.
3. Contracts of Carriage
International contracts of carriage are governed by
international conventions that determine the rights and duties
of the parties to a contract of carriage. So far, Egypt is a party
to two main conventions: the United Nations Convention on
the Carriage of Goods by Sea 1978 known as The Hamburg
Rules and the 1999 Convention for the Unification of Certain
Rules for International Carriage by Air known as Montreal
1999 Convention.
a) The Contract of Carriage of Goods By Sea.
According to Art 2 of the Hamburg Rules: " 1. The provisions of this Convention are applicable to all
contracts of carriage by sea between two different States, if:
(a)The port of loading as provided for in the contract of
carriage by sea is located in a Contracting State, or
49
(b) The port of discharge as provided for in the contract of
carriage by sea is located in a Contracting State, or
(c) One of the optional ports of discharge provided for in the
contract of carriage by sea is the actual port of discharge and
such port is located in a Contracting State, or
(d) The bill of lading or other document evidencing the
contract of carriage by sea is issued in a Contracting State, or
(e) The bill of lading or other document evidencing the
contract of carriage by sea provides that the provisions of this
Convention or the legislation of any State giving effect to
them are to govern the contract.
2. The provisions of this Convention are applicable without
regard to the nationality of the ship, the carrier, the actual
carrier, the shipper, the consignee or any other interested
person.
3. The provisions of this Convention are not applicable to
charter-parties. However, where a bill of lading is issued
pursuant to a charter-party, the provisions of the Convention
apply to such a bill of lading if it governs the relation between
the carrier and the holder of the bill of lading, not being
the charterer.
4. If a contract provides for future carriage of goods in a series
of shipments during an agreed period, the provisions of this
Convention apply to each shipment. However, where a
shipment is made under a charter-party, the provisions of
paragraph 3 of this Article apply."
Therefore, if a contract of carriage of goods by sea
fulfills any of the above requirements it will be governed
solely by the Hamburg rules. On the other hand, if the contract
50
of carriage of goods does not fulfill those requirement then we
must return to the general provisions of Egyptian Maritime
Law no 8 for 199021.
b) The Contract of Carriage of Goods By Air.
As in Maritime Transport, Air Transport in Egypt is
governed by either the Montreal Convention 1999 or the
Egyptian Civil Aviation Code if the Montreal Convention is
not applicable to the dispute22.According to Article 1 of the
Montreal Convention its’ article will be applied to disputes
that fulfill the following perquisites “….1. This Convention
applies to all international carriage of persons, baggage or
cargo performed by aircraft for reward. It applies equally to
gratuitous carriage by aircraft performed by an air transport
undertaking.
2. For the purposes of this Convention, the expression
"international carriage" means any carriage in which,
according to the agreement between the parties, the place of
departure and the place of destination, whether or not there be
a break in the carriage or a transhipment, are situated either
within the territories of two States Parties, or within the
territory of a single State Party if there is an agreed stopping
place within the territory of another State, even if that State is
not a State Party. Carriage between two points within the
territory of a single State Party without an agreed stopping
place within the territory of another State is not international
carriage for the purposes of this Convention.
3. Carriage to be performed by several successive carriers is
deemed, for the purposes of this Convention, to be one
undivided carriage if it has been regarded by the parties as a
single operation, whether it had been agreed upon under the
form of a single contract or of a series of contracts, and it does
not lose its international character merely because one 21 The Contract of Carriage of Goods by sea is governed by articles 196 -247 22 Previously, air transport was governed by the Warsaw Convention which has been
altered by the Hague Protocol 1955, the Guadalajara Convention 197.
51
contract or a series of contracts is to be performed entirely
within the territory of the same State.
4. This Convention applies also to carriage as set out in
Chapter V, subject to the terms contained therein….”
Therefore, any contract of carriage by Air the does
not fulfill the above requirements will not be governed by
the Warsaw Convention but it will be governed by the
Chapter Seven and Eight of the Egyptian Civil Aviation
Code no 28 / 1981
6-An Appraisal
After analyzing art 19 it is time to make our own
appraisal of its suitability in solving the present day
challenges imposed by conflict of law in contractual
obligations.
First, we must admit that Art 19 is poorly drafted to
the extent that its’ utility is severely impaired. The text of
the article focuses on the parties’ implied choice rather
than on demonstrating the basic party autonomy conflict
of law rule. As I have demonstrated, earlier Art 19 does
not lay down the requirements of a valid binding conflict
of law clause nor does it determine the limits imposed on
the parties’ choice of law. As a matter of legislative
drafting more attention should have been devoted to
define the parties’ express choice of law than their
presumed implied choice of law.
Second, it is no secret that Art 19 is now outdated
and that Judicial application of that article has not yet
succeed in accommodating the current updates in this
field. As we have seen in Rome I Regulation, it is now
acceptable for the Court to apply the mandatory rules of
State other than that of the Forum or the chosen law if that
state has sufficient connection with the performance of the
52
contract. This is not the case with Art 19 which is silent
on this issue.
In addition, Art 19 rests on the premises that the
parties conflict of law is limited to choosing a law that
belongs to a certain legislation. This an outdated view
because it is now acceptable for the parties to choose the
rules of a model law or contract prepared by an
organization, cherry-picking rules form various states to
govern various aspects of the contract.
Another aspect of Art 19's antiquity is the use of
place of contract, the parties’ common domicile as
alternative conflict of law rules. The modern day practice
proves that the place of contract or the parties’ common
domicile is a futile solution because most contracts are
done between contracting parties of different domiciles
through exchange of communication. On the other hand,
the present modern conflict of law doctrine resort to the
law of the place where the habitual residence of the party
and requires effecting the characteristic performance of
the contract. I hope that the Courts will develop by time a
number of alternative conflict of law rules that reflect the
intrinsic nature of the contract in question.
Subsection Two : The Applicable Law to Non-
Contractual Obligations
1- Introduction
The non-contractual obligations are obligations that
results from torts and unjust enrichment.
2- Legal Provision
According to Art 21 of the Egyptian Civil Code "...Non-
contractual obligations are governed by the law of the state in
whose territory the act gave rise to the obligation took
place...However, when the obligation arises from a tort the
provisions of the preceding paragraph shall not apply to an act
which occurred abroad and which although is considered
53
unlawful in accordance with the law of the state in where the
act occurred if that act was lawful in Egypt..."
3- Connecting Factor
There are many possible applicable laws to any non-
contractual obligation. For example, torts can be governed by
the law of the place where the tort occurred , Lex Delicti
Commissi, or the law of the place where the action for
damages was brought which is the forum's law. Finally, the
tort can be governed by the proper law of the tort Lex Propria
Delicti. The above goes to unjust enrichment. Here we have
the law of the place where the enrichment has occurred or the
law of the place where the poverty occurred.
However, the Egyptian legislator choose to follow the
steps of other legislators in that matter by selecting the law of
the place where the act occurred regardless of whether it is a
beneficial or a harmful act. This is said to be an application of
the local law. Nonetheless, with torts the legislator made an
exception. In order for the Egyptian court to use the above
conflict of law rule it must ascertain that the unlawful act
committed outside Egypt is also unlawful act according to the
Egyptian law. Although, some writers argue that we did not
need that exception because it could be substituted with the
concept of public policy.
The local law in most cases can be easily ascertained
and the parties will normally expect it. Nevertheless, there are
incidents when the court might find it difficult to determine
the local law because the location of the harmful act is not
defined or if the elements of tortuous liability , injury and
harmful act, are scattered among several states. This occurs
when the harmful act takes place in one state while the injury
itself occurs in another state. The same goes to unjust
enrichment when the beneficial act occurs in one state and the
poverty occurs in another state.
As regards the places of accidents, harmful acts, some
scholars suggested that we interpret the concept of local law
54
widely so that it may include the concept of social milieu.
According to those scholars the law of the local place does not
necessarily govern the act in its material sense. For example
suppose a groups of American students went to Canada for
camping. Suppose that an accident occurred there which was
caused by a harmful act committed by an American student by
which another American student was harmed. In this case the
applicable law is the American law not the Canadian law
because all of the elements of this case points to a social
milieu where the American law's application will be the
appropriate. Although some notable Egyptian conflict of law
scholars support the social milieu idea, the text of the Art 21
prevents us from adopting that view. As regards to the
problem of the scattered elements of the liability many
suggestions were made in line with the search for the most
connected law.
4-Legal Concept.
The concept of non-contractual obligations covers the
following:
a- Elements of tortuous liability : unlawful act,
prejudice and causal link
b- Element of unjust enrichment : enrichment, poverty
and causal link
Subsection Three: The Applicable Law to the Status of
Property
1- Introduction
Private international law deals with rights in property
which needs a conflict of law rule to determine the law
governing those rights either in rem rights or in personam
rights. For several decades it was a given that the conflict of
law issues in those assets are governed by the famous Lex Rei
Sitae conflict of law rule .
Although this rule seems to be ,at first blush, simple
and straightforward in reality it is not. First, this rule is used
55
for both immovables and movables. Immovables are fixed by
their nature but movables are not. Movables are by nature
capable of being moved from one state to another which gives
arise to the "mobile choice of law" problem. Second, this rule
presupposes that the asset has a physical location but in reality
there are assets that do not have a physical location such as
debts, negotiable instruments and intellectual property23.
Therefore, in order to address the matter properly we shall
deal with conflict of law in rights in tangible assets, such as
the immovables and movables, and then we shall deal with
conflict of law issues in intangible assets.
i-Tangible Assets
Tangible assets are assets that occupy a certain space.
The conflict of law issues in those assets are governed by the
Lex Rei Sitae conflict of law rule as embodied in Art 18 of the
Egyptian Civil Code "...the possession, ownership and other
real rights in immovables are governed by the law of the place
where the immovable property is situated and the law of place
where the movable was situated at the time when the event
giving rise to acquisition, loss of possession, ownership or
other real rights in the movable....."
It is clear from the text of Art 18 that the Egyptian
legislator chose, like most of the world's legislators, that the
law of situs to govern solely24 all legal issues relating to rights
in an asset whether it was a movable or immovable. It is the
law of situs that defines what the rights in an asset and how it
can be acquired created and transferred25. As we have seen
earlier on, the law of situs governs the question of whether a
particular asset is classified as a movable or immovable26.
Nonetheless, that does not mean that Art 18 is applied blindly
23 Pierre Mayer et Vicent Heuzé, Supra note (15) at, page 429: 24 Bernard Audit, Supra note (19) at, page 633 25 Pierre Mayer et Vicent Heuzé, Supra note (15) at page 432 26 Dicey & Morris, "The Conflict of Laws", edited by Lawrence Collins, Volume 2,
Sweet & Maxwell, 1993, page 915
56
to both types of tangible assets without due regard to the
differences inherent within their nature
a) Immovables
The Lex Rei Sitae conflict of law rule was devised
specifically for Immovables because they have a fixed
location that does not change periodically and the historical
socio-economic and policitical significance of real estate. In
fact, the Lex Rei Sitae conflict of law rule was a manifestation
of the State's exercise of its sovereignty over its natural
resources by applying its law exclusively to address all legal
issues relating to immovables situated within its borders27. In
addition, practical reasons helped the dominance of the Lex
Rei Sitae conflict of law rule. The use of real estate as a
valuable collateral for secured credit and the subsequent need
to keep track of all transactions relating to a particular real
estate to preserve the secured creditor's right in the collateral
means that a recording system administrated by the State
where the asset located becomes a necessity.
As a result, it is for the creditors' and the owners' best
interest that the law of the State where the immovable is
situated will govern all transactions that aim at altering the
proprietary rights in, or establishing collateral over an
immovable. Therefore, it does not surprise anyone to assume
that there is a consensus that the transactions affecting real
estate will always be governed by the Lex Rei Sitae.
Nonetheless, conflict of law scholars have recognized
that there is a need to distinguish between the contractual
effects of a transaction that aims at altering the proprietary
rights in, or establishing collateral over an immovable, and the
actually proprietary effects of the transaction. It is general
agreed that the contractual effects of the transaction is
governed by its own proper law, the Lex Contractus, while
27 Pierre Mayer et Vicent Heuzé, Supra note (15) at page 430.
57
that proprietary effects of the transaction is governed by the
Lex Rei Sitae28.
To illustrate I give this example. Suppose that a Dutch
firm is interested in buying a building in Cairo to use it as a
warehouse. Suppose also that the parties, the firm and the
owner of the warehouse, agreed that the contract of sale will
be governed by the Dutch law. In this case the Dutch firm's
duty to pay will be governed by the Dutch law, the law of
contract, because it is a contractual effect that does not alter
the proprietary rights in the warehouse nor it establishes a
collateral over the warehouse. On the other hand, the original
owner's duty to transfer the ownership in the warehouse will
be governed solely by the Egyptian law, the Lex Rei Sitae,
because this duty aims at altering the proprietary rights in the
warehouse.
Of course, there are instances when the above
distinction between the contractual effects to the transaction
and its proprietary effects cannot be implemented. This is the
case when the law of contract creates a proprietary rights in
the immovable that the Lex Rei Sitae does not recognize such
as tenancy in common, a proprietary right recognize in most
common law systesm, or when the law of contract requires
formalities unknown to the Lex Rei Sitae29. It those cases, the
Lex Rei Sitae prevails over the law of contract.
b) Movables
However, difficulties may arise when the assets is a
movable that can change its location at any given point of
time. This gives rise to mobile conflict of law problem
because of the movable's constant change of location and the
corresponding change in the Lex Rei Sitae30. Fortunately, there
are solutions to this problem. First, according to Art 18 of the
Egyptian Civil Code the place where the movable was situated 28 Id., at 432; Dicey & Morris, Supra note (26) at page 967 29 Pierre Mayer et Vicent Heuzé, Supra note (15) at page 432 30 Id., at 438
58
governs all issues relating to the proprietary rights in the
movable asset. Therefore, the validity of a transfer of
ownership in the movable and the proprietary effects of that
transfer is governed by the law of the state where the movable
is at the time of the transfer31.
Consequently, if the movable was in Egypt and while it
was within the Egyptian borders the owner of the movable
decided to sell it before the movable was moved to India it is
the Egyptian law which will determine the terms and
conditions for transferring the ownership in that movable. If
that transfer was valid according to Egyptian law then it will
remain valid even after the movable moves to India and even
if the above transfer was invalid according to Indian law and
vice-versa.
Second, If we are dealing with a shipment of
movables, such as merchandise and bulk cargo, which is in
transitu most Egyptian conflict of law scholars agree that the
applicable law will be the law of the place of destination if the
merchandise was shipped by road or rail and in case of cargo
shipped on ships and airplanes we will apply the law of the
flag regardless of the actual place where the cargo exists32.
Third, certain movables such as airplanes and ships
have their own specific conflict of law rules. The transaction
that aims at altering the proprietary rights in ship or an
airplane, or establishing collateral over an airplane is governed
by the law of the state where the airplane's register exist. The
same applied to ships where transaction that aims at altering
the proprietary rights in, or establishing collateral over a ship
is governed by the law of the ship's flag33.
ii-Intangible Assets
The Lex Rei Sitae conflict of law rule was devised for
assets that occupy a physical space but it was never intended 31 Dicey & Morris, Supra note (26) at page 965 32 Pierre Mayer et Vicent Heuzé, Supra note (19) at page 631 33 Id., at 431.
59
to be used with non-physical assets which do not occupy a
physical space because they are a mere legal fiction without
any tangible existence34. Assets like debts, Intellectual
property are now more valuable than any physical asset
whether movable or immovable. It is true that some legal
systems tend to deal with such assets as movables but does not
helps overcome the fact that Lex Rei Sitae conflict of law rule
is based on a physical connecting factor , the location of the
asset itself.
Therefore, conflict of law scholars either devised a
fictional location for the non-physical asset or devised new
conflict of law rules that are not based on the asset's location.
An example of the first approach is shares and bonds issued
by corporations. The shares and bonds are representative of
the right to ownership in the corporation's capital and the right
to demand payment of a certain sum of money. Neither of
them have a physical location yet, conflict of law scholars and
courts decided that the place where the corporation's registrar
is located will govern the proprietary rights in the shares and
bonds35.
Another example for a fictitious location approach in
non-physical assets is debts that are not embodied in
negotiable instruments. The location of those debts for the
purpose of determining the law governing their transfer is the
debtor's place of residence36. The same principle applies to
industrial designs which are governed by the law of the place
where it was registered37.
Nonetheless, the Egyptian legislator chose to abandon
this approach when it comes to negotiable instruments.
According to Art 387 of the Egyptian Commercial Code " The
34 Id., at 429. 35 Audi, Supra note ( 19) at 650; Dicey & Morris, Supra note (26) at page 931. 36 Dicey & Morris, Supra note (26) at page 924. 37 Pierre Mayer et Vicent Heuzé, Supra note (15) at page 430.
60
form of any bill of lading is regulated by the laws of the
territory in which the bill of exchange has been signed
If, however, the obligation entered into by means of a
bill of exchange are not valid according to the provisions of
the above law, but are in conformity with the Egyptian law the
circumstances that the previous contracts are irregular in form
does not invalidate the subsequent contracts in Egypt"38.
The Egyptian legislator adopted a similar rule for
cheques in art 481 of the Egyptian Civil Code" The form of
any contract arising out of a cheque is regulated by the laws
of the territory in which the contract has been signed
If, however, the obligation entered into by means of a
cheque are not valid according to the provisions of the above
law, but are in conformity with the Egyptian law the
circumstances that the previous contracts are irregular in form
does not invalidate the subsequent contracts in Egypt"
This means that debts embodied in negotiable
instruments should be formally valid either according to the
place where the instrument was made or according to the
Egyptian law. These conflict of law rules are based on novel
legislative policies. First, they represent an exception form Art
20 policy of validating the contracts formally. We do not have
here several alternative connecting factors although that the
formal invalidity of the negotiable instrument has a far-
reaching effect over the substantive validity of the contracts
arising from the instrument. e.g. the contracts will no longer
be valid as contracts derived from an obligation to pay an
negotiable instrument if the negotiable instrument does not
met the formal requirements in the law of the place where it is
made.
Another novel aspect of the above rules is the use of
Egyptian law's provisions as an escape device to avoid
38 Note that the same rule is applied to promissory notes by virtue of Art 470 of the
Egyptian Commercial Code.
61
nullifying the formally invalid negotiable instruments despite
the fact that those instruments were not made in Egypt and
there it is not necessary that they have any physical
connection with Egypt. This represents the Egyptian
legislator's wish to move away from the fictitious location
approach to a rule of validation approach to save the
negotiable instruments based contracts.