choice of law 2013

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Chapter Three : Positive Rules of Conflict of

Laws1

Introduction

Though the Egyptian legal system does not contain

a specific legislation on conflict of laws, most of the

Egyptian rules of the conflict of laws can be found in the

Egyptian Civil Code. However, many other rules of

conflict of laws can be found in other different statutes

such as the Commercial Code Act no 17 /1999 and theArbitration Act 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

group is concerned with pecuniary transactions. It is to be

noted that both topics share similar questions of formality

which can be solved by similar rules.

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.

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.


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Section One : Conflict of Laws in Formality.

1-IntroductionFormality is a term general refers to

"procedure" in contrast to "substance". The Majority of

modern legal systems have been settled on the adoption

of the "Locus Regit Actum" rule in regard 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 done, it is alsovalid in the state where it is to be 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

contracting parties were permitted to apply to of formality

irrespectively, the law of the state in which the

transactions were 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

SeeBLACKS LAW DICTIONARY (6th ed.1990) 941.


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2- Historical Background

Questions of conflict of laws first appeared in themiddle ages within the context of business relations

among the cities of north Italy. Therefore, the first

solutions 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". Thedistinction 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 theapplication of that rule upon the implied will of the

parties. This interpretation opened the path for the party

autonomy rule that 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

an express will is better for consideration that an impliedwill.

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

allowed be governed by another law at that time. It is

worthy to mention that the the "Locus Regit Actum" rule


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disappeared temporarily in the era of the domination of

the territorial school which prevailed in the 16 th century.

Under such school, conflict of laws was solved byanalyzing 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 time under practical reasons. These reasonsaimed at facilitating the creation of transactions. They

took into consideration that the concerned parties may

face difficulty in knowing 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 directstowards considering the "Locus Regit Actum" rule as a

facultative rule.

The Egyptian legislator opted for the modern

philosophy. This can be induced for the facility which has

been granted to the Egyptian judge to apply the law

which applicable to the substance, or the law applicable


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to the common domicile of the contracting parties, or

their law of common nationality, which ever validates the

transaction, i.e. Lex Validatus. Therefore, The Egyptianpositive rule applicable to formality is not as the rest of

the traditional conflict of law rues, neutral. It is rather of a

material objective.

4- What is meant by the concept of formality?

Distinction between "substance" and "formality"

can be of no importance when the contracting partiessatisfy the formality requirements provided for 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 contain the required procedures for

filing a lawsuit before the court which relates to the

judicial authority of the state while formality is concerned

with the actives of the individuals. Although bothformality 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


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Fori, because it is mandatory to follow that law in all

matters relating to the filing a lawsuit before the court.

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 rimrights (e.g. pledge). Though 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 which 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

Laws may require the satisfaction of certain

formalities for the creation of certain transactions 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


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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 subject to nothing but the lawapplicable 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 atthe 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.

3

SeeCollection of Act Prparatoires, Part I , 269


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Their arguments are based upon the philosophy of

facilitation which constitutes the modern background for

the place of creation of the transaction. First, why shouldwe 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 place of transaction. Third, the other doctrinerender the "Locus Regit Actum" rule idle, because if we

restrict the parties choice 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 "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 impossiblecreation of the transaction at places other than the place to

which the law "substance" pertains?

Consequently, adopting of a wide concept of

formality is required to the extent of including the

question of whether particular formality is required or

not. Such a doctrine fits the requirements of facilitation

and which are 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


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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 forthe 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

law to the transaction's substance requires such evidence

then the transaction may be proved by testimonial

evidence.

Some of the Egyptian scholars argue for releasing

the parties form the required documentary evidence

provided for by the applicable law at the place of creation

of the transaction if the Lex Loci does not require such

type of evidence. Those scholars relay on the modern

philosophy of 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 o persons requires

the discussion of the following: the preliminary topics,

marriage, 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


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Subsection Four: Inheritance and Will

Subsection One: Introductory IssuesThe Egyptian Quest to Independence & the

Abolishment of Foreign Capitulations

Before examining the choice 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 theMamluk and the Ottoman Empire resort 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 encourage foreign investment.

Nonetheless, the European and other Western

powers were interested in establishing a foothold in theregion 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


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of Egypt 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 aBritish 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 ahierarchy. 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 choice 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 choice of law situations wereonly possible before the Mixed Courts. The Mixed

Court's Council later on issued a set of procedural rules,

known are the "Rglement d'organisation judiciaire mixte

" which contained, ironically, the choice 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 share

view among all political powers around the political

spectrum in Egypt that the foreign capitulations must

come to an end.


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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. TheUnited 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 explicitly called upon the

abolishment of the Foreign Capitulations.

The United Kingdom mobilized its diplomacy to

set out a conference held at Montreux, Switzerland in1937. 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 choice 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 theRglement

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 "PersonalStatus" as it is understood under most Western choice of

law doctrines such as inheritance, wills and other

dispositions mortis causa.

Second, the Egyptian Government has agreed to

retain the same choice of law rules that were included in

Article 29 of theRglement d'organisation judiciaire


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The Egyptian government even agreed to express state

the rejection of the Renvoi in order to prevent the

Egyptian Courts form using the foreign choice of rulesthat uses the domicile as a connecting criterion for

personal status choice 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 criterion 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 foreigncapitulations and enact new choice of law rules that might

lead to the application of the Islamic Shariah on

foreigners7.

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.

6This was done by incorporating Art 31 of theReglement"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.7DECLARATION BY THE ROYAL EGYPTIAN GOVERNMENT

"The undersigned, acting in virtue of their full powers, make the following

declaration:...............


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1- The Concept of " Personal Status "

As we have seen earlier, the concept of "Personal Status"under Egyptian choice of law rules is an enlarged concept

unlike that adopted under other choice of law rules.

According to the Article 28 of theRglement

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 ofproperty 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

3. PERSONAL STATUS

The Royal Egyptian Government, having already, and more particularly in theEstablishment 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."


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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 theEgyptian choice of law rules is done according to the

Egyptian law.

2-Applicable Law to "Personal Status "

Personal Status is governed by the personal law (

Lex Personae). In most Common Law jurisdictions Lex

Personaeis the law of domicile (Lex Domicilii) while inmost of the Civil Law jurisdictions 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 the selection of

personal law as a connecting criterion for the choice of

law rules used by the Egyptian Legislator designed the

Personal Status choice of law rules.

An Appraisal of theLex Patriae

As we have seen earlier, the foreign states agreed

with the Egyptian Government to use Lex Patriae as achoice of law criterion. This in turn, drives us to evaluate

how suitable was the choice of Lex Patriae as a choice of

law criterion.

(a) The Advantages of Lex Patriae

Lex Patriae as a choice of law criterion has two

main advantages. First, it is easily ascertainable because a


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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 wellevidenced since a person normally cannot change his

nationality without recourse to a set of official procedures

that will produce official documents to establish the

occurred change of nationality.

Nonetheless, the application ofLex Partriaecan be

criticized for the following: First, as a result of increase

social mobility it is now uncommon to find persons whohold 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

8This 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.


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answer. Some jurisdictions 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. UsingLex Partriaewill 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 choice of law rules in

that Jurisdiction.

The third, as is all too obvious today a person may be

stateless either as a result of being a member of a societythat 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 according to Art 25 (2) of the Civil Code.

However, if the Egyptian nationality is not among othernationalities 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, interest,

social relations, his participation in public affairs and his


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intentions. The explanatory memorandum of the Egyptian

Civil Code supports such solution. The determination of

the de factonationality 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.


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Subsection Two Marriage:

1- IntroductionMarriage 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 themarriage contract will be relevant. Therefore, this

subsection will be divided into the following headings:

i- The Validity of the Contract of Marriage

ii-Effects of Marriage

iii- Nullity of Marriage

iv-Dissolution of Marriage

v-Exception application of the Egyptian Law

Heading One: The Validity of the Contract of

Marriage

(a) Formal Validity

According to Egyptian law the formal aspects ofmarriage are like any other formality governed by Art(20)

of the Civil Code. In pursue of Art(20) formality is valid

according to any of the following laws: the law of the

state in which the contract made, the law applicable to

matters of substance, the law of the common domicile of

the contracting parties or the law of their common

nationality. Since that the substantive aspects of the


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marriage are governed by the law of the common

nationality of the spouses then the connecting factors for

the formal aspects of the marriage are: the law of theplace of conclusion, the law of the common nationality

of the spouses and the law of the common domicile.

The Place of Conclusion ( Lex Loci

Celebrationis)

Marriage is formally valid if it is made according

to the formality requirements at the place where themarriage was concluded. In such a case the marriage had

satisfied the local formality. The Egyptian law recognizes

many types of local formality for valid marriages.

The first type is the official formality and it is made

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.

The second type of formality for marriage in Egypt

is the Islamic customary. 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


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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 ismade 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.

The Law of the 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.

The Law of the Common Domicile

Formal aspects of marriage can be valid if they

satisfy the legal requirement at the law of the spouses'

common domicile. Therefore, foreigners domiciled in

Egypt can validly conclude marriage in accordance with


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the Egyptian official or customary forms even if they

were accidently residing outside Egypt.

Legal Category of the Contract of Marriage

Formal Validity

TheLex Foridetermines what constitutes formality

in the contract of marriage because it is a matter of

characterization. According to the dominate Egyptian

doctrine the Egyptian Lex Fori which will decide theformal aspects is the 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 thetransaction 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 Egyptthe 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


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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 powerof each means of proof.

(b) Substantive Validity of the Contract of

Marriage

The Connecting Factor

The validity of the substantive aspects of the

marriage is left to the spouses' law of the commonnationality. 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


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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.

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 andwhat is considered a substantive aspect of the marriage.

We remind the reader that we have concluded that

witness requirement and religious ceremony to be among

the formal aspects of the marriage. However, the essential

elements for the contract of marriage are left to the

concept of matters of substance.

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 their highly possible conflict with

Islamic Sharia which constitutes the basics of the public

policy in Egypt. As an example, our mandatory Islamic

law rules do not allow a female Muslim to marry a non-

Muslim male.

It is to be noted that public policy is operative only

with 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


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was concluded that the substantive aspects of that

marriage will be governed by the Egyptian law.

Heading Two : The Effects of Marriage

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 theeffects of the marriage is the nationality of the husband at

the time of concluding the marriage. 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 thefact 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 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.


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Legal Category

The legal category of effects of marriage includestwo 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, to be present at themarital domicile and the service to husband and children.

Also they may 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 herdower, 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 alimonypendete lite is

a temporary alimony, which a husband by a court orderpays 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 of law are directly

applicable regardless to the connected foreign laws to

marriage. Actually such rules of law belong to the

mandatory rules of law.


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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 thefact that such lack of capacity is not established for the

protection of the wife but rather for the protection of the

family. Therefore, such 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 herexercise 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 rgime matrimonial.

By virtue of this legal system the spouses will arrange the


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system by which their matrimonial estate will be

organized, before, through and after marriage. The

matrimonial regime is unknown to the Egyptian laws(whether the laws applicable to Muslims or those which

are applicable to non-Muslims). This explain the

Egyptian legislator's adoption of a legislative

qualification for such 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 atthe 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 beharmed 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 supposed 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 matrimonialregime 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.."


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However, the bona fide third party should not be

harmed by the fact of not publishing a suitable

matrimonial regime to his interests. Therefore, theEgyptian 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 of

recording it in the register of trade and publishing its

summary in the register's journal.."

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 andwhich 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. Theserestrictions should be observed because they were laid

down for the purpose of protecting the matrimonial

relationship.


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Heading Three Nullity of Marriage

1-Applicable LawIt 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? According to the dominant doctrine the

nullity of the marriage is subject to the law whose

requirements were not fulfilled. Therefore, in order for amarriage 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 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 theMatrimonium Putativum?


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According to the dominant doctrine Matrimonium

Putativum is governed by the same law that led to the

nullity of the marriage because Matrimonium Putativumis 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.

Heading 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 ofthe 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 procedure conducted outside the courts. Under


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Islamic shaira a husband may be able to divorce his wife

by uttering the work "talaq" with the intention of

dissolving the marriage. However, divorce or moreparticularly 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 adivorce 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 factorhas 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 suchfraud 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.


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2- Legal Category

The Legal Category of dissolving the marriageincludes: conditions for dissolution, its consequences and

procedure.

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 presenting the proof before

the court is subject to the forum's law because it is a

matter of procedure. Also, determining what constitute a

repudiation, divorce or separation is governed by forum's

law because it is a matter of characterization

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 damagesfor 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


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governed by the husband's law of nationality at the time

of concluding the marriage.

Excluded Matters: 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 statein which

the lawsuit is brought or in the statein with the

proceedings are taken place..." However, some lawsrequires 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 the forum's law because

they fall into the scope of the forum's law mandatory

rules.

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


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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 beforeconcluding 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 willbe applied. the Egyptian legal system recognizes the

application of the dual religious rules of non-Muslim

spouse if either one enjoys the Egyptian nationality and

both shared the same sect and denomination.

3- 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 is 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


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3- The Concept of "Capacity"

(a) Excluded MattersThe 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 specialincapability is subject to the law applicable to the

transaction concerned with that forbiddance. e.g.

forbidding judges and doctors from exercising certain

transactions.

(b) Included Matters

The included mattes among the concept of capacity

are those which are related to the idea of capacity toexercise 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


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recognizable and enforceable in Egypt so that it could be

given effect.

4-The Exception

(a) Lizardi Case

This is the exception was developed by the French

case Lizardi. 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 fromhim. However, we 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.

(b) Positive Provision

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 due to a reason that is not apparent one

which cannot be easily detected by the other party then


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that reason shall have no effect on that foreigner's legal

capacity..."

(c) Requirements of the Exception

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

(d) The Effects of the Exception

If the requirements for the exception was fulfilledthen the foreign national law will be disregarded and will

be substituted with the Egyptian law.

(e) 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 exerciseof 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


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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 dispositionrequired by his trade ...."

It is a opportunity to remind the reader the married

foreign females is determined by their national law

according to Art 14 of the trade law 17/1999

Section Four Inheritance and Will

1- Legal ProvisionArt 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 one applicable law to all matters of


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succession regardless of the type of property within the

state i.e. whether the property is a movable or an

immovable.

(b) Concept of Inheritance

Protection of the rights of creditors and third

parties on succession 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, differentfaiths, 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

a- The ancestor's creditors rights on the property

under succession

b-Publication of the right to inherit

c- Co-ownership between heirs.


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(e) Vacant Succession

The determination of the vacant succession is leftto the forum's law because it is a matter of

characterization. Under the Egyptian law, vacant

successions exist when no one makes a claim against the

property of the ancestor as a heir or when all the eligible

heir have renounced the estate. According to Islamic

sharia vacant successions belongs 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, there are some

issue that require a special treatment.

(b) Substantive Issues in the Will

There are two types of substantive issues in thewill. The first type relates to the concept of succession

while the second type relates to the concept of the will as

an 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.


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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 theapplication of the testator's 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 at the moment of creating 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 Issues 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 ApplicableLaw 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:

a- Denial of inheritance due to sexual or racial

discrimination


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b-Allowing heirs who had deliberately killed their

ancestor to inherit

c-Allowing illegitimate children to inherit

d-Allowing inheritance between a Muslim and

non-Muslim

e-Denying females the right to inherit

f-Favoring the elder son.

Section Three Conflict of law rules in Pecuniary

Rights

1- Introduction

Pecuniary rights are those which 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 ofobligations 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 tocontractual obligations, the applicable law to non-

contractual obligations and the applicable law to the

status of property


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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

Contractual obligations are those which are basedon contracts. Most of the international business

transactions are conducted through international

contracts. As a result, the proliferation of free market

concepts has increased the likelihood of conflict of law

issues raised by international contracts.

2- Positive Provision

The determination of the applicable law tointernational contracts depends of the competent forum

whether it was a court or an arbitration panel. We will

concentrate on the first case which 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


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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 theparties 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 was, unfortunately,

poorly drafted. Art 19 clearly adopts the party autonomychoice 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 choice of law clause within the

contract in question, or a tacit choice 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 choice 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..."


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3- Connecting Factor

According to the Art 19 a distinction must bemade between an existing choice of law , express or tacit,

and the absence of an agreement on choice of law.

I- An Existing Express Choice of Law

The correct construction of Art 19 direct us to

search for the parties' express choice of law before

searching for the parties' implied choice of law through

conducting an examination of the circumstancessurrounding the contract.

(a) 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 specificallyfor their needs10

. In addition, an express choice 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 choice

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 onapplying the chosen law and not on finding the law

applicable to the contract which the parties' tacit consent

was inclined to choose.

10Peter M. North, "General Course on Private International Law", Receuil Des

Cours, Volume 220, Year 1990, page 15311

Ibid


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(b) Extent of Freedom of Choice.

The extent of freedom given to the parties tochoose the law governing their contract is an issue that is

heavily debated between choice of law scholar between

those who see that parties are completely free to make

their choice and those who prefer setting some restraints

on the 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, andthey may even detach their contract from the ambit of any

national law, contract sans loi . This is supported by the

modern legislations on contractual choice of law12

.

However, there is within the choice of law scholars

those who believe that the parties freedom in choosing

the law of their contract is not absolute. They restrict the

parties choice of law by requiring that the chosen lawshould be connected to the international contract in

question. Otherwise, all choice of unconnected laws will

be disregarded13

. The same applies to the parties choice

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


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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 their freedom is subjected to certain

requirements in order to have effect. 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 publicpolicy of that jurisdiction. 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 ofchoice 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

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, or..."14Peter M North, Supra note (10 ) at 162.15Pierre Mayer et Vicent Heuz, " Droit International Priv", 7eedition,

Montchrestien, 2001 page 481.


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exception. First, the mandatory rules of a connected

Member State. Second, the European Union Regulations

and Directives that are applicable in the Member Statewhere 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.

(c) The Timing of Express Choice

The parties may choose the law governing theircontract 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 choice of law clauses where the

choice 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"

Floating choice of law clauses may not provide us

with an answer as to which law is applicable.

Furthermore, floating choice of law clauses will give rise

to the following problem: Which law should determine if

the choice of law event has occurred?

(d) Validity of the Choice of Law Clause

The choice 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 choice of law valid we can at least

deduct from the general principles of law the following

requirements:_


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1) The choice of law must be clear. A choice of law

clause in a contract must be clear in indicating which law

should govern the contract. If the clause is not clear thenwe 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 virtual render

the choice of law useless.

2) The choice of law must be made in Bona Fide. If

the choice of law clause was made in bad faith , eitherthrough use of misrepresentation, mistake, undue

influence,...etc. then the clause will have no effect and it

will be vitiated by the Court. The choice of law clause, as

any other clause, is the product of the parties mutual

consent so it comes to no surprise that a defective consent

cannot produce a valid choice of law clause.

3) The choice of law must be legal. The choice oflaw 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

jurisdiction16

. 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 solely for the

purpose of avoiding certain rules in order to give the

parties to the contract the opportunity to maximize theirgains

17. Mandatory rules and the public policy will

16Peter M North, Supra note (10 ) at 165

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.


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always have an overriding effect over the law of contract

chosen by the parties18

.

II- An Existing Implied Choice of Law

According to Art 19 the choice 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 thereview by the court of cassation. Nonetheless we can give

examples of circumstances that may lead to the deduction

of an implied choice 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 lawas 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

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


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to expect that the parties' 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 theircontract .

c-The recourse to the authentication in a certain

state may indicate the choice of that jurisdiction'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 theywished 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 theLyold'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.

IV-Criticism

The doctrine of implied choice of law is criticized

for allowing the court to conclude the parties choice of

law form silence. The Judge's conclusions is ,at best,

second guessing the parties real intention without

asserting his findings on credible evidence. Indeed, some

choice of law scholars point that the absence of an

express choice of law is an evidence on none choice of

19Bernard Audit, "Droit International Priv", 3eedition, Economica, Paris, 2000,

page 680.


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law. However, this criticism cannot be positively

supported by the law in Egypt because the implied choice

of law is clearly adopted within the wording of Art 19 ofthe Civil Code.

III-Clear Absence of Choice 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 obliged to apply the law of the parties commondomicile 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 was 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 choice 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


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services it is the service provider's habitual residence..and

so on20

.

20article 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

choice of law 2013

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