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.

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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.

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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.

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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.

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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

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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

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"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,

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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

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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

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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

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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

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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."

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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.

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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.

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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

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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.

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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

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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

24

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.