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Egypt at a crossroad

By Mary Ayad - posted Wednesday, 12 December 2012

Egypt is at a crossroad following the introduction of a Constitutional Declaration and a draft Constitution seeking to establish the structure and sources of legal authority in Egypt.

The phrase 'principles of Islamic sharia' has been causing much debate and speculation these days but what does it really mean and why is this relevant to Western parties interested in doing business in or investing in Egypt?

The purpose of this article is to provide a scholarly answer to this question through an examination of the Constitutional Decree, the proposed Egyptian Constitution and a summary of the strengths of the unique business and legal climate that give great cause for the recent investor confidence in the Egyptian Bourse.


The upcoming vote on December 15th on the Constitutional referendum has been such a source of debate that it has led to responses from specific groups such as the Judges Club and Morsi supporters in the Muslim Brotherhood party. Notwithstanding that the Judges Club and several prosecutors' offices (mainly in the Nile Delta) have gone on strike, the Supreme Judicial Council (SJC) is still operating and professors, lawyers and other qualified groups can oversee the Constitutional Referendum, together with a significant proportion of the judiciary.

Islamist supporters of the President, through sheer force of numbers protesting outside the courts, have last week physically prevented judges from meetings with the bicameral parliament. Given that in the past the National Democratic Party of Mubarak (followed by SCAF) violently suppressed all forms of protest and encroached on the independence of the judiciary, this vigorous democratic activity signals a society that is in its nascent beginnings toward healthy pluralism and active democratic campaigning.

The sources of the debate are the Constitutional Declaration (or "Decree") and the proposed changes to the Egyptian Constitution. An examination of four of the seven articles of the Decree are with serious implications and ramifications.

Article 2, states: 'All Constitutional declarations, laws and decrees made since Morsi assumed power on 30 June 2012 cannot be appealed or cancelled by any individual, or political or governmental body until a new Constitution has been ratified and a new parliament has been elected. All pending law suits against them are void.' The implication here is that the judiciary, as a governmental body, is what is essentially targeted.

Article 4 is an extension of Article 6 of the previous Constitutional Declaration in which the timeline for drafting the new Constitution was extended. Article 5 reads: 'No judicial authority can dissolve the Constituent Assembly or the Shura Concil.' The purpose of this article is for executive protection of these two bodies which are predominately composed of members of the Muslim Brotherhood. This has created tension between much of the judiciary on one hand and a coalition formed by the executive and legislative branches centering on their shared loyalty to the Muslim Brotherhood, even though the President has officially stepped down from that party after election.

Article 6 solidifies the implications of the preceding articles: 'The president is authorised to take any measures he sees fit in order to preserve and safeguard the revolution, national unity or national security.' This final article may imply an implicit emergency law given the fact that 'the revolution' can be interpreted according to a specific party.


Fortunately this Decree is superseded by the Constitution. Article 6 of the draft Constitution contains several fundamental principles: 'The political system is based on the principles of democracy and shura (consultation), citizenship (under which all citizens are equal in rights and duties), multi-party pluralism, peaceful transfer of power, separation of powers and the balance between them, the rule of law, and respect for human rights and freedoms' all as elaborated in the Constitution. No political party shall be formed that discriminates on the basis of gender, origin or religion.'

This article, in my view, is the most important article in the draft Constitution and any article that may either implicitly or explicitly or by implication contradict with this article should be rescinded.

Article 179 provides for an independent judicial body named "State Affairs" which is entrusted with 'the drafting of contracts and the settling of disputes to which the State is a party, in the manner regulated by law.' Article 180 provides for the "Administrative Prosecution", also an independent judicial body endowed with powers such that it 'investigates financial and administrative irregularities, raises disciplinary proceedings before the courts of the State Council and follows up on them, and takes legal action to address deficiencies in public facilities.

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About the Author

Miss Mary B Ayad is a law lecturer at Macquarie University and completing her PhD dissertation in the matter of international commercial arbitration law and international investment arbitration law. She specialises in investor-State disputes involving Middle Eastern governments. She is widely published and has extensive international experience.

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