Law regulating appeals against gov't contracts upheld by Egypt's highest judiciary authority

Ahram Online , Monday 16 Jan 2023

Egypt’s Supreme Constitutional Court (SCC) rejected on Saturday a lawsuit contesting the constitutionality of a 2014 law regulating appeals against state contracts.

highest judiciary authority


The referral decision dates back to 2014 when the Egyptian Administrative Court was hearing an appeal brought up by a group of employees of Nubaria Seed Production Company (Nobasid) against the privatisation of the company. The employees –   represented by renowned leftist lawyer, labour activist, and former presidential candidate Khaled Ali – contested the constitutionality of the appeals regulation act, known as law no.32 for 2014.

Before the enactment of the law, several suits were filed against administrative contracts signed by the state or one of its bodies with the private sector, including contracts for the allocation of lands. These lawsuits constituted legal disputes that dragged in courts for years. Examples of these lawsuits are those concerning the selling to the private sector of Tanta Flax Company and of Omar Effendi, as well as a number of similar lawsuits filed for similar reasons.

The law was issued by former interim President Adly Mansour in 2014. Its aim was to bring to a halt suits filed by non-involved parties by limiting litigation rights only to parties involved in the state contracts.

These parties include those who have personal or in-kind rights over the money addressed by the contract as well as the parties signing the contracts.

Under the law, courts shall not accept third-party suits or appeals.

In a statement reported by news agency MENA, Counselor Mahmoud Ghoneim, SCC Vice-President, said that law 32/2014 does not confiscate or restrict the right to litigation, but rather regulates this right by defining the eligible categories.

The citizen, Ghoneim added, is also included in the categories that have litigation rights in case a final ruling is issued against one of the parties to the contract in a public money crime that constituted one of the basis for sealing the contract.

By passing the bill, the legislator aimed to “encourage public and private investment and provide an environment that attracts investments in a way that supports national economy,” according to SCC vice-president.

The court, the country's highest judiciary authority, had seen the law as necessary as the national economy was going through “a critical” phase that needed “working on attracting foreign investments and blocking whatever undermines confidence in the safety of [the country’s legislative] economic construction to ensure the state’s respect for its contracts.”

Dr. Salah Fawzy, a constitutional law expert, told Ahram Online that the 2014 law tackles issues of misuse of the right of litigation, highlighting that many cases were filed by parties who have no relation to already signed contracts.

The law, according to Fawzy, addresses litigation rights relevant to administrative contracts one of whose parties is affiliated to the state. He asserted that litigation in this context “cannot be open for everyone.”

He added that the law regulates litigation and contributes to achieving legislative stability and attracting investments. These kinds of suits, he said, cause the state to face a dilemma; they also undermine trust in legal dealings, especially in contracts cases, and therefore drive out foreign investment.


Short link: