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Commercial Code (promulgated by Law No. 17 of 1999), Egypt

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Latest Version in WIPO Lex
Details Details Year of Version 1999 Dates Entry into force: October 1, 1999 Adopted: May 17, 1999 Type of Text IP-related Laws Subject Matter Undisclosed Information (Trade Secrets), Copyright and Related Rights (Neighboring Rights), Transfer of Technology, Industrial Property Notes The Commercial Code (promulgated by Law No. 17 of 1999) contains provisions relating to intellectual property rights (Articles 34(2) & 43(2)), undisclosed information relating to industrial secrets and the secrecy of the technology (Articles 66 & 83); and transfer of technology (Articles 72 to 87). Article 3 of the Law states that it's published in the official journal and shall come into force on October 1, 1999, with the exception of the provisions concerning cheques that shall come into force on October 1, 2000.

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Main text(s) Main text(s) Arabic القانون التجاري (الصادر بالقانون رقم 17 لسنة 1999)      English Commercial Code (promulgated by Law No. 17 of 1999)        
 Law No. 17 of 1999 Promulgating Trade Law

Law No. 17/1999

to Promulgate Law of Commercial

In the Name of the People;

The President of the Republic;

The People’s Assembly passed the following bill, and we promulgated it jut

law:

Article: 1- The trade law as promulgated by royal edict dated 13 November

1883,with the exception of chapter-I of part-2 thereof concerning

partnerships the remaining ports shall be superseded and substituted by the

attached law;

The text of article 337 of the Penal code shall be superseded effective

October 1, 2000;

Each provision contradicting the provisions of the attached law shall also be

superseded(2).

Article: 2- Ministerial decrees which are necessary for the implementation of

this law are issued by the competent ministers each in so far as he is

concerned.

Article: 3- The present law is published in the official journal and shall come

into force effective on the I” of October 1999, with the exception of the

provisions concerning checks that shall come into force effective the J’ of

October, 2000.

A check issued before that date shall be subject to the legal provisions

applicable to the date of issuance it, if the check bears an attested date, or if

the date thereof is attested before the 1st of October, year 2001.

Certifying the date of the aforementioned check shall be attested duty-free at

one of the Notary public Registration administration. It may also be attested

by recording it in special registers with one of the banks, or by any of the

other methods prescribed in article 15 of the evidence law that is applicable

to civil and commercial matters

The present code shall be stamped with the seal of the state and shall be

enforced as one of its lawst3. Issued at the Presidency of the Republic on the

V of Safar, 1-lejira Year 1420, corresponding to 17 may, 1999.

Trade law

Part-I

Trade in general

General provisions

Article I: The provisions of the present law shall apply to trading activities

and to all natural or juridical person for whom the quality of trader is

established.

Articie2: 1- the provisions of the accord between the contracting patties shall

apply to commercial matters. In case no such accord exists, the provisions of

the present law, or other laws related to commercial matters, then the rules

of trading practices and customs shall apply. If no trading practices or

customs exist, the provisions of the civil code’ shall apply.

2- The agreements between the contracting parties, or the rules of trading

practices or customs shall not be applicable where they contradict with the

public order in Egypt.

Article3: If the contract is commercial with regard to one of its parties, the

provisions of the commercial law shall not be applicable except to the

obligations of that party, exclusively; the provisions of the civil code shall

apply to the obligations of the other party, unless otherwise prescribed in the

law.

Chapter 1

Commercial activities

Article4: The following works shall be considered commercial activities:

A. Purchase of movables whatever their kind with the aim of selling or

leasing them as they are, or after shaping them in another form, and also

selling or leasing these movables.

B. Renting movables with the aim of leasing them, and also leasing these

movables.

C. Founding trading firms.

Article5: The following activities shall be considered trading works in case

they are exercised by way of profession:

A. Supply of goods and services;

B. Industry;

C. Land and inland water transport;

D. Trade agencies and brokerage whatever the nature of the operations

exercised by the broker;

E. All kinds of insurance;

F. Bank and money exchange transactions;

G. Warehousing the goods, the means of transport, the crops, etc.

H. Publishers houses and offices operating in the fields of publication,

printing, photocopying, typewriting, etc, translation, broadcasting,

televising, the Journalism, news transmission, postal activities, and

communications, as well as publicity and advertisement

I. Commercial exploitation of computer software, and space

transmission via satellites.,

J. Prospecting operations of natural resources, such as mines, quarries,

oil and gas explorations, etc.

K. Poultry industry and livestock breeding and others, with the aim of

setting them.

L. Building construction, restoration, modification, demolition, or

painting contracts and public works contracts.

M. Construction, purchase or rental of realties with the aim of selling or

leasing them complete or divided into apartments, rooms, or

administrative or commercial units, whether furnished or unfurnished.

N. Tour and travel offices export and import offices, customs release

offices, employment offices, and halls for public auction sales.

O. Hotels, restaurants, coffee shops and Coffee, acting and cinema

works, circus works, and other public entertainment and amusement

Sites.

P. Distribution of water, gas, electricity and other energy sources.

Article 6: All works connected with maritime or air commercial navigation

shall be considered a commercial activity, Particularly the following:

A. Building, repair, and maintenance of Ship or aircraft.

B. Buying, selling, leasing, or renting ships or aircraft.

C. Purchase of supplies, provisions, or equipment for ships or aircraft.

D. sea or Air transport.

E. Stevedoring, loading or unloading operations.

F. employing navigators, pilots, or other workers on ships or aircraft.

Article7: All works can be compared analogously to the works in the

foregoing articles due to likeness in qualities and purposes shall be

considered a commercial works.

Article 8: 1. Works that are carried out by the trader for business affairs

connected with his trade shall be considered commercial works.

2- All work carried out by the trader shall be considered related to his

trade, unless otherwise established.

Article9: The farmer’s sale of the products of the land cultivated by him

whether in his quality as its owner or just using it, shall not be considered

a commercial work.

Chapter— 2

The trader

Article10: The following shall be a trader:

1- Whoever exercises by way of profession, in his name or for his own

account, a commercial activity.

2- Each firm assuming one of the forms prescribed in the laws

concerning the companies, whatever the purpose for which the

firm is established.

Article 11: 1- The following, whether Egyptian or alien, 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

minor at that age.

B. Whoever completes eighteen years of age under the conditions

prescribed in the 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 of age shall not exercise

the profession of trade in Egypt even though the law of the state to

which he belongs, by his nationality considers him of full age on

completing eighteen years, or allows him to exercise trade.

3. A minor who s authorized to exercise trade shall have complete

legal to fulfil all 1egal dispositions as required for his trade.

Article: 12-1- If the child or the person placed under an interdict has a

fund in some trade, the court issue an order to extract his money from

it, or continue placing the funds there according to the best interest of

such person.

2. if the court orders continuing the exercise of trade, the proxy

deputizing for the minor or the interdicted individual may be granted

an absolute or restricted permission to effect such dispositions as

necessitated by the trade.

3. if serious reasons should arise to cause fear of mismanagement by

the deputizing proxy who is authorized to continue exercising the

minor’s trade or that of the interdicted person, the court may withdraw

or restrict the permission without prejudice to the rights acquired by

the bona fide third party.

4. Each court-writ that is pronounced concerning the continuation of

the minor’s trade or that of the interdicted person, or withdrawing,

restricting or liquidating the trade, shall be recorded in the Register of

Commerce and published in the register’s journal.

Article: 13- If the court should order continuing the trade of the minor

or the interdicted person, no commitments shall be made except

within the limits of his funds which are invested in that trade. The

trader’s bankruptcy may be declared, providing the bankruptcy shall

not compromise the funds and property uninvested in the trade.

In this case, the declaration of bankruptcy shall not have any effect

with regard to the minor of the interdicted person.

Article 14-1- The law of the State to which a married woman belongs

by her nationality shall regulate her eligibility to exercise trade.

2. An alien wife exercising trade as a profession shall be supposed to

be exercising it with her husband’s permission. If the law applicable

allows the husband to object to her exercise of trade as a pm Cession,

or to withdraw his previous permission the objection or withdrawal of

the permission shall be recorded in the Register of Commerce and

shall be published in the Register’s journal. The objection or

withdrawal of the permission shall have no effect except from the date

of completing such publication.

3. The objection or withdrawal of the permission shall not affect the rights

acquired by the bona third party.

Article 15-1: An alien wife exercising trade shall be supposed to have goi

married according to the system of separation of (lands and property, unless

otherwise provided by the terms of the financial agreement between the two

spouses.

2. The terms of financial agreement between the two spouses shall not be

invoked vis-a-vis third parties except after its notarization by Publishing its

summary in the register’s journal.

3. In case of neglecting the publication of the financial terms of agreement

between the two spouses, the third party may prove that the marriage had

taken place according to a financial system more suited to his interests than

the system of separation of funds.

4. A court ruling pronounced abroad concerning the separation of finds and

property between the two spouses shall not be invoked except from the date

of recording it n the register of Commerce and publishing its summary in the

register’s journal.

Article 16:1- The provisions of the Commercial Law shall not apply to small

craftsman.

2. A craftsman exercising a trade of insignificant costs to obtain an amount

of income securing his daily sustenance shall be considered the owner of a

small craft.

Article: 17- If a person prohibited to exercise trade by virtue of special laws,

regulations or systems, embarks on exercising trade activities, he shall be

considered a trader and shall be subject to the provisions of the Trade Law,

Article: 18- Whoever chooses trade for a profession under a false or hidden

name behind another person shall be regarded as an established trader, in

addition to establishing this quality in the visible person.

Article: 9- The quality of trader shall be presumable in the person

impersonating it by announcing it in the papers, leaflets, on Radio or

Television, or by any other method. This presumption may be denied by

establishing that the person assuming the said quality did not exercise trade

actually.

Article: 20- The quality of trader shall not be established to the State and

other public law persons However, the provisions of this law shall apply to

the trading activities exercised by the State, excluding those excepted by

special text.

Chapter— 3

Commercial Books

Article 21: Any trader whose capital, invested in trade, exceeds twenty

thousand Egyptian pounds shall keep books as necessitated by the nature and

irnportances of his trade, particularly the journal and inventory books. Such

books shall be held in a way ensuring the demonstration of his financial

standing, and his rights and debts as connected with his trade.

Article22:I- In the journal shall be entered all trade transactions carried out

by the trade, as well as his personal drawings, day by day and in detail, with

the exception of the personal drawings which may be recorded in the total,

month by month.

2- The trader may use an auxiliary journal in which to record details of the

different types of the trade transactions. In this case, he will only record the

total of these transactions in the journal, at regular intervals. if he does not

follow this procedure, each auxiliary journal shall be considered an original

book.

Articte23:1- Details of the goods available with the trader at the end of the

financial year are recorded in the inventory book, or a total statement of the

goods, if their details are mentioned in separated books or statements. In this

case, these books or statements shall be considered a supplementary part of

the original inventory book.

3- A copy of the annual balance sheet and of the profit and loss account

shall be recorded in the inventory book.

Articie24: The trader shall keep a copy of the correspondence, cables and

other documents as dispatched or received by him in respect of matters

connected with his trade. Keeping such copies shall be done in a regular

method facilitating the verification process.

Article25:1- The commercial books shall be free of any empty spaces,

deletion, erasure, writing in margins, or between the lines.

2.. Before using the journal and inventory books, their pages shall be

numbered, and the Commercial Register Office shall sign each page

thereof and stamp each page with the seal of the office, along with

indicating the number of the book pages.

3Y

3. The journal and inventory books shall be submitted at the end of the

trader’s financial year to the Commercial Register Office to ratify the

number of pages that were used during the year. On using the whole pages

of tie book, the trader shall submit the book to the Commercial Register

Office to mark its annotation thereon that the pages of the books have all

been used 4. In case of discounting the activity of the store, the trader or his

successors shall submit the journal and inventory books to the Commercial

Register office to mark its annotation thereon that the books have been

closed.

5. A decree of the competent minister may be issued setting provisions

concerning the reorganization of the commercial books used by the banks or

the companies defined by the decree.

Article26:1- The trader or his successors shall maintain the commercial

hooks and the documents supporting the entries recorded therein for a period

of five years starting from the date the books are marked with an annotation

thereon concerning the closure or termination of the book.

2. They shall also keep copies of the correspondence, cables and others for a

period of five years from the date of their dispatch or receipt. They may as

well keep, for the said period, microfilm copies instead of the originals.

These copies shall have the determinative effect of the originals in the

matters of evidence, if in preparing; maintaining and retrieving them are

observed the rules and controls prescribed in a decree of the Minister of

Justice.

Article: 27- The entries to be recorded in the commercial books by the

employers who are authorized to do that shall be considered as good as the

entries recorded by the trader himself, and shall be assumed to have been

recorded with his knowledge unless he provides evidence to the contrary.

Article2S:1- The court, upon the request of the litigant, or ex officio, may

order the trader to submit his books to it to derive therefrom whatever is

relevant to the dispute brought before it. The court may review the books

itself or via an expert to be appointed by it .

2. The court may not order the trader to let his opponent have access to his

books except in litigation connected with successions, and in matters of

common property, funds, or the companies.

3. In the case of bankruptcy or a composition to avoid the bankruptcy, the

books shall be delivered to the court, the bankruptcy assignee, or the

composition supervisor.

4. If the trader refrains, without acceptable reasons, from submitting his

books to review, the court may consider that, as presumption of the Validity

of the facts required to be derived from the books.

Article: 29- Whoever contravenes the provisions prescribed in this chapter

or in the decrees to be issued for its implementation shall be liable to a fine

penalty of not less than one hundred Egyptian pounds and not more than one

thousand pounds

CHAPTER -4

COMMERCIAL REGISTER

Article: 30-1 A register shall be provided at the administrative quarter

concerned, in which the names of traders shall be recorded, whether

individuals or companies.

2. Those who are subject to the mandatory requirement of recording in the

Commercial Register, the dates of inscription, the data to be recorded, the

deletion of the records and the sanctions prescribed for contravening these

provisions shall be subject to the Laws and decrees issued in respect thereof.

Article: 31- A trader who has been recorded in the Commercial Register

Office shall indicate his trade name, the Commercial Register Office where

he is recorded, and his registration number, prominently on the sign of his

store as well as in all the correspondence and printed mailer related to his

trade.

Article: 32-1- Each person has the right to obtain a copy extracted from the

registration page from the Commercial Register Office. La case he is not

recorded, the Office shall grant a negative certificate in respect thereof.

2. The copy extracted from the registration page shall not comprise the

following:

a) The bankruptcy declaration sentences in case a court ruling has been

issued rehabilitating him.

b) The interdiction sentences in case a court ruling is issued removing the

interdiction.

Article: 33-1. The data recorded in the Commercial Register shall be

considered an evidence/argument vis-à-vis third parties from the date of the

recording them in the Register unless otherwise prescribed in the law.

2. No datum to be recorded mandatory in the Commercial Register shall be

considered as argument vis-à-vis third parties, in case they were not virtually

recorded therein, unless it is established that the third party was aware of the

contents of that datum.

3. A trader shall riot stick his non-registration in the Commercial Register to

break up from his obligation as imposed by the law, or those arising from his

dealings with third parties, in his quality as a trader.

CHAPTER -5

TRADING SHOP

Article 34: 1- A trading shop is a group of movable property appropriated

for the exercise of a specific trade. They shall comprise the element of

liaison with the customers and the business reputation.

2. The trading shop may comprise other incorporeal elements like the trade

name, the trading feature, the trade marks, the letters patent, the industrial

drawings and designs, the right of rental, the intellectual and technical

property rights, the know-how right, and the franchise or concession and

manufacturing license.

3. The trading store may comprise the goods, furniture, machines,

equipment, apparatuses, and other materials that are necessary for the

exploitation of the trading store.

Article 35: If the contracting parties fail to indicate the elements of which

the trading store subject of the contract is made up, the store shall — in

addition to the contacts with the clients and the trading reputation —

comprise every incorporeal or physical element that is necessary for

exploiting the trading store as intended by the two contracting parties.

Article 36: If the trader is the owner of the realty where he exercises the

trade, this realty shall not be an element in his trading store.

Article37: 1- All disposal the subject of which constitutes alienating the

ownership of the trading store, instituting a real right on it, or leasing its

exploitation, shall be effected in writing, otherwise it shall be considered

null and void.

2. Disposing of trading store and its lease contract shall be recorded in a

special register to be re-organized by a decree of the competent Minister,

and shall be kept in the Commercial Register Office.

3. Disposing of the trading store and leasing its exploitation shall be

recorded in the Commercial Register for its publication. This registration

shall comprise the following data.

A. Names, addresses, and nationalities of the contracting Parties.

B. Date and Type of the contract.

C. The activity 3nd address of the trading store and the elements agreed

to be included in the contract.

D. The price and the amount paid of a on selling the place, Or the rental

amount agreed upon, and the method of settling the rest of the price or

exploitation rental amount.

E. The agreements concerning the contract and undertakings related to

the trading store.

F. The agreements related to reserving the seller’s right to rescind the

contract or his franchise/lien right.

Article38: 1- The ownership of the trading store shall not be alienated

between the parties to the contract or in relation w third parties except from

the date the disposition is recorded in the register provided for the purpose

and its summary is published in the journal of the Commercial Register.

2. if the trading store comprises elements subject to a special system of

registration or notarization, publishing the disposal of the store in the journal

of the Commercial Register shall not stand for the special publication or

registration unless otherwise prescribed in the law”.

Article39: The alienee to whom reverts the ownership of the store subject of

the disposal shall not replace the alienator in the rights and undertakings

resulting from the contracts connected with the trading shop unless

otherwise agreed upon.

Article 40: Tire alienator shall remain liable for the debts connected with the

trading store and which took place before the month during which the store

was disposed o1 unless the creditors clear him of his debts.

Article 4l: By exception from the provisions prescribed in the trade law

(Part: On Bankruptcy) the seller of the trading store who has not received

fall settlement of the price, may raise against the group of creditors in the

buyer’s bankruptcy, an argument concerning his right to rescind the compact

and recover the store, or his franchise/lien right in respect thereof, if he had

reserved this or that right in the sale contract, and he mentioned it explicitly

in the slimily which was registered and published. The rescission or

franchise/lien shall only cover the elements comprised in the sale contract.

Article42: 1- Whoever disposes of a trading store, by the alienating its

ownership to a third party or by leasing its exploitation, shall not exercise an

activity similar to that of the trading store, in a way causing harm to the

alienee or the person to whom the exploitation reverts, unless otherwise

agreed upon.

2. This ban shall be valid for a period of ten years from the date of

publishing /registering the disposal of the store, unless a shorter period is

agreed upon.

Ariicle43:1- Subject to the provisions prescribed in this Chapter, the laws

and decrees on the sale, mortgage and leasing the exploitation of the stores,

shall apply in respect of the foregoing trading store.

2. The laws and decrees on the trade names, commercial privileges,

trademarks, and industrial drawings and designs, as well as the letters patent

and other elements of industrial and literary ownership, shall apply.

CHAPTER -6

STOCK EXCHANGE

Article44:1- The Stock Exchange shall be considered a juridical person.

2. Subject to the provision of this chapter, the establishment of the Stock

Exchange and its statutes shall be subject to the provisions of the laws and

decrees regulating them.

Article45:1 Dealings in the Stock Exchange with regard to debentures listed

in its schedules of prices shall not be allowed except through an exchange

broker authorized to work in it, otherwise all transactions shall be null and

invalid.

2. An exchange broker shall not carry out operations in the stock exchange

for the account of his clients unless he is authorized by the client to fulfil

them by virtue of a special delegation in writing. If the broker performs

without the virtue of a special delegation, the client may accept or refuse it.

Article46: Time added-transactions shall be valid even if the contracting

parties intended thereby to render such transactions a mere obligation to pay

the price differences providing the transaction shall be carried out in the

stock exchange, and shall be connected with debentures listed in the price

schedules of that Exchange. A decree of the competent minister shall be

issued reorganizing these operations.

PART II

COMMERCIAL OBLIGATIONS

AND CONTRACTS

GENERAL PROVISIONS

ArticIe4l-1: Those who are bound together for a commercial debt shall be

jointly responsible for that debt, unless otherwise prescribed by the law or

the agreement.

2. This provision shall also apply in case of multiple warrantor5 for the

commercial debt.

Article4S-1: Guaranteeing the commercial debt shall not be considered a

commercial transaction unless it is so prescribed in the law, or the warrantor

is a bank or a trader that has an interest in the guaranteed debt.

2. In the commercial warranty, the warrantor — even if he is not a joint

guarantor — may not request despoiling the debtor unless otherwise agreed

upon.

Article49: If the trader performs for the account of a third party works or

services falling within his commercial activity, he shall be assumed as

having performed them in exchange for compensation unless he proves

otherwise. The compensation shall be according to the practice and usage. In

case no practice or usage exists in respect thereof, the judge shall assess such

compensation.

Article 50: 1- The loans concluded by the trader for affairs connected with

his trading works shall be considered commercial loans.

2. if the trader’s profession necessitates paying some amount or expenses for

the account of his client, he may claim from them an interest thereon from

the date of paying these amounts, unless otherwise agreed upon.

3. The interest shall be calculated according to the rate with which the

Central Bank deals, unless otherwise agreed upon.

4. The interest shall be paid at the end of each year, if the debt is deferred for

more than one year, and on the maturity date if the debt is deferred for one

or less than one year, unless otherwise agreed upon, or the practice runs

differently.

Article5l: The orders and delegations issued by the trader in matters

connected with his trading activity shall not expire with his decease.

However, his successors may cancel them if they decide to discontinue the

trade, and in this case no compensation shall be due or payable by them if

they notil5’ the party contracting with the predecessor of their desire to

rescind the deals in an appropriate time.

Article52: The trader may not, due to exploitation or injustice, request

nullifying the contracts he concludes for matters connected with his

commercial works, or reducing the resultant obligation ensuing therefrom on

him.

Article 53-l: If the subject of the commercial obligation Constitutes the

delivery of something within a specific occasion or One of the seasons of the

year, the prevailing customs at the place of delivery shall be referred to, for

determination of the time at which the delivery shall take place. If no

customs exists, the delivery shall take place at the suitable time before the

end of the term or season.

2. The prevailing customs at the place of delivery, concerning the method of

measuring, weighing, counting, or scaling the goods shall be considered

complementary to the contract unless otherwise agreed upon.

Article54: If the subject of the commercial obligation constitutes the

performance of a certain work, the debtor shall exert in it the care and

attention of the ordinary trader.

Artide55: If a certain period is determined for starting the implementation

and this period lapses without the debtor beginning the execution of his

obligation, he shall not thereafter oblige the creditor to accept it.

Article56: If either party reserves the right to rescind the contract within a

certain period, his execution, during that time, of his obligations as imposed

on him by the contract, or his acceptance of the other party’s execution of

his obligations deprives him of the right to rescind

Article 57. The fulfillment of commercial obligations shall not be claimed

except during the working hours as determined by the law or statues, or as

applicable by the prevailing customs.

Article58: Demanding or notifying the debtor, in commercial matters, shall

be done by virtue of an official warning, or by registered letter with

acknowledgement of the receipt. In case of urgency, the demand or

notification may be effected by virtue of a cable, telex, fax, or other quick

communication methods.

Articie59: The court may not grant the commercial obligation debtor a time

during which he shall fulfil or divide his debt, except in necessary cases, and

no gross damage shall attain the creditor.

Article60: A creditor shall not be forced to accept the compensation amount

agreed upon instead of prosecution, unless otherwise agreed upon.

Article 61-1: Settling a commercial debt to the holder of a debt document

duly marked with an annotation of quittance from the creditor or his deputy

shall clear the debtor of his debt, unless the creditor establishes that the

debtor has not made adequate investigation to ensure the valid settlement of

the debt.

2- The existence of the debt instrument in the hands of the debtor shall be

considered a presumption of clearing his financial Position and conscience

from his debt, unless otherwise established.

Article 62: in commercial matters, the creditor may ask to pay the debt by

check, if the debt amount exceeds one hundred thousand Egyptian pounds.

Article 63-1: If the debt is a time debt and the debtor is authorized to settle

it before the maturity date, he shall not — when using this right — deduct

part of the debt except with the approval of the creditor, unless otherwise

prescribed by a text in the law or in trade practices.

2. If the debtor is unauthorized to settle the debt before its maturity date, he

may oblige the creditor to accept that settlement if he pays him the interest

due on the debt until expiry of the date, or clear him of the obligation to

refund the amount if it had been paid in advance, unless there is an

agreement, a trade usage and practice, or a text of the law providing

otherwise.

Article 64: The interest on delaying the settlement of commercial debts shall

become due upon their maturity unless otherwise provided by the law or in

the agreement. In any case, the total interest received by the creditor shall

not exceed the debt amount on which the interest is calculated unless

otherwise provided by the law or applied in practice.

Article65-1: All the debenture of which the subject is to pay an amount of

money or delivery of goods may be circulated by endorsement if it is to the

order of the creditor, or by handing over if it is to bearer.

2. The endorsement alienating the ownership or the handing over process

shall result in transferring all the rights resulting from the debenture to its

new bearer.

3. In case of the endorsement alienating the ownership, the endorser shall

guarantee settling the right affined in the debenture on its maturity date

unless agreement is reached on restricting the guarantee to the virtual

existence of the right at the time of endorsement.

4. If the debenture is instituted on the occasion of a Commercial transaction,

the co-signatories of the debenture shall be jointly bound by it unless

otherwise prescribed by the law or in the agreement.

5. The debtor, vis-à-vis the bearer of the debenture, shall not invoke the

defense based on personal relationships concerning the creator of the

debenture, or its previous hearer, unless the intention of its bearer

— at the time he obtains the debenture — is to cause harm to the debtor or

the defense is connected with the debtor’s Lack of legal capacity

6. The debtor may refrain from paying the debenture if it is not delivered to

him marked with the annotation of quittance.

7. The Loss of the debentures referred to in this article shall be subject to the

provision concerning the loss of securities unless otherwise prescribed by

the law.

Articte66-1: All act contravening the customs and norms observed in

commercial dealing, shall he considered an illegal competition. In that shall

be included in particular, the encroachment on a third party’s trademarks, his

commercial name, the letters patent, or his industrial secrets which he

possesses the right to invest, and instigating the workers in his trading store

to divulge his secrets, or quit working for him, and also all act or claim that

results in causing confusion to the trading store or his products, or in

weakening the confidence in its - owner or those in charge of its

management, or in his products.

2. All illegal competition shall force its perpetrator to compensate the harm

ensuing therefrom. The court shall, in addition to the compensation, have the

power to pronounce a ruling ordering the removal of the harm and the

publication of a summary of the sentence at the expense of the judgment

debtor in a daily newspaper.

Article ó7-1: The producer and distributor of the commodity shall be

accountable, vis-à-vis whoever sustain a bodily or physical harm caused by

the product, if that person establishes that the harm was caused by a flaw in

the product.

2. The product shall be defective, and in particular if no adequate care and

precaution is observed in its design, manufacture, composition, preparation

for consumption, preservation, packing, or the method of displaying or using

it, to prevent the occurrence of harm or to caution against the possibility of

its occurrence.

3. In the provision of this article:

A. The term “producer” shall mean the manufacture of the commodity who

prepares it in its final shape in which it is displayed for circulation, whether

all the pads of which the commodity is composed are of his make, or he uses

parts of a third party’s make The term “producer” shall not apply to the

subordinates of the producer.

B. The term “distributor” shall mean the importer of the commodity for

trading, and wholesale merchant who assumes its distribution in the local

market to the retailers, even if — at the same time — he distributes them by

himself at retail price. The term shall also comprise the retailer if he is

aware, or if it is his duty to be aware, at the time of selling the commodity,

of the flaw found in it. The criterion in that is in what an ordinary trader who

exercises the sale of a commodity of the same kind shall do if he finds

himself in the same conditions.

4- The claimant may bring a liability action against the producer or the

distributor or both of them together without being jointly liable. If the

business center of the producer or distributor is seated abroad, he may be

sued before the Egyptian court within the jurisdiction and circuit of which

lies a branch, factory, agency, or office thereof.

5. The liability action shall prescribe with the lapse of three years from the

date the person harmed thereby learns of the occurrence of the harm and of

the person accountable for it This action shall lapse with the passage of

fifteen years from the day the illegal act takes place.

6. All condition or statement that is liable to relieve the producer or

distributor from the responsibility, or limit or reduce the period of

prescription shall be null and void.

Article 68: The action resulting from the obligations of the traders towards

one another, and which are connected with their commercial transactions

shall prescribe with the lapse of seven years from the date on which the

fulfillment of the obligation falls due, unless otherwise provided by the law.

Similarly, the final rulings as pronounced in these actions shall lapse with

the expiry often years.

Article 69: Evidence of the commercial obligations, whatever their amount,

may be established by all methods of evidence unless otherwise prescribed

by the law.

2. In other than the cases for which the law necessitates establish the

evidence in writing) in commercial matters, evidence of

opposite of written evidence content or of exceeding such write evidence

may be established by all methods.

3. Papers in private form in commercial matters shall be regarded as a proof

in their date, vis-à-vis a third party, even though such date might not be

affirmed or established, unless the law provides for the affirmation of the

date. The date shall be considered valid until the opposite is established.

Article70; Commercial books may be accepted in establishing an evidence

in court actions brought by or against the traders, Once these books are

connected with their commercial works, in accordance with the following

rules.

A. The data mentioned in the books shall be regarded as a proof vis..à.. vis

their owners. However, a person who whishes to deduce from these books

what conforms to the provisions of the law, as an evidence for himself, may

not divide the data contained therein.

8. The data contained in books conforming to the provision of the law shall

be regarded as a proof for the owner of these books against his adversary

merchant, unless the adversary reverses and annuls them by data indicated in

his books that conform to the provisions of the law, or provides evidence of

their invalidity by any other way.

C. If the books of each of the two adversary parties conform to the

provisions of the law and the comparison between them results in conflicting

data, the Court shall demand providing another evidence.

I). lithe data in discrepancy in the books of the both adversaries are found

different, and the books of either party conform to the provisions of the law

while the other party’s books are nonconforming, the criterion shall then be

in the contents of the conforming books, unless the adversary establishes an

evidence to the contrary of their contents. This provision shall apply if one

of the two adversary parties submits conforming books while the other does

not submit any books.

Artide71: In Commercial matter, agreement on arbitration may be reached

before or after the litigation erupts, subject to the provisions prescribed in

the special laws.

Chapter--1

Transfer of Technology

Article 72:1- The provisions of this Chapter shall apply to each contract for

transfer of technology to be used in the Arab Republic of Egypt, whether

such transfer is international, lying across the regional borders of Egypt, or

inland. No criterion in both cases shall be observed as regards the nationality

of the parties to the agreement or their places of residence.

2.The provisions of this chapter shall apply to each agreement on transfer of

technology to be concluded by virtue of a separate contract or within another

contract.

Article73: The transfer of technology contract is an agreement in which the

(supplier of technology) undertakes to transfer, against payment, technical

know — how to the (importer of technology) to use it in a special technical

way, for the production or development of a specific commodity, the

installation or operation of machines or equipment, or for the provision of

services. The mere sale, purchase, lease, or rental of commodities or

trademarks shall not be considered a transfer of technology, unless this is set

forth as part of, or is connected with the transfer- of - technology contract.

ArticIe74-1: The Technology Transfer Contract shall be concluded in

writing, otherwise it shall be null and invalid.

2. The Contract shall comprise a statement of knowledge elements and

ancillaries to be transferred to the importer of the technology. Mentioning

this statement may be accompanied with the feasibility studies, instructions,

designs, engineering drawings, charts, pictures, computer software and other

know — how defining documents, in appendices to be attached to and to be

an inseparable part of the contract.

Articte75: Any condition prescribed in the Technology Transfer Contract,

which is liable to restrict the freedom of the importer in using, developing,

acquainting with or announcing about the production, may be invalidated.

This shall in particular apply to the conditions binding the importer with one

of the following requirements:

A. Accepting the improvements introduced by the importer to the

technology, and paying their value.

B. Prohibiting the introduction of improvements or modifications to the

technology to suit the local conditions or the conditions of the importer’s

establishment. Also, prohibiting the acquisition of another technology

similar to or competing with the technology subject of the contract.

C. Using specific trademarks to distinguish the commodities for which the

technology was used in their production.

D. Limiting the volume of production, its price, the method of its

distribution or its export.

E. Participation of the supplier in running the establishment of the importer,

or his interference in choosing the permanent workers in it.

F. Purchase of the raw materials, equipment, machines, apparatuses, or spare

parts for operating the technology, from the supplier alone, or from the

establishments exclusively specified by the supplier.

G. Restricting the sale of the production, or the delegation for its sale,

exclusively to the supplier or the persons defined thereby.

The forgoing shall apply unless any of these conditions is prescribed in the

technology transfer contract, with aim of protecting the consumer of the

product, or safeguarding a serious and legal interest of the technology

supplier.

Article 76: The supplier of technology shall disclose the following to the

importer, in the contract, or during the negotiations preceding its conclusion:

A. The risks that might occur from using the technology and in particular

those connected with the environment, public health, or the safety of lives or

property and funds. He shall demonstrate to him the methods he knows to

avoid these risks.

B. Judiciary actions and other obstruction that might impede the use of

technology-related rights, particularly those connected with letters patent.

C. Provisions of the local law concerning the authorization for the export of

technology.

Article 77-1: The supplier shall submit to the importer the information, data,

and other technical documents as required for assimilation of technology,

and also the necessary technical services to be requested by the importer for

the operation of the technology, particularly expertise and training.

2. The supplier shall inform the importer of the improvements he night

introduce to the technology during the validity period of the contract, and

shall transfer these improvements to the importer if the letter requests him to

do so.

Article 78: The supplier, during the validity the contract, shall provide the

importer, upon the latter’s request, the spare parts he produces which are

required for the machines or equipment used in operating his establishment.

If the supplier does not produce these parts in his own factory, he shall

advise the importer of the sources where they are available.

Article 79: The importer, in operating the technology, shall employ workers

with a measure of technical skill, and have recourse to technical experts

whenever necessary, providing the selection of these workers or experts

shall be among Egyptians residing in Egypt or living abroad, whenever this

is possible.

Article 80: The importer shall inform the supplier of the provisions of

national legislations connected with the import of technology.

Article 81: The importer shall not assign the technology he has obtained to a

third party, except with the approval of the supplier.

Article 82-1: The importer shall pay the charges for the technology and the

improvements introduced to it, at all the times and places as agreed.

2. The charges may be a total amount payable altogether or in several

installments. They may also be a share in the capital invested in operating

the technology or a portion of the yield of this operation. The charges may as

well be in the form of a certain quantity of the commodity in which the

technology is used for its production, or a primary material the importer

produces and undertakes to export to the supplier.

Article 83-1: The importer shall maintain the confidentiality and secrecy of

the technology he obtains and of the improvements introduced to it. He shall

be accountable for the damage occurring from divulging this secrecy

whether it takes place in the stage of negotiating contract negotiations or

later after.

2. The supplier shall maintain the secrecy of the improvements introduced

by the importer and transferred thereby to the supplier by virtue of a

condition prescribed in the contract. The supplier shall be liable for

compensating the harm caused from divulging this secrecy.

Article 84: Agreement may be reached that the importer of technology shall

alone have the right of using it and trading in the production providing

this right shall be limited to a specified geographical area, and to determined

period of time to he agreed upon by the two parties.

Article 85-1: The supplier shall guarantee the conformity of the technology

and the documents attached to it, to the Conditions prescribed in the

contract, he shall also guarantee the production of the commodity, or he

performance of the services agreed upon according to the specifications

prescribed in the contract, unless otherwise agreed upon in writing

.

2- Each of the supplier and the importer shall separately and not jointly be

liable for the harm caused to the persons, funds, and property from using the

technology or the commodity produced by applying that technology.

Article 86: Either party to the technology transfer contract may, after the

lapse of five years from the date of its conclusion, request its termination or

the reconsideration of its terms by amending them to suit the general

existing economic conditions. Submitting this request may be repeated

whenever five years have elapsed unless another period is agreed upon.

Article 87-1: The Egyptian courts shall have the jurisdiction of deciding

disputes arising from the technology transfer contract referred to in article 72

of this law. Agreement may be reached on settling the dispute amicably or

via arbitration to be held in Egypt according to the provisions of the

Egyptian law.

2. In all cases, deciding the subject of dispute shall be according to the

provisions of the Egyptian law, and all agreement to the contract otherwise

shall be null and invalid.

Chapter —2

Commercial Sale

Division —1

General Provisions

Article 88-1: The provisions prescribed in this division shall apply to the

goods sale contract, which are concluded between traders for trade-related

matters unless otherwise prescribed by the law. These provisions shall not

apply except when the charge in exchange for the sale is in cash, or both in

cash and in kind, and the portion in kind is less than the portion in cash.

2. The international commercial sales shall be subject to the provisions of

international conventions concerning these sales, as are enforced in Egypt.

They shall also be subject to the prevalent practices in international trade

and the explanations prepared by the international organizations for the

terms of this trade if the contract refers to them.

Article 89-I: If the contracting parties do not determine the price, the sale

shall be concluded at the price on the basis of which dealings between them

are concluded. If no previous dealings exist between them, the sale shall be

concluded at the ruling price in the market.

2. If the agreement is reached on concluding the sale at the market price, or

if the market price should be applied, according to the provision of the

previous clause, the criterion shall be on the average market price at the time

and place the contract is concluded. However, the foregoing shall only apply

where nothing is otherwise agreed upon or the practice in trade provides

differently, or if it transpires from the ruling conditions that another price

must be applied. In case of multiple market prices, the criterion shall be on

the medium price.

Article 90: A third party may be mandated for determining the selling price.

If that party does not determine the price at the time defined for it, or at the

proper time in case of non-determination of the price, the ruling market price

at the time and place the contract was concluded shall be approved.

However, this shall only apply unless it transpires from the prevalent

conditions or trade practices that another price should be approved.

Article: 91: If the price is estimated on the basis of weight, the criterion shall

be on the net weight, unless otherwise agreed upon or trade practices

differently provide.

Article:92-I: If agreement is reached that the buyer shall determine the

shape, size, or other characterizing specifications of the sold item, he shall

do that at the time agreed upon, or at a suitable time where no specified time

is set therefore, otherwise the seller may ask for rescission and

compensation.

2. The seller, after the lapse of the time referred to in the previous clause,

shall have the right to determine die specifications of the sold item,

according to the buyer’s needs as can be known to the seller. Such

determination of specifications shall be final if the buyer does not object

there to within fifteen days from the date he is notified thereof.

Article 93-1: If no time for delivery is determined, the delivery of the item

shall take place upon concluding the contract, unless the nature of the item,

or the trade practice provides for determining another time

2. If agreement is reached that the buyer shall determine the time of delivery,

the seller shall comply therewith for delivery at time determined by the

buyer, subject to the period the nature of the sold item requires for its

preparation for delivery.

Article 94-1: If, at the request of the buyer, the seller dispatches the sold

item to other than the location determined for its delivery the consequences

of deterioration shall be on the buyer, from the time ‘of its delivery to the

party assuming its transport, unless otherwise provided by the law or

differently agreed upon.

2. The expenses involved in delivery of the sold item to other than the place

specified for implementing the sale, shall be at the expense of the buyer

unless otherwise provided by the law or differently agreed upon.

3. If the seller contravenes, without pressing necessity, the buyer’s transport

instructions, he shall be liable for all harm and damage occurring to the sold

item due to such contravention.

Article95: In delivering the sold item all shortage or damage occurring to it

within the limits tolerated in trading practices shall not be reckoned with.

Article 96: If the seller fails to deliver the sold item at the time determined in

the contract, the buyer may notify him to implement the contract, within a

suitable period to be determined thereby. If, within that period, the seller

failed to deliver the sold item, the buyer may obtain a similar item at the cost

of the seller, and claim from him the difference between the price agreed

upon and that which he paid in good faith in order to obtain that object. If

the sold object has a known price in the market, the buyer-even if he does

not actually buy a similar item may clairn from the buyer the difference

between the price agreed upon and the market price on the day determined

for delivery. The buyer may, instead, notify the seller that the failure to

deliver within the period determined in the notification shall result in

considering the contract as rescinded, and in this case the buyer shall have

the right to claim compensation if so necessary.

Article 97: In case of agreement on delivering the sold item in batches, the

buyer may ask for rescinding the contract if the seller fails to deliver one of

the batches at the time agreed upon. The rescission of the contract shall not

apply to the batches already delivered unless a gross damage occurs to the

buyer as a result of delivering the sold item in divided batches.

Article 98: if the price is not paid at the time agreed upon, the Seller after

demanding the buyer to pay, may resell the goods to third parties

goods are thus sold, in good faith, at less than the price agreed upon the

seller shall have the right to claim the difference from the buyer. If the good

have a known price in the market, the seller, even if he has not actually

resold the goods, shall have the claim from the buyer the difference between

the price as agreed upon and the price in the market on the day defined for

paying.

Article 99-1: The buyer who has paid the price in full may ask the seller to

give him a list of the goods in which to mention that the price has been duly

settled.

2. If the buyer accepts, explicitly or implicitly, the list of the goods he has

received from the buyer, he shall not have the right, thereafter, to object to

the data and information provided therein. The buyer’s non—objection to

the list, within ten days from its delivery date, shall be considered as implicit

acceptance.

Article 100-1: if the buyer refuses to receive the sold item, the seller may:

after recording the condition of the sold goods, request a warrant on a

petition from the judge concerned to permit the sale of the goods after the

lapse of a period he determines and notifies to the buyer. The judge shall

also determine the method of carrying out the sale. He may also order selling

the perishable objects without determining a period or notification.

2. The seller shall deposit the sale proceeds in the court treasury pending

settlement of the dispute between him and the buyer, if the latter had already

paid the price in full.

Article 101-l: If, after receiving the sold item, it transpires that its quality

and quantity less and lower than what was agreed upon, or a defect is

detected in it, or that it does not conform to the conditions or the specimen

on the basis of which the contract was signed, no court ruling shall grant the

buyer the ability to rescind the contract unless the shortage, defect or

nonconformity of the sold item results in its exceptualy for the purpose the

buyer prepared it for, or in difficult disposal thereof, unless an agreement or

the trade practice provides for imperative rescission of the contract in

refusing the request for the rescission, reducing the price shall be sufficient

without derogation to the buyer’s right to compensation.

2. The buyer shall notify the seller of the discovered shortage, defect, or

non-conformity, within fifteen days from the date of the actual receiving of

the sold item. He shall bring an action for rescission or an action for

reducing the price, within sixty days from the date of receiving the sold item.

I if the notification does not take place, or the action is not filed within the

date prescribed in the previous clause, the right of the buyer to bring the case

shall lapse, unless he establishes the fraud on the part of the seller.

4. In all cases, the action shall lapse with the expiry of six months from the

actual delivery date.

5. Agreement may be reached on modifying the dates agreed upon in this

article. The buyer may also be exempted from observing them.

Article102-1: If after delivering the sold item to the buyer it is found that it

exceeds the quantity agreed upon, no court ruling shall be issued authorizing

the seller to recover the increase unless the buyer refuses to complete the

price within fifteen days from the date he is notified of the existing increase.

2. The seller’s action for recovery of the increase shall not be accepted after

the lapse of sixty days from the date of actual delivery of the sold item to the

buyer.

3. Agreement may be reached on modifying the dates prescribed in this

article. The buyer may also be exempted from observing such dates.

Article103-1: Agreement may be reached on forcing the buyer not to reduce

the price below a specified limit in the resale process, if the sold item is a

commodity protected by a registered trademark distinguishing it. The court

may issue a ruling invalidating this condition if the sold item is a commodity

necessary for popular consumption.

2. The successors of the buyer shall not be committed to observe the

condition referred to in the previous clause unless they were aware of it or

were able to learn of it.

Division—2

Provisions Governing Certain

Types Of Commercial Sales

Article 104: The provisions of this chapter shall apply if the sale deed is a

commercial contract for both of its parties or for just one of them.

I— Sale By Installments

Article 105-1: if the buyer fails to settle one of the price installments as

agreed upon, no court ruling shall be issued to rescind the sale deed, if it

transpires that the buyer has settled 75% of his obligations.

2-In case a court ruling is pronounced rescinding the sale, the seller shall

refund the installments he has received after deducting the equivalent of the

charges payable against benefiting by the sold item, plus a compensation for

the harm attaining him on account of the Unusual Use of the item. All

agreement on loading the buyer with stricter obligations shall be null and

invalid.

3. The agreement on maturity of the whole price in case one of the

installments is not paid at its maturity date, shall not be enforced, unless the

buyer fails to pay at least two consecutive installments.

Article106-I: If the seller retains possession of the sold item until total

settlement of the price installments, the buyer shall acquire this ownership

on paying the last installment. The buyer shall bear the consequences of the

deterioration of the sold item from the time it is delivered to him.

2. without prejudice to the provisions prescribed in Bankruptcy, the

provision on retaining possession of the item shall not be enforced vis-à.. vis

third parties unless the said condition is written on a paper having a

registered date preceding the third party’s right, or prior to the

implementation procedures adopted by the creditors on the sold item.

Article107-1: The buyer shall not dispose of the sold item before settling all

installments of its price except with a written permission from the seller. All

disposal performed by the buyer contrary to this provision shall not be

enforced Vis—à-vis the seller if the latter proves that the alienee was, at the

time of disposal, aware that the price of the item had not been settled in full.

2. In case the buyer disposes of the sold item without the seller’s permission

before settling all the price installments, the seller may ask the buyer to pay

him the remaining installments forthwith.

3. The buyer, on contravening the provisions of the first clause, shall be

liable to jail punishment for a period not exceeding six months, and a fine of

not more than 500 Egyptian pounds, or either penalty. The provision of

article 18-bis (A) of the Criminal Procedure Law shall apply to this crime.

The Public Prosecution shall order the stay of execution of this penalty if An

agreement / composition is reached during its execution, even after the

judgment becomes peremptory.

2 —Sale by Liquidation or By Public Auction

Article 108-I: The trader shall announce the price of the commodity offered

for sale, in the liquidation sale process, accompanied by a statement of the

actual price at which this commodity was being sold during the month

preceding the liquidation.

2. All procedures likely to announce about the sale of commodities at

reduced prices shall be considered as good as a seasonal liquidation

Article109: The trader shall not sell by public auction the Unused

commodities he deals in except for one of the following reasons providing

he shall announce the reason for so doing, before the public auction sale

session:

Liquidating the trading store finally;

B. Liquidating a branch of the store;

C. Liquidating trade in one of the items in which the store is dealing;

D. Liquidating the commodities defected as a result of fire, leakage of water,

or such other reasons

E- Status of seasonal liquidation, providing it shall be completed within at

most two weeks.

Article 101-1: Used commodities shall not be sold by public auction except

through registered appraiser in the relevant special register;

2. Sale by public auction shall mean all optional sales at which everyone can

attend, even if it is stipulated to pay charges for attending the auction, or that

attendance shall be restricted to a specified category of persons.

Articlelll-1: The buyer in whose favor the auction is adjudicated shall pay

half the price in the auction session and the rest at the time of delivery of the

sold item to him. Delivering the item shall take place within three days from

the date of closing the auction, unless otherwise stipulated in the conditions

of the patty applying for the sale session.

2. If the buyer does not pay the rest of the price, or does not come to receive

the sold item, at the time referred to in the previous clause, a resale of the

item by public auction shall as well be held on the buyer’s responsibility,

and he shall not be accepted for participation in the auction.

3. If the second auction is adjudicated with less than the price of the first

auction, the defaulter buyer shall bear the difference, and if the auction is

adjudicated with a larger price, the increase shall go to the party applying for

the sale.

Article 112: The valuator shall not refrain from adjudicating the auction

except in the following two cases:

A. lithe auction for a commodity is restricted to one person.

B. If the auction result fails to reach the basic price.

Article 113: Neither the sale demanding party nor the valuator shall

participate personally, or represented, in the auction held for the

commodities displayed for sale.

Article 114: The valuator shall have a lien right on account of the

remuneration or commission payable to him on the price of the commodity

he is assigned to sell by public auction.

3-Supply Contract

Article ll5: If agreement is reached on minimum and maximum limits for the

quantities to be delivered by the supplier, the supply demanding party shall

design the quantity necessary for him, providing it shall fall between the two

limits, and he shall notify the supplier of a suitable date therefore. If the

agreement is only on the minimum limit, the supply demanding party shall

design the quantity necessary for him, providing it shall not be less than the

minimum limit agreed upon and he shall notify the supplier of a suitable date

therefore.

Article 116-1: If the agreement is reached on a term for supply, this term is

supposed to be stipulated in the interest of the two parties. Hence, it shall not

be amended except with their approval.

2. If agreement is reached that the supply demanding party shall determine a

term for supply, he shall notify the supplier of a suitable date for the term he

determines.

3. If no term for supply is agreed upon, either party may terminate the

contract at any time providing he shall notify the other party of a suitable

date therefore.

Article ll7: If one of the two parties defaults in implementing his obligations

concerning one of the periodical supplies, the other party may not rescind

the contract, unless the default in prosecution is likely to cause him a gross

damage, or weaken the trust in the ability of the defaulting party to

implement the subsequent supplies regularly.

Article 118: No agreement shall be made on preventing the supply

demanding party from contracting with other than the supplier on the

purchase of goods or services subject of the contract, except for a period not

exceeding five years from the date of the contract, whatever the privileges

the supplier shall determine for the demanding party. All agreement on a

longer period shall not be renewed except after its expiry, and it shall only

be for once, and with express agreement.

Chapter-3

Commercial Pawn

Article 119: Subject to the provisions concerning the reorganization of

special types of commercial pawn, the provisions of this chapter shall apply

to each pawn to be determined on a movable property to guarantee a debt

considered as commercial in relation to the debtor.

Article 120-1: For the pawn to be enforced toward third parties the seizen of

the pawned object shall pass to the Pawnee or to a peer to be appointed by

the contracting parties, and the pawned object shall remain in the Possession

of the party who received it until the pawn is terminated.

2. The pawnee or the peer shall be the possessor of the pawned object in the

following cases:

a. If it is placed at his disposal in a way making the third party believe that

the object has become in his custody.

b. If he receives a debenture representing the pawned object and giving its

holder the exclusive right of receiving it.

3. The possession of rights shall be transferred by delivery of the debentures

recorded in them. If the debenture is deposited with a third party, delivering

the deposit receipt shall be considered as delivering the debenture itself

providing the debenture shall be defined in the receipt in a way negating all

ignorance thereof, and that the depositary shall agree to holding for the

account of the pawnee. In this case, the depositary shall be considered as

having waived all right he has in withholding the debenture for himself for a

reason preceding the pawn, unless he has reserved that right when he

accepted to hold the debenture for account of the pawnee.

Article l2l-1: The rights established in nominal debentures shall be pawned

with a draft in which it shall be mentioned that it is for pawing and it shall be

recorded in the register of the quarter issuing the debenture.

2. The rights established in a debenture to order shall be pawned by

endorsement in which to mention that they are for pawning, or another

statement shall be added in the same sense.

3. The pawn referred to in the two previous clauses shall be enforced vis-à

vis the debtor without need for announcing the pawn to him, or for his

acceptance thereof.

Article l22-1: Subject to the provisions prescribed in the previous article,

enforcing the commercial pawn vis-à-vis third parties shall not require it to

be in writing, nor the paper in which a pawn is recorded to bear a fixed date.

2. The commercial pawn between the contracting parties and in relation to

third parties shall be established by all methods of evidence whatever the

amount of the debt that is guaranteed with the pawn.

Article 123: The pawnee shall deliver to the debtor—upon request a receipt

in which to indicate the substance and nature of the pawned object, and its

kind and amount, as well as the other qualities characterizing it.

Article 124-1: if the pawn is imposed on a fungible item, the pawn shall

remain standing even if the pawned object is replaced by another object of

the same kind.

2. If the pawned object is part of non- replaceable property, the debtor may

replace it by another object, providing it was agreed upon in the pawn

contract, and the pawnee shall accept a substitute.

Article 125: The pawnee shall effect all arrangements and procedures which

are necessary for reserving and ensuring the maintenance of the pawned

object. he shall fulfill, for the account of the debtor, the rights connected

with that object, such as receiving its value, and be an ancillary thereto,

providing he shall deduct the amounts he received from the amount

guaranteed by the pawn, even though its maturity is not due yet. Deduction

shall first be from the value of expenses spent in maintaining and preserving

the object, then the expenses, thereafter from the yield, and last from the

original debt, unless otherwise agreed upon.

Article I26-1: If the debtor fails to pay the debt guaranteed by the pawn, at

its maturity date, the pawnee, after the lapse of five days from the date of

requesting the debtor to pay his debt, shall have the right to submit a petition

to the competent judge at the court within the circuit of which lies his

domicile, to issue a court writ ordering the sale of whole or of the pawned

object.

2. The court writ issued by the judge for selling the pawned object may not

be executed except after the lapse of five days from the date of notifying the

order to the debtor and the guarantor, if any, along with indication of the

location, date and hour of the sale session.

3. The sale shall take place at the time and place defined by the judge, and

by public auction, unless the judge orders following another method. If the

pawned object is circulated in the stock exchange, the judge shall order

selling it in that stock exchange by means of one of the brokers approved for

working in it.

4. The Pawnee shall receive, through priority, settlement of his original debt,

its yield and expenses, from the price accruing from the sale.

Articlei27: If the pawn is imposed on various properties the pawnee shall

have the right to define the property to be Sold unless otherwise agreed

upon, or imposing the pawn is likely t harm the debtor. in all cases, the sale

may not cover other than the portion adequate to settle the right of the

pawnee.

Article 128-1: if the price of the pawned object decreases in the market so

that it becomes inadequate to guarantee the debt, the pawnee may appoint a

suitable date for the debtor to complete the guarantee. If the debtor refuses

that, or the defined date lapses without the guarantee being completed

thereby, the pawnee may levy execution on the pawned object by following

the procedures prescribed in article 126 of this law, and the pawn shall

involve the price resulting from the sale.

2. if the pawned object is exposed to destruction or, or its maintenance

requires exorbitant expenses, while the debtor does not wish to offer another

object in replacement, each of the pawnee and the debtor may request the

competent judge to issue a court writ authorizing him to sell the object

forthwith in any way to be defined by the judge, and the pawn then shall

move to involve the price resulting from the sale.

Article l29: All agreement to be concluded at the time of or after imposing

the pawn, giving the pawnee, in case of the failure to settle the debt at its

maturity date, the right to posses the pawned object or sell it without

observing the procedures prescribed in article 126 of this law, shall be null

or invalid.

Chapter— 4

Depositing in General Warehouses

Article 130-1: Depositing in general warehouses is a deed by virtue of which

the warehouse investor undertakes to receive the goods to preserve them for

the account of the depositor or the person to whom devolves the ownership

or possession of the goods by virtue of the debentures representing them.

2. No a general warehouse shall have the right to issue debentures which

represent the deposited goods are liable to circulation may not be established

or invested except by license from the competent administrative Authority

according to the conditions and situations to be issued by a decree therefrom.

3. In applying the provisions of this ‘chapter to warehousing goods o which

no taxes or customs duties were paid, shall he observed as prescribed in the

laws related thereto and the decrees issued for their implementation.

4. A warehousing establishment having no right to issue debentures

representing the goods and which are liable to circulation shall not be

considered a general warehouse subject to the provisions prescribed in this

chapter.

Article 131-1: Whoever invests a general warehouse shall cover it with fire

insurance at one of the insurance companies. This insurance shall comprise

insurance on the goods deposited in the warehouse for account of third

parties.

2. However, the insurance shall not cover the goods deposited with one of

the general warehouses existing in a sea port or an airport, if the goods are

also covered by sea or air fire insurance. If the incident occurs during the

validity of the sea or air insurance, this insurance shall alone be applicable

for settlement of the compensation. The goods shall not be

- covered by the insurance on the warehouse except after the lapse of the sea

or air insurance validity period, or in case of the inadequacy of this sea or air

insurance to cover the damage.

Article l32-1: The depositor shall submit to the general warehouse true and

valid data on the nature, the type, the amount and the value of the goods

deposited therein.

2. The depositor shall have at all times the right to examine the goods that

were delivered to the warehouse for his account, take samples thereof, and

enable third parties to do that.

Article 133-1: The warehouse investor shall be responsible for preserving

and maintaining the deposited goods up to and not exceeding their value as

estimated by the depositor.

2- the warehouse investor shall not be accountable for the damage,

deterioration or shortage occurring to the goods, if this is caused by a force

majeure. the nature of the goods, an innate flaw in them, or the method of

packaging or packing them.

Article 134: The warehouse investor may submit to the concerned judge, at

the court within the circuit of which lies the warehouse, a request on a

petition to issue a court writ to sell the deposited goods if they are exposed

to fast deterioration. The judge shall determine the method of carrying out

the sale and disposing of the price.

ArticIe135-I: The depositor may deal in the deposited goods by sale

pawning, and other dispositions by virtue of the debentures, which at issued

by the general warehouse.

2. The warehouse investor may extend loans to the depositor, Pawning the

goods deposited therewith, he may also deal by the pawn debenture

representing the goods

3. The goods deposited in the general warehouses may not be Pawned nor an

execution be levied thereon in settlement of the pawnecl debt except by

following the provisions prescribed concerning commercial pawn.

Article I36-1;The depositor shall receive a warehousing receipt showing his

name, occupation, domicile, the type, nature and quantity of goods, and

other necessary data to define their identity and value as well as the name of

the warehouse in which they are deposited and the name of the company

insuring the warehouse, and whether or not the duties and taxes due thereon

have been paid.

2. To the warehousing receipt shall be attached a pawn debenture

comprising all the data mentioned in the warehousing receipt.

3. The depositor may divide the goods into several sets and obtain a deposit

receipt and a pawn debenture for each set thereof.

4. The warehouse shall keep duplicates of the deposit receipt and the pawn

debenture.

Article 137-1; If the deposited goods for which a deposit receipt and pawn

debenture are delivered, are of fungible objects, the depositor may replace

them by other goods of the same type and quality, if so prescribed in the

deposit receipt and pawn debenture. In this case, all rights of the bearer of

the receipt, or debenture and its privileges shall be transferred to the new

goods.

2. The receipt of the deposit and the pawn debenture may be issued for a

quantity of fungible goods in bulk in a larger quantity.

Article l38-I: The receipt for the deposit goods or the pawn debenture may

be issued in the name of or to order of the depositor.

2. If the receipt for the deposit or the pawn debenture is to order of the

depositor, he may assign them together or separated, by endorsing them.

3. The person to whom a receipt for deposit or a pawn debenture is endorsed

may request recording the endorsement made for him together with a

statement of his domicile in the warehouse book.

Article 139-I: The endorsement of’ the deposit receipt or pawn debenture

shall be dated and comprising the signature of the endorser.

2. If the pawn debenture is endorsed independently from the receipt of the

deposit, the endorsement shall comprise, in addition to the data prescribed in

the previous clause, a statement of the original debt amount guaranteed by

the pawn, its yield and the date of its maturity as well as the name,

occupation and domicile of the creditor.

3. The first endorsee shall submit a request for recording the pawn debenture

endorsement and the data of that endorsement in the warehouse books, along

with marking a relevant annotation thereof on the pawn debenture.

Article I4O-1: The bearer of the pawn debenture without the deposit receipt

shall have a pawn right on the deposited goods.

2. The bearer of the deposit receipt without the pawn debenture shall have

the right of withdrawing the deposited goods providing he shall pay the debt

guaranteed by the pawn if it is mature and payable. If the debt is not mature

or payable he may withdraw the goods before the debt maturity date falls

due if he deposits in the warehouse an adequate amount to cover the debt

and its yields until the maturity date falls due. This provision shall apply, if

the debt matures and the bearer of the pawn debenture does not show up to

receive it.

3. The withdrawal may be restricted to a portion of the goods after

depositing an amount commensurable with that portion.

Article 141: If the debt which is guaranteed by the pawn is not settled at its

maturity date, the bearer of the pawn debenture separately from the deposit

receipt may demand selling the pawned goods by following the procedures

prescribed in respect of the commercial pawn.

Article l42-l: The pawnee shall have precedence in getting settlement of his

right from the price of the goods, over the ordinary creditors, after deducting

the following amounts:

A. Taxes and duties payable on the goods.

B. Sale and deposit expenses of the goods and other goods preservation

costs.

2. If the bearer of the deposit receipt is absent at the time of selling the

goods, the amount exceeding the dues of the pawn debenture bearer shall be

deposited in the treasury of the Summary Court within the circuit of which

the warehouse lies.

Article l43-1: The bearer of the pawn debenture may not have recourse

against the debtor or the endorsers except after levying execution on the

pawned goods, and after establishing the inadequacy

of the sale proceeds to settle his debt.

2. Recourse against the endorsers shall be within fifteen days from the date

of selling the goods, otherwise the right of the bearer to have recourse

against the debtor shall abate.

3- in all cases, the right of the pawn debenture bearer to have recourse

against the endorsers shall abate if he does not proceed with the procedures

of !levying execution on the pawned goods within thirty days from the debt

maturity date.

Article 144: if an accident occurs to the goods, the bearer of the deposit

receipt or the pawn debenture on the insurance amount, which will become

due if an accident occurs, shall have all the rights prescribed for him on the

goods as well as.

Article145-1: The person from whom the deposit receipt is lost or damaged

may request the concerned judge at the courl within the circuit of which lies

the warehouse, to issue a court writ on a petition, to deliver to him a copy of

the lost or damaged receipt providing he shall prove his ownership thereof,

along with presenting a warrantor. The said warrantor shall be relieved of

this responsibility with the lapse of six months from the date of submitting

the warranty without anyone showing up to claim recovery of the sold

goods.

2. The person from whom the pawn debenture is lost may request the

concerned judge in the court within the circuit of which lies the warehouse

to issue a court writ on a petition to settle the debt guaranteed by the pawn

on its maturity date, providing he shall establish his ownership of the lost

debenture, and provide a warrantor. if the debtor does not execute the order,

the part in whose favor the order is issued shall levy execution on the

pawned goods by following the procedures prescribed therefore concerning

the commercial pawn, providing the first endorsement on the debenture has

been recorded in the warehouse books according to the provisions of clause-

2 of article 139 of this law. The warrantor’s responsibility shall be relieved

with the lapse of six months from the maturity date of the debt without the

one in whose favor the order was issued taking procedures of levying

execution on the goods.

Article 146-1: If the depositor does not recover the goods at the

end of the deposit contract, the warehouse investor may request selling them

by following the procedures prescribed therefore in respect of the

commercial pawn, and get settlement of the amounts due to him from the

proceeds of the sale and deliver the balance to he depositor or deposit it in

the treasury of the concerned court.

2. The provision prescribed in the previous clause shall apply if the deposit

contract is for an indefinite period, and one year has lapsed without the

depositor requesting recovery of the goods, or announcing the wish to

continue the deposit contract.

Article 147-1: Whoever establishes or invests a general warehouse without

obtaining the license referred to in the second clause of article 130 of this

law, shall be liable to a jail penalty and a fine of not less than five thousand

pounds and not exceeding fifty thousand pounds or either penalty.

2. The court, in case of an indictment sentence, shall have the power to order

closing the warehouse and depositing the goods existing in it, in one of the

licensed warehouse, at the expense of the judgment debtor, for their delivery

to their owners, or disposing of them for their account, according to the

provisions prescribed in this chapter. The court shall order publishing the

pronounced judgment, comprising an indication of the site of the new

warehouse, in a daily newspaper at the expense of the judgment debtor.

Chapter-5

Commercial Agency

Division-I

General Provisions

Article 148: The provisions of commercial agency shall apply, if the agent

has taken profession of effecting trade operations for account of third

parties.

Article 149-1: If the commercial agency is granted as absolute, it shall only

apply to commercial dealings and transactions.

2. If the commercial agency is granted specifically for a specified

commercial dealing, the agent may perform all works necessary for carrying

out this dealing without need for permission from the principal.

Article 150-1: The Commercial Agency is granted with pay.

2. The pay shall be due to the commercial agent as soon as the transaction he

is charged to work out is concluded. The pay shall also be due to him if he

establishes that the difficulty of concluding the deal was for reasons

attributed to the principal.

3. in other than the two cases referred to in the previous clause, no pay but

only compensation shall be payable to the agent for the effort he exerted as

prescribed in commercial practices and usage.

4. in exception from the provisions of the second clause of article 709 if the

Civil Code, if agreement is reached on the pay of the commercial agent, this

pay shall not be subject to the estimation of the judge.

Article 151-1: The agent shall follow the instructions of the Principal, if he

contravenes them without acceptable justification, the principal nay refuse

the deal.

2. If no instructions are given by the principal concerning the deal, the agent

shall delay its conclusion and ask for the instructions from the principal,

unless delaying the deal will cause harm to the principal, or if the agent was

delegated to work without instructions from the principal.

Article 152: If the goods or objects held by the agent for the account of the

principal are threatened with quick deterioration or drop in value, while the

agent has received no instructions from the principal in their respect at a

suitable time, the agent may request the concerned judge at the court within

the circuit of which lies the agent’s business center to issue a court writ on a

petition to sell the goods in the manner to be determined by the judge.

Article 153: The agent shall have the right to refrain from carrying out the

work entrusted to him of performing that work will require unusual expenses

and the principal has not sent these expenses to him, unless it was agreed

that, or according to previous dealings between the two parties, the principal

will pay these expenses.

Article 154: If the agent refuses to carry out the deal entrusted to him, he

shall notify the principal thereof forthwith. In this case, the agent shall

maintain and preserve the goods and other objects he holds for the account

of the principal until he receives instructions in their respect. If the

instructions are not received at a suitable date, the agent may request the

concerned judge in the court within the jurisdiction of which lies the center

of his business to issue a court writ on a petition to deposit the goods or

objects with a trustee to be appointed by the judge.

Article 155-1: The agent shall be accountable for the deterioration of the

goods or objects he holds for the account of the principal unless this

deterioration results from causes the agent or his subordinates have nothing

to do with, or from an inherent defect in the goods or the object.

2. The agent shall not insure the objects he holds for the account of the

principal unless the principal asks him to do that, or insuring the objects is

an exigency of usage and trade practices or is necessitated by the nature of

the object.

Article 156-1: The agent may not designate himself as another party to the

deal he is charged to conclude except in the following cases:

A. if he is so permitted by the principal.

B. If the instructions of the principal regarding the deal are explicit and the

agent carries out the operation precisely as instructed.

C. if the deal is connected with a commodity having a fixed price in the

market and the agent bought it or sold it at that price.

2. The agent, in the cases mentioned in the previous clause, shall not receive

any pay in return for the agency.

Article 157: A third party who deals with the agent may request the agent to

show him the agency deed, the correspondence and other documents fixing

or restricting the power of the agent. The restrictions imposed on the power

of the agent may not be invoked vis-à-vis third parties unless it is established

that the third party was aware of them at the time of signing the contract.

Article 158-1: The agent shall notify the principal of the deals he concludes

for his account.

2. The agent shall submit to the principal, at the time agreed upon between

them or according to trade practices or previous dealings between them, an

account of the works he concludes for his account. This account shall

conform to truth. If it comprises premeditatedly untrue or incorrect data, the

principal may refuse the deals connected with these data, in addition to his

right to claim compensation. The agent shall not receive a pay for these

transactions.

Article 159-1: In addition to his right to withhold the goods, the agent shall

have a lien right on the goods and other objects sent, or deposited with or

delivered to him by the principal.

2.The lien right shall guarantee the agent’s pay, as well as the expense and

amounts he pays for or lends to the principal, and other amounts payable to

the agent because of the agency whether they are spent before delivery of the

goods or objects or during their existence in the hand of the agent.

3. The lien right shall be determined regardless of whether the debt arose

from works connected with the goods or objects that are still in the agent’s

possession or other goods or objects that were Previously sent to, deposited

with, or delivered to him.

Article 160-1: The agent shall not have the lien right referred to in the

previous article unless he is holding the goods or objects for the account of

the principal. This possession shall be realized in the following cases:

A. If the agent has actually received the goods or objects.

B. If they are placed at his disposal in customs or in a general or special

warehouse.

C. If he is possessor of the goods or objects before their arrival by virtue of a

bill of lading or any other transport instrument.

D. If he exports them and is still possessor thereof by virtue of a bill of

lading or any other transport instrument.

2. If the goods or objects subject to his lien right are sold and delivered to

the buyer, the agent’s lien right shall be transferred to the price.

Article 161: The trade agent’s lien right shall have precedence over all other

lien rights, except the judiciary expenses, and the taxes and dues payable to

the state.

Article 162-1: The procedures of levying execution on the goods and objects

existing in the trade agent’s possession.

2. However, if the agent is charged to sell the goods or objects in his

possession, he may levy execution on them by selling them without need to

follow the procedures referred to in the previous clause unless it is difficult

for him to execute the instructions of the principal concerning the sale.

Article 163: Either party to the commercial agency contract may terminate

the contract at all times. The compensation shall not be payable unless the

termination of the contract occurs without prior notice or at an unsuitable

time. If the contract is for a definite time, its termination shall be based on a

gross and acceptable reason, otherwise the compensation shall be payable.

Article 164: If the principal does not have a known domicile in Egypt, his

agent’s domicile shall be considered a domicile for the principal, and he may

be sued and the official judiciary papers may be served on him at that

domicile, in connection with the works carried out by the agent for the

account of his principal.

Article 165: With regard to the reorganization of work in commercial agency

business in Egypt, the laws and decrees related thereto shall be applicable.

Division —2

Certain Types of Trade Agency

I-Commission Agency

Article 166-1: A commission agency is a contract by virtue of which the

agent undertakes to effect in his name a legal act for the account of the

principal.

2. In addition to the general provisions on commercial agency, the

provisions prescribed in the following articles shall apply to the commission

agency.

Article 167-I: If the commission agent sells at less than, or buys at higher

than the price determined by the principal, the principal if he desires to

refuse the deal, shall notify the agent of his decision at the nearest time from

learning of it, otherwise he shall be considered accepting the price.

2. The principal shall not refuse the deal if the commission agent accepts to

bear the price difference.

Article 168-1: If the commission agent buys for account of the principal

goods differing from the kind or type the principal required, the principal

shall not be committed to accept them.

2. if the agent buys goods conforming to the required goods, but in a Larger

quantity, the principal shall not be bound to accept other than the quantity he

required. But, if the quantity is less than the requirement of the principal, the

latter shall have the choice of either to accept or refuse it.

Article 169: if the commission agent concludes, a contract with better terms

than those determined by the principal, the benefit shall devolve to the

principal. The agent shall submit his account on the real basis according to

which the deal was concluded.

Article 170-1: If the commission agent mandated to sell, grants the buyer a

period to settle the price, or allows him to settle by installments without the

principal’s permission, the principal may require the agent

to settle the whole price immediately, and in this case the commission agent

may retain the price difference if the deal has been concluded With a higher

price.

2. However, the commission agent may grant a time for settlement or accept

settlement of the price by installments without the principal’s permission, if

trade practices in the area where the sale was concluded provide for that,

unless the principal’s explicit instructions oblige him to sell in full cash

payment.

Article l71: If the principal’s instructions provide for selling with deferred

price, and the commission agent sells in full cash, the principal may not

require him to pay the price except at the maturity date determined by him.

In this case the commission agent shall pay the price on the basis of deferred

sale.

Article 172-1: The commission agent may not change the trade marks placed

on the goods he receives from the principal or for his account unless this

takes place within the limits of the law and he is authorized expressly to do

that.

2. If the commission agent holds a number of goods of the same variety,

which sent to him from different principals, he shall place on each sort of

goods a statement characterizing each type.

Article 173-1: The commission agent may mention the name of the principal

he deals for his account unless the principal asks him not to reveal his name.

Such disclosure of the principal’s name shall not change the nature of the

agency as long as the agent concludes the contract in his own name.

2. The commission agent shall disclose to the principal the name of the third

party who concluded the contract with him, if the principal requires him to

do that. If the commission agent refrains from disclosing the name of the

third party, without acceptable justification, he may then be considered

guarantor for execution of the deal.

Article 174-1: The commission agent shall be directly responsible vis-à-vis

the third party with whom he concludes the contracts. This third party shall

also be directly responsible vis-à-vis the commission agent.

2. The third party who concludes the contracts with the commission agent

shall not have the right of recourse to the principal, nor shall the principal

claim remedy from the third party by lodging a direct court action unless

otherwise provided by the law.

Article 175-1: if the commission agent who is charged to sell becomes

bankrupt before receiving the goods sold from the buyer , the principal may

claim from the buyer directly to settle the Price to him.

2. if the commission agent who is charged to buy becomes bankrupt before

receiving the goods sold to him, the principal may claim from the seller

directly to deliver the sold goods to him.

Article 176-1: The commission agent shall not guarantee the settlement of

obligations of the third party with whom he concludes the contracts unless

he expressly pledges to guarantee him, or it is prescribed in the law or

provided for in trade practices of the area wherein he exercises his activities.

2. Special pay shall be due to the guarantor commission agent, which the

court shall determine in case no agreement or trade usage and practices exist

in respect thereof.

2-Contracts Agency

Article 177: Contracts agency is a contract under which a person undertakes

on a permanent basis, and in a specific area of activity, promoting,

negotiating and concluding transactions and deals in the name and for the

account of the principal in return for pay. His assignment may also comprise

executing the contracts in the flame and for the account of the principal.

Article 178: The contract agent shall assume the exercise of his agency

works and the management of his commercial activity in respect thereof, on

an independent basis. He shall alone bear the expenses necessary for

managing his activities.

Article 179: The principal shall not have recourse to more than one contract

agent in the same area and for the same branch of activity. Nor shall the

contract agent represent for more than one establishment exercising the same

activity in the same area, unless otherwise agreed explicitly by the two

parties.

Article 180: The contract agency deed shall be recorded in writing. and shall

particularly indicate the limits of the agency, the pay of the agent, the area of

his activity, and the period of the contract if it is for a definite period.

Article 181: If in the deed it is stipulated that the contract agent shall erect a

building for display, stores for the commodities, or repair or maintenance

installations, the term of the contract shall not be for less than five years.

Article 182-1: The contracts agent shall not receive the rights of

principal, unless the principal grants him this right in which case the agent

shall not grant a reduction or a term without a special authorization.

2. The contract agent may receive the orders related to the execution

contracts concluded through him. He shall be considered a representative of

his principal in the court actions connected with these contracts, as brought

by or against him in the area of the agent’s business.

Artic1e 183-1: The principal shall settle the pay agreed upon to the agent.

2. This pay may be a percentage of the value of the transaction This

percentage shall be calculated on the basis of the selling price to customers

unless otherwise agreed upon.

Article 184 : if the contract agency is confined to one agent in a defined

area, the contract agent shall receive his pay for the transactions/deals

concluded by the principal directly or via third parties in this area, even if

these transactions have not been concluded by endeavors of this agent,

unless otherwise agreed explicitly between the two parties.

Article 185: The principal shall provide the agent with all data and

information necessary for implementation of the agency task, and supply

him, in particular, with the specifications of the commodities, forms,

drawings, trademarks and other data that should assist him in promoting the

sale of the commodities subject of the agency as well as marketing them.

Article 186: The contract agent shall maintain the rights of the principal He

shall have the right to take all protective measures necessary to preserve

these rights. He shall provide his principal with the data and information

concerning the status of the market in the area of his activities.

Article 187: The contract agent shall not disclose the secrets of the principal

to which he will have access on the occasion of implementing the agency

task, even if this takes place after the end of the contractual relation.

Article 188-1: The contract agency deed shall be concluded in the common

interest of the two parties. If the deed is for an indefinite period, the

principal shall not end it without the occurrence of a fault by the agent,

otherwise he shall compensate him for the harm caused to him as a result of

such removal. All agreement to the contrary of that shall be null and invalid.

2. The agent shall compensate the principal for the damage/harm caused to

him if he relinquishes the agency at an unsuitable time and without an

acceptable excuse.

Article 189-1: If the deed is for a definite term, and the Principle decides not

to renew it at the expiry of its term, the agent shall have the right to receive a

compensation to be determined by the judge even if there is an agreement to

the contrary.

2. For such compensation to be payable, the following is stipulated.

A- The agent shall not have committed an error or deficiency in the course

of executing the deed.

B- The activity of the agent shall have led to evident success in promoting

the sales of the commodity or increasing the number of customers.

2. In estimating the compensation due consideration shall be given to the

harm and damage caused to the agent and the degree of the benefit accruing

to the principal from the agent’s efforts in promoting the sates of the

commodity and increasing the number of customers.

Article 190-1 The compensation court action referred to in the previous

articles shall abate with the lapse of ninety days from the time of deed

termination.

2. All other actions resulting from the contract agency deeds shall abate with

the lapse of two years from termination of the contractual relation.

Article 191: In exception to the jurisdiction rules as prescribed in the

Procedure Code, the court, within the circuit of which lies the location of

implementing the deed, shall be concerned with examining all disputes

arising from the Contracts Agency Deed.

Chapter-6

Brokerage

Article 192: Brokerage is a contract under which the broker undertakes to a

person to look for a second party to conclude a specific contract and mediate

for its conclusion.

Article 193: If the broker’s pay is not determined in the law or in the

agreement, it shall be determined as prescribed in trade practices and usage.

If no such usage exists, the judge shall estimate it based on the broker’s

exerted effort, and the time he exhausted in fulfilling the work he was

charged to perform.

Article 194-1: The broker shall not deserve his pay except when his

mediation Leads to concluding the contract. if the contract was not

concluded with the person delegating him due to the latter’s obstruction the

court may compensate the broker for the effort he exerted.

2. The broker shall be paid his dues upon concluding the contract, even if he

has not executed the whole or part of it.

3. If the contract is pending on a condition, the broker’s recompense shall

not be payable to him unless the condition is realized.

4. If one of the contract effects depends on completing a specified legal

procedure such as ‘registration’ in selling a realty, or recording in the

‘official mortgage’, the broker’s recompense shall be payable to him upon

concluding the heads of agreement

Article 195: If the contract that the broker mediated in concluding is

rescinded, he may claim his pay, or keep the pay if he has already received it

unless fraud or gross error is established on his part

Article 196: The court may reduce the pay of the broker if it is inconsistent

with the effort he exerted, unless the pay agreed upon was paid after

concluding the contract which the broker mediated in concluding.

Article 197: If the broker mediates in concluding a legally banned deal, no

recompense shad be payable to him.

Article 198-1: The recompense of the broker shall not be payable to him

except from the party to the contract who mandated him to seek its

conclusion.

2. If the mandate is issued from the two parties, each of them shall be

responsible, separately and not jointly between them, vis-ã-vis the broker,

for settling to him the recompense payable thereto, even if they have agreed

between them that one of them shall pay him the whole recompense.

Article 199: The broker may not retrieve the expenses he spent in executing

the work he was charged to perform, unless agreement was reached on

retrieving it, in which case the expenses shall be payable to the broker, even

if the contract has not been concluded.

Article 200: The broker, even if he was not mandated except by one of the

parties to the contract, shall display the deal to both parties with honesty, and

shall inform them of all conditions he is aware of regarding the deal. The

broker shall be responsible toward them for any fraud or gross error

emanating from him.

.

Article 201: The broker shall not join himself as party to the contract he

mediates to conclude, unless the contracting party allows him to do that. In

this case no recompense shall be payable to the broker.

Article 202: The broker shall be responsible for compensating the harm

caused by the destruction or loss of the documents, papers, or objects related

to the contract he is mediating to conclude, unless he establishes The force

majeure. . -

Article 203: The broker shall not guarantee the affluence of the two parties

to the contract he is mediating to conclude, and shall not be accountable for

the implementation of the contract, or the value or kind of the goods related

thereto, unless fraud or gross error is established on his part.

Article 204-1: If the broker delegates someone for the implementation of the

work assigned to him, without being licensed For that, he shall then be

accountable for the work of his assigned delegate as if that work emanated

from him. The broker and his delegate shall be jointly responsible.

2. If the broker is authorized to assign a delegate for him, Without

appointing the person of that delegate for him, he shall not be accountable

except for his error in choosing his delegate or the ‘error in his instructions

as issued to his delegate.

3. in all cases, the party mandating the broker and the broker’s delegate may

have remedy directly over each other.

Article 205-I: If several brokers are mandated by virtue of one contract, they

shall be jointly responsible for the work they are charged to perform unless

they are authorized to work severally.

2. If several persons delegate one broker, in a joint work among themselves,

they shall be jointly accountable vis-à-vis that broker for all that is payable

to him, in implementation of that mandate, unless otherwise agreed upon.

3. If the contract is concluded with the mediation of several brokers, and no

separate pay is determined for each of them, then a portion in the joint

recompense shall be payable to each of them in proportion of the effort

exerted by each one in concluding the contract.

Article 206-1: The broker shall record in his books all dealings as concluded

through his endeavors, and keep their relevant documents. He shall give true

copies of them to whoever of the contracting parties requests to get them.

The provisions of the commercial books shall apply to these books.

2. In selling by sample, the broker shall keep the sample unless it is

perishable, until the buyer accepts the goods without reservation, or until all

disputes in respect thereof are settled.

Article 207: Provisions as are prescribed in the laws on brokerage shall

apply to brokerage in the stock exchange.

Chapter-I

Transport

General provisions

Article 208: The transport contract is an agreement by virtue of which the

carrier shall transport persons or objects by his special means of transport to

a specified place in return for pay.

Article 209-1: With the exception of maritime transport, the provisions

Prescribed in this chapter shall apply to all types of transport whatever the

quality of the carrier, unless otherwise prescribed in the law.

.2. These provisions shall also apply to transport even if it is coupled with

operations of another nature, unless these operations are the main Purpose of

the contract.

Article 210-1: The transport contract and the commission agency contract

for transport shall be concluded by mere agreement. This contract may be

established by all methods of evidence as legally prescribed.

2.The carrier’s receipt of the object subject of transport shall be considered

acceptance on his part of the offer issued from the sender.

3. The passenger’s boarding of the means of transport shall be considered

acceptance of the offer issued from the carrier unless it is established that the

intention of the passenger was not toward concluding the transport contract.

Article 211-1: If the carrier has more than one form of the contracts he

concludes, the transport shall be considered as contracted for by virtue of the

form comprising the general conditions, unless agreement is reached on

following another form comprising special conditions.

2. If agreement is reached on following a special form, the conditions

comprised therein shall not be divided.

Article 212: If the carrier monopolizes a type of the means of transport, or

the investment of specific transport lines, he shall accept whatever transport

orders are submitted to him, unless the request contravenes the general

conditions prescribed for transport, or the carrier meets with practical

difficulty in implementing it for reasons he and his subordinates have

nothing to do with their occurrence.

Article 213-1:The carrier’s responsibility shall cover his and his

subordinates’ deeds, which occur from them during the performance of their

services.

2. All persons employed by the carrier in implementing the obligations

ensuing from the transport contract shall be considered subordinate.

3. Each condition, which provides for exempting the carrier from the

responsibility for the deeds of his subordinates, shall be null and invalid.

Article 214-1: In transport contracts, the explosion or burning of the means

of transport, their derailment from the tracks on which they run, their

collision, or other such accidents as are ascribed to the tools or machines

which the carrier uses in prosecuting the transport, even if it is established

that he has taken due precaution to guarantee their efficiency for work, and

to prevent the harm and damage caused thereby, shall not be considered

force majeure.

2. The accidents that are due to the sudden decease of the carriers

subordinates, or their suffering from physical or mental weakness during the

‘work, even if it is established that the carrier has taken due precautions to

guarantee their physical and mental fitness shall also not be considered force

majeure.

Article 215-1: The carrier shall not be responsible for compensating the

harm caused by obstruction of the transport operation, or by swerving from

the road determined therefore, by reason of being obliged to extend help to

any sick or Injured person, or a person in danger.

Article 216-1: fraud in transport matters means all deed, act, or abstention

emanating from the carrier or his subordinates, with the aim of causing harm

and damage.

2, Gross error means all deed, act, or abstention emanating from the carrier

or his subordinates with indiscretion coupled with awareness of the harm

and damage that might result therefrom.

Division I

Transport of Objects

Article 217-I: The consignor shall provide the carrier with data on the name

and address of the consignee, the place of destination, the kind of objects to

be transported, their type, weight and size, the method of packing them, the

number of parcels comprising them, and other data the carrier may require,

or as prescribed in the law in order to define the description of the object.

2. The consignor shall be accountable for the harm and damage resulting

from the untrue and incorrect data provided by him, or their inadequacy.

Article 218-1: If a consignment note is drawn up, it shall comprise,

particularly, the following data:

A- Place and date of the consignment note.

B- Name of the consignor and consignee as well as the carrier’s commission

agent —if any- and their addresses.

C- Place of shipment and destination.

D- The data concerning the determination of the object to be transported,

such as its weight and volume, the methods of packing it, the number of

parcels, and all other data necessary to define the description of the object

and the estimation of its value.

E- The date determined to assume the transporting process.

F- The transport charges and other expenses, along with indicating Whether

they are payable by the consignor or the consignee.

G- The conditions for loading or unloading, the kind of carriages used in the

transport operation, the road to be followed, determination of the liability

and other special conditions that might be included in the transport

agreement.

2. The consignor may ask the carrier to deliver to him a copy of the

consignment note duly signed by the carrier.

Article 219: If no consignment note is drawn up, the consignor may request

a receipt duly signed by the carrier to the effect that the latter has received

the object to be transported. The receipt shall be dated and Comprise the

adequate data for determination of the description of the object and Eht

transport charges

Article 220: The consignment note may be drawn up in the name, or to

order, of a determined person, or to bearer. The consignment note shall be

circulated according to the rules prescribed in the Civil Code on transfer of

debt if it is nominal, by endorsing it if it is to order, or by handing it over if it

is to bearer.

Article 221: The consignment note is an evidence as to the data set forth

therein, and those who claim something contrary to these data shall provide

evidence of their claim.

Article 222: The rights ensuing from the transporting deed shall not be

established for the consignee, nor shall he bear the obligations resulting from

it unless he accepts these debts and obligations explicitly or implicitly. The

consignee’s receipt of the consignment note, or the transported object, the

claim to deliver the transported object, or issuing instructions in respect

thereof shall specifically be considered as implicit acceptance.

Article 223-1: The consignor shall deliver to the carrier the object and the

documents necessary for effecting the transporting process. The consignor

shall be responsible for the inadequacy of these documents or their

nonconformity to reality. The carrier shall be responsible for their loss or

misuse.

2. If the process of transporting goods necessitates special preparedness on

the part of the carrier, the consignor shall notify him thereof in ample time

before delivering the object to him.

3. Delivering the object to be transported shall take place at the location of

the carrier, as defined in the transporting contract, unless otherwise agreed

upon.

Article 224-1: If the nature of the object necessitates preparing it for

transport by wrapping, packaging or packing, the consignor shall Perform

that in a way protecting the transported object from destruction or

deterioration, and avoiding the exposure of persons or other property

transported therewith to harm. If the transporting conditions require

following a specific way of wrapping, packaging or packing, the consignor

shall observe complying therewith.

2. The consignor shall be accountable for the harms ensuing from defect in

wrapping, packaging or packing. However, the carrier shall be accountable

for these harms if he accepts transporting the consignment while he is aware

of the defect. The carrier shall be considered aware of the defect if it is

visible, or it cannot be a hidden defect to the ordinary carrier.

3. The carrier shall not disavow his responsibility for the destruction or

damage occurring to the objects he transported by establishing that the harm

originated from a defect in wrapping another object, or in packaging or

packing it. All agreement contrary to that shall be null and void.

Article 225-1: The carrier shall have the right to check and examine the

objects required to be transported, to ascertain their actual condition and the

validity of the data given by the consignor in their respect.

2. If examining the object necessitates removing the covers or opening the

receptacles, the consignor shall be notified to attend the examination and

checking process. If he fails to attend at the date specified therefore, the

carrier may carry out the examination process in the absence of the

consignor, and the carrier may then have remedy over the consignor or

consignee for the examination expenses.

3. If, through examination of the object, it transpires that its condition does

not allow for transporting it without harm, the carrier may refuse

transporting the object, or may implement the transport order after taking a

declaration from the consignor of his knowledge about the condition of the

object, and his acceptance to transport it. The condition of the object and the

consignor’s declaration shall be recorded in the consignment

note.

Article 226: The carrier’s receipt of the objects to be transported, without

reservation on his part, shall mean he has received the said items in good

condition and confirming to the data indicated in the consignment note. If he

argues otherwise he shall provide due evidence confirming his claim.

Article 227-1: The carrier shall load the consigned object on a means of

transport unless otherwise agreed upon.

2. If agreement is reached that the consignor shall assume the loading of the

transported object, the carrier shall not be accountable therefore However, if

the carrier accepts to do the transportation without reservation, it shall be

assumed that the loading has taken place according to the valid norms until

the carrier provides evidence to the contrary.

3. If the consignor asks for loading on a means of transport with designated

specifications, the carrier, then, shall not be responsible for the harm

resulting from using that transport.

Article 228-1: The carrier shall follow the route agreed upon. If no

agreement is reached on following a specific route, he shall follow the best

of routes.

2. However, the carrier may change the route agreed upon, if he is forced by

necessity to do that. In this case, the carrier shall not be accountable for the

delay or other harms resulting from changing the route, unless fraud or gross

error is established on his part or on the part of his subordinates. The carrier

shall also have the right to claim the additional expenses resulting therefrom.

Article 229-1: The carrier shall guarantee the safety of the consigned object

during the execution of the transporting contract.

2. If the maintenance of the transported object in the course of the route

necessitated re-packing, repairing the covers, increasing or diminishing

them, or other necessary arrangements, the carrier shall perform that task

and pay whatever expenses are required therefore, providing he shall have

remedy over the consignor or the consignee for such expenses, unless such

arrangements are due to an error of the carrier. However, the carrier shall not

be committed to perform unusual arrangements during the process of

transporting the object, such as spraying the plant with water, feeding the

animal, giving it water, or providing medical services thereto, unless

otherwise agreed upon.

Article 230-1: The carrier shall unload the object transported thereby on its

arrival unless otherwise provided by the law or differently agreed upon. In

the latter case, the carrier shall not be accountable for the harm caused by the

unloading process.

2. In all cases, the carrier shall bear the unloading expenses unless otherwise

agreed or applied in transport practices and usage.

Article 231-1: if the delivery is not mandatory at the place of the consignee,

the carrier shall notify him of the arrival of the consigned object and the date

during which he may arrive to receive it.

2. The consignee shall receive the transported object at the date defined by

the carrier, and shall bear the warehousing expenses. The carrier, after the

lapse of this date, may transport the goods or to the location of the consignee

in return for an additional charge.

3. The consignee may ask to check the consigned object before receiving it.

If the earner refrains from enabling him to do that, the consignee may then

refuse to receive the transported object.

Article 232-1: The consignor, during the existence of the consigned object in

the carrier’s possession, may order him to refrain from transporting it, or

stop transporting it and proceed with returning the consigned object to the

consignor or direct it to another person than the original consignee, or to

another place, and other such instructions, providing the consignor shall pay

to the carrier the freight already done, the expenses and compensation for the

harm caused thereto account of the new instructions. If the consignor had

already received a copy of the consignment note, he shall submit it to the

carrier to record the new instructions in it duly signed by the consignor,

otherwise the carrier may refrain from executing these instructions.

2. The right to issue the instructions connected with the transported object

shall be transferred to the consignee upon receiving the consignment note. In

this case as well, the consignment note shall be handed to the carrier to

record in it the new instructions duly signed by the consignee, otherwise the

carrier may refrain from executing them.

3. No fresh instructions connected with the transported object may be issued

after its arrival and after the consignee has asked to receive it, or was

notified to come to receive it.

Article 233: The carrier shall execute the instructions issued to him by the

one having the right to issue them according to the provisions of article 232

of this law, unless they contradict the transporting conditions, or if the

carrier finds it practically difficult to execute them, or if implementing them

is liable to cause confusion to the transporting movement, or the value of the

transported object is insufficient to cover the expenses the carrier will

sustain because of their execution. in these cases the carrier shall notify the

one who issued the fresh instructions of his refrain from executing them, and

the reason for such refrain. The carrier shall be responsible if he refrains

from executing the instructions without justification.

Article 234-1: If transport stops during the transporting process, Of the

consignee fails to show up to receive the transported object, or attends but

refuses to receive it or pay the freight and expenses due thereon the carrier

shall notify the consignor accordingly and ask for his instructions And, in

exception to the provisions of article 232 of this law, the carrier shall

execute the instructions he receives from the consignor even if the consignor

finds it practically difficult to submit the consignment note he received from

the carrier.

If the instruction of the consignor are no received within an appropriate date,

carrier may request the concerned judge to appoint one or more experts to

record the condition of the transported object and permit him to deposit it

with a trustee for the account and on the responsibility of the consignor, or

to sell it the way he defines if the transported object is liable to destruction,

deterioration, or decline of its value, or if its maintenance requires exorbitant

expenses, and deposit the price with the treasury of the court for the account

of the parties concerned.

Article 235-1: The consignor shall pay the freight and other expenses due to

the carrier unless it was agreed that the consignee shall pay them.

2. If it is agreed the consignee shall pay the freight and other expenses, each

of the consignor and the consignee shall be jointly responsible for paying it,

vis-â-vis the carrier.

Article 236: The freight shall not be payable to the carrier for objects

transported thereby and destroyed by force majeure.

Article 237-1; If a force majeure halts transporting the consigned object, no

freight shall be payable to the carder.

2. If the force majeure prevents continuing the transporting process, the

freight expenses of only the executed portion shall be payable to the carrier.

3. In all cases, the carrier may claim the freight, and unloading and other

necessary expenses.

Article 238: The right to claim back the amount paid in excess of the freight

agreed upon or that which is decided in the transport conditions shall be for

those who paid the freight.

Article 239-i: The carrier shall have the right to withhold the transported

object against receiving the freight, expenses and other amounts due to him

for his transporting services.

2. The carrier enjoys a lien right on the price resulting from the execution

levied on the object to secure settlement of all amounts due and payable to

him. In levying such execution, the executio11 procedures on objects

commercially pawned shall be applied.

Article 240-1: The carrier shall be accountable from the time he receives the

object to be transported, for its destruction wholly or partially, and for us

deterioration, as well as for the delay in delivering it.

2. The object being transported shall be considered Practically ‘destroyed

altogether, if the carrier does not deliver it or fails to notify the consignee to

come to receive it within thirty days from the lapse of the date determined

for delivery of the consigned object, or the lapse of the time the ordinary

carrier exhausts in transporting if found in the same conditions and does not

determine a date for delivery.

Article 241: The carrier shall not be accountable to: the destruction or

deterioration of the object after delivering it to the consignee or his assigned

proxy, or the trustee appointed by the judge to store the consigned object,

unless fraud or gross error is established on the part of the carrier or his

subordinates.

Article 242-1: The carrier shall not be accountable for the decrease in weight

or size occurring to the transported object during its transport, by force of its

nature, unless the decrease is established to have occurred from another

reason.

2. If the consignment note comprises several objects divided into sets or

parcels, the tolerated decrease shall be divided on the basis of the weight of

each set or each parcel, if the weight is defined separately in the

consignment note or it was possible to define it.

Article 243: If the object is transported under the supervision of the

consignor or the consignee, the carrier shall not be accountable for its

destruction or damage, unless fraud or gross error is established on his part

or on the part of his subordinates.

Article 244-1: The carrier shall not disavow his liability for the destruction

of the transported object, or its damage or the delay in delivering it, except

by establishing the effect of a force majeure, or inherent defect in the

transported object, or the error of the consignor or the consignee.

2. If the carrier establishes one of the effects mentioned in the previous

clause, the claimant may reverse this evidence by establishing a proof that

the harm did not occur because of it.

Article245-1: All provisions exempting the carrier from the responsibility

for the destruction of the transported object wholly or partially or for

deterioration shall be null and void.

2. Alt conditions liable to commit the consignor or the consignee to pay all

or part of the costs of insurance against the carrier’s responsibility, and also

all stipulation providing for assignment by the consignor or the consign of

the rights resulting from insuring the object against transport risks to the

carrier, shall be considered as an exemption from the liability.

Article 246-i: The carrier may:

A-. Stipulate determining his responsibility for the destruction of the

transported object, wholly or partially, or for its deterioration, providing the

compensation agreed upon shall not be less than one third of the value of the

transported goods at the place and time of transporting them. All agreement

on less than this limit shall be increased to reach its amount

B- Stipulate exempting him totally or partially from his liability for the

delay.

2. The condition providing for exemption from or determination of the

responsibility shall be written in the consignment note, otherwise it shall be

considered as null and non-existent. If the transporting contract is written on

printed forms, the condition shall be vivid and written in a manner drawing

the attention, otherwise the court may consider this condition as null and

non-existent

3. The carrier shall not insist on the condition for exemption from the

responsibility or for its determination, if fraud or gross error is established

on his part or on the part of his subordinates.

Article 247-1: If the transported object is destroyed or damaged without

mention of its value in the consignment note, the compensation shall be

estimated on the basis of its actual value at the place and time of arrival,

unless otherwise provided by the law or differently agreed upon. Except for

the case of total destruction, in estimating the compensation the value of the

tolerated decrease shall be observed according to article 242 of this law.

2. If the value of the transported object is indicated in the consignment note,

the carrier may contest and controvert in respect of this value, and prove by

all methods of evidence the real value of the transported object.

3. With the exception of the cases of fraud and gross error on the part of the

carrier or his subordinates, the carrier shall not be accountable for the

destruction of the object he was charged to transport, comprising money,

securities, jewels, rarities, or other precious objects, except within the limits

of written data the consignor had submitted in their respect.

Article 248-1: Combining the compensation for total destruction and the

compensation for delay shall be disallowable.

2. No court ruling shall be issued compensating the delay in case of partial

destruction except for the portion remaining undestroyed.

3. In all cases, the compensation ruled by the court shall not exceed the

amount payable in case of destruction of the whole object.

Article 249: If the transported object is damaged or delayed in arrival thus

becoming unfit for its designed purpose, and the carrier j established to have

been responsible for the damage or delay) the claimant of the compensation

may give up the object to him against obtaining compensation to be

estimated on the basis of total destruction of the object.

Article 250-1: If the compensation is paid due to the destruction of the

transported object, then the object is found within a year from the date the

compensation was paid, the carrier shall promptly notify the person who

received the compensation, and advise him of its condition, along with

inviting him to come and examine the object at the place where it is found,

or the place of departure or that of arrival, as chosen by the person who

received the compensation.

2. If the person who received the compensation fails to send his instructions

within fifteen days from the date he receives the notification, or sends the

instructions but fails to attend the inspection of the found object at the time

determined by the carrier, or if he arrives but refuses to recover the object,

the carrier may dispose of it.

3. If the person who received the compensation asks to recover the object, he

shall refund the compensation he received, after deducting the expenses and

the charges for the harm caused because of the delay iii delivering the

object.

Article 251-1: Receiving the transported object, without reservation, shall

extinguish the right to have remedy over the carrier because of partial

deterioration or damage, unless. the consignee registers the condition of the

object and lodges a case against the carrier within ninety days from the date

of delivery.

2. The carrier shall not insist on refusing the case according to the previous

clause:

A- If it is established that the damage or deterioration originated from fraud

or gross error on the part of the carrier or his subordinates.

B- If it is established that the carrier or his subordinates premeditatedly hid

the partial destruction or deterioration.

3. Recording the condition of the object referred to in the first clause of this

article shall be done by one of the administration officers or by an expert, the

competent judge shall appoint by a court writ on memorandum.

Article 252-1: If several carriers successively executed One transporting

contract, each of them shall be responsible jointly with the others vis-à-vis

the consignor or the consignee, as if the carrier alone executed the contract,

and all condition to the contrary shall be null and void.

2. If one of the successive carriers pays the compensation Or the

compensation is claimed officially from him, he can then have remedy over

the other carriers, each in proportion of his dues of the transporting charges.

The share of the insolvent shall be distributed among the others in the same

proportion. The carrier who establishes that the harm did not occur in the

portion transported by him shall be exempted from sustaining the

responsibility.

Article 253: The last carrier shall be accountable vis-à-vis the former carriers

concerning the claim made to the consignee for the amounts due in respect

of transporting the consignment. He shall have the right of collecting them

on their behalf and taking legal procedure toward collecting the transporting

charges, including the use of the lien right on the transported object.

Article 254-1: All court action arising from an object-transporting contract

shall become subject to prescription with the lapse of one year from the date

of delivering the transported object to the consignee, or to customs, or to the

trustee appointed by the judge, in order to store the transported object. In

case of total destruction of the object, the period shall begin from the lapse

of the time prescribed in clause-2 of article (240) of this law.

2. The carrier’s action to have remedy on the successive carriers according

to clause-2 of article (252) of this law, shall be subject to prescription with

the lapse of ninety days from the date of settling the compensation or the

date of claiming it officially.

3. Whoever commits a fraud or gross error, personally, or by his

subordinates shall not insist on the prescription stipulated upon in this

article.

Division — 2

Transport of Persons

Article 255-1; The passenger shall pay the transport fare at the time agreed

upon or defined in the transporting regulations, or as applied in transport

practice and usage.

2. He shall follow the carrier’s instructions concerning transport.

Article 256-1:If a force majeure prevents carrying Out the transporting

process, or conditions cropped up before Carrying it out turning it dangerous

to lives, the carrier shall not pay compensation due to his failure to transport,

nor shall the transport fare be payable to him.

2. If the force majeure or the danger to lives occurs during the transporting

process, the carrier shall riot be paid the fare except for the portion

completed of the transport,

Article 257-1: If the passenger changes his plan before the transport begins,

he shall inform the carrier of his decision before the day set for the

transportation process. In case of necessity, the notification may be given on

the said day, providing it shall be handed before the hour defined for

execution of the transport.

2. If the notification takes place according to the previous clause, the

transporting fare shall not be payable to the carrier.

3. If the passenger gives up continuing the transport after beginning it, he

shall pay the fare in full, unless it was necessary for him to take that

decision, in which case the fare shall only be payable for the portion of the

transport already executed.

Article 258: Subject to the provisions of article 257 of this law, if the

passenger fails to come at the time determined for transport, he shall pay the

fare in full. If he has paid it, he may be transported at a subsequent time,

unless otherwise agreed upon, or differently applied in transporting usage

and practices.

Article 259:If transport is delayed for reasons attributed to the carrier or his

subordinates or the means of transport he uses, the passenger may choose

another means of transport. In this case, the carrier shall sustain the expenses

to be involved in sending him to the place agreed upon. The passenger may

however wait until the transport operation is back to normal, in which case

he may not be forced to pay any additional fare, subject to the right of the

passenger to compensation in both cases if so necessary.

Article 260: The transport ticket may be assigned before transpo1. takes

place unless the ticket is in the name of the passenger and personal

considerations are observed in issuing it.

Article 261-1: If the passenger is obliged to use a seat/place in a lower class

than that indicated in the transport ticket, he may claim, from the carrier the

difference between the fares of the two classes.

2. If the passenger pays an additional fare in return for special privileges, he

may claim refunding this fare if the carrier does not provide the privileges

related to that fare.

Article 262: The carrier may withhold the luggage of the passenger to secure

collecting the transport fare and other amounts payable for the transport. The

carrier shall have a lien right on the price resulting from levying execution

on this luggage for settlement of all amounts due to him for his transport

services. The procedures of levying execution on commercially pawned

objects shall be followed in this respect.

Article 263-1: The carrier shall carry the passenger and his luggage to the

place of destination at the time agreed upon or as mentioned in the transport

regulations, or as applied in transport practices and usage. In case no

determination of time is set, the transport shall be executed within the time a

standard and ordinary carrier takes if found in similar conditions.

2. The carrier, before carrying out the transport process, or while in route

shall examine the luggage of the passenger in his presence — if possible- to

ensure their conformity to transport requirements.

Article 264-1: The carrier shall guarantee the safety of the passenger during

the implementation of the transport contract. All agreement providing for

exemption of the carrier from this guarantee shall be null and void.

2. Implementing the transport contract shall comprise the period lying

between the passenger’s boarding of the means of transport at the place of

departure and his debarking the transport means at the place of arrival. In

case there a platform or quays for berthing the means of transport, the

implementation of the transport contract shall comprise the period between

the entry of the passenger to the quay at the place of departure and his exit

from the quay at the place of arrival. If it is decided necessary to change the

means of transport in route, the guarantee shall not comprise the period of

transferring the passenger from one means of transport to another unguarded

by the carrier or his subordinates.

Article 265: The carrier shall be accountable for the following:

1. Delay in arrival to destination.

2. Physical/bodily or non-physical harms caused to the passenger during the

transport contract.

Article: 266- The carrier shall not renounce his responsibility for the delay

or physical or non-physical harms caused to the passenger during the

execution of the transport contract, except by establishing the force majeure,

or the passenger’s error.

Article 267-1: All condition providing for exempting the carrier wholly or

partially from the responsibility for the physical detriment caused to the

passenger shall be null and void.

2. All condition that is liable to oblige the passenger to pay all or part of the

cost of insurance against the carrier’s responsibility and all condition by

virtue of which the passenger assigns to the Carrier his right of insurance

against the carrier’s errors shall be regarded practically as a condition for

exemption from responsibility.

Article 268-1: The carrier may stipulate exempting him, wholly or partially

from the responsibility arising from delay or non-physical detriment caused

to the passenger.

2. The conditions for determining the responsibility and exemption

therefrom shall be in writing, otherwise it shall be considered as null and

void. If the transport contract is drawn up on printed forms, the condition set

therein shall be vivid and written in a manner drawing the attention,

otherwise the court may consider this condition as null and void.

3. The carrier shall not insist on the condition for determining the

responsibility or exemption therefrom if is established that fraud or gross

error was issued on his part or his subordinates.

Article 269-1: The passenger shall guard the luggage and animals he is

licensed to transport with him. The carrier shall not be accountable for their

loss or the harm caused to them, unless the passenger establishes the issue of

an error from the carrier or his subordinates.

2. The passenger shall be accountable for the harm caused to the carrier or

his subordinates or to third party because of the luggage or animals he

carried with him.

3. The provisions applicable to the transport of objects shall apply to the

transport of luggage delivered to the carrier.

article 270-1: if the passenger dies or contracts a disease during transport

contract, the carrier shall take necessary arrangements for preservation of the

luggage until it is delivered to the concerned parties

3. If a concerned person happens to be present at the time of the passenger’s

death or when falling sick, he may interfere to watch the arrangements taken

by the carrier and ask him to deliver thereto a declaration that the luggage

and effects of the deceased passenger exist his possession.

Article 271: The successors of the deceased passenger, and the persosons he

supports in implementation of an alimony/maintenance obligation, may file

a liability action against the carrier claiming compensation from him for the

harm caused to their ancestor or supporter, whether the death occurred

directly following the accident, or after the lapse of a period of time from its

occurrence.

Article 272-1: All action arising from the transporting contract, the merits of

which are concerned with claiming compensation front the carrier for the

passenger’s death or for causing physical harms to him, shall prescribe with

the lapse of two years. This period shall begin, in case of the passenger’s

death, from the date the decease occurs, and in case of a physical injury from

the date the accident takes place.

2. All other action arising from the passenger’s transporting contract shall

prescribe with the lapse of one year. This period shall begin from the time

determined for arrival to destination. in case the date is not defined, it shall

begin from the period an ordinary carrier takes in transport if found in the

same conditions.

3. Those on whose part fraud or gross error emanates shall not insist on the

prescription stipulated upon in this article.

Division —3

Transport Commission Agency

Article 273-1: The commission agency for transport is a Contract by virtue

of which the agent concludes in his name and for account of his principal a

contract for transport of objects or persons, and in case of necessity for

carrying out transport related operations.

2. If the commission agent for transport assumes and transport process by his

own means, he shall be considered carrier and the transport contract

provisions shall apply to him.

Article 274: With the exception of the provisions prescribed in the following

articles, the provisions concerning the transport commission agency contract

shall apply to the commission agency for transport.

Article 275: The principal may at all time cancel the transport and order

before the agent concludes the transport contract providing the principal

shall refund the expenses sustained by the agent and compensate him for the

work performed.

Article 276-1: The commission agent for transport shall execute the

instructions of his principal especially those connected with the transporting

date, choosing the carrier, and the route to be followed.

2. The commission agent for transport shall not record in his principal’s

account, a transport fare more than that agreed upon with carrier. The benefit

of all privileges the agent obtains front the carrier shall devolve try the

principal unless otherwise agreed upon in the commission agency contract or

where differently applied in transport usage and practices.

Article 277: The commission agent for transport shall guarantee the safety of

the passenger or the object being transported. All agreement to the contrary

shall be null and void.

Article 278: 1-The commission agent for transport shall be accountable,

from the time he receives the object to be transported, for the destruction of

that object, totally or partially, for its deterioration or for the delay in its

delivery. He shall not disavow this responsibility except by establishing the

existence of the force majeure, an inherent flaw in the transported object, or

the error of the principal or consignee.

2-In transport of persons, the commission agent shall be accountable for the

delay in arrival to destination, and for the physical or non-physical harm

attaining the passenger during the execution of the transport contract. He

shall not disavow this responsibility except by establishing the existence of a

force majeure or the passenger’s error.

Article 279- 1: The following shall be null and void:

A- All condition providing for the exemption of the commission agent from

the responsibility for destruction of the object being transported, wholly or

partially, or its deterioration.

B- All condition providing for his exemption from responsibility for the

physical harms occurring to the passenger

2. Each condition that is likely to force the consignor or the consignee in the

transport of objects, force the passenger in the transport of objects, and force

the passenger in the transport of persons, to pay all or some costs of

insurance against the transport commission agent’s responsibility. Also, each

condition by virtue of which the consignor or the consignee, or the passenger

assigns to the commission agent the rights resulting from the insurance he

concluded against transport risks, s considered as an exemption from

responsibility.

Article 280:1- Except for the cases of fraud and serious error on the part

of’ the commission agent for transport or one of his subordinates, or the

carrier or one of his subordinates, the commission agent for transport may

stipulate the following:

A. Determining his liability for the destruction of the transported object,

wholly or partially, or its deterioration, providing the compensation agreed

upon shall not be less than one third of the value of the goods transported

from the place and time of their transport. All agreement on compensation

less than that limit shall be increased to that limit.

B. Exempting him wholly or partially from the liability for the non- physical

harms attaining the passenger.

C. Exempting him wholly or partially from the liability for delay.

2. The condition for exemption from or determination of the liability shall be

in writing, otherwise it shall be considered as null and void. If the

commission agency for transport contract is drawn up on printed forms, the

condition shall be vivid and written in a way drawing the attention;

otherwise, the court may consider it as null and void.

Article 281: The principal and the carrier may have remedy direct over each

other for claiming the rights resulting from the transporting contract. Also,

the passenger or the consignee and the carrier may have remedy direct over

each other in claiming the said rights. In all cases, the commission agency

for transport shall be involved in the case.

Article 282: If the commission agent pays the transport fare/charges to the

carrier then, he shall replace him in all rights payable thereto.

Article 283: The provisions prescribed in articles 254 and 272 of this law

shall apply to the prescription of court actions ensuing from the commission

agency for transport contract.

Division — 4

Special Provisions On Air Transport

Article 284:1. Air transport in this Division shall mean the transport of

persons or luggage or goods by planes for profit making.

2. Luggage shall mean the objects the traveler may carry with him on the

plane, arid which are delivered to the carrier to keep in his watch during the

travel. The expression shall not comprise small and personal objects the

traveler keeps in custody during the travel.

ArticIe28S:1-The provisions of international conventions in force in Egypt

shall apply to international air transport.

2-The provisions of this branch and the special provisions prescribed i the

following articles shall apply to inland air transport.

3-Air transport shall be inland transport if the two points determined it the

agreement of the contracting parties for departure and arrival lie i Egypt.

even if the plane is continuing its trip after departing the arrival point beyond

the Egyptian territorial borders.

Article 286-1: The air consignment note shall comprise a statement that the

transport is carried out according to the provisions of limited responsibility

prescribed in article 292 of this Law, otherwise the carrier shall not insist on

these provisions.

2. The air carrier shall ascertain the travelers on the plane and the goads

transported on it, or those the traveler’s keep in their custody during the

travel fulfill the conditions necessary for boarding the plane, prescribed in

the law and the transport regulations.

Article 287: The air carrier shall be accountable for the harm occurring in

case of the traveler’s death or injury, wounds or any other physical harm if

the accident which caused the harm occurs during the traveler’s existence in

the custody of the carrier or his subordinates within the airport. of departure,

or on the plane, inside the arrival airport, or in any other airport or place at

which the plane lands voluntarily or in emergency cases.

Article 288-1: The air carrier shall be accountable for the harm occurring in

case of destruction of the luggage and goods or their deterioration if the

accident which led to the harm occurs during air transport.

2-The air transport shall comprise the period in which the luggage or the

goods are in the custody of the carrier or his subordinates inside the

departure airport, and during the air travel, and inside the arrival airport, and

at any other airport or place at which the plane lands voluntarily or in

emergency cases

3-The air transport shall not comprise the period during which the luggage

or goods are on land, sea, or river transport outside the airport, unless that

transport is necessary for shipping the luggage or goods, delivering them, or

transferring them from one plane to another, in implementation of the air

transport contract.

Article 289:1- The air carrier shall be accountable tbr the harm resulting

from the delay in arrival of the passenger, luggage or goods.

2.The luggage or goods which the carrier does not deliver to the consignee,

or the carrier notifies the consignee to attend (0 receiving the goods within

thirty days from the expiry of the period spent by the ordinary air carrier in

transporting the goo if he is found in the same conditions, shall be

considered as practically destroyed luggage or goods.

Article 290:1-The air carrier may not disavow his responsibility except by

establishing the force majeure, inherent flaw in the object, or the error of the

consignor, consignee, or passenger.

2-If the air carrier establishes one of the cases mentioned in the previous

clause, the claimant may negate this established evidence by proving that the

harm did not ensue from that cause, or that it was not the only cause for the

harm, in the latter case, the compensation shall be reduced in proportion of

the harm attributed to the condition established by the air carrier.

Article 291: The air carrier shall not be accountable for the small or personal

objects which are kept in the custody of the passenger during the travel,

unless the passenger establishes the issue of an error on the part of the

carrier or his subordinates.

Article 292:1- In case of air transport of persons, the compensation to be

ruled for payment by the air carrier shall not exceed one hundred and fitly

thousand Egyptian pounds, for each traveler, unless an express agreement is

reached on exceeding that amount.

2-In case of transporting luggage or goods, the compensation shall not

exceed fifty Egyptian pounds on each kilogram. However, if the consignor,

in delivering the luggage or goods to the carrier, announces that he attaches

a special importance to delivering them at the place of arrival in view of

their value, and pays the additional charge demanded by the carrier for it, the

carrier shall pay the compensation according to the value announced by the

consignor, unless the carrier establishes that it exceeds the real value of the

transported object.

3. As for the small or personal objects remaining in the traveler’s Custody

during the travel, the compensation to be ruled for each traveler in respect of

these objects shall not exceed live hundred pounds.

4. the air carrier shall not insist on determining the responsibility prescribed

in this article, if it is established that the harm resulted from the act or refrain

of the carrier, his subordinates, or his agents, while performing their work

with the aim, of causing harm, or with indiscretion coupled with awareness

of possible occurrence of the harm.

Article 293: 1. If an action for compensation is lodged against a subordinate

or an agent of the carrier, he may insist on determining the responsibility

prescribed in article 292 of this law, if it is established that the act causing

the harm occurred while performing his duties.

2.The subordinate or agent of the carrier may not insist on determining his

responsibility if it is established that the harm was caused by an act or

refrain on his part while performing his duty with the aim of causing harm,

or with indiscretion coupled with awareness of possible Occurrence of the

harm.

3.The total amount obtained by the claimant of the compensation from the

carrier, his subordinates, or his agents, shall not exceed the limits prescribed

in article 292 of this law.

Article 294:1- All condition providing for exemption of the air carrier from

the responsibility or for determining it at less than the limits prescribed in

article 292 of this law shall be null and void.

2- All condition that is liable to oblige the traveler or the consignee to pay all

or some of the air carrier’s liability insurance expenses, and all condition by

virtue of which the traveler or the consignee assigns to the carrier his rights

in transport risks insurance shall be considered practically congruent to

exemption from the responsibility.

Article 295: Receiving the luggage or goods without reservation shall

extinguish the right of remedy against the carrier due to the partial

destruction or deterioration, unless the traveler or the consignee records the

condition of the luggage or goods and lodges the case within ninety days

from the date of their delivery. The provisions prescribed in the second and

third clauses of article 251 of this law shall apply in this respect.

Article 296-1. All court actions resulting from the air transporting Con. tract

and in which the merits constitute a claim for compensation against the

carrier for the destruction or deterioration of the luggage and goods shall

prescribe with the lapse of one year. This period shall apply in cash of partial

destruction or deterioration from the date of delivering the transported object

according to the first clause of article 254 of this law. In case of total

destruction, it shall apply from the expiry date of the period prescribed in the

second clause of article 289 of this law.

2. All court action resulting from the air transport contract in which the

merits constitute a claim for compensation against the carrier due to the

travelers decease or physical harm, shall prescribe with the lapse of two

years. This period shall, in the death case, apply from the date of its

occurrence, and in the physical injury case from the date the accident takes

place.

3. All other court actions resulting from the air transport contract shall

prescribe with the lapse of one year. This period shall apply from the date

determined for arrival of the plane to destination. In case the arrival date is

not defined, the prescription period shall apply from the time the ordinary air

carrier takes if found in the same conditions.

4.The carrier from whom or from whose subordinates or agents fraud or

serious error emanated shall not insist on the limitation period prescribed in

the foregoing three clauses of this article.

Article 297: 1-. If agreement is reached on free transport, the air carrier shall

not be accountable, unless the compensation claimant establishes that the

harm emanated from an error of the carrier or from a subordinate or an agent

thereof. Ta this case, the air carrier or his subordinates or agents may insist

on determining the responsibility according to article 292 of this law.

2.Transport shall be free if it is made without charge and the carrier is not

using transport as his profession. If he is using it as a profession, transport

shall not be considered free even if it is made without a charge.

Article 298: The responsibility of the air carrier shall be within the limits

prescribed in article 292 of this law, whatever the legal ground on which the

liability action is based, and whatever the quality of the litigants in it, or

their number or the amount of compensations they claim

Article 299: 1 The aircraft pilot shall have authority over all persons existing

on board.

2. he shall have the power to send out any person or object representing a

danger to the safety, or disturbance of order On the plane.

3. In the course of the flight, he shall have the authority to drop from the

plane, if necessary, the objects loaded on it, or some of them or its fuel,

providing he shall notify his decision to the plane investor at the earliest

possible time. He shall begin with throwing out objects of small value

whenever possible.

4.The carrier shall be accountable for the destruction of the objects the pilot

decides to throw out for the safety of the plane.

PART ll

BANKING TRANSACTION

Article 300: Subject to the provisions of the third clause of article 361 of this

law, the provisions of this part shall apply to the transactions the banks

conclude with its customers, whether or not they are traders, and whatever

the nature of these transaction.

1- Money Deposit

Article 301: The money deposit is a contract whereby the bank is authorized

to possess the money deposited therewith and to dispose thereof consistently

with its activities, along with its commitment to refund its equivalent to the

depositor according to the contract condition.

Article 302: The bank shall establish an account for the depositor in which

shall be recorded all transaction taking place between the bank and the

depositor or the bank and the third parties for the account of the depositor.

Article 303:1- The money deposit contract shall not result in the right of the

depositor to withdraw amount from the deposit account if it does not show a

credit balance.

2- If the bank carries out transactions for the account of the depositor

resulting in turning his deposit into a debit account, the bank shall notify the

depositor forthwith to adjust his situation

Article 304:1- The bank shall send to the depositor a statement of the

account at least once every year, unless agreement or usage and bank

practices provide for sending the statement more than once during the year.

The statement shall comprise a copy of the account after the last

negotiation/discount and the balance carried forward.

2- No request for correcting the account shall be accepted even if it is based

on error, omission, or duplication, in respect of entries made more than three

years back, unless the depositor advises the bank during this period of

having received no statement of his account according to the situations

mentioned in the previous clause.

Article 305:1- The deposit shall be repaid upon demand unless otherwise

agreed upon. The depositor shall have the right to dispose of his credit

balance or of part thereof, unless using this right is made conditional upon a

prior notice or the maturity date of the deposit

2- if the depositor dies the deposit shall continue to exist according to the

contract conditions unless the successors demand recovering it before its

maturity date.

Article 306: Dealing shall be with the branch of the bank where the account

is opened, unless otherwise agreed upon.

Article 307: In case the depositor has several accounts in the same bank or in

its branches, each of these accounts shall be considered independent and

separate from the other accounts.

Article 308:1- The bank may open a joint account between two or more

persons, equally between them, unless otherwise agreed upon.

2- The joint account shall be opened upon the request of all its owners.

Drawing from this account shall not take place except with the approval of

all of them, unless otherwise agreed upon.

3- If one of the joint account owners notifies the bank in writing of a

difference existing between them, the bank shall freeze the account until the

difference is settled between them consensually or juridical.

4- If an attachment is levied on the account of one of the joint account

owners, the attachment shall apply to the share of the person under

attachment, in the joint account on the day the bank is notified of the

attachment. The bank shall suspend withdrawing from the joint account

within the limits of the attached share and notil& the account owners or their

representative of the said attachment within a period not exceeding five

days.

5- If one of the joint account owners dies, or loses his legal capacity, the rest

of owners shall notify the bank thereof and of their wish to Continue the

account, within a period not exceeding ten days from the date of the decease

or loss of the legal capacity. The bank shall suspend withdrawing from the

joint account pending determination of the successors or appointment of the

guardian on the person who lost his legal capacity.

Article 309:1- If the bank issues a savings passbook, it shall state on the

name of the person in whose favor it is issued and record in it the payments

and withdrawals, the data in the passbook as signed by the bank’s employee

shall be a proof confirming these data in the bank’s relation with the person

in whose favor the passbook was issued.

2- A savings passbook may be issued in the name of an underage person.

The minor and any other person shall have the right to deposit in this

passbook. The underage person shall not have the right to withdraw from it

except according to the provisions prescribed in the law,

2- Deposit of Debentures

Article 310: The bank shall not use the rights resulting from the debentures

deposited with it unless otherwise agreed upon.

Article 311: 1- The bank shall exert in preserving the debentures deposited

with it; the same care as exerted by a paid depositary and no agreement shall

be reached otherwise.

2- The bank shall not abandon its possession of the deposited debentures

except for a demanding reason.

Article 312:1- The bank shall collect the yield of the debenture, or its profits

and value if it matures, or is amortized, and also all other amount payable

because of the debenture unless otherwise agreed upon. These amounts shall

be entered in the depositor’s account.

2- The bank shall carry out all transactions necessary to preserve the rights

connected with the debenture as granted to it free of charge, such as

presenting it for replacement, stamping it with the seals, or adding fresh

interest coupons to it.

Article 313: The bank shall notify the depositor of all matters or right

connected with the debenture and necessitating the depositor’s approval, or

depending on his choice. If the depositor’s instructions are not received in

due course, the bank shall act in respect of that right in the interest of the

deposition. The depositor shall sustain the expenses in addition to the

ordinary commission.

Article 314:1- The bank shall restitute the deposited debentures upon the

demand of the depositor, subject to the time necessary for preparing the

debentures for restitution.

2- Returning the debentures shall be at the place where they are deposited.

‘[he bank shall return the debentures themselves unless agreement is reached

or the law provides for returning debentures of the same kind or other

debentures.

Article 315: 1-Restituting the debenture shall be to its depositor or the

successors thereof, or to those appointed by these persons, even if it

comprises an indication of being owned by a third party.

2- If a person claims that the deposited debenture is payable to him, the bank

shall notify the depositor forthwith and refrain from returning the debenture

to him until the dispute in respect of it is settled consensually or juridical.

The party claiming that the debenture is due to him shall lodge his court

action within thirty days from the date of his claim, otherwise the claim shall

be considered as null and void.

3- Letting Of Safes

Article 316: Letting safes is a contract by virtue of which a bank undertakes

in return for rental fee to place a specific safe at the disposal of the lessee to

and utilize by it for a determined period.

Article 317: 1-The key to the safe shall be handed to the lessee, and the bank

shall keep another key. With the exception of the lessee and the bank, no

duplicate key to safe shall be handed to any other person.

2- The key handed to the lessee shall remain the bank’s property and shall be

returned to it at the end of the lease.

3- The bank shall not permit anyone other than the lessee or his special

proxy to use the safe.

Article 318:1- The bank shall take necessary arrangement to secure safety

the safe and preserve its contents.

2- The lessee shall not put in the safe objects threatening its safety or the

safety of the location in which it is placed.

3- If the safe becomes danger-threatened, or it transpires that it contains

dangerous objects, the bank shall notify the lessee immediately to attend and

vacate its contents, or withdraw the dangerous objects therefrom. If the

lessee fails to attend at the time defined therefor, the bank may ask the

competent judge to issue a court writ on memorandum allowing the bank to

open the safe and empty it of its contents or withdraw the dangerous objects

therefrom in the presence of an appointee designated by the judge for the

purpose. A report on the case shall be drawn up, in which the contents of the

safe shall be listed. If the danger is impending, the bank may, on its

responsibility, open the safe and vacate its contents, or withdraw the

dangerous objects thereform, without notice or permission from the judge.

Article3I9:1- If the lessee does nor pay the rent of the safe at its due dates

the bank, after the lapse of thirty days from notifying the lessee to pay

consider the contract as terminated spontaneously, and recover the Safe after

notifying the lessee to attend to open it and vacate its Contents.

2- if the lessee does not attend at the date determined thereof, the bank ma

request the competent judge a court writ on memorandum permitting the

bank to open the safe, and vacate its contents in the present of an appointee

designated by the judge to issue for the purpose. A report shall be drawn u

on the case, in which the contents of the safe shall be listed. The judge ma

also order depositing the contents with the bank or with a trustee to be

designated thereby for that purpose.

Article 320:The bank shall have the right to withhold the contents of the

safe. it shall also have a lien right on the price accruing from their sale for

payment of the rent and expenses due to the bank

.

Article 321:1-The protective or executive attachment may be levied on the

safe.

2- The attachment is levied by notifying to the bank the contents of the

document by the virtue of which the attachment shall take place. The bank

shall also be charged to report whether it was renting a safe to the debtor

attached. The bank, upon receiving the notification shall advise the lessee

forthwith of levying the attachment and prevent him from using the safe

3- If it is a protective attachment, the lessee may request the competent

judge to issue a court writ on memorandum authorizing him to withdraw

some of the safe contents in the presence of trustee delegated by the judge. –

4- lf it is an executive attachment, the bank shall open up the safe and vacate

its contents in the presence of the distrainer, or the delegate assigned by the

judge for the purpose. The lessee shall be informed of the date defined for

opening up the safe and undertaking the inventory of its contents. These

contents shall be handed to the bank or a trustee to be appointed by the judge

of the execution, until selling them according to the provisions prescribed in

the civil and commercial procedure law.

5- If there are papers and documents forming no part of the sale, they shall

be handed to the lessee. If he is not attending at the time the safe is opened

up, they shall be handed to the bank to safe keep them until the lessee or his

successors fail to attend to receive the papers or documents referred to

hereinbefore, within five years, the bank shall have the right to raise the

issue to the Judge of Summary Action to determine whatever he chooses in

their respect.

.article 322: Notifying the safe lessee shall be valid notification is addressed

to him at the last domicile he the bank.

Article 323: With the exception of the cases prescribed in the law the bank

shall not open up the safe or vacate its content except

with permission from the lessee or in his presence, or e implementation of a

court judgment, or a court writ issued by the competent judge or the public

prosecution.

4- pawning Of Securities

Article 324: The rules on commercial pawning and the following provisions

shall apply to securities pawning.

Article 325:1- If the Pawnee is holding the pawned document for another

reason prior to the pawn, he shall be considered possessor thereof in his

quality of Pawnee once the pawn is established formed.

2. The third party who is appointed by the two contracting parties to hold the

pawned securities shall be considered relinquishing all rights he has to

withhold them for a reason prior to the pawn unless he has reserved that the

right on accepting to hold the pawned securities for account of the pawnee.

Article 326: If the pawned securities are submitted by other than the debtor,

their owner shall not be committed to settle the debt guaranteed by the pawn

except in his quality of in kind guarantor.

Article 327: If the value of the pawned security had riot been paid in full at

the time it was submitted for pawning, the debtor — if asked to settle the

unpaid portion of its value — shall submit to the pawnee the necessary

money in settlement of that portion at least two days before its maturity,

otherwise the pawnee may demand selling the security by following the

procedures prescribed in article 126 of this law, then settle the unpaid

portion of the value of the security from the price accruing from the sale, and

the pawn shall then be transferred to the remaining of the price.

Article 328: The lien right of the Pawnee shall continue to exist with its

degree between the contracting parties and vis-à-vis the third party, on the

yield of the pawned security and its auxiliaries as well as its value upon its

authorization, and also the securities substituting it.

5- Bank Transfer

Article 329:1- A bank transfer is a transaction by virtue of which the bank

posts a specific amount on the debit side of the account Upon a written order

from the remitter, and on the credit side of another account. With this

operation the following transaction may be carried out.

A. Transferring a specific amount from one person to another, each of them

having an account with the same bank, or with two different banks.

B. Transferring a specific amount from an account to another both opened in

the name of remitter with the same bank, or with t, different banks.

2- The agreement between the bank and the remitter organizes the condition

for issuing the order. However, transfer order shall not be to bearer.

3- Agreement may be reached that the beneficiary submit by himself the

transfer order to the bank instead of giving the transfer instructions to the

bank by the remitter.

Article 330: If the bank transfer takes place between two branches of the

bank or two different banks, any objection issued from a third party

concerning this transfer shall be submitted to the branch or the bank in

which the beneficiary’s account is opened. –

Article 331: The transfer order may involve amounts actually inscribed in

the account of remitter, or amount he agrees with the bank to enter in his

account during a specific period.

Article 332:1- The beneficiary shall own the amount subject of the bank

transfer from the time it is posted on the credit side of his account. The

remitter may cancel his transfer order until the said entry is posted.

2- If agreement is reached that the beneficiary shall himself present the

transfer order to the bank, the remitter may not then o back on the order

subject to the provision of Article 337 of this law

Article 333: The debt, in settlement of which the transfer order is issued,

shall continue to exist with its guarantees and auxiliaries, until the amount is

actually posted on the credit side of the beneficiary’s account.

Article 334: Agreement may be reached on deferring the implementation of

the transfer orders issued by the remitter submitted direct by the beneficiary

to the end of the day in order to implement them with other orders of their

kind as issued on the same day.

Article 335: 1- If the amount available in the account to honour the transfer

order is less than the amount mentioned in that order, and the order is

addressed by the remitter, the bank may refuse implementing the order,

providing it shall notify the remitter of this decision Without delay.

2- If the transfer order is submitted direct by the beneficiary, the bank shall

enter to his credit the short difference unless the beneficiary refuses doing

that. The bank shall mark its annotation on the transfer order as entering the

short difference or as being refused by the beneficiary to enter it.

3- The remitter shall have the right to dispose of the short difference if the

bank refuse implementing the order or the beneficiary refuses to post the

short difference for his account.

Article 336: If the bank does not execute the transfer order on the first duty

day following the day the order was submitted, the order within the limit of

the unimplemented transfer order shall be added to the orders submitted on

the following days during that period.

Article 337:1- If the beneficiary is declared bankrupt, the Remitter may

object to the implementation of the transfer order, even if the beneficiary has

received it by himself.

2- Declaring the bankruptcy of the remitter shall not prevent implementing

the transfer orders issued thereby if they were submitted to the bank before

the date of issuing the ruling concerning the declaration of bankruptcy.

6- Ordinary Bank Credit

Article 338:1- The ordinary bank credit is a contract by virtue of which the

bank places at the disposal of the beneficiary means of payment within the

limits of a specified amount.

2.The credit shall be opened for a specified or unspecified period

Article 339:1- If the credit is opened for a non specific period the bank may

cancel it at any time, providing the beneficiary shall

notified ten days at least before the date the bank defines for revoking the

credit, unless otherwise agreed upon.

2- In all cases, the credit opened for an unspecific period shall be considered

cancelled with the lapse of six months from the date the beneficiary is

notified of its opening without using it.

Article 340: If the credit is opened for a specific period, the bank shall not

revoke it before the Lapse of this period except in the case of the

beneficiary’s death or being interdicted him, or discounting his payments,

even if no court judgment was issued declaring him bankrupt, or in case a

serious error is issued from him in using the credit

7- Documentary Credit

Article 341:1-The documentary credit is a contract by virtue of which the

bank undertakes to open a credit upon the request of one of his clients

(called ‘the remitter’) in favour of another person (called ‘the beneficiary’),

guaranteed by documents representing transported goods or goods prepared

for transport.

2- The documentary credit contract is separate from the contract because of

which the credit was opened. The bank shall remain alien to that contract.

3- The rules prescribed in bank usage and practices standardizing the

documentary credits issued from the International Chamber Of Commerce

shall apply where no special text in this division is prescribed in respect

thereof.

Article 342: The bank opening the credit shall implement the conditions of

fulfillment, bank acceptance and discount, as agreed upon in the credit

opening contract, of the documents are conforming to the credit opening

conditions.

Article343:1-The documentary credit may be revocable or firm and

irrevocable.

2- The credit shall be irrevocable ‘unless it is explicitly agreed on its

irrevocability.

Article 344: No obligation on the bank toward the beneficiary sall result

from the revocable documentary credit. The bank may at any time modify or

revoke it of its own, or upon the request of the remitter without need for

notifying the beneficiary unless it has been implemented.

Article 345:1- The bank’s obligaton in case of the firm documentary credit

shall be absolute and direct vis-à-vis the beneficiary, and all bona fide holder

of the debenture withdrawn in implementation of the contract for which the

credit was open.

2- The firm documentary credit may not be revoked or modified except with

the consent of all concerned parties.

Article 346:1-The firm documentary credit may be confirmed by another

bank commited in its turn, definitively direct vis-a-vis the beneficiary.

2- The mere notification of opening the firm documentary credit, which is

sent to the beneficiary via another bank shall not be considered a

confirmation of the credit by this bank.

Article 341:1- The bank shall ascertain the confirmity of the documents to

the instructions of the remitter for opening the credit.

2- II the bank refuses the documents, it shall inform the remitter immediately

of its refusal along with indicating its reasons.

Article 348:1-No responsibility shall be on the bank if the documents are in

their appearance conforming to the instructions it received from the remitter.

2- The bank shall not bear any obligation concerning the goods for which the

credit was opened.

Article 349:The documentary credit, shall not be transferred or divided

unless the bank opening it is permitted to transfer the whole or part of it to a

person or a group of persons other than the first beneficiary upon

instructions issued from the beneficiary. The transfer shall not take place

unless the bank approves it. The transfer shall take place only once, unless

otherwise agreed upon.

Article 350: If the remitter does not pay to the bank the value of the

documents conforming to the credit opening conditions within six months

from the date he is notified or receiving these documents, the bank may levy

execution on the goods by following the procedures of levying execution on

commercially pawned objects.

8- Discount

Article351:1 Discount is an agreement by undertakes to pay in advance the

value of negotiable beneficiary of the debenture in return for transferring

the bank, along with the beneficiary’s commitment to refund the nominal

value to the bank if the original debtor does not pay it.

2- The bank shall deduct from the discount it pays to the beneficiary a

percentage of the debenture amount, in addition to the commission if

it is stipulated.

Article 352: The percentage shall be calcu1ated on the basis of the

period from the date of discount until the maturity date of the debenture, or

on the basis of a longer period with regard to pawing transactions and other

transactions that comprise an undertaking from the beneficiary to refund the

amounts he collected before the maturity date of the debenture.

Article 353: The beneficiary shall refund to the bank the nominal value of

the unpaid debenture.

Article 354:1- The bank shall have all rights resulting from the debenture

discounted thereby vis-à—vis the original debtor of the debenture, the

beneficiary, and other committed parties.

2- The bank shall in addition have an independent right vis – a- vis the

beneficiary in retrieving the amounts it paid without deducting the

percentage it discounted and the commission it collected. It shall have the

choice of using this right within the limits of the unpaid debentures whatever

the reason of refaining from their payment.

9-Letter Of Guarantee.

Article 355:1- The letter of guarantee is a written undertaking from the bank

upon the request of a person called (the remitter) to pay an amount, specified

or liable to be specified, to another person (the beneficiary), if he asks the

bank to do so, within the period determine in the letter, and without

reckoning to any objection

2- The rules and practices prevailing in international dealings transactions

concerning the letter of guarantee shall apply where no text or usage is

prescribed in this division.

Article 356; The bank may require a. deposit against Issuing the of

guarantee. This deposit shall be cash. in debenture goods assigning the

remitter’s right vis-à.—vis the beneficiary.

Article 357: The beneficiary shall not assign his right as prescribed in the

letter of guarantee except with the approval of the bank, and providing the

bank shall be authorized by the remitter to give this approval.

Article 358: The bank shall not refrain from paying the beneficiary for a

reason ascribed to the bank’s relation with the remitter or the remitter’s

relation with the beneficiary.

Article 359:1- The bank shall be relieved of its liability vis-à-vis the

beneficiary if no request for payment reaches it from the beneficiary within

the validity period of the letter of guarantee, unless it is agreed explicitly on

renewing this period automatically, or the bank agrees to its extension.

2- The bank shall restore to the remitter at the end of the validity period of

the letter of guarantee the deposit he gave the bank to obtain this letter of

guarantee.

Article 360: If the bank pays to the beneficiary the amount agreed upon in

the letter of guarantee, it may have recourse against the remitter for the

amount paid and its yield from the date of its payment.

10- Current Account

-

Article 361:1- The current .account is a contract by virtue of which two

parties agree on positing in an account through mutual payments of

interviewed debts resulting from transactions taking place between them so

that rather than settling these debts respectively they settle them by a single

adjustment of the account on closing it.

2- The agreement providing for not beginning the payment of one party

except after ending the payment of the other party shall not be considered a

current account.

3- The provisions of this division shall apply to each current account, even if

one of the two is not a bank.

4- The provisions prescribed in article 308 of this law shall apply to the joint

current account opened with the bank.

Article 362:1- The entries posted in the current account shall not be divisible

before closing and balancing the account.

2- No clearance shall be applicable between an item in an account and

another item in the same account.

Article 363: Posting the debt in the current account shall not prevent the

rights connected with the transaction creating that debt.

Article 364: If the entry in the current account is extinguished or its amount

is reduced for a reason subsequent to posting it in the account, this entry

shall be cancelled or reduced, and the account shall be adjusted accordingly.

Article365: The current account may be suspended temporarily during its

course to indicate the situation of either party, at the dates the two parties

agree upon, or as determined by the law. Either party shall have the right to

dispose of its credit balance as displayed on suspending the account

temporarily, at any time, unless otherwise agreed upon.

Article 366:1- Payment in the current account shall not produce an

interest/yield unless otherwise agreed upon. The interest shall be calculated

according to the rate the Central Bank deals in, at its maturity, unless a lower

interest is agreed upon.

2- No interest on the interests shall be calculated unless the account is a

current account between a bank and other person.

Article 367:1- In the current account all debts resulting from business

relations taking place between the two parties to the account shall be

entered, unless these debts are accompanied with legal or consensual

security deposit.

2- However, debts accompanied with consensual security deposit, whether

such deposits are determined by the debtor or a third party, may be entered

in the current account, if all concerned parties agree thereon. In this case, the

security deposit shall move to guarantee the balance of the current account

on closing it, within the limits of the guaranteed debt, without consideration

to the changes occurring in the account during its operation, unless

otherwise agreed upon. The transfer of the security deposit to the current

account shall not be considered as proof vis-à-vis their parties except from

the date of its declaration in case the law necessitates declaring it.

Article 368:1- If the account items comprise cash debts rated in different

currencies, or valuable objects, the two parties may agree on entering them

in the account providing they shall be recorded in separate sections where

analogy is observed in the payments within these sections, and the two

parties authorize the maintenance of the unit of the account despite its

multiple sections.

2- The balances of the separate section accounts shall be transferable

between them so that a set-off may be carried out between them to extract

single balance at the time the two parties determine, or at most on closing

the account.

Article 369:1- If a period is determined for the current account it shall be

closed at its expiry. It may also be closed before the expiry date with the

consent of the two parties.

2- If no period is determine for the current account it may be closed at any

time as desired by either party, subject to the notification dates agreed upon,

or as applied in practice and usage.

3- In all cases the current account shall be closed with the decease of either

party, declaring his bankruptcy or insolvency, or in placing him under

interdiction.

Article 370: The current account shall be balanced upon closing it. The debt

of the balance shall mature unless otherwise agreed upon, or if certain

transactions that should be recorded in the account are still current and

posting them is liable to change the amount of the balance. In this case, the

debt of the balance matures effective the day following the last entry these

transactions necessitate.

Article37l: If the current amount is opened between the bank and another

party, the account shall be considered discounted at the end of the financial

year of the bank, discounting this account shall not be considered as closing

it, but it shall remain opened and its balance shall be carried forward to the

same account that resumes its movement on the day next to discounting it.

Article372: The general rules shall apply to an the prescription of the debt of

the balance and its interest. The interest on that debt shall be calculated from

the date of closing the account, unless otherwise agreed upon.

Article373: The creditor of a party to account may, in the course of the

account, levy an attachment on the credit balance of its debtor. In this case

the party with whom the account is opened shall effect a temporary balance

of the account to disclose the situation of the person placed under attachment

at the time of levying the distraint.

Article 374:If either party to the current account is declared bankrupt, no

pawn to be imposed on his funds and property after the date determined by

the court shall be used as argument against the group of creditors in his

bankruptcy, to discontinue the payments that should guarantee the possible

debt of the balance, within the limits of the debit balance at the time of

determine the pawn. The pawn may be used as argument in respect of the

difference — if any — between the amount of that balance and the balance

showing at the time of closing the account, unless it is established that the

creditor, at the time of imposing the pawn, was aware that the debtor has

discontinued the payment.

Article 375:1- If the proceeds of discounting a commercial paper is posted in

the current account, and its value was not paid at the maturity date, the party

that discounted the paper may, even after declaration of the bankruptcy of

the person who submitted it for discount, cancel the entry by effecting a

counter-entry.

2- No counter-entry shall be made in connection with the commercial papers

unless the value was not paid at their maturity date. All agreement otherwise

reached shall be null and void.

Article 376:1- A court action for correting the current account shall not be

accepted even if the request is based on an error or omission, or duplicate

entries, concerning the entries made more than three years before, unless

either party to the account notifies the other party, during that period, of is

insistence on correcting the account, or if in the case of the accounts with the

bank when it is established that the client not has received from the bank any

statement of his account, during the said period.

2- In all cases, the court action shall abate with the lapse of five years from

the day the right to correct the account is established.

Article 377: If the current account is opened with a bank, the bank may not

give information or data on the number of the account, its movement, or its

balance, except to the owner of the account, his special proxy, his

successors, or the legatees after his death, or according to the provisions of

law no. 205 of the year 1990 on the and confidentiality of accounts.

PART- IV

COMMERCIAL PAPERS

Article 378:The provisions of this part shall apply to drafts promissory

notes, checks and other commercial papers whatever the quality of the

concerned parties, or the nature of Works for which they are created.

Chapter—i

DRAFTS

1- ISSUE OF DRAFTS

Article379: The draft shall comprise the following data:

A. The term ‘draft’ written in the body of the debenture and the language

used in writing the debenture.

B. An unconditioned order to settle a defined amount of money.

C. Name of the party committed to pay.

D.. Maturity date.

E. Place of payment.

F. Name of the party to whom or to whose order the payment shall be made

(the beneficiary).

G. Date and place of issuing the draft.

H. Signature of the party issuing the draft (drawer) legibly written.

Article 380 : A debenture empty of one of the data mentioned in article 379

of this law shall not be considered a draft except in the following cases:

A. the draft which indicates no maturity date shall be considered payable at

sight.

B. If it does not indicate the place of settlement, the place next to the name

of the drawee shall be the place of settlement, and a domicile of the drawee

at the same time.

C. If it does not mention the place of issue, it shall be considered as issued at

the place mentioned next to the signature of the drawer.

Article38l: 1-The draft may be drawn to order of the drawer himself.

2-It may be drawn on the drawer.

3-It may be drawn for the account of another person.

Article 382:The draft may be payable at the domicile of a third party,

whether in the location of the drawee’s domicile or in any other place.

Article 383:1-The drawer of the payable draft which falls due at sight or

payable at a specified time after sight may stipulate a separate interest on the

amount mentioned in it.

2- This condition in other drafts shall be considered as null as nonexistent

3- The interest in the draft shall be mentioned. If it does not indicate the

interest, this condition shall be considered as non-existent

4- The interest shall be calculated from the date of issuing the draft, if date

agreed upon.

Article 384:1- The draft amount is written in figures and in words, the

criterion in case of difference shall be the one written in words.

2- If the amount is written several times in words or in figures, the criterion

in case of difference shall be that of the least amount

Article 385: The obligations of those lacking legal capacity who are not

traders and the legally incapacitated, resulting from their signatures on draft

as drawers, acceptors, alternative guarantors, or any other quality shall be

null in their respect solely.

Article 386: If the draft carries signatures of persons lacking the legal

capacity of commitment thereto, or phony signaures, signatures of bogus

persons, or signatures which, for other reasons, are non committing for their

signatories, or forthose in whose names the draft was signed, the obligations

of the other signatories of the draft shall still remain valid.

Article 387:1- The form of the obligations by virtue of the draft shall be

subject to the law of the state in which it was issued.

2- However, if the obligation is not valid in form, under the law referred to

in the previous clause, but valid according to the provisions of the Egyptian

law, the flaw in its form shall have no effect on the validity of the

subsequent obligations arising in Egypt by virtue of the draft.

Article 388:1- In determining the legal capacity of the person who is

committed by virtue of the draft, reference shall be made to the law of the

State to which he belongs.

2- if the law applicable hereto considers the person committed by virtue of

the draft lacking legal capacity, his commitment shall remain valid if he has

signed the draft in a state whose law considers him of full legal capacity.

Article 389:1- A person who signs a draft on behalf of another person

without mandate from the latter shall be committed personally by virtue of

the draft. If he settles it, all rights that would devolve to the person he

alleged to sign on his behalf shall devolve to the signatory.

2- This provision shall apply to the proxy if he exceeds the limits of his

powers.

Article 390:1- The drawer of the draft shall guarantee its acceptance and

settlement.

2- He may stipulate exempting him from the acceptance guarantee, and all

condition for his exemption from the settlement guarantee shall be null and

non-existent

2- ENDORSEMENT

Article 391:1- All draft that it is drawn to order shall be negotiable by

endorsement even if nothing is stated on it.

2- A draft in which the drawer adds the statement “not to order” or any other

statement indicating this meaning, shall not be negotiable except by

following the procedures of the transference of debts as prescribed in the

civil Code, in addition to the result ensuing thereform.

3- Endorsement may be made to the drawee whether or not he accepts the

draft. It may also be made to the drawer or any other committed party. All

these may also endorse the draft anew.

Article 392:1- The endorsement shall be unconditional. All condition

whereupon the endorsement is dependent shall be considered null and non-

existent.

2- Partial endorsement shall be null and void.

3. Endorsement to bearer shall be considered made in blank.

Article 393: — 1- The endorsement shall be written on the draft itself or on a

paper attached thereto “allonge” and shall be signed by the endorser.

2- In the endorsement the name of the endorsee may not be mentioned i may

also be restricted to the signature of the endorser (endorsing in blank). In the

latter case, the endorsement, to be valid, shall be written

the back of the draft, or on the allonge.

Article 394:1- The endorsement shall transfer all rights resulting from the

draft.

2- If the endorsement is made in blank, the bearer may:

A: Fill in the blank space by writing his name or the name of the another

person.

B. Endorse the draft anew in blank or to another person.

C. Hand the draft to another person without filling in the blank soace even if

he does not endorse it.

Article 395: 1- The endorser shall guarantee the acceptance and settlement

of the draft, unless otherwise stipulated.

2- He may prohibit endorsing it anew. In the latter case he shall not

committed to ensure the guarantee vis-à-vis the person to whom the draft

shall devolve by subsequent endorsement.

Article 396:1- The possessor of the draft shall be its legal bearer if he

establishes that he owns the right to it by a series of un interrupted

endorsements, even if the last endorsement is in blank. Cancelled

endorsement in this respect shall be considered as null and non-existent. If

the endorsement in blank is followed by another endorsement. The signatory

of this endorsement shall be considered the party to whom the right to the

draft devolves by the endorsement in blank.

2.If a person loses his possession of the draft, the bearer shall not be

compelled to give it up if he establishes the right to it according to the

previous clause, unless he had obtained it by ill-will, or committed a serious

error in order to obtain it

Article 397: Subject to the provisions of article 385 of this law, a party

against whom a court action for a draft is brought can invoke against its

bearer the rebuttals based on this personal relationships with its drawer or

previous bearers, unless the intention of the bearer at the time to obtained the

draft was to cause harm to the debtor.

Article 398:1- If the endorsement compries the statement “value for

recovery” or “value for collection”, or for “proxy” or any other statement

indicating the sense of “proxy”, the bearer may use all the rights resulting

from the draft, but he cannot endorse it except in his capacity as “proxy”

2- The obligors in this case shall not invoke against the bearer except the

rebuttals that may be used against the endorser.

3- The proxy comprised in the endorsement shall not expire with the decease

or interdiction of the principal.

Article 399: 1- If the endorsement comprises the statement “value of

guarantee” or “value of pawn”, or any other statement indicating the sense of

“pawn”, the bearer may use all the rights resulting from the draft. However,

if he shall endorse the draft, the endorsement, shall be considered made for

the purpose of proxy.

2- The draft obligors shall not use against the bearer the pleas based on their

personal relationships with an endorser, unless the bearer’s intention on

obtaining the draft was to cause harm to the debtor. Protecting the bearer in

this case shall be within the limits of his pawn-guarantee debt.

Article 400: 1- The endorsement subsequent to the maturity date shall

produce the effects of the endorsement preceding it. But, the endorsement

subsequent to protesting against the failure to honour the draft shall not

produce except the effects of the transference of debt.

2- An endorsement without date shall be supposed to have taken place

before the lapse of the date determined for invoking -the protest, unless

otherwise established.

3- CONCURRENT CONSIDERATION

Article 401: The drawer of the draft or the party in whose favour it was

drawn shall keep with drawee a concurrent consideration (for its settlement).

The drawer for account of a third party shall be accountable, before the

endorsers and the bearer of the draft exclusively, for providing the

concurrent consideration

Article 402: The concurrent consideration shall be considered duly provided

if the drawee is debtor to the drawer or the draft drawing orderer at its

maturity date, with a payable amount of money at least equal to the amount

of the draft.

Article 403:1- Accepting the draft shall• be considered a presumption of the

existence of the concurrent consideration with the acceptor. This

presumption shall not be reversed in the drawee -bearer relationship.

2- The drawer alone, in case of denial, whether or not the draft was accept

shall establish that the drawee had with him a concurrent consideration at the

maturity date. If he does not establish that, he shall be guarantor of the

settlement, even if he lodges the protest after the legally determined date. w

the drawer establishes the existence of the concurrent consideration and it

continued in existence until the date on which the protest ought to have be

lodged, he shall then be cleared thereof, up to the equivalent of that

consideration, unless this was used in his interest.

Article 404:1- The ownership of the concurrent consideration shall be

transferred by the rule of the law to the successive bearers of the draft.

2- If the concurrent consideration is less than the amount of the draft, the

bearer shall have on this incomplete concurrent consideration all the rights

prescribed therefore on the complete consideration. This provision shall

apply if the consideration is disputed or immature debt on the maturity date

of the draft.

Article 405: The drawer, even if he lodges the protest after the date legally

determined therefore, shall deliver to the draft bearer the documents

necessary for obtaining the concurrent consideration. If the drawer is

declared , bankrupt, the trustee in the bankruptcy shall commit himself to do

that.

Article 406: If the drawer is declared bankrupt, even before the draft

maturity date, the bearer atone excluding the other creditors of the drawer,

shall get settlement of his dues from the concurrent consideration found in a

valid manner with the drawee.

Article 407:1- If the drawee is declared bankrupt and the concurrent

consideration is a debt to the drawer, this debt shall form part of the

bankruptcy assest.

2- If the drawer has with the drawe goods, commercial papers, securities, or

other property that may be retrieved according to the provisions on

bankruptcy and that this property was explicitly or implicitly appropriated

for settling the draft, the bearer shall have priority in getting settlement of

his rights out of its value.

Article 408:1- If several drafts are drawn against one concurrent

consideration insufficient to settle them all, their drawing dates shall be

arranged in connection with their bearer’s rights in having their debts settled

out of the concurrent consideration. The bearer of the draft the date of which

precedes the dates of the other drafts shall enjoy precedence over the others.

2- If the drafts are drawn on the same date, the draft carrying the acceptance

of the drawee shall have precedence.

3- If none of the drafts carries the drawee’s acceptance, the draft for which

the concurrent consideration is appropriated shall have

precedence.

4- The draft comprising the non-acceptance condition shall be

the last in order.

4- ACCEPTANCE

Article 409: The draft bearer and each holder thereof may, unlit its maturity

date, present it to the drawee in his domicile to accept it.

Article 410: 1- The drawer of the draft may stipulate Presenting it for

acceptance within a date determined by him, or without determining a date

therefore.

2- The drawer shall have the right to stipulate non-presenting the draft for

acceptance. However, this condition shall not be set if the draft is payable

with another person than the drawee, or is payable at another place than that

in which the domicile of the drawee exists, or if it shall be payable after a

specified period from sighting it.

3- The drawer may also stipulate non-presenting the draft for acceptance

before a specified date.

4- Each endorser shall have the right to stipulate presenting the draft for

acceptance at a date determined thereby or without determining a date

therefore, unless the drawer has stipulated non- presenting it for acceptance.

Article 411:1-A draft that is mature for settlement after the lapse of the

specified period from sighting it shall be submitted for acceptance within a

year from its date.

2- The drawer shall have the power to shorten or extend that date.

3- Each endorser shall have the right to shorten the date.

Article 412:1- The drawee may request presenting the draft for acceptance

once again on the day next to its first presentation. The allegation that this

request was refused shall not be accepted from the interested parties unless it

was mentioned in the protest

2- The bearer of the draft submitted for acceptance shall not be made to give

it up to the drawee.

Article 413:1- The acceptance shall be written on the draft itself

be indicated by the expression “accepted” or by any other statement

denoting its meaning and shall be signed by the drawee.

2- The drawee’s mere signature on the front part of the draft shall considered

“acceptance”.

3- If the draft is payable after a specified period from sighting it , or it should

be presented for acceptance within a specified period based on a special

condition, the date of acceptance shall be indicated as the day on which it

was signed, unless the bearer obligates indicating the date of acceptance as

the day on which the draft was submitted, If acceptance is void of the date,

the bearer — in order to maintain his rights in having recourse against the

endorsers and the drawer — may establish the absence of the date by

lodging a protest at a time it could be useful

Article 414:1- The ‘acceptance’ of the draft shall be unconditional

However, the drawee may restrict it to a portion of the draft amount,

2- All other amendment in the data of the draft, within the ‘acceptance’

formula, shall be considered as refusal of the ‘acceptance’. However, the

acceptor shall remain bound by the contents of his ‘acceptance’ formula.

Article 415:1- If the drawer defines in the draft a place for settlement other

than the domicile of the drawee, without indicating the name of the person

with whom the settlement shall take place, the drawee may name him at the

time of ‘acceptance’. If he does not name him, the acceptor drawee shall be

considered bound to pay at the place of settlement.

2- If the draft is payable at the domicile of the drawee, he may — at the

acceptance — name an address in the same place of his domicile where the

settlement shall take place.

Article 416: 1- If the drawee accepts the draft he shall be bound to settle its

value at its maturity date.

2- In case of non-settlement, the bearer, even if he is the drawer himself,

shall claim from the acceptor-drawee, in a direct court action resulting from

the draft, all that may be claimed by virtue of articles 444 & 445 of this law.

Article 417:1- If the drawee cancels his acceptance as written on the draft

before returning it, the acceptance shall be considered as refused, and

cancellation shall be considered as having taken place before returning the

draft, unless contrary is established.

2- However, if the drawee notifies the bearer or any other signatory

acceptance, in writing, he shall be committed towards them With limits of

that acceptance.

5- ALTERNATIVE GUARANTEE

Article 418:1- An alternative guarantor may guarantee the settlement of the

draft amount wholly or partially.

2- This guarantee shall be from any person, even if he is of those who signed

the draft.

Article 419: 1- The alternative guarantee shall be written on the draft or on

the allonge.

2- The guarantee shall be given with the statement ‘for alternative guarantee

or any other expression denoting that meaning, and shall be signed by the

guarantor.

3- This guarantee shall be made use of by the mere signature of the

guarantor on the forepart of the draft unless this signature is issued by the

drawee or the drawer.

4- The name of the guaranteed shall be mentioned in the guarantee,

otherwise it shall be considered as made for the drawer.

Article 420:1- The alternative guarantor shall abide by the method whereby

the guarantee was committed.

2- The alternative guarantor’s obligation shall be valid, even if the obligation

he guaranteed was invalid for any other reason than a flaw in form.

3- If the alternative guarantor honours the draft, all the rights ensuing

therefrom vis-â-vis each obligor by virtue of the draft shall devolve to him

vis-à-vis the guaranteed.

6- MATUR1TY

Article 421:1- A draft that is due for settlement may be drawn:

A. At sight.

b. A specified time after sight.

C. A specified time from the date of its issue.

D. At a specific date.

2- Drafts comprising maturity dates other than those mentioned of the

previous clause, or successive maturity dates, shall be null d void.

Article 422:1- A draft payable at sight shall be due for payment upon

presenting it. It shall be submitted for payment within One year from issuing

it. The drawer may shorten or extend that date and the endorsers may

shorten it.

2- The drawer may stipulate non-presenting the draft payable at sight before

the lapse of a specific period. In this case, the date for presenting the draft

shall be calculated starting from the date it falls due.

Article 423:1- The maturity date of the draft payable after a time from sight

shall begin from the date of acceptance or the date of protest.

2- If no protest is made, the undated acceptance shall be Considered as

taking place with regard to the acceptor on the last day of the period

prescribed for presenting the draft for acceptance.

Article 424: 1- A draft drawn for one month or for several months from the

date of sighting it shall mature on the corresponding date of the month in

which the settlement shall be due. If there is no corresponding date in that

month, its maturity shall be on the Last day of the month.

2- If the draft is drawn for one and a half month or for several months and

half a month from the date issuing it, or the date of sighting it, it shall then

be necessary to begin calculating complete months.

3- If the maturity of the draft is on the first, in the middle, or at the end of the

month, the intended day shall be the 1st day, the 15th day or the last day of

the month.

4- The statement ‘half month’ shall mean fifteen days.

Article 425:1- If the draft matures on a specific date, and at a place where

the calendar differs from its place of issue, the maturity date shall be

considered as determined according to the calendar of the place of

settlement.

2- If the draft is drawn between two places of different calendars, d matures

after a specified time from the date of its issue, the date of issuing it shall be

restituted to the corresponding day in the calendar of place of settlement.

The maturity date shall be determined accordingly.

3- The date of presenting the draft shall be calculated according to the

provisions prescribed in the previous clause.

4- These provisions shall not apply if from the conditions or data of the draft

it transpires that it is intended to follow the other provisions.

7- PAYMENT

Article 426:1- The bearer of the draft payable on a defined date or after a

defined period from the date of its issue or from sighting it, shall present it

for payment on its maturity date, or on one of the two working days

following that date.

2- Presenting the draft to one of the legally recognized clearing houses shall

be practically as good as presenting it for honouring.

Article 427:1- If the drawee honors the draft he may recuperate it from its

holder, duly signed to denote honouring it.

2- The draft bearer shall not refrain from accepting partial payment.

3- If the payment is partial, the drawee may ask to record it on the draft and

be handed a quitclaim.

4- The drawer, the endorser, and others who are bound by the draft shall be

releived of their obligation within the limits of the amount paid of its value.

Its bearer shall lodge the protest in respect of the unpaid portion.

Article 428:1- The draft bearer shall not be forced to collect its value before

its maturity date.

2- If the drawee pays before the maturity date he shall bear the consequences

thereof.

3- Paying the draft at the maturity date without valid objection shall clear the

responsibility of the payer, unless a fraud or series error occurs from him. he

shall check to ascertain the sequence of endorsements, but is not obliged to

ascertain the validity of the endorsers’ signature.

Article 429:1-If the drawer defines the draft amount in a foreign currency

that should be one of those for which exchange rates are announced locally,

payment in Egypt shall be in this currency unless it is mentioned in the draft

that paying its value may be done in the local currency according to the

selling, closing, or transfer rates with the Central Bank of Egypt, or

according to the currency note rate if the Central Bank does not announce

transfer rates for the draft currency. This shall be on the maturity- date, and

if payment is not made on that date, the draft bearer shall have the choice

between claiming the draft amount evaluated in the national currency

according to the rate referred to on the maturity date or the payment date.

2-If the draft amount is defined in a currency carrying a common

denomination and its value differs in the country where it is issued from its

value in the country of payment, the currency shall be meant to be that of the

country of payment.

Article 430:1- If the draft is not presented for payment on its maturity date

each debtor on it may deposit its amount in the treasury of the court within

the circuit which the place of payment lies of depositing the amount shall be

at the cost and the responsibility of the bearer.

2- The clerks office of the court shall hand the depositor a document which

shall acknowledge the deposited amount, its value, the date of issuing the

draft, the maturity date, and the name of the person in whose favour the draft

was drawn up originally.

3- If the bearer claims from the debtor honoring the draft, the debtor shall

deliver to him the deposit document against receiving from him the draft

duly marked with an annotation that payment has been made against the

deposit document. The bearer shall collect the amount from the clerks office

of the court by virtue of this document to the without valied, he shall pay the

value of the draft to him.

Article 431: No objection to paying/honouring the draft shall be accepted

except in the case of its loss, or the bankruptcy or interdiction of its bearer.

Article 432:1- If an unaccepted draft is lost, and it was drawn up in several

copies, the party to whom it is payable shall claim payment thereof by virtue

of one of the other copies.

2- If the draft is drawn up in several copies, and the copy bearing the

.acceptance formula is lost, claiming its payment by virtue of one of the

other copies shall not be possible except by a warrant of the competent judge

and providing a guarantor is presented.

Article 433:The party from whom a draft is lost — whether it is accepted or

unaccepted — and he is unable to present one of the other copies, may

obtain a warrant from the competent judge for its payment providing he

establishes its ownership and he presents a guarantor therefore.

Article 434: 1 In case of refraining from paying the value of the lost draft,

after claiming it according to the provisions of the second clause of article

432 and the provisions of article 433 of this law, the draft owner, in order to

preserve his rights, shall establish this fact by loding a protest he draws up

on the day next to the maturity date, and announcing it to the drawers and

the endorsers in the way and the time prescribed in article 440 of this law.

2- The protest shall be written on the date prescribed in the previous clause,

even if it proved practically difficult to obtain the warrant from the judge in

due time.

Article 435:IThe owner of the lost draft may obtain a copy thereof, by

referring to the one to whom the draft was endorsed. This endorser shall

assist him and permit him to use his name in claiming from the previous

endorser. The owner shall rise in this claim from one endorser to another

until he reaches the drawer.

2- Each endorser shall write his endorsement on the copy of the draft

delivered from the drawer, after marking an annotation thereon that it is a

duplicate of a lost draft.

3- Claiming payment by virtue of this copy shall not be possible except by

order of the competent judge providing a guarantor is presented.

4- All expenses involved shall be on the owner of the lost draft.

Article 436: Honouring/paying the draft on its maturity date, upon the order

of the judge in the case referred to in the previous articles shall clear th

debtor of this debt.

Article437: The obligation of the guarantor prescribed in the second clause

of article 432 and articles 433 & 435 of this law shall expire with the lapse

of three years if no claim is made or court action lodged during that period.

8- RIGHT OF RECOURSE

Article 438:1- The draft bearer — in case it is not paid on its maturity date

— shall have the right of recourse against the endorsers, the drawer, and

other parties bound to honour the draft.

2- The bearer shall have the right of recourse before the maturity date in the

following cases:

A. Total or partial refain from acceptance.

B. Bankruptcy of the drawee, whether acceptor or non-acceptor of the draft,

or his discontinuation of the payment, even if not confirmed by a court

ruling, or levying an unavailing distress upon his property.

C. Bankruptcy of the owner of the draft in which a condition is set not to

present it for acceptance.

3- Each guarantor, on being subject to recourse against him before the

maturity date in the cases prescribed in items (b) & (C) of the previous

clause may, within three days from the date of recourse, submit to the

competent judge at the court within the circuit of which lies his domicile a

memorandum requesting a period for payment. If the judge deems there is a

justification for granting that period, he shall determine in his warrant the

date during which payment shall be made providing it shall not exceed the

date appointed for the draft maturity; This warrant shall be final.

Article 439:1- Establishing the refrain from the accepting or paying the draft

shall be through a protest against the non-acceptance or non-payment of the

draft.

2- The protest against non-acceptance of the draft shall be made within the

dates determined for submitting the draft for acceptance. If the first

presentation for acceptance takes place according to the first clause of article

411 of this law on the last day of the time determined for presenting the

draft, the protest may be made on the next day.

3- The protest against non-payment of the maturing draft shall be made on

an appointed day from the date of issuing the draft or the date of sighting it

within the four working days next to the draft maturity day. If the draft is

payable at sight, the protest against non-payment shall be made according to

the conditions prescribed in the previous clause concerning the protest

against non-acceptance.

4. The protest against non-acceptance shall suffice to do without presenting

the draft for payment, or lodging a protest against non-payment.

5- In case the drawee discontinues payment, whether he is acceptor of the

draft or riot, or in case of levying an unavailing distress o property, the

bearer of the draft may not have recourse against the guarantors except after

presenting the draft to the drawee to pay it. And after lodging a protest

against non-payment.

6- In case the drawee is declared bankrupt, whether he is acceptor of the

draft or not, and also in case of the declared bankruptcy of the drawer of the

draft in respect of which a condition is set for non-presenting it for

acceptance, presenting the bankruptcy ruling shall be adequate to enable the

bearer of the draft to use his rights of recourse against the guarantors.

Article 440:1 The bearer of the draft shall notify the endorsement and the

drawer of the non-acceptance it or non-payment it, within the four working

days next to the day on which the protest is made or the day of presenting

the draft for acceptance or payment, if it comprises the condition of recourse

without expenses. Each endorser during the two working days following the

day of his receipt of the notification, shall in turn notify the one who had

endorsed the draft for him that he has received that notification, indicating

thereto the names and address of those who gave the previous notification,

and thus from one endorser to another endorser until reaching the drawer.

The period with regard to each endorser shall begin from the date he

receives the notification from the endorser who preced him.

2-Once one signatory of the draft has been notified according to the previous

clause, his alternative guarantor shall also be notified at the same date.

3- If one of the endorsers does not show his address or shows it

ambiguously, obscurely, and illegibly, the notification of his preceding

endorser shall be adequate.

4- The person who addresses the notification shall proceed by sending it in

registered mail, Cable, Telex or Fax message, or any other method, even by

returning the draft itself. He shall establish his dispatch of the notification at

the date determined therefor, The date shall be considered complied with if

the registered letter or cable is delivered to the post or the telegraph office at

the said date.

5-The rights of the party committed to dispatch the notification shall not

abate if he fails to send it at its determined date. However, in case of

necessity, he shall compensate the harm resulting from negligence providing

the compensation shall not exceed the amount of the draft.

Article 441:1- The drawer and each endorser or alternative guarantor may

exempt the bearer from staging a protest against non-acceptance or against

nonpayment in using his right of recourse, if he writes on the draft the

condition ‘recourse without expense’ or ‘without protest’ or any other

condition denoting the same meaning, along with signing this condition.

2-. This condition shall not exempt the bearer from presenting the draft at

the prescribed dates, nor from sending the necessary notification. Those

insisting vis-a-vis the bearer on his failure to observe these dates shall

establish this argument.

3- If the drawer writes the condition ‘recourse without expense’, the effects

of this condition shall apply to all signatories. If one of the endorsers or

alternative guarantors writes it, its effects shall apply to him alone.

4- If the drawer is the one who set this condition and the bearer stages

protest despite that, he shall alone bear the expenses. if, however, an

endorser or alternative guarantor set the condition, recourse against the other

signatories may be made for the expenses of the protest, if staged.

Article 442:1. The persons who are obligors by virtue of a draft shall be

jointly accountable vis--vis its bearer.

2- The draft bearer shall have the right of recourse against these obligors,

severally or jointly, without being obliged to observe the order of their

obligations.

3- The right shall be established for each one having signed the draft if he

pays its amount.

4- A court action brought against one of the obligors shall not prevent

having recourse against the rest, even if they are subsequent to the obligor

on whom the notice of action is addressed in the first place.

Article 443: The draft bearer shall claim the following from those who have

the right of recourse against him:

A. Original amount of the non-accepted or non-paid draft along with the

interest agreed upon.

B. The interest calculated according to the rate applied by the Central Bank

of Egypt, effective the maturity date.

C. Expenses of the protest, notifications, stamp duty, and others.

Din case of recourse before the draft maturity date, the equivalent of the

official discount rate are the date of recourse in the place where the bearer’s

domicile is located shall be deducted from its amount.

Article 444: The one who pays the draft may claim the following from his

guarantors:

A. The amount he paid.

B. The interest on this amount, calculated from the day of payment,

according to (he rate applied by the Central Bank of Egypt

C. The expenses he incurred

Article 445:1- Each obligor from whom a draft is claimed by way of

recourse, or who is targeted for its claiming, shall have the right to claim, in

case of paying the draft amount, to be handed the draft together with the

protest and quitclaim for the amount he paid.

2- Each endorser who pays the draft shall have the right to cancel his

endorsement and the subsequent endorsements.

Article 446: In case of recourse after partial acceptance , the one who pays

the unaccepted portion of the draft amount shall have the right to request

recording this payment on the draft and a quitclaim to be handed to him. The

bearer, in addition to this request, shall deliver to him a true copy of the draft

signed by him, and also the protest to enable him to use his right of recourse

against others.

Article 447:1- The rights of the draft bearer vis-à-vis the endorsers, the

drawer, and other obligor, except the acceptor, shall abate with the lapse of

the dates defined for doing the following:

A. Submitting the drafts at sight or maturing after a defined time from

sighting.

B. Lodging protest against non-acceptance or non-payment.

C. Submitting the draft for payment in case it comprises the

condition recourse without expense. –

2- However, the drawer shall not benefit by this abatement unless he

establishes that he brought in the payment consideration in the maturity date.

In this case, the beret can only have recourse against the drawee.

3- If the draft is not presented for acceptance on the date stipulated by the

drawer, the bearer’s rights of recourse because of non- acceptance and non-

payment equally shall abate, unless it transpires from the statement of the

condition that the drawer only meant to exempt himself from the acceptance

guarantee solely.

4- If the endorser is the one who stipulates in the endorsement a date for

presenting the draft for acceptance, he alone shall benefit by this condition.

Article 448:1- If the force majeure presenting the draft or loading the protest

at the dates determined therefore, these dates shall extend subsequently.

2- The bearer shall notify the force majeure, without delay, to the one who

endorsed the draft to him, and record the notification together w the date and

his signature on the draft or the allonge. These notifications shall

sequentially be sent according to article 440 of this law.

3- The bearer after disappearance of the force majeure shall submit the draft

for acceptance or payment without delay, then lodge the protest if necessary.

4- If the force majeure lasts for more than thirty days, calculated from the

maturity date, recourse may be applied against the obligors without need for

presenting the draft or lodging the protest.

5- If the draft is payable at sight or matures after a defined period from sight,

the thirty days period shall run from the date the bearer notifies the force

majeure to the one who endorsed the draft to him even if this date falls

before the lapse of the dates set for presenting the draft. The period for

sighting the draft shall be increased over thirty days if the draft matures after

a specified period from sight’.

6- Matters related to the person of the draft bearer or the one he assigned for

presenting it or for lodging the protest shall not be considered a force

majeure.

Article 449: The bearer of the draft in respect of which a protest against non-

payment is lodged may levy a pitventive distress without bail on the

property of each of the drawer, acceptor, endorser, alternative guarantor, or

other obligors regarding the draft, subject to the provisions prescribed in the

Civil and Commercial procedure law.

The judge shall issue his writ of preventive attachment without hail

whenever the draft bearer submittes the application accompanied by the

original copy of the draft and a protest for not paying

9- INTERVENTION.

First: General provisions.

Article 450:1- The draft drawer, endorser, or alternative guarantor shall have

the power to appoint a person to accept it or pay its amount if necessary.

2— The draft may be accepted or paid by a person intervening in favour of

any debtor therewith who is target for recourse to be exercised against him,

subject to the conditions prescribed in the following articles.

3- The intervening party may be among third parties, even if it the non-

acceptor drawee. The intervening party may also be any person bound to

honour the draft, with the exception of the acceptor drawee.

4- The intervening party shall notify the party in whose favour the

intervention takes place, within the next two working days, otherwise he

shall be accountable when necessary for compensation of the harm ensuing

from his negligence providing it shall not exceed the amount of the draft.

Second: Acceptance by Intervention.

Article 451: 1- Acceptance intervention may be effected in all cases where

the possibly acceptable draft bearer has the right of recourse before the date

of its maturity.

2- If, on the draft, one is appointed to accept or pay its amount in case of

necessity, at its place of payment, the bearer shall not, before its maturity

date, have recourse against the one who made this appointment, nor the

signatories subsequent to him, unless he presents the draft to the person

appointed for its acceptance or payment, and this person refrains from

accepting it, and the bearer established this refrain by lodging a protest

3- The bearer, in the other cases, may refuse the acceptance by intervention.

If he accepts it, he shall lose the right of recourse before the maturity date

against the one in whose favour the intervention took place and the

signatories subsequent thereto.

-

Article 452: The acceptance by intervention shall be mentioned on the draft

and signed by the intervening party. Besides the name of the one in whose

favour the intervention is made. If the acceptance by intervention is void of

this last statement, it shall be considered made in favour of the drawer.

Article 453:1- The acceptor by intervention shall be bound vis-ã-vis the

bearer of the draft and the subsequent endorsers, for the one in whose favour

the intervention is made, in the manner with which the latter is bound.

2- The one in whose favor the intervention is made and his guarantor may,

notwithstanding the occurrence of acceptance by intervention, oblige the

bearer, in return for paying the amount prescribed in articles 443 of this law,

to deliver the draft and the protest and hand a quitclaim acknowledging

receipt of the said amounts.

Third: Payment by Intervention.

Article 454:1- The draft may be paid by intervention in all cases where its

bearer has the right of recourse against those bound to honour it, on its

maturity date, or before the date of its maturity.

2- This payment by intervention shall be made by paying all the amounts the

person in whose favour the intervention took place had to pay.

3- Payment shall take place at most on the day following the last day on

which a protest against non-payment may be lodged.

Article 455:1- If those who accept the draft by intervention, or those

appointed for its payment whenever necessary, have a domicile in the place

of payment, the bearer shall present the draft to all these persons for its

payment. He shall lodge a non-payment protest, if so necessary, at most on

the day following the last day on which this protest may be lodged.

2- If the protest is not lodged on that date, the obligation of the one

appointing the person who is charged with paying the draft when necessary,

or the one who accepted the draft by intervention in his favour shall be

released. The obligation of the endorsers subsequent to that person will

similarly be released.

Article 456: If the draft bearer refuses the payment of the draft by

intervention, he shall lose his right to recourse against each of those whose

obligation would be released by this payment.

Article 457:1- Payment by intervention shall be indicated by writing a

quitclaim on the draft mentioning the one in whose favour the payment has

been made. If the quitclaim is void of this indication, payment by

intervention shall be considered as having taken place in favour of the

drawer.

2- The draft and the protest if lodged shall be delivered to the person who

paid the draft by intervention.

Article 458: 1- The payer of a draft by intervention shall acquire all the

rights ensuing thereform vis-à-vis the one in whose favour the payment is

made, and also vis-à-vis the obligors toward that person by the virtue of the

draft, however, the payer by intervention may not endorse the draft anew.

2- The obligation of the endorsers subsequent to the one in whose favour

payment is made shall thus be released.

3- If several persons compete to pay intervention, preference shall be given

to the payer whose payment shall result in releasing the obligation of the

largest number of obligors. Whoever intervenes to pay the draft in violation

of this rule while knowing of this violation, shall lose his right of recourse

against the person whose obligation would be released if this rule was

observed.

10- Multiplicity Of Copies

Article 459:1- The draft may be drawn in several copies conforming to each

other.

2- The number of the draft and the number of the copies drawn up thereof

shall be mentioned in the text of each copy, otherwise each copy shall be

considered a draft independent by itself.

3- Each bearer of a draft in which no mention is made that it was drawn

from a unique copy may request a copy thereof at this expense. In order to

realize that he shall resort to the one endorsed it for him who shall assist him

with the previous endorser, and so forth until he rises to the drawer.

4- Each endorser shall write his endorsement on the new copies.

Article 460:1- Paying the draft by virtue of one of its copies shall release the

obligation even if no stipulation is made therein that such payment will

invalidate the effect of the other copies. However, the drawee shall remain

obligated to pay by virtue of each copy he signed for acceptance and has not

recovered it.

2- The endorser who endorsed the copies of the draft for different persons,

and also the endorsers subsequent to him, shall be obligated by virtue of all

the copies carrying their signatures, without recovering them.

Article 461:1 - Whoever sends one of the drafts copies for acceptance shall

indicate on the other copies the name of the person in whose possession this

copy shall be kept, and this person shall deliver it to the legal bearer of any

other copy. If he refuses to deliver it, the bearer shall not have the right of

recourse unless he lodges a protest in which to mention:

A:That the copy which was sent for acceptance was not delivered to him

despite his demand for it.

B:That no acceptance or payment to place by virtue of another

11- Duplicates.

Article 462:1- The draft bearer may draw up duplicates thereof.

2- The duplicates drawn up shall be true copies completely conforming to

the original draft and the endorsement and other data on it. He shall indicate

in the limit at which copying ends from the original.

3- The copy may be alternatively endorsed and guaranteed the way the

original is endorsed or guaranteed, and with the same effects.

Article 463: 1- The possessor of the original shall be indicated in the copy of

the draft. This possessor of the original shall deliver it to the legal bearer of

the copy.

2- If the holder of the original refrains from delivering it, the holder of the

copy shall not have the right of recourse against its endorsers or alternative

guarantors, unless a protest is lodged in which is mentioned that the original

was not delivered to him upon his request.

3- If, on the original, the statement “from now no endorsement shall be valid

except on the copy” or any other statement denoting this meaning, was

written after the last endorsement that took place before making the copy, all

endorsement written on the original shall then be considered a null or non-

existent.

12- Perversion.

Article 464: If a perversion occurs in the text of the draft the signatories

subsequent to this perversion shall bind themselves by the contents of the

perverted text. However, the previous signatories shall bind themselves by

the original text contents.

13- Prescription.

Article 465:1- The court actions arising from the draft against its acceptor

shall prescribe with the lapse of three years from the date of maturity.

2- The court actions of the bearer against the endorsers and the drawer shall

prescribe with the lapse of one year from the date of the protest lodged

within the statutory date, or from the date of maturity if the draft comprises

the condition: “recourse without expenses”.

3- The court actions of the endorsers against each other and the drawer shall

prescribe with the lapse of six months from the day on which the endorser

pays the draft, or from the day of filing the case against him.

Article 466:l If the court action is filed, the prescription periods set forth in

the previous article shall not apply except from the date of the last valid

procedure in the case.

2- The said prescription shall not apply if a court ruling is pronounced

confirming the debt or the debtor admits the debt in a separate document,

resulting in renewal of the debt.

Article 467: The interruption of the period stipulated upon in the prescription

of the court action shall have no effect except with regard to the person

towards whom the procedure interrupting the prescription period was taken.

CHAPTER 2

PROMISSORY NOTE

Article 468: A promissory note shall comprise the following data:

A.. The ‘order condition’ or the expression ‘promissory note’, or any other

statement denoting the same sense, written in the text of the note, in the

language of the note itself.

B. Unconditional undertaking to settle a specified amount of money.

C.. Maturity date.

D. Place of payment.

E. Name of the person to whom or to whose order payment shall be made

(beneficiary).

F. Date and place of establishing the note.

G. Signature of the person instituting the note (writer of the document).

Article 469: A bond that is void of one of the data mentioned in the previous

article shall not be considered a promissory note except in the following

cases:

A. If the promissory note is void of an indiction of the maturity date, it shall

be considered payable at sight.

B. If the promissory note is void of an indiction of the payment place or

domicile of its writer, the place of instituting the note shall be considered a

place for its payment and a domicile for its writer.

C. If the promissory note is void of an indiction of the place of its

establishment, the place indicated next to the name of the writer shall be

considered a place for its institution.

Article 470: The provisions on the draft shall apply to the promissory note,

to the extent where they do not contradict with its entity. The provisions on

the following issues shall in particular apply thereto:

Legal capacity.

- Endorsement.

- Alternative guarantee, considering that if the name of the guaranteed

obligors is not mentioned in the formula of the guarantee it shall then be

considered made in favour of the writer of the note.

- Maturity.

- Payment, payment by intervention, and protest to payment.

- Recourse and protest.

- Duplicates and multiplicity of copies.

- Perversion.

- Prescription.

Article 471:1- The writer of the promissory note shall commit himself the

way the acceptor of the draft does.

2- The maturing promissory note shall be presented after a specific period

from sighting to the writer at the time prescribed in article 441 of this law,

for an annotation thereon, indicating he sighted it. The annotation shall be

dated and signed by the writer. The sighting period shall begin from the date

of that annotation. If the writer refrains from adding the annotation a protest

shall be lodged to establish his refain. The date of that protest shall be

considered the start of sighting validity period.

Article 472: In matters where no special texts are prescribed in this chapter,

the provision governing the draft shall apply to the check where they do not

contradict with its nature.

CHAPTER-3

THE CHECK

I- ISSUING THE CHECK

Article 473 : The check shall comprise the following data:-

A. The word ‘check’ written in the text of the document in the language used

in writing the document.

B. An unconditional order to pay a specified amount of money, written in

figures and in words.

C. Name of the bank on which the check is drawn.

D. Place of payment

E. Date and place of issuing the check.

F. Name and signature of the person issuing the check.

Article 474: A document that is void of one of the data mentioned in article

473 of this law shall not be considered a check except in the following cases:

A. If the check is void of the data on the place of payment, it shall be

considered payable at the place where the head office of the drawee bank

exists.

B. If the check is void of the data on its place of issue, it shall be considered

issued in the domicile of the drawer

Article 475: A check issued in Egypt and payable in it may not be drawn

except on a bank. A document drawn in the form of a check n other than a

bank, or written on other than the forms of the drawee bank shall not be

considered a check

Article 476: If the amount of the check written in words and in figures

together, the criterion in case of difference shall be in the amount written in

words.

Article 477:1- The check may be stipulated to be paid to:-

A. The person named in the text, with or without stipulating that it shall be

payable to order.

B. Bearer of the check.

2- A check drawn in favour of a named person and in which the expression

or the bearer or any other statement denoting this meaning is provided shall

be considered a check to bearer.

3- A check in which the name of the beneficiary is not mentioned shall be

considered a check to bearer.

4- A check payable in Egypt and comprising the condition non-negotiable

shall not be paid except to the beneficiary who revived it coupled with this

condition.

Article 478: 1- The check may be drawn to order of its drawer.

2- It may also be drawn to order of another person.

3- It may not be drawn on its drawer except in case of drawing it from a

bank on one of its branches, or from a branch on another branch, providing

the check shall not be payable to its bearer.

Article 479: The obligations of those lacking legal who are not traders and

legally incapacitated, which result from their signatures on the check as

drawers, endorsers, or alternative guarantors, or in any other quality, shall be

invalid in relation to them solely.

Article 480: - If the check carries the signatures of persons lacking the

binding legal competency, or forged signatures, signatures of bogus persons,

or signatures that do not commit their owners for other reasons, nor those in

whose names the check was signed, still the obligations of the other

signatories of the check shall remain valid.

Article 481:1- The form of commitment by virtue of the check shall be

subject to the law of the state in which it was issued

2- However, if the commitment is invalid in form by virtue of the law

referred to in the previous clause, but valid in form according to the

provisions of-the Egyptian law, this flaw in form shall have no effect on the

validity of the subsequent obligations arising by virtue of the check in Egypt.

Article 482(1): 1- No acceptance is required for the check, If the acceptance

formula is written in it, it shall be considered as null and non-existent.

2- However, the check may be presented to the drawee to mark a

certification annotation on it. This annotation denotes the existence of the

amount payable against the check, with the drawee, on the date of

annotation. The drawee’s signature on the front portion of the check shall be

considered a certification thereof.

3- The drawee may not refuse certifying the check if an amount sufficient to

pay against the check exists therewith.

4- The amount payable against the certified check shall remain frozen and

on the drawee’s responsibility in favor of the bearer until expiry of the dates

on which the check can be presented for collection.

5- However the drawee may annotate on the check for indicating that the

signature of the drawer conforming to his signature existed at the drawee but

this annotation not indicating that the drawee has the concurrent

consideration for the check at the time of annotation.

Article 483: The interest condition set in the check shall be considered as

non-existent.

Article484: A provision may be added in the check by special agreement

between the drawer and the drawee, for payment of the check at the location

of another bank.

Article 485:- The drawer shall guarantee payment of the check value. All

condition providing for exemption of the drawer himself from the guarantee

shall be considered as non-existent.

Article 486: 1- The bearer check shall be negotiable upon delivery.

2- A check which is issued conditional upon its payment to a named person,

whether the condition ‘to order’ is or is not provided in its text, shall be

negotiable by endorsement.

3- A check which is issued conditional upon its payment to a named person,

and in which is written the statement ‘not to order’ or any other statement

denoting the same sense, may not be negotiated except by following the

provisions on debt transfer as prescribed in the Civil Code, with all effects

consequent upon this transfer.

4- The check may be endorsed to the drawer or to any other obligor. These

may also endorse the check anew.

Article 487:1- Endorsement shall be unconditional. All condition set for the

endorsement shall be considered as non-existent and. null, and the

endorsement shall remain valid.

2- A partial endorsement shall be null and invalid.

Article 488: The endorsement shall be on the check itself. The signature of

the endorser may be restricted to (“endorsement in blank”). To be valid, the

endorsement shall be on the back of the check.

Article 489: 1- The endorsement shall transfer all rights consequent upon the

check to the endorsee.

2- If the endorsement is in blank, the bearer may:

A. Fill in the blank spaces by writing his name or the name of another

person.

B. Endorse the check anew in blank or to another person.

C. Deliver the check to another person without filling in the blank space,

even if he does not endorse it.

Article 490: 1- The endorser shall guarantee paying the amount of the check

unless otherwise agreed upon.

2- The endorser may ban endorsing the check anew. In this case he shall not

be committed to guarantee vis-à-vis those to whom the check devolves by a

subsequent endorsement.

Article 491: The holder of the endorsable check shall be considered its legal

holder, as long as the endorsements provided therein are uninterrupted, even

if the last endorsement thereof is in blank. Cancelled endorsements shall in

this respect be considered null and non-existent. If the endorsement in blank

is followed by another endorsement, the tatter endorser shall be considered

the one to whom the check devolved by the blank endorsement

Article 492: The endorsement on a bearer check renders the endorser

responsible according to the provisions on the right of recourse. However,

this endorsement shall not result in rendering the document a check to order.

Article 493: If the person loses the possession of the bearer or endorsable

check, the one to whom the check devolved shall not be forced to relinquish

it unless he has obtained it in bad faith, or has committed a serious error

toward obtaining it, providing that

— in case of the endorsable cheek — he shall establish his right to it

according to the provisions of article 491of this law.

Article 494: Subject to the provisions of article 479 of this law, the litigant

against whom a lawsuit by virtue of a check shall not use, against the bearer,

the rebuttals based on his relationships with the drawer or former bearers of

the check unless the intention of the bearer at the time he obtained the check

was to harm the debtor.

Article 495:1- If the endorsement comprises the statement (amount for

collection), or the amount for chashing, or for delegation, or any other

statement indicating the delegation, the bearer may use all rights resulting

from the check, but he may not endorse it except by way of the ‘delegation’.

2- The obligors in this case shall not use, vis-à-vis the bearer of the check,

except the pleas and rebuttals that may be used vis-àvis the endorser.

3- The delegation vested in the endorsement shall not extinguish with the

death of the principal or the interdiction brought on him.

Article 496: 1- The endorsement subsequent to the protest, or whatever

stands for it, and the endorsement which takes place after the lapse of the

period prescribed for presenting the check shall produce nothing but the

effects of the debt transference prescribed in the Civil law.

2- In the undated endorsement it shall be assumed that it had taken place

before lodging the protest or whatever stood for it, or before the lapse of the

period prescribed for presenting the check, unless otherwise established.

3- The date of endorsement shall not be advanced. If it occurs, it shall be

considered a forgery.

2- CONCURRENT CONSIDERATION.

Article 497: 1- The check drawer or the person drawing the check for his

account shall deposit with the drawee a concurrent consideration for the

check. The person drawing for the account of others shall be accountable

vis-a-vis the endorsers and the bearer alone for providing the concurrent

consideration.

2- Subject to the provisions of article 503 of this law, the concurrent

consideration shall be in hand, if the drawer or the remitter had with the

drawee at the time of issuing the check an amount payable and at least equal

to the amount of the check, besides being possible for disposing thereof by

virtue of a check according to an explicit or implicit agreement between the

drawer and the drawee.

Article 498: The drawer alone shall establish, in case of denial, that the

drawee had therewith a concurrent consideration at the time of issuing the

check. If he does not establish that, he shall then be a guarantor for

honouring the check, even if he lodges the protest, or an action substituting

that procedure, after the statutory date. If the drawer establishes the

existence of the concurrent consideration amount and its continued existence

until the date at which the protest, or the protest substitute procedure, ought

to have been lodged, his obligation will be cleared up to equivalent of that

concurrent consideration amount, unless it was used in his interest.

Article 499:1- The ownership of the concurrent consideration amount shall

be displaced by rule of the law to the successive bearers of the check.

2- If the concurrent consideration amount is less than the value of the check,

the bearer shall have on the short consideration amount all the rights

prescribed therefore on the complete consideration amount.

3- The bearer shall have the power to refuse the incomplete consideration

amount if offered thereto by the drawee, besides, the choice to accept it. In

this case, the drawee shall annotate on the check the amount paid and

request a quitelaim from the bearer for the amount. The bearer shall lodge a

protest or a procedure standing for it, regarding the remaining portion.

4- The obligation of the drawer, or endorsers and the alternative guarantors

shall be cleared up as much as the incomplete consideration amount in case

of settling it and an annotation is added on the check accordingly.

3-ALTERNATIVE GUARANTEE

Article 500:1- An alternative guarantor may guarantee honouring the whole

at part of the check amount.

2- This guarantee may be offered from a third party except the drawee. It

may also be offered by one of the check signatories.

Article 501: 1- The alternative guarantee shall be fixed on the check.

2- The guarantee shall be provided by the expression ‘for alternative

guarantee’ or by any other expression denoting the same sense, and shall be

signed by the guarantor.

3- Benefiting by the alternative..guarantee shall be realized through the

guarantor’s mere signature on the front side of the check.

4- In the alternative guarantee shall be mentioned the name of the

guaranteed, otherwise the guarantee shall be considered made in favour of

the drawer.

****

Article 502:1- The alternative guarantor shall bind himself by the method the

guaranteed committed himself with.

2- The alternative guarantor’s obligation shall be valid even if the obligation

comprised therein was invalid for any other reason than a flaw in form.

3- If the alternative guarantor honours the amount of the check, all the rights

ensuring therefrom vis-à-vis the guaranteed and every obligor shall devolve

to him by virtue of the check, vis-ã-vis the said guaranteed.

4- HONOURING THE CHECK

Article 503:1-The check shall be payable upon sigthing.All statement

otherwise added shall be null and non-existent.

-If the check is presented for honouring before the date mentioned in it the

issue date, it shall be honoured on the day it is presented, with the xception

of the lined checks prescriped in article (515) of this law as well as the

governmental checks shall not be paid except on the date indicate therein as

their date of issue.

1.

Article 504:1- A check draw and payable in Egypt shall be presented for

honouring within six months.

2- A check drawn and payable in any other country abroad , shall be

submitted for honouring within eight months.

3- The validity of the period mentioned in each of the two previous clauses

shall begin from the date indicated on the check.

4- Presenting the check to one of the clearinghouses that are legally

recognized shall practically be as good as presenting it for honouring.

Article 505: If the check is drawn between two Locations with different

calendars, the date of its issue shall be referred to the corresponding day in

the check honouring place.

Article 506: If the check is payable in Egypt, the drawee bank shall not

refrain from honouring it, as long as it has a consideration amount to honour

it, even if the date of its presentation has expired.

Article 507:1- Objection shall not be acceptable in honouring the check,

except in case of its loss, the bankruptcy of its bearer, or placing him under

interdiction.

2- If objection is made despite this ban for other reasons, the court of

summary actions shall upon the request of the bearer, pronounce a

judgement cancelling the objection even in case of instituting an original

lawsuit.

Article 508: The death of the drawer, losing his legal capacity or his

bankruptcy after issuing the check shall not affect the rulings ensuing from

the check.

Article 509:1- If several checks are presented at the same time, and the

consideration amount is found inadequate to honour them, the order of their

dates of issue shall be observed.

2- If these checks are detached from one check book and they bear the same

date of issue, the check with the preceding number shall be considered as

issued before the other bearing subsequent numbers. f the checks are

detached from different check books, honouring them shall first begin with

the check issued for the least amount.

Article 510:1- if a condition is set providing for honouring the check in

Egypt in a specified foreign currency, this currency should be used in

honournig the check if the drawer has with the drawee a cosideration

amount in that currency.

2- If a conditon is set providing for honouring the check in Egypt in a

specified foreign currency, without the drawer having with the drawee a

consideration amount for honouring the check in that currency, the check

may be honoured in Egyptian currency accrording to the exchange rate

announced for’ selling/transfers’ with the drawee at the time the check is

presented for honouring, if a consideration amount is available with it in that

currency, unless the bearer refuses this honouring of the check.

3-If no honouring of the check is fulfilled on presenting the check, the bearer

shall have to choose between the exchange rate ruling on the presentation

day “closing”, or at the time of honouring the check.

In the respect of applying the piovisions of limes 2 & 3, if there is no

announced rate for transfers, the currency note rate shall be applied.

4- If the check is presented for the first time after the lapse of the period for

its presentation, the criterion shall be the exhange rate culling on the day the

period set for its presentation expires.

5- If the check amount is defined in a currency carrying a common

denomination and its value differs in the country of issue from its value in

the check honouring country, it shall then be presumed that the currency is

intended to be that of the check honouring country.

6- If the check amount is defined in a currency carrying a common

denomination between different foreign currencies not including the

currency of the check honouring country, the cretirion shall be the type of

currency available in the drawer’s account. The criterion may also be on the

basis of the currency of the country where the check was issued if no

currency carrying the common name exist in the drawer’s accounts. In case

multiple currencies exist in the drawer’s accounts with the drawee, and it is

found pratically difficult to determine the currency intended for use in

honouring the check, the check shall then be honoured with the currency of

the least rate, unless the bearer refuses paying the check amount acording to

these bases.

Article 511:1- In case of losing the check issued to order, the provisions

prescribed in articles from 433 to 436 of this law shall apply.

2- The warrantor’s obligation to be presented in case of losing the check

issued to order shall expire with the lapse of six months from the date of

payment, if no claim or lawsuit is instituted during that period.

Article 512:1- If the check to bearer is lost or damged, its owner may object

with the drawee against paying its value. The objection shall comprise the

number and amount of the check, the name of its drawer, and all other data

to enable recognizing it, as well as the conditions surrounding its loss or

damage. If some of these data are practically difficult to provide, the reasons

for that shall be mentioned. If the objector has no domicile in Egypt, an

elected domicile shall be appointed for him in it.

2-Once the drawee received the objection, it shall refrain from honouring te

check to its holder, and set aside the consideration amount, until a final

decision is issued in respect thereof.

3- The objector shall publish the number of the lost or damaged check, its

amount, the drawer’s name, the drawee’s name, the name of the objector and

his address, in a daily newspaper. All disposal in connection with the check

after the date of that publication, shall be null and invalid.

Article 513: 1- The holder of the bearer check, in case of its loss, may

contest the objection filed to prevent honouring the check, with the drawee.

The drawee shall annotate on the check that the objection is lodged, and

keep a copy thereof, then noti1’ the objector with the name of the check

holder and his address.

2- The holder of the check shall notify the objector by registered mail with

acknowledgement of receipt, of the need to institute an action for maturity

on 9ie check within thirty days from the date he receives the notification.

The notification shall comprise the check holding justification for holding

the check and its date and their date.

3- if the objector does not institute the action for repossession of the check

within the period prescribed in the previous clause, the summary court judge

shall, at the request to the check holder pronounce a judgement ruling the

cancellation of the objection. In this case the holder of the check shall be

considered, in relation to the drawee, the legal possessor of the check.

4- If the objector institutes an action for repossession of the check, the

drawee may not honour the check except to the litigant who presents a final

ruling on the ownership of the check, or a compromise settlement duly

signed by the two parties acknowledging for him its ownership.

Article 514:1- If a period of six months lapse from the date of objection as

prescribed in article 512 of this law, without the check holder presenting it

for honouring, the objector may request the court to authorize him to cash

the check amount. This ruling shall be pronounced vis-à-vis the drawee after

the court ascertains the objector’s ownership of the check.

2- If the objector does not institute the action reffered to in the previous

clause, or institutes it but the court refuses it, the drawee shall re-enter the

consideration amount on the assets side of the drawer’s account.

Article 5 15:1- The owner or holder of the check may rule it by drawing two

parallel lines on the front side of the check.

2- Linage. the check shall be general or special.

3- If between the line no statement is mentioned or the word ‘bank’ or any

other statement denoting the same sense is written between the two lines, it

shall be a general Image of the check. but, if a specific bank’s name is

written between the two lines, it shall be a special Image of the check.

4- The general Image may be turned into a special Image. But the special

linage may not be turned into a general Image.

5- Cancelling the linage or the name (of the bank) as written between the

two lines shall be considered as null and non-existent.

Article 516: 1-The drawee, in case of general linage, may not pay the check

amount except to a bank or a client of the bank.

2- The drawee, in case of special linage, may not pay the amount of the

check except to the bank whose name is written between the two lines. If

this bank is itself the drawee bank, payment may be made to one of its

clients by posting the value of the check in the account of this client. The

bank whose name is written between the two lines may assign to another

bank collecting the amount of the check by virtue of an endorsement for

delegation.

3-A bank may not receive a check with a special linage for settlement of its

amount except from one of its clients or from another bank. it may not

receive the amount of this check for account of other person than them.

4- if the check carries more than one special image, the drawee may not

honour it except if it carries two special Image, and one is for collecting its

value at the clearing house.

5- If the drawee violates the provisions prescribed in this article, he shall be

accountable for compensating the harm up to and exceeding the check

amount.

6- The expression ‘client’ in the provision of this article shall mean each

person having an account with the drawee, and from whom he obtained a

check book, or he had the right to obtain that check book.

Article 517:1- The drawer of the check or its bearer may stipulate

dishonouring it in cash by putting on its front the expression (for posting in

the account) or any other expression with the same meaning. In this case, the

drawee does not have but to settle the value of the check by inscribing

written entries, such as posting in the account or bank transference or

clearing, settlement made by posting theses entries shall stand for honouring

the document.

2- crossing out the expression for posting in the account’ shall not be

reckoned with.

3- If the drawee violates the provisions prescribed in this article he shall be

responsible for compensating the harm up to and not exceeding the amount

of the cheek.

5-RIGHT OF RECOURSE.

Article 518: 1- The bearer of the check shall have the right recourse against

the drawer, the endorsers, and other obligors if he submits it within the

period set for presenting it, but its amount was not paid, and he establishes

the refrain from payment by virtue of a protest. Instead of protesting, he may

record the refrain from payment, its reason, by a statement to be issued by

the drawee, mentioning the date of presenting the check. The statement shall

be dated and written on the check itself, in addition to footing it with the

signature of the one who issued it. This statement may also be issued on a

special form or from the clearing house, providing it shall be mentioned that

the check was submitted in due course but was not honoured.

2- The statement referred to in the previous clause cannot be refrained from

if requested by the bearer, and even if the check comprises the condition of

recourse without expenses. However, the obligor committed to issue the

statement may request a period not exceeding the working day following the

day on which the check was presented, even if it was presented on the last

day of the period defined for presenting the check.

3- Refraining from payment shall be established in the way prescribed in

clause-I of this article, before the lapse of the period for presentation. if the

check is pesented on the last day of that period, refraining from payment

may be proved on the working day next to it.

Article 519: The check bearer shall notify the endorser, and also the drawer

that it was not honoured, and each endorser shall notify in turn the one who

endorsed the check to him. The provisions prescribed in article 440 of this

law shall apply to this notifications.

Article 520: In the check, the condition ‘recourse without expenses’ may be

written. Hence The provisions prescribed in article 441 of this law shall

apply.

Article 521:1-Obligors by virtue of a check shall be accountable jointly vis-

à-vis bearer.

2-The bearer shall have the right of recourse against these obligors, severally

or jointly, without being restricted by the order of their obligations.

3-The right shall be established for each obligor in the check if he pays its

value.

4-An action instituted by one of the obligors shall not prevent having

recourse against the rest, even if they are subsequent to the obligor to whom

the action was addressed in the first place.

Article 522: The check bearer shall have the right to claim the following

from the one against whom he has the right of recourse:

I-Original amount of the dishonoured check.

2-The interest, calculated from the date of presenting the check according to

the rate of the Centeral Bank of Egypt dealings.

3-Expenses of the protest, or of the procedure standing for the protest, the

notifications expenses, the stamp duty, and others.

Article 523: A person honouring the check (paying its value) shall claim the

following from his guarantors:

A. The amount he paid.

B. The interest on that amount calculated from the date of honouring the

check, according to the rate applied by the Central Bank of Egypt in its

dealings.

C. The expenses he incurred.

Article 524:1- Each obligor from whom the payment of the check was

claimed, or who was targeted for that claim, may — in case he proceeds

with honouring the check demand delivering the check to him, together with

the protest, or whatever stands for the protest, and a quittance for the amount

he paid.

2- each endorser who had paid the value of the check may cancel his

endorsement and the subsequent endorsements.

Article 525:The bearer of the check for which a non-payment protest or

whatever stands for the protest is instituted, may levy a preventive

attachment without hail on the property of each of the drawer, the endorser,

or the alternative guarantor, subject to the provisions prescribed in respect of

this attachment in the Civil and Commercial

Procedure law.

Article 526:1- If a force majeure prevents submitting the check for payment,

or for instituting protest or a substitute action within the times prescribed

therefore, these periods shall be extended.

2-The bearer shall, without delay, notify his endorser of the force majeure.

and shall record this notification, dated and signed by him, in the check. The

sequence of the notification shall be according to article 440 of this law.

3-The bearer, after the disappearance of the force majeure, shall present the

check for payment ‘without delay’, and shall institute the protest or the

procedure standing for it, whenever necessary.

4-If the force majeure persists for more than thirty days calculated from the

date on which the check bearer notified his endorser of the force majeure,

even if that date took place before the expiry of the period set for presenting

the check, recourse may take place against the obligors without need for

presenting the check, recourse may take place, or instituting the protest or

the procedure stanting therefore, unless the right of recourse is suspended by

virtue of the law for a longer period.

3-Matters connected with the person of the check bearer or the one assigned

thereby to present it, or institute the protest or whatever stands for the protest

shall not be considered a force majeure.

Article 527:The check bearer reserves his right of recourse against the

drawer even if he does not present the check to the drawee nor institute the

protest or whatever stands for the protest within the statutory date. This is

unless the drawer has offered the consideration amount that remained with

the drawee until expiry of the period for presentation of the check, then the

consideration amount disappeared by an act non-attributed to the drawer.

Article 528:1- The drawee shall bear alone the harm ensuing from honouring

a check in which the drawer’s signature was forged or in which the data was

twisted, if no error can be attributed to the drawer. All condition otherwise

prescribed shall be considered null and non-existent.

2-The drawer shall be considered at fault in particular if he does not exert in

preserving the check book delivered to him the care an ordinary person

exerts in preserving his book.

3-The drawee shall not be committed to ascertain the validity of the

• signatures of endorsers or alternative guarantors. Nor shall he accountable

for their forgery.

6- DISTORTION

Article 529:If a distortion occurs in the text of the check, the signatories

subsequent to the distortion shall bind themselves by the disported text. The

signatories prior to the distortion shall commit themselves to the original

text.

Article 530:1- Each bank delivering to its client a book comprising blank

check forms in blank for payment according by from its safes, shall write on

each form thereof the serial number of the check, the name of the bank or of

one of its branches, the name of the client receiving the book, and his

account number.

2-The client’s explicit or implicit acceptance of the periodical statement of

account, the bank sends to him, shall be considered clearing the bank’s

obligations in respect of its debit and credit entries in that account from the

amounts of the checks. The client’s non-objection to the statement of

account within thirty days from the date he receives it shall be considered

implicit acceptance in particular. After acceptance of the statement of

account, the bank may return to the client the checks he paid deductible from

his account, and retain photocopied registrations of these checks, which shall

have full conclusiveness in favour of the bank.

7- PRESCRIPTION

Article 53l: 1-The action for the check bearer’s recourse against the drawer,

the endorsers, and other obligors who are committed to pay the check

amount shall prescribe with the lapse of a year from the date of presenting

the check for honouring, or the expiry date of the period during which it

shall be presented.

2-The check bearer’s action against the drawee shall prescribe with the lapse

of three years from the date the check is presented for honouring, or the

expiry date of the period for its presentation.

3-The actions for recourse of the obligors against each other shall prescribe

with the lapse of year from the day the obligor pays the check amount or the

day he is claimed juridically to honour the check.

4-If the action is instituted, the prescribtion period stipulated upon in this

article shall not apply except from the date the last procedure is carried out

in the action.

5- The period of that prescription shall not apply if a court ruling is

pronounced affirming the debt, or the debtor acknowledges it by separate

document, in a way resulting in its renewal.

6-The provisions prescribed in the Civil code shall apply to the interruption

or suspension of this prescription period.

Article 532: The check bearer, despite the prescription of court actions

claiming payment of its value, may claim from the drawer who did not

submit the consideration amount or submitted then recovered it wholly or

partially, to refund what the bank gained thereform unjustifiably. The bearer

may also address this claim to each endorser realizing a gain unjustifiably.

8- PENALTIES

Article 533-1- Each employee at the bank perpetrating premeditatedly one

of the following deeds shall be liable to a fine penalty of not Less than three

thousand Egyptian pounds and not exceeding ten thousand pounds:

A .Announcing, contrary to reality, the non-existence of a consideration

amount to meet the check, or the existence of a smaller consideration

amount.

B .Refusing in bad faith the payment of a check having a MI or partial

consideration amount and no valid objection was submitted in respect

(hereof.

C .Refraining from placing or giving the statement referred to in the first

clause of article 518 of this law.

D) .Delivering to a client a checkbook not comprising the data prescribed in

article 530 of this law.

2- The bank shall be responsible jointly with his judgment debtor employees

for settlement of the financial penalties ruled by the court.

Article 534:1- Whoever permeditatedly commits any of the following deeds

shall be liable to imprisonment and a fine penalty not exceeding fifty

thousand Egyptian pounds, or either penalty:

A. Issuing a check having no payable consideration amount.

8. Recovering or disposing of all or part of the balance of account after

issuing the check so that the remaining balance turns inadequate to honour

the check.

C. Issuing an order to the drawee not to pay the check amount in other than

the cases prescribed legally.

D. Writing or signing a check in bad faith in a way causing its nonpayment.

2-Whoever endorses for another a check for transfer of ownership or

delivers to him a bearer check although he knows it does not have a

consideration amount to meet the whole check, or that it is unpayable shall

be liable to the penalty stipulated upon in the previous clause.

3-If the culprit reverts to perpetrating one of these crimes within five years

from the date a final judgment is pronounced against him, the penalty shall

be confinement to jail and a fine not exceeding one hundred thousand

pounds.

4-The victim of the crime and his special attorney in the crimes prescribed in

this article may request the Public Prosecution or the court, according to

each case, and in any condition of the action, to register his composition

with the defendant.

The composition shall result in abatement of the criminal case, even it were

instituted by direct prosecution.

The Public Prosecution shall order the stay of execution of the penalty if a

compromise is reached during its execution, even after the ruling becomes

preemptory.

Article 535: A beneficiary who in bad faith obtains a check without

consideration amount, shall be liable to a fine penalty not exceeding one

thousand Egyptian pounds, whether he is a natural or juridical person.

Article 536: Whoever contends in bad faith that a check is forged and a final

judgment is passed invalidating this allegation shall be liable to a jail penalty

and a fine not exceeding half the amount of the check or either penalty.

Article537-1- If a ruling of indictment is pronounced in one of the check

crimes prescribed in article 534 of this law, the court may order publishing

the ruling at the expense of the indicated person in the judgments newspaper

that published by the public union of the Egyptian commercial chamber.

This publishig shall comprise the name, domicile, and profession of the

indicted, and the penalty ruled on him.

2. In case of recidivism, the court may order withdrawing the checkbook

from the indicted and prevent giving him new checkbooks for a period to be

determined by it The Public Prosecution shall communicate this order to all

banks.

Article 538:The sanctions prescribed for the crimes defined in article

533,534, and 535 of this law shall be inflicted on whoever commits outside

Egypt (aboard) a deed rendering him a perpetrator or accomplice in one of

these crimes, in connection with a check drawn on a bank in Egypt, even if

this deed is non-punishable in the country where it was committed.

Article 539:A check bearer who lodges a civil case in the criminal

prosecution which is brought according to article 534 of this law, may

request a court ruling to pay him the unpaid portion of the check amount.

The provisions on the collateral civil case shall apply to this request.

Chapter—4

Common provisions

Article 540: The non-acceptance or non-payment protest shall be drawn up

according to the rules prescribed in the Civil and Commercial Procedure

Law for bailiffs papers in the domicile of the obligor committed to accept or

honour the commercial paper, or in the last domicile known to him.

Article 541:The protest shall comprise, in addition to the data that should be

mentioned in the bailiffs’ papers, a textual copy of the commercial paper and

of all contents thereof concerning its acceptance, endorsement, and

alternative guarantee, as well as the payment of its amount whenever

necessary, and other such data. The protest shall also comprise a notice to

accept or honor it, the reasons for refain from them, the inability to set the

signature , or refraining therefore, and the amount paid of the paper value in

case of partial payment.

Article 542:No other paper shall stand for the protest except in the case

prescribed in the law.

ArticleS43: 1- The bailiff charged to effect the protest shall leave a copy

thereof with the one towards whom the protest is drawn up.

2- The bailiffs shall record the protest papers fully and completely, day by

day, along with observing the order of their dates, in a special register to be

regulated by virtue of a decree to be issued from the Minister of Justice.

Article 544: 1- During the first ten days of each month, the bailiffs office

shall send to the Commercial Register Office, within the circuit of which lies

the place for Protest editing, a list of the non-payment protests drawn up

thereby during the previous month concerning the accepted drafts and

promissory notes.

2- This list shall comprise the following data:

A. The protest date.

B. Name, profession, and domicile of the draft owner.

C. Name of the party drawing up the promissory note, or name, profession,

and domicile of the draft acceptor.

D. Maturity date.

E. Amount of the draft or promissory note.

F. Summary of the reasons of refrain from payment as mentioned by the

debtor at the time of writing the protest.

3-The Commercial Register Office shall hold a register in which to record

the data mentioned in the previous clause which person may obtain for a fee.

The Commercial Register Office shall issue a bulletin comprising these data.

The public union of the Egyptian commercial chamber publishes theses data

in judgments newspaper by which it issued

Article 545:1- If the maturity data of the commercial paper corresponds to

an official holiday, or to the weekly holiday in the establishment of the

debtor, no claim shall be made for payment of the paper except on the

following working day.

2- No procedure connected with a commercial paper shall be taken to

present it for acceptance or payment, or for drawing up the protest, except on

a working day.

3-If for carrying out any procedures connected with a commercial paper, a

time was appointed and its last day corresponded to an official holiday or the

weekly holiday in the establishment of the debtor, the time shall extend to

the following day.

4-For each time, the holidays that happen to fall within it shall be computed.

5-Each trader shall announce in a prominent place in his establishment, the

weekly holiday in the establishment, otherwise the holiday shall be

presumed to be on Friday every week.

Article 546: In computing the legal times, or the Convention On

Commercial Paper, the first day thereof shall not be included, and the time

shall be completed with the close of the last day thereof.

Article 547: The courts shall not grant a period for honouring the

commercial paper, or for carrying out any procedures relate4 thereto except

in cases and within the limits prescribed in the law.

Article 548:1- In the cases where the law requires affixing the signature on

the commercial paper, the personal seal or the fingerprint may stand for that

signature.

2-In all cases, the signature shall be legible, or with the name and surname

(family name) of the signatory that can easily be recognized, otherwise the

cowl may consider the signature as null and nonexistent.

3-If two witnesses testify in the commercial paper or in the allonge annexed

to it that the person holding the seal or using his fingerprint has stamped it

with his seal or used his fingerprint before them, and that he is aware of the

content of the obligation, the signatory shall not then claim ignorance of the

said of the obligation, the signatory shall not then claim ignorance of the

said content, with the exception of the cases of deception and coercion.

Article 549: The creditor’s acceptance of receiving a commercial pa. per in

settlement of his debt shall not result in renewing that debt unless it

transpires clearly that the contracting parties’ intention is aimed at this

renewal.

Part v Bankruptcy and composition

Chapter—I

Declaration Of Bankruptcy

Article 550: 1- every trader who by virtue of the provisions of this law is

bound to hold commercial books shall be considered in a state of bankruptcy

if he stops paying his commercial debts following disturbance of his

financial affairs.

2- Discontinuance of payment shall produce no resultant effect before a

court ruling is pronounced declaring him bankrupt, unless otherwise

prescribed in the law.

Article 551: 1- A trader may be declared bankrupt after his death or after

retiring from trade activities, if he died or retired from trade while in a state

of discontinued payments. The request for declaration of bankruptcy shall be

submitted during the year following the death or retirement from trade

business. This period shall not begin to apply, in case of retiring from trade,

except from the date of deleting the name of the trader from the Commercial

Register.

2- The successors to the trader may request declaring his bankruptcy after

his death, subject to the duration mentioned in the previous clause. If some

successors object to the declaration of bankruptcy, the court shall listen to

their statements, then issue a final decision in the request pursuant to the

interests of the parties concerned.

3- The initiatory pleading for declaration of bankruptcy shall be announced,

in case of the trader’s decease, to the successors in their totality, in the last

domicile of the deceased.

Article 552: A trader shall be declared bankrupt upon his request, the request

of one of his creditors, or that of the Public Prosecution. The court may pass

its ruling for declaration of his bankruptcy, motu proprio (of its own).

Article 553: 1- The trader shall request to be declared bankrupt within

fifteen days from the date he discontinues paying. The request shall be

lodged in an initiatory pleading to be deposited with the Clerk’s Office of

the payment, and shall attach thereto the following documents:

A. The main commercial books.

B. copy of the last balance sheet account and the profit and loss account

C. A total statement of personal expenditures for the two years prior to

submitting the request for declaration of bankruptcy, or for the period of his

trade activity if less than two years.

D.A detailed statement of the realty and rnovables he owns their

approximate value at the date he discontinues paying, and the cash amount

deposited in his name with the banks whethere in Egypt or abroad.

E. A statement of the creditors, their addresses, the amounts of their rights or

debts, and the insurance guaranteeing them.

F. A statement of the protests drawn up against the trader over the two years

prior to the date the bankruptcy declaration request was submitted.

2. The documents referred to in the previous shall be dated and signed by the

trader. If it is practically difficult to submit some of these documents, or

fulfill their data, the reasons for that should be explained.

Article 554:1- Each creditor of a due commercial debt, free from litigation

(dispute) shall have the power to request a court ruling for declaration of the

bankruptcy of his debtor trader. The creditor of a due civil debt shall have

this right if establish that the trader has discontinued honouring his due

commercial debts in addition to his civil debt.

2-The creditor of a time debt shall have the right to request declaring the

bankruptcy, if his debtor trader does not have a known domicile in Egypt,

resorts to fleeing, closes down his trading store, embarks on liquidating it, or

carries out acts that are harm flit to his creditors, providing the creditor shall

submit proof that the debtor has discontinued honouring his due commercial

debts.

3-The creditor shall request the court to declare the bankruptcy of his debtor

by virtue of an initiatory pleading to be deposited with the clerk’s office of

the competent court, accompanied by evidence that he deposited the amount

of the thousand pounds in trust with the court treasury, for account of

publication expenses of the bankruptcy declaration ruling. In this pleading

he shall request taking the necessary preventive procedures, and indicate

there in the conditions from which evidence is established on the debtor’s

discontinuance of paying his debts. The clerks’ office of the court shall

determine the nearest session for examination of the case and for serving the

notice on the debtor.

Article 555: The trader shall not be declared bankrupt because of

discontinuing the payment of the criminal fines, taxes, duties, or social

insurance due on him.

Article 556:1- If (he Public Prosecution requests declaring the bankruptcy of

the trader, or if the court, decides, of its own, declaring him bankrupt. the

clerk’s office shall serve the notice on him, on the day of the session.

2-In case of the trader’s death or retirement from the trade business, the

court may not, of its own, or upon the request of the Public Prosecution,

consider declaring him bankrupt after the lapse of the period referred to in

the first clause of article 551 of this law.

Article 557:The clerks’ office shall notify the Public Prosecution of the

request for declaration of bankruptcy. The failure of the Public Prosecution

to attend or to express its opinion shall not prevent pronouncing a court

ruling in the bankruptcy action.

Article 558: The court concerned with examining the bankruptcy case may

order taking the necessary arrangement to preserve or manage the property

of the debtor until the court pronounces a final decision in the case. The

court may also take such procedures as shall enable it to become aware of

debtor’s financial conditions and the reasons for discontinuing his payment.

Article 559: 1- The court of first instance within the circuit of which the

commercial domicile of the debtor lies is concerned with declaring the

bankruptcy. If the trader does not have a commercial domicile, the

concerned court shall be the one within the circuit of which his ordinary

domicile is located.

2-Subject to the provisions of bilateral or multilateral international

conventions in force in Egypt, a trader having a branch or agency in Egypt

may be declared bankrupt even if no ruling is pronounced declaring him

bankrupt in a foreign country. In this case, the court concerned with

declaring the bankruptcy in Egypt shall be the court within the circuit of

which the branch or the agency lies.

Article 560:1- The court declaring the bankruptcy shall be concerned with

examining all court actions consequent upon the bankruptcy.

2- The action shall be considered resultant from the bankruptcy in particular

if it is connected with its management, or the final decision requires

applying the provisions on bankruptcy. This shall not comprise the actions

consequent upon the debts of the bankruptcy by owed third parties or to due

to the third parties by the bankruptcy.

Article 561:1- The court shall determine in the bankruptcy declaration ruling

a temporary date for discounting the payments. It shall appoint a trustee for

the bankruptcy, and a judge of the court to be the judge for the bankruptcy.

The court shall order placing the seals on the debtor’s trade location.

2- The court, in case of necessity, may order taking the necessary

proceedings to keep the person of the debtor under custody. The court may

not order taking these proceedings in the bankruptcy declaration ruling if the

debtor requests to be declared bankrupt within the time referred to in the first

clause of article 553 of this law.

3- The clerks’ office shall send to the Public Prosecution a summary of the

bankruptcy declaration ruling upon its issuance.

ArticleS62: 1- If in the bankruptcy declaration ruling the date on which the

debtor discontinued paying is not defined, the date on which the bankruptcy

declaration ruling is issued shall be considered a temporary date of

discontinuing the payment.

2- If the bankruptcy declaration ruling is pronounced after the death of the

debtor or after his retirement from trade business, without defining the date

of discontinuing the payment, the date of this death or retirement from trade

business shall be considered a temporary date of discontinuing the payment.

3- In defining the date of discontinuing payment, the court shall make use of

each deed, statement or act issued from the debtor and revealing a

disturbance of his works or his attempts to continue his trade activity by

illegal means or harmful methods to his creditors. As part of these practices,

the debtor’s attempt in particular to escape or commit suicide, hide his

property or sell them at a loss, or conclude loans with oppressive terms, or

enter in irrational speculations.

Article 563: 1- The court may, on its own, or upon the request of the Public

Prosecution, the debtor, one of his creditors, the trustee of the bankruptcy or

other interested parties, modify the temporary date of discounting the

payment to the lapse of len days from the date of depositing a list of the

funded debts with the clerks office of the co according to the first clause of

the article 653 of this law, and after the lapse of this period the date defined

for discounting the payment shall become final.

2- En all cases, the date of discounting the payment shall not be moved back

to more than two years prior to the date of issuing the bankruptcy declaration

ruling.

Article 564: 1- The clerk office of the court issuing the bankruptcy

declaration ruling shall notify the trustee of the bankruptcy upon issuing the

ruling, by registered mail with acknowledgment of receipt, to assume the

bankruptcy work.

2- The trustee of the bankruptcy shall register the bankruptcy declaration

ruling as well as the ruling modifying the date of discounting the payment,

in the commercial register.

3- The trustee of the bankruptcy shall publish the summary of the ruling in a

daily newspaper to be appointed by the court for the bankruptcy declaration

ruling. The publication shall be made within ten days from the date he is

notified of the ruling. The said summary shall comprise, in relation to the

bankruptcy declaration ruling, the name and domicile of the bankrupt, his

entry number in the commercial register, the court issuing the ruling, the

date of its issue, the temporary date of continuance the payment, the name of

the bankruptcy judge, and the name and address of its trustee. The

publication shall comprise calling the creditors to submit their debts in the

bankruptcy. In case of modifying the date of discounting the payment, the

publication shall comprise, in addition to the said data, the new date defined

by the court.

4- The trustee of the bankruptcy shall, within thirty days from the date he is

notified of the bankruptcy declaration ruling, record its summary in the

name of the group of creditors, in each real estate registration office within

the circuit of which lies a realty of the bankrupt. Recording this summary

shall not result in any other right to the group of the creditors.

Article 565: 1- Each interested party, other than the litigants, may object to

the bankruptcy declaration ruling in the court issuing it, Wit thirty days from

the date of publishing it in the papers, unless it Was appealed against in

which case the objection shall be raised to the court examining the appeal.

2- Subject to the provisions of the first clause of article 563 of this law, the

period for objection to all rulings issued in court actions as a result of the

bankruptcy shall be thirty days from the date of their issue, unless they are

due for publication in which case the period shall begin from the date of

publishing it.

3- The provisions of the Civil and Commercial Procedure Law sha)) apply to

the period for appealing the ruling issued in bankruptcy dec- laration

actions, and other ru!ing issued in court actions resulting from the

bankruptcy and the method of lodging them.

Article 566: The rulings issued in bankruptcy actions shall be due for self-

execution without bail, unless otherwise prescribed.

Article 567: No contestation shall be issued in any way against:

A. The ruling or decisions concerning the appointment or replacement of the

bankruptcy judge, trustee, or controller.

B. Rulings as issued in objection against the decisions of the bankruptcy

judge.

C. Orders as issued canceling the custody proceedings on the person of the

insolvent.

E. The rulings issued for staying the bankruptcy proceeding until final

decision is taken in the objection Lodged against the bankruptcy judge

concerning acceptance or refusal of the debts.

F. The rulings issued concerning acceptance of the litigious debts

temporarily.

Article 568: If the debtor settles all commercial debts due on him, before the

bankruptcy declaration ruling acquires res judicata force, the court shall

cancel the bankruptcy declaration ruling, providing the debtor shall sustain

all the action expenses.

Article 569: If at the time of declaration of the bankruptcy, no money is

available to meet the expenses of the declaration and publication of the

bankruptcy ruling, setting the seals on or removing them from the property

of the bankrupt, or holding the insolvent person under custody, these

expenses shall be paid from the trust amount which is deposited by the party

requesting the declaration of the insolvency, as prescribed in article 554/3 of

this law. The party requesting the declaration of the bankruptcy shall recover

the amounts he had paid, by virtue of the lien he enjoys over all creditors,

from the first money entering the bankruptcy. The bankruptcy judge may

also order starting the sale of certain property of the bankruptcy to face these

expenses.

Article 570: 1- If the debtor requests to be declared bankrupt, and the court

refuses the request, it may pronounce a ruling inflicting on him a fine of not

less than one thousand pounds and not exceeding five thousand pounds, if it

transpires to the court that he intended feigning the bankruptcy.

2- If a creditor requests declaring the bankruptcy and t’ie court refuses his

request it may rule inflicting on the creditor the fine prescribed in the

previous clause, and publishing the ruling at his e:pense in the papers it

defines, if it transpires to the court that he premeditated harming the

goodwill of the debtor, subject to the debtor’s right to claim compensation.

CHAPTER -2

PERSON MANAGING THE BANKRUPTCY

Article57l: 1- In a bankruptcy ruling, the court shall appoint a proxy for

management of the bankruptcy, called ‘bankruptcy Trustee’.

2- The bankruptcy judge may, at all times, order, of his own or at the request

of the bankrupt or the controller, adding one or more trustees, providing

their number shall not be more than three.

3- The competent minister shall issue a decree regulating the professjon of

bankruptcy trustees.

Article 572: 1- A person who is spouse to the bankrupt or a relative up to the

fourth degree, or has been a partner, employee, accountant, or agent of the

bankrupt during the two years prior to the declaration of the bankruptcy shall

not be appointed a trustee for the bankruptcy.

2- A person, against whom a ruling was issued convicting hint I a murder or

an offense involving moral turpitude or a misdemeanor against honor or

trust, shall not be appointed a trustee for the bankruptcy.

Article 573:1- The bankruptcy trustee shall manage the property of the

bankruptcy and maintain it. He shall be deputed for the bank.. rupt in all

actions and works necessitated by this management.

2- The bankruptcy trustee shall record, day by day, all works related to the

management of the bankruptcy, in a special book with numbered pages

signed or stamped by the bankruptcy judge who shall affix at the end of the

book an annotation marking its end.

3- The court, the bankruptcy judge arid the controller may view arid inspect

this book at all time, So the bankrupt may also view arid inspect it by

permission from the bankruptcy judge.

Article 574:1- If there are :multiple trustees for the bankruptcy, they shall

work collectively and account jointly for their management of the

bankruptcy.

2- The bankruptcy judge may distribute the work among them or

commission one of them to perform a specified work. In this case, the

bankruptcy trustee shall not be accountable except for the work he is

charged to perform.

3- The bankruptcy trustees may delegate each other in performing the works

assigned to them. They may not delegate third parties except with

permission from the bankruptcy judge. In this case, the bankruptcy trustee

and his delegate shall be responsible jointly for the said works.

Article 575: The bankrupt and the controller may lodge their objection with

the bankruptcy judge against the works of its trustee before their completion.

This objection shall result in discontinuing the performance of work. The

bankruptcy judge shall issue his final decision in the objection within five

days from the date it is submitted. The decision of the bankruptcy judge

shall be executable forthwith.

Article 576: The court may, on its own or upon the request of the bankruptcy

judge, the bankrupt, or the controller, rule for isolating the bankruptcy

trustee and appointing another or reducing the number of trustees in case of

their multiplicity.

Article 577:1- The remuneration and expenses of the bankruptcy trustee

shall be determined by a decision of the bankruptcy judge, after the trustee

submits a report on his management.

2- The bankruptcy judge may order the payment of amounts to the bank

ruptcy trustee before the submission of the report referred to in the previous

clause, deductible from his remuneration.

3- All person concerned may challenge, in court, the decision of the bank.

ruptcy judge concerning the assessment of the remuneration and expenses

of the bankruptcy trustee.

Article 578: 1- The Bankruptcy judge, in addition to the powers prescribed

for him by special provisions, shall assume the control of the management of

the bankruptcy, supervision of its proceedings, and taking necessary

arrangement to preserve its property and funds.

2- He shall call the creditors to convene in the cases prescribed in the law,

and chair the meetings.

3- He shall submit to the court every three months a report on the status of

the bankruptcy, and another on each dispute connected with the bankruptcy

if its settlement falls within the jurisdiction of the court.

4- He shall have the power at all time to summon the bankrupt, his

successors, his agent, or his employees, or any other person to hear their

state-ments in the bankruptcy affairs.

Article 579: The decision issued by the bankruptcy judge shall be deposited

with the clerk office of the court on the day next to the issuing it. The judge

shall order the clerk office to notify them to the person specified thereby.

This notification shall be by registered letter with acknowledgement of

receipt, unless otherwise prescribed in the law or the bankruptcy judge

orders notifying them in another way.

Article 580: 1- The decisions issued by the bankruptcy judge may not be

challenged, unless otherwise prescribed in the law, or the decision exceeds

his power.

2- The challenge shall be submitted in an initiatory pleading to be deposited

with the clerks’ office of the court, and be announced to be concerned

parties within ten days from the date of depositing it, or of its notification

according to each case. The court shall examine the challenge in its first

session, providing the bankruptcy judge whose decision is challenged shall

not participate in this challenge. The challenge shall stay the execution of the

decision until the court issues a final decision in respect thereof, unless it

orders continuing the execution of all decision.

3-If the court refuses the challenge, it may pronounce a ruling imposing on

the petitioner a fine of not less than five hundred pounds and not exceeding

two thousand pounds if it transpires to it that he premeditated obstructing the

implementation of the bankruptcy judge’s decision.

Article 581 1- The court may, at all time, replace the bankruptcy judge by

substituting another from the court judges.

2- In case of temporary absence, the president of the court shall appoint one

of its judges to deputize for the bankruptcy judge.

Article 582: 1- The bankruptcy judge shall appoint one or more controllers

among the creditors who nominate themselves for that.

2- The bankrupt and each creditor may object to the decision of the

bankruptcy judge concerning the appointment of the controller, without this

objection staying the implementation of the decision. The objection shall be

submitted to the bankruptcy judge himself who shall issue a decision in it

summarily .

Article 583: The controller or the representative of the juridical person

appointed as controller shall not be spouse to the bankrupt, or a relative

thereof up to the fourth degree.

Article 584: 1- The controller, in addition to the powers prescribed therefor

by special provisions, shall examine the balance sheet account and the report

submitted by the debtor, and other such tasks as shall be assigned to him by

the bankruptcy judge, concerning control on the works of its trustee, and

shall assist the bankruptcy judge in that.

2- The controller may request from the bankruptcy trustee clarifications on

the development of its proceedings, its revenues and expenses, and the status

of the prosecutions related thereto.

Article 585: 1- The controller shall not receive a salary for his work.

However, the court may decide granting him a total bonus for his work if he

exerts an unusual effort, and the financial condition of the bankruptcy allows

doing so.

2- The controller may be removed by a decision of the bankruptcy judge.

3- The controller shall only be accounted for his serious error.

CHAPTER -3

BANKRUPTCY EFFECTS

1- Bankruptcy Effects In Relation To the Debtor.

Article 586: 1- The court, upon the request of the bankruptcy judge, the

Public Prosecution, the bankruptcy trustee or the control-ler, may in case of

necessity order placing the bankrupt person under custody or prevent him

from leaving the country for a deter. mined renewable period. The bankrupt

may complain from that order, without resulting in staying the execution.

2- The court may decide at all times to cancel the order of the custody on the

bankrupt person, or the order preventing him from leaving the country.

Article 587: - The bankrupt shall not absent himself from his domicile

without notifying the bankruptcy trustee in writing about the address of his

whereabouts. Nor shall he change his domicile except with a permission

from the bankruptcy judge.

Article 388: 1- A person declared bankrupt shall not be a voter or member of

the parliamentary councils, local councils, the chambers of commerce or

industry or the professional unions. He shall not be a director or member on

the Board of any company, nor shall he work in banks activities, commercial

agencies, import and export works, or brokerage in selling or buying

securities, or selling by public auction, unless he is rehabilitated.

2- Whoever is declared bankrupt shall not deputize for a third party in

running his property. However, the competent court may permit him to

manage his minor children’s property, if no ensues there-from.

Article 589: 1- The mere issue of the bankruptcy declaration ruling shall

fetter the hands of the bankrupt from managing and disposing of his

property. The dispositions made by the bankrupt on the day the bankruptcy

declaration ruling is issued shall be considered as made after issuing the

ruling.

2- If the disposition is not to be used as evidence vis-à-vis third parties

except by entry, registration, or other proceedings, it shall not apply to the

group of creditors unless the proceeding took place before issuing the

bankruptcy declaration ruling.

3- Fettering the bankrupt’s hand from managing and disposing of his

property and funds shall not prevent him from taking the necessary

procedures toward maintaining and preserving his rights.

Article 590: 1- After the bankruptcy declaration ruling is pronounced a

bankrupt, shall not settle his debts, nor receive his due rights.

2- However, if the bankrupt holds a commercial paper, its value may be

settled to him at its due date, unless the bankruptcy trustee objects to such

settlement according to article 431 of this law.

Article 591: After the bankruptcy declaration ruling is pronounced, no

clearing arrangements shall take place between the bankrupt’s due rights and

his obligations unless a link connects them together. This linkage exists

particularly if the rights and obligations arise from one source, or a current

account comprises them.

Article 592: 1- Hand binding shall comprise all property owned by the

bankrupt on the day the bankruptcy declaration ruling is pronounced, and the

property of which the ownership devolves to him while he is in a state of

bankruptcy.

2.. However, hand binding shall not comprise the following:

A-The property on which no attachment is legally permissible, and the

allowance determined for the bankruptm.

B- Property owned by other than the bankrupt.

C. Rights connected with the person of the bankrupt or his personal status.

D. Compensations payable to the beneficiary in a valid insurance policy

concluded by the bankrupt before the issue of the bankruptcy declaration

ruling. However, the beneficiary shall refund to the bankruptcy all insurance

premiums the bankrupt paid from the date the court appoints to discontinue

the payment, unless otherwise prescribed in the law.

Article 593: If an estate devolves to the bankrupt, his creditors shall have no

rights thereon except after the creditors of the legator shall have all their

rights on the property. They shall have no rights on the bankruptcy.

Article 594: 1- After the issuance of the bankruptcy declaration ruling, no

court action shall be brought by or against the bankrupt, nor shall steps be

followed therefor, with the exception of the following:

A. The actions connected with the property and dispositions not included in

the hand binding.

B. Actions related to the bankruptcy works that the law allows the bankrupt

to carry out.

C. Criminal actions.

The court may permit the involvement of the bankrupt in bankruptcy related

actions, It also allow the involvement of the creditor in these actions if he

has an interest therein.

3- If the bankrupt files or against a criminal action is filed against him or an

action related to his person or his personal status, the bankruptcy trustee

shall be involved therein, if it comprises financial claims.

Article 595: - Lf the court ruling is pronounced against the bankrupt after

declaration of his bankruptcy, to compensate the harm caused to a third

party, the judgment creditor may enter in the bankruptcy with the res

judicata compensation unless his connivance with the bankrupt is

established,

Article 596: 1- The bankruptcy judge, after hearing the statements of its

trustee, may determine an allowance for the bankrupt, to be paid from the

bankruptcy funds upon his request or the request of his dependents.

2- The party requesting the allowance and the bankruptcy trustee may

complain about its estimation before the bankruptcy judge, without resulting

in staying the payment of the allowance.

3- The bankruptcy judge may at all times, of his own or upon the request of

the bankruptcy trustee, modify, the amount of the allowance or order its

cancellation. Complaining from this decision may also be raised before the

bankruptcy judge himself,

4- The payment of the allowance may be stopped once the composition

ratification ruling acquires the res judicata status. If no composition takes

place, the allowance shall be discontinued once the merger status is

established.

Article 597: Subject to the provisions of article 588 of this law, the bankrupt

may, without permission, exercise a new trade without the funds and

property of the bankruptcy. The creditors whose debts are realized on the

occasion of this trade shall have precedence in receiving their rights from its

funds and property.

Article598: The following disposals shall not be insisted upon vis-à-vis the

group of creditors, if the debtor fulfils them after the date of discounting the

payment and before issuance of the bankruptcy declaration ruling:

A. Granting the donations, whatever their kind is with the exception of small

presents offered according to usage and practice.

B. Settling the debts before their maturity date, whatever the method of

settlement. Establishing a consideration amount for settlement of a

commercial paper not yet maturing shall be considered as good as settlement

before the maturity date.

C. Settling the due debts with other than the object agreed upon. Payment by

means of the commercial paper, or bank transfer shall be considered as good

as settlement with money.

D. All pawns or other consensual deposit, as well as all Hen to be deter.

mined on the debtor’s property as a guarantee for a debt prior to the deposit.

Article 599: A court ruling may be issued for non-execution of all disposals

by the bankrupt, other than those mentioned in article 598 of this law, during

the period referred to therein, vis-à-vis the group of creditors, if the disposal

is harmful to it and the party disposed to was at the time of that disposal,

aware of the bankrupt’s discontinuance of payment.

Article 600: If the value of a commercial paper is paid after the date of

discounting the payment, and before the bankruptcy declaration ruling, the

amount paid to the bearer shall not be restituted from him, but the drawer or

the one for whose account the commercial paper is withdrawn shall be

obliged to refund the amount paid, if at the time of establishing the

commercial paper he was aware of the bankrupt’s discontinuance of

payment. The commitment to refund, in case of the promissory note, shall be

that of the first endorser if, at the time he obtains the promissory note, he is

aware of the bankrupt’s discontinuation of payment.

Article 601:1- A court ruling may be pronounced for non-execution of the

pawn, lien, or particular lien rights determined on the debtor’s property vis-à

vis the group of creditors, if they were recorded after the date of payment

discontinuation, and after the lapse of thirty days from the date of

determining the pawn, lien or particular lien.

2- The creditor holding the pawn or lien that comes next to the pawn or lien

for which. a ruling of non-execution was pronounced vis-à-vis the group of

creditors shall acquire the degree of that deposit. However, the said creditor

shall not be given from the price accruing from the sale of the property for

which the deposit was provided, except what he would obtain for the

purpose of exhaustion of the previous pawn or lien, and the difference shall

devolve to the group of creditors.

Article 602:1- If a court is pronounced for non-execution of any disposal

vis-à-vis the group of creditors, the party disposed to shall refund to the

bankruptcy the portion obtained by the bankrupt by virtue of this disposal or

the value of the object at the time it was received. He shall also pay the

interest on the amounts he received., or its yield from the date of reception

2- The party disposed to shall have the right to restitute the compensation

presented thereby to the bankrupt if this compensation itself is found with

the bankruptcy. If it is found, the party that was disposed to shall have the

right to claim from the group of creditors the benefit accruing thereto from

such disposal, and to participate in the bankruptcy in his quality of ordinary

creditor with the excess portion in the value of this benefit.

Article 603: The bankruptcy trustee alone may request non-executing the

debtor’s disposals vis-à-vis the group of creditors, if the act took place

before the bankruptcy declaration ruling was issued, in accordance with the

provisions of the Civil Code. The ruling issued for non-executing that

disposal shall apply vis-à-vis all creditors, whether their rights were

established before or after the occurrence of that disposal.

Article 604: Court actions arising from the application of the provisions

prescribed in articles from 598 to 601, and the article 603 of this law, shall

abate with the lapse of two years from the date of issuing the bankrupt

declaration ruling.

2- Bankruptcy Effects With Regard

To The Creditors

Article 605: 1- The ordinary creditors or the general lien creditors shall not,

after the court bankruptcy declaration ruling, institute individual cases

against the bankruptcy, nor take any judiciary procedures against it

2- the issue of a bankruptcy declaration ruling shall result in discontinuing

the individual cases brought by the creditors mentioned in the previous

clause, and in staying the execution proceedings that these creditors began

before the bankrupt declaration ruling was issued, However, it a day is

determined for selling the realty of the bankrupt, proceedings of execution

may continue with permission from the bankruptcy judge.

3- As for mortgagees and those vested with lien and particular lien rights on

the debtor’s property, they may institute the individual actions or continue

therewith vis-à-vis the bankruptcy trustees, They may also levy or continue

the execution on the property covered by their deposits.

Article 606: A bankruptcy declaration ruling shall abate the maturity dates of

all cash debts due on the bankrupt, whether they are ordinary debts, or debts

guaranteed with a general or special lien.

Article 607: A bankruptcy declaration ruling shall stop applying the interests

on ordinary debts, with regard to the group of creditors only interest on

debts guaranteed by pawn, lien, or particular lien shall not be claimed except

from the amounts resulting from the sale of property Covered by deposits.

The original debt shall first be discounted, then the interest due before

issuing the bankruptcy declaration ruling, and last the interests falling due

after issuance of the ruling.

Article 608: The court may deduct from the time debt in which no interest is

stipulated, an amount equivalent to the interest payable for the period from

the date of the bankruptcy declaration ruling until the maturity date.

Article 609: Participation in bankruptcy may be realized, with the debts

conditional upon a dissolving condition, along with offering a warrantor. But

debts dependent upon a suspending condition will have their share ji the

distribution set-aside until revealed the result of the condition.

Article 610: 1- In case of is several obligors for one debt, and one of them is

declared bankrupt, this bankruptcy shall produce no effect with regard to the

other obligors, unless otherwise prescribed in the law.

2- If a composition is reached with the obligor who became bankrupt, his

conditions shall not apply to the other obligors.

Article 611: If the creditor received part of the debt from one of the obli-

gors with one debt, then the rest of obligors became bankrupt, or one of

from the non-bankrupt obligor. This obligor may participate in each

bankruptcy by what he paid for it.

Article 612:1- If all obligors to one and the same debt become bankrupt

altogether, the creditor may participate in each bankruptcy with all his debt

until he settles it wholly, comprising the original debt, the interests and the

expenses.

2- No bankruptcy may have recourse against another bankruptcy by what it

paid for it.

3- If the total amount the creditor obtained exceeds his debt and its

auxiliaries, the increase shall return to the bankruptcy of the one guaranteed

by the others, according to the order of their debt obligations. If no such

order exists, the increase shall return to the bankruptcies that paid more than

their share of the debt

3- Bankruptcy Effects Regarding Creditors Of Debts

Guaranteed By A Pawn or A Lien On Movable

Article 613:— The names of creditors of the bankrupt, who are holding in

the list a legal form a pawn, or particular lien on movable, shall not be

included in of the creditors, except as a reminder.

Article 614: The bankruptcy trustee may at all time, and after obtain-ing

permission from the bankruptcy judge, pay the debt guaranteed by a pawn

and restitute the object pawned for the account of the group of creditors.

Article 615:1- If the pawned movable is sold at the request of the Pawnee

for a price exceeding the debt, the bankruptcy trustee shall collect the excess

amount for the account of the group of the creditors. If the price is less than

the debt, the Pawnee shall participate with the rest owed to him in the

bankruptcy in his quality of ordinary creditor providing his debt was verified

according to the provisions of this law

2- The bankruptcy trustee may notify the Pawnee by registered mail with

acknowledgement of receipt of the necessity of taking legal proceedings to

execute on the pawned objects before the end of the state of the Union. If the

Pawnee does not take the proceeding necessary, the bankruptcy judge, upon

the request of its trustee and after hearing the Pawnee’s statement, or

notifying him, may permit the bankruptcy trustee to sell the pawned

movables. The permission of the bankruptcy judge shall be notified to the

Pawnee, and the latter may challenge this decision. This challenge shall

result in staying the sale, unless otherwise ordered by the court.

Article 616:1- The bankruptcy trustee, after getting permission from the

bankruptcy judge, within the ten days following issuance of the bankruptcy

declaration ruling, out of the bankruptcy ‘money and despite the existence of

any other debt, shall pay wages, and salaries, and amounts that were due

before issuance of the bankruptcy declaration ruling, for a period of thirty

days for the workers of the bankrupt. If the bankruptcy trustee does not have

the money necessary to settle these debts, settlement shall be made from the

first money entering the bankruptcy, even if there are other debts preceding

them in lien degree 2- Amounts due to the said categories found in excess of

the foregoing shall have the legally prescribed lien degree.

617: In case of terminating, the lease of the realty in which the bankrupt

exercises his trade, the lessor, according to article 624 of

this law , shall have the lien of guaranteeing the rental due to him on the year

prior to issuing the bankruptcy declaration ruling, as well as the current

ear if the movables existing in the leased realty are sold or moved, the lessor

shall remain maintaining his lien right.

rticle 618: The lien prescribed for the government concerning all kinds of

the taxes shall only comprise the tax due on the bankrupt for the two years

prior to issuing the bankruptcy declaration ruling. The other due taxes shaH

be included within the distributions in their quality of ordinary debts.

Article 619: The bankruptcy judge may, upon the proposal of its trustee,

order when necessary, using the first money entering the bankruptcy in

settling the rights of the creditors who have a lien on the movables of the

bankrupt, providing their names are indicated in the final list of undisputed

debts as referred to in the first clause of article 655 of this law. If litigation

occurs concerning the lien, settlement shall not be made except after

deciding the dispute with a final judgment.

4- Bankruptcy Effects In Relation To

Owners Of Debts Guaranteed By Pawn Or

Lien or Particular Lien On Realty.

Article 620: In case the price of realities is distributed before distributing the

price of movables, or both distributions take place together, the mortgagees

or lien creditors or particular lien creditors who have not received their right

wholly or partially from the prices of realties burdened with insurance shall

have the right to participate with the balance due to them, with the ordinary

creditors, in the distribution of property to which the right of the group of

creditors is pinned, providing their debts have been verified according to the

provisions of this lawm.

Article 621: 1. If one or more distributions of the movables price take place

before distributing the price of the realities, the mortgagees, or lien creditors

or particular lien creditors shall have the right to participating in the

distributions with all their debts providing they have been verified according

to the provisions of this law. Their share in these distributions shall be set-

aside until carrying out the final settlement.

2- After selling the realties and carrying out the final settlement cording to

the categorization mortgagees, and lien creditors and

ticular lien creditor, those whose category qualifies them to obtain all their

debts from the price of the said realities, may not receive the debt except

after deducting the amount set aside for him, and this amo shall be returned

to the group of the ordinary creditors.

3- If the class of the mortgagee or lien creditors or particular lien creditors

qualified him, only for obtaining part of his debt, he shall have the right to

participate in a prorata division with the rest of his due debt. If in effecting

the final settlement it transpires that what he obtained and what was said

aside for his account exceeds the amount of his due debt, the excess portion

shall be deducted and restored to the group of ordinary creditors.

Article 622: The mortgagee or lien creditors or particular lien creditors who

do not obtain anything from the price of realties which are burdened with

their insurance shall be considered ordinary creditors and in that qualitY all

the effects resulting from the works of the group of creditors and judicial

composition if it shall apply to them.

5- Effect of Bankruptcy on Valid Contracts

Concluded Before ItS Declaration

Article 623: 1- A bankruptcy declaration ruling shall not result in rescinding

the contracts which bind the two sides, and to which the bankrupt 15 a party,

unless they were based on personal considerations.

2- If the bankruptcy trustee does not execute the Contract, Of does not

continue its execution, the order Party may demand its rescission. All

decisions the bankruptcy trustee take concerning the contract shall be

brought before the bankruptcy judge to authorize it. The other party may

appoint to the bankruptcy trustee a suitable period to explain his attitude

regarding the contract.

3- The cntractiflg party may participate in the bankruptcy as an ordinary

creditor, with the compensation resulting from the recession, unless it is

specified that the compensation shall maintain the lien prescribed legally

thereof.

Article 624: 1-. If the bankrupt is a lessee of the realty in which he exercises

his trade, the bankruptcy declaration ruling shall not result in terminatifl8 the

lease or maturity of the rental of the period remaining for termination of the

lease. All conditions contrary thereto shall be considered as null and non-

existence.

2- If the lessor begins execution on the movables existing in the realty, and

this execution has not been completed at the time the bankruptcy declaration

ruling is pronounced, the execution shall be stayed for a period of sixty days

Prom the date of that ruling, subject to the lessor’s right in taking preventing

proceedings, and in requesting vacation of the realty according to the general

rules and provisions. The bankruptcy judge may order continuing the stay of

execution for a period of another thirty days if he deems necessary. The

bankruptcy trustee shall notify the lessor of the realty, during the period of

stay of execution, of his wish to end or continue the lease.

3-If the bankruptcy trustee decides continuing the lease, he shall pay the

rental arrears and submit an adequate guarantee for payment of the future

rental. The lessor may request the bankruptcy judge to terminate the lease if

the guarantee is inadequate, within fifteen days from the date he is notified

of the bankruptcy trustee’s wish to continue the lease.

4- The bankruptcy trustee, after obtaining permission from the bankruptcy

judge, may sublet the realty or give up the rental, according to the provisions

regulating the owner-tenant relationship, even if the bankrupt is prevented

from that by virtue of the tease, providing this step shall not result in causing

harm to the lessor.

Article 625: 1- If the employer becomes bankrupt and the labour contract is

for an indefinite period, the worker and the bankruptcy trustee may

terminate the contract subject to the provisions prescribed in labor laws. The

worker may not in this case claim compensation from the bankruptcy unless

the termination of his contract is oppressive, or without observing the

notification dates.

2- If the labor contract is for a determined period, it shall not be terminated

unless it is determined to discontinue the trade. The worker may in this case

claim compensation from the bankruptcy.

3- The compensation payable and due to the worker according to the two

previous clauses shall have the lien privilege legally prescribed therefor.

6- Restitution

Article 626:1- Each person may restitute from the bankruptcy the objects

established to be his property or he has the right of restituting them upon

declaration of the bankruptcy.

2- The bankruptcy trustee, after consulting with the controller and obtaining

a permission from the bankruptcy judge, may return the object to its owner

or the person having the right to restitute it. If he refuses the restitution,. the

party requesting it may bring the dispute before the court.

Article 627:1- The objects existing in the possession of the bankrupt by way

of deposit, or for selling for the account of its owner, or for delivering to

him, may be restituted, providing it is existing in kind i the bankruptcy.

The price of goods may also be restituted, if it has not been already settled,

in cash, by commercial paper, or by posting it in a current account between

the bankrupt and the buyer.

2- The restituting party shall pay to the bankruptcy trustee the rights due to

the bankrupt.

3- If the bankrupt had deposited the goods with a third party they may be

restituted therefrom.

4- If the bankrupt bad borrowed by mortgaging the goods, and the

mortgagee was unaware at the time of instituting the mortgage that the

bankrupt was not the owner of the goods, they shall not then be restituted

except after settling the debt guaranteed by the mortgage.

Article 628:1- The commercial papers of value that were delivered to the

bankrupt for collection or for appropriating them for particular settlement

may be restituted if found existing in kind in the bankruptcy and their value

has not already been paid.

2- The currency notes deposited with the bankrupt may not be restituted,

unless the restitution claimant provides and establishes their description.

Article 629:1- If the sale contract is rescinded by virtue of a court ruling, or

a condition in the contract, before issuance of the buyer bankrupt declaration

ruling, the seller may retrieve the whole or some of the goods in the

bankruptcy, providing it exists in kind.

2- The goods may be retrieved even if the rescission takes place after

issuance of the bankruptcy declaration ruling, providing the restitution

action or the rescission action as lodged before issuance of this ruling.

Article 630:1- if the buyer becomes bankrupt before paying the price and

the goods are still with the seller, he may retain them.

2-If the buyer becomes bankrupt after sending the goods, and before they

enter his stores or the store of his agent who is charged to sell them, the

seller may retrieve their possession. However, the retrieval may not take

place if the goods lose their sameness, or the bankrupt disposes thereof

before their receipt, without deception, by virtue of the title document s or

the consignment notes.

3-In all cases, the bankruptcy trustee, after getting permission of the

bankruptcy judge, may request the delivery of goods providing he shall pay

the price agreed upon to the seller. If the bankruptcy trustee does not request,

the seller may insist on his right to rescind the deed and claim compensation

and participate with it in the bankruptcy.

Article 631:1- If the buyer becomes bankrupt before paying the price and

after entry of the goods in his stores or the stores of his agent who is

assigned for selling them, the seller may not request rescinding the sale or

retrieve the goods. Also, his lien Tight shall abate.

2-All conditions liable to enable the seller retrieve the goods or maintain his

lien Repletion thereon, shall not be used as argument vis-à-vis the group of

creditors.

Article 632: retrieval actions, which are directed to the bankruptcy trustee in

the cases mentioned in articles 626 to 630 of this law shall prescribe with the

lapse of one year from the date of publishing the bankruptcy declaration

ruling in the daily newspaper to be specified by the court according to

clause-3 of article 564 of this law.

CHAPTER-4

MANGEMENT OF BANKRUPTCY

1- MANGEMENT OF THE BANKRUPTCY ASSETS

Article 633:1- Seals shall be put on the stores, offices, safes, books, papers,

and movables of the bankrupt.

2- The bankruptcy judge shall command putting the seals upon issuance of

the bankruptcy declaration ruling. He may delegate an officer of the court

for this mission. He shall also notify the president of each court within the

circuit of which a property of the bankrupt exists, to command seconding an

official to put the seals on this property.

3- If it transpires to the bankruptcy judge the possibility of undertaking the

inventory of the property of the bankrupt in one day, immediately without

need for putting this property under seal.

4- A report shall be drawn up under seal or on the inventory to be signed by

the person performing it, and the report shall be handed to the bankruptcy

judge.

Article 634: No seals shall be put on the clothes and necessary movables of

the bankrupt and his dependants. The bankruptcy judge shall define these

objects and deliver them by means of a list to be signed by each of the

bankruptcy judge and the bankrupt.

Article 635:1-The bankruptcy judge may, of his own or upon the request of

the bankruptcy trustee, command setting the seals on, or removing them

from the following objects.

A. Commercial books and registers.

B. Commercial papers and other papers payable soon, or those near

maturity, or which need taking proceedings to maintain the rights,

established therein.

C. Money necessary for spending on the bankruptcy urgent matters.

D. Objects fast perishable or those exposed to decrease in value or requiring

exorbitant expenses for their maintenance and preservation.

E.Things necessary for operation of the store if it is decided to continue on

work.

2- An inventory shall take place concerning the object mentioned in the

previous clause in the re, the bankruptcy judge or his delegated assignee to

handle this issue, and the inventory shall be delivered to the bankruptcy

trustee in a list to be signed thereby.

Article 636:1- The bankruptcy judge, upon the request of the bankruptcy

trustee, shall command removing the gals to begin making an inventory of

the bankrupt’s property and funds.

2- Removing the seals and the inventory shall begin within thirty days from

the date of issuing the bankruptcy declaration ruling.

Article 637:1- The inventory shall take place in the presence of the

bankruptcy judge or one of his delegates therefor, the bankruptcy trustee and

the court’s clerk. The bankrupt shall be notified thereof and he may attend

the inventory.

2- The inventory list shall be drawn up in two copies and signed by the

bankruptcy judge or the one he delegates therefor, the bankruptcy trustee

and the clerk of the court. One of the copies shall be deposited with the

clerks office of the court and the remaining copy shall be kept with the

bankruptcy trustee.

3- In the statement shall be mentioned the property on which no seals were

put, or from which the seals were removed.

4- An expert may be resorted to in carrying out the inventory and assessing

the property.

Article 638: If the bankruptcy is declared after the trader’s decease, and no

inventory statement was drawn up on the occasion of his death, or if he dies

after declaration of his bankruptcy and before beginning to draw up the

inventory list or before completing it, the inventory list shall be drawn up

forthwith or continued to. be drawn up in the manner prescribed in the

previous article, in the presence of the successors of the bankrupt or after

notifying them to attend.

Article 639:The bankruptcy trustee shall, after the inventory, receive the

bankrupt’s property, books and papers, and confirm that by singing the end

of the inventory list accordingly.

Article 640:1-The commercial books shall not be handed to the bankruptcy

trustee except after the bankruptcy judge closes the books.

2-The bankrupt shall be called to attend the session of closing the

commercial books. If he does not attend, he shall be called once more to

attend within three days from the date of notification, otherwise the books

shall be closed in his absence.

3-The bankrupt shall not deputize another person to attend the books closing

session, except for reasons to be accepted by the bankruptcy judge.

Article 641:1- If the bankrupt has not submit the balance sheet account, the

bankruptcy trustee shall draw it up and deposit it with the clerks office of the

court.

2- The bankruptcy trustee shall receive the correspondence received in the

name of the bankrupt, which concern his works, and he may open and keep

it. The bankrupt may also review them.

Article 642:1-The bankruptcy trustee shall perform all works necessary to

maintain rights of the bankrupt with third parties, and shall claim and secure

receiving these rights.

2- He shall record the bankrupt’s in kind rights on his debtors’ real- ties, if

the bankrupt has not recorded them.

Article 643:1-The property of the bankruptcy shall not be sold during the

preliminary proceedings period. However, the bankruptcy judge may, upon

the request of its trustee, permit selling the easily perishable objects, or due

to a fast drop in their value, or those requiring exorbitant expenses for their

maintenance. He may also permit selling the bankruptcy property if the sale

is necessary to obtain money for spending on its affairs, or the sale will

realize positive benefit to the creditors or the bankrupt. No permission for

sale shall be given in the taller case except after notifying the bankrupt of the

sale and hearing his statements.

2- The movable property shall be sold in the manner to be specified by the

bankruptcy judge. But, the sale of realities shall take place according to the

provisions prescribed in the Civil and Commercial Procedure code

concerning the sale of the bankrupt’s realties.

3- The decision of the bankruptcy judge for the sale of the bankrupt’s

property may be challenged in court, during the period of preliminary

proceedings.

Article 644:1- The bankruptcy judge, after consulting with the controller,

and hearing the bankrupt’s statement or notifying him, may permit the

bankruptcy trustee to arrange a composition or accept arbitration in each

litigation connected with the bankruptcy, even if it is connected with real

rights or prosecutions.

2- If the amount of the dispute is undefined or it exceeds five thousand

Egyptian pounds, the composition or acceptance of arbitration shall not be

valid except after ratifying its conditions by the bankruptcy judge, and

calling the bankrupt to attend the ratification and the bankruptcy judge hears

his statements if he attends. His objection shall not have any effect.

Challenging the bankruptcy judge’s decision shall be in court if the decision

is issued refusing the ratification of the composition or arbitration

conditions.

3- The bankruptcy trustee shall not waive the rights of the bankrupt, nor

acknowledgement a third party’s right thereon except according to the

conditions prescribed in this article.

Article 645: 1- The bankruptcy judge, upon the request of its trustee or the

bankrupt, and upon consulting the controller, may permit continuing the

operation of the trading store if it is necessary for the genera! good, or in the

interest of the bankrupt or the creditors.

2- The bankrupt judge, upon the proposal of its trustee, shall appoint and

determine the salary of the person who will assume the management of the

trading store. The bankrupt may be appointed for management, and the pay

he will receive shall be considered a substitute to the allowance.

3- The bankruptcy trustee shall supervise the person to be appointed for

management. He shall submit a monthly report on the progress of trade to

the bankruptcy judge.

4- The bankruptcy and the bankruptcy trustee may challenge in court the

bankruptcy judge’s decision refusing to permit the sustained operation of the

trading store.

Article 646: In case of the bankrupt’s decease, his successors shall act for

him in the bankruptcy proceedings. They shall have the right to delegate one

of them to represent them in these steps. If they do not reach agreement on

that, the bankruptcy judge may, upon the request of its trustee, delegate

someone to represent them, and the judge may, at any time, isolate the

delegated representative of the successors and appoint another.

Article 647: 1- The amounts collected by the bankruptcy trustee for the

account of the bankruptcy shall be deposited with the treasury of the court,

or a bank to be appointed by the bankruptcy judge, on the day they are

collected, or at most on the next work day to that day.

The bankruptcy trustee shall pay a compensation to be determined by the

bankruptcy judge if he delays depositing the collected amounts.

He shall submit to the bankruptcy judge a statement of the said amounts

within five days from the date they are deposited.

2- These amounts or others that are deposited by third parties for the account

the bankruptcy shall not be withdrawn except by order from the bankruptcy

judge.

Article 648: 1- The bankruptcy judge may, in case of necessity, and after

consulting the controller order that distributions be made to the creditors

whose debts are verified, according to a list to be prepared by the trustee and

annotated by the bankruptcy judge to proceed with the distribution.

2- The bankrupt and all interested party may challenge, in court, the

bankruptcy judge’s decision to proceed with distributions to the creditors.

Article 649: 1- The bankruptcy trustee shall submit to the bankruptcy judge,

within thirty days from the date he is notified of his appointment, a report on

the bankruptcy causes, and the obvious status and conditions of the

bankruptcy. The bankruptcy judge may appoint another period for

submission of this report. He shall refer the report together with his remarks

to the Public Prosecution.

2- The bankruptcy trustee shall submit reports to the bankruptcy judge on

the condition of the bankruptcy at periodical dates to be determined by the

judge,

Article 650: 1- All creditors, even if their debts are accompanied by special

security or confirmed by final court judgment, shall deliver to the

bankruptcy trustee, one month after issuing the bankruptcy declaration

ruling, the documents of their debts accompanied with a statement of these

debts and guarantee deposits if any, and their amount evaluated in the

national currency, on the basis of the announced rates of exchange with the

Central Bank Of Egypt (selling, closing, transfers, or currency notes), if

there are not exchange rates on the day of issuing the bankruptcy declaration

ruling. The bankruptcy trustee shall issue a acknowledgement receipt for the

delivery of the statement and the debts documents to him.

2- The statement and the documents may be sent by special registered

3- The statement shall comprise appointing an elected domicile in the court

circuit for the bankruptcy trustee.

4- The bankruptcy trustee shall return the documents to the creditors after

closing down the bankruptcy. He shall be responsible to keep them for a

period of one year from the termination date of the bankruptcy.

Article 651: 1- If all the creditors whose names are recorded in the balance

sheet account do not submit the documents of their debts during the ten days

following publication of the bankruptcy declaration ruling in the papers, the

bankruptcy trustee shall immediately publish in the daily newspapers

wherein the bankruptcy ruling was published, a call to the creditors to

submit their documents accompanied by the statement referred tom the

previous article.

2- The creditors shall submit the documents of their debts accompanied by

the statement within ten days from the date of publication in the papers. This

period shall be forty days with regard to the creditors living abroad. No

period for the distance shall be added to either of these two periods’ .

Article 652: 1- The bankruptcy trustee shall verify the debts with the

assistance of the controller and the attendance of the bankrupt or after

notifying him to attend.

2- If the bankruptcy trustee, the controller, or the bankrupt contest the

validity of one of the debts, its amount, or its guarantees, the bankruptcy

trustee shall notify forthwith to the creditor. The creditor shall submit

written or verbal explanations within ten days from the date receiving the

notification.

3- The executable debts, which are due to the Government because of the

dues and taxes of all kinds, shall not be subject to investigation proceedings.

Article 653: 1- The bankruptcy trustee shall deposit with the clerks office of

the court, after completing the verification, a list comprising a statement of

its documents, the reasons of contesting them if any, and his view

concerning their acceptance or refusal. He shall also deposit a list of the

names of creditors who claim having special deposit guarantees on the

property and funds of the bankrupt, indicating the amount of their debts, the

type of their guarantee deposits, and the property on which they are

prescribed.

2- Depositing this statement shall take place within at most sixty days from

the date of publishing the bankruptcy declaration ruling. The period may,

whenever necessary, be extended by a decision from the judge of the

bankruptcy.

3- Within six days from the date of depositing the statement, the bankruptcy

trustee shall publish in a daily newspaper an affirmation of having obtained

the said statement and list, and shall send to the bankrupt and each debtor

during that period a copy of the list and statement, indicating the amounts he

considers to accept of each debt.

4- Interested parties may each review the list and statement deposited with

the clerks office of the court.

Article 654: The bankrupt and each creditor whose name is mentioned in

the list of debts may contest the debts indicated therein, within ten days from

the date of publishing in the newspaper about depositing the said statement.

The litigation shall be delivered to the clerks office of the court or sent to it

by registered mail with acknowledgement of receipt, or by cable, telex, or

fax. The clerks office shall submit it forthwith to the bankruptcy judge. No

time for distance shall be added to that period.

Article 655: 1- After the lapse of the time prescribed in the previous article,

the bankruptcy judge shall set a final list of uncontested debts, and the

bankruptcy trustee shall mark on the statement accompanying the documents

of these debts an annotation affirming its acceptance, and indicating the

amount accepted of each debt thereof.

2- The bankruptcy judge may consider the debt as contested, even if no

contestation is submitted in respect thereof.

3-The bankruptcy judge shall issue a final decision in the contested debts

within thirty days from the expiry date of the contestation period. The clerks

office shall noti& the interested parties of the session date at least three days

before holding it.

Article 656: 1- The decision issued by the bankruptcy judge concerning the

acceptance or refusal of the debt may be challenged in court, within ten days

from the date of issuing the decision. If the debt amount exceeds the

summary court’s final quota. The challenge shall not result in staying the

bankruptcy proceedings unless the court orders staying them.

2- The court, before deciding the challenge may order accepting the debt

temporarily for an amount estimated thereby.

3- The court’s ruling for rejection of the debt completely or accepting it shall

not be contested.

If challenging the debt is related to its deposit guarantees, it shall be

accepted temporarily in its quality of ordinary debt’.

5- The creditor whose debt was unaccepted finally or temporarily shall not

participate in the bankruptcy proceedings.

Article 657: 1- The creditors who failed to submit their request within the

dates prescribed for the current distributions shall not participate. However,

they may contest before the bankruptcy judge pending the end of money

distribution. They shall bear the litigation expenses.

2- The litigation shall not result in staying the distributions ordered by the

bankruptcy judge. However, the said creditors may participate in the new

distributions with the amount estimated temporarily by the bankruptcy

judge. Their shares shall be kept for them pending final decision in the

litigation.

3- If their debts are established thereafter, they shall not claim shares in the

distributions already made. They may however take from the remaining

amounts without distributing the shares of their debts that would have

devolved to them if they had participated in the previous distributions.

3- Closing The Bankruptcy For

Inadequacy Of Property And Funds

Article 658: 1- If the bankruptcy works are stopped for inadequacy of

property and funds before ratifying the composition or the establishment of

the state of the Union, the bankruptcy judge may, on his own, or upon the

report of the bankruptcy trustee, order its closure.

2- The bankruptcy closure decision for inadequacy of its property and funds

shall result in restituting to each creditor the right to take proceedings and

assume the individual cases, against the bankrupt.

3- If the creditor’s debt has been finally verified in the bankruptcy, he may

levy execution on the bankrupt’s property based on a certificate of his debt

amount from the bankruptcy judge. This certificate shall be considered as

good as final ruling concerning this execution.

Article 659: 1- The bankrupt and interested parties may each request at all

time the bankruptcy judge to cancel the bankruptcy closure writ due to the

inadequacy of its property, if they establish the existence of adequate

property and funds to face the bankruptcy work expenses, or if they deliver

to the bankruptcy trustee and adequate amount therefor.

2. The bankruptcy judge may, on his own or upon the request of the

bankruptcy trustee, order reopening the bankruptcy and continuing its

proceedings.

3- In all cases the expenses of the proceedings that were fulfilled according

to the two previous clauses shall be paid by given priority.

Chapter – 5 –

End Of Bankruptcy

1-End Of Bankruptcy For Disappearance Of The Interests

Of The Group of Creditors .

Article 660 : The bankruptcy judge, after setting the final statement of the

depts. Referred to in article 655 of this law, may at all time , upon the

request of the bankrupt, order terminating the bankruptcy if he establishes

that he has settled all verified debts of the creditors in the bankruptcy , or

that he deposited with the clerks office of the court , or with the bankruptcy

trustee the amounts necessary for settling these debts comprising the

original debt, the interests, and the expenses.

Article 661:1-The bankruptcy judge may not order terminating it for

disappearance of the interest of the group of creditors, except after reviewing

a report from the bankruptcy trustee in which he shows that one of the two

conditions referred to in the previous article has been realized.

2-The bankruptcy shall end upon issuing a decision from the bankruptcy

judge terminating it for disappearance of the interest of the group of

interested creditors, and the bankrupt shall restitute all his rights.

2- Judicial composition

Article 662: 1- The bankruptcy judge, in case the debtor requests a

composition, shall order the clerks office of the court to call the creditors

whose debts were finally or temporarily accepted, to attend the deliberations

in the composition.

2- This invitation, in case no litigation arises for the debts, shall be directed

within the five days next to setting the final statement of the debts prescribed

in article 655 of this law, and in case any litigation arises, the invitation shall

be directed within the fifteen days that follow the expiry of the period for

contesting the last decision of the bankruptcy judge concerning acceptance

or refusal of the debts.

3- Within the time prescribed in the previous clause, The bankruptcy trustee

shall publish the invitation to attend the composition deliberations in the

daily newspaper wherein was published the bankruptcy declaration ruling.

Article 663: 1-The composition assembly shall convene headed by the

bankruptcy judge at the place and time determined thereby.

2-The creditors shall attend the assembly personally or represented in

writing by mandated proxies, for the composition.

3-The bankrupt shall be invited to attend the assembly. He shall not delegate

another to deputize for him except for serious reasons acceptable to the

bankruptcy judge.

Article 664: 1-The bankruptcy trustee shall submit a report to the

composition assembly, on the status of the bankruptcy and the proceedings

taken in respect thereof, as well as the proposals of the bankrupt in the

composition and the view of the bankruptcy trustee in these proposals.

2- The report of the bankruptcy trustee shall be read out in the composition

assembly, and shall be delivered signed thereby to the bankruptcy judge. The

statements of the bankrupt shall be heard, if he attends, and the bankruptcy

judge shall draw up a report on the decisions of the assembly .

Article 665: 1-The composition shall not take place except with the approval

of the majority of creditors whose debts were finally or temporarily

accepted, providing they shall be holders of two thirds of the value of these

debts. In these two majorities, the creditors who did not participate in voting

shall not be counted, nor shall their debts be counted.

2- No voting on composition shall take place by correspondence.

Article 666: 1-The bankrupt’s spouse and relatives up to the second degree

shall not participate in the composition deliberations, nor shall they vote on

its conditions.

2- If one of those creditors referred to in the previous article assigns his debt

to a third party after pronouncement of the bankruptcy declaration ruling the

assignee may not then participate in the composition deliberation or vote

thereon.

Article 667: 1-Creditors, with in kind security deposits as prescribed on the

funds and property of the bankrupt, may not participate in voting on

composition, supported by their debts, which are guaranteed by the said

security deposits, unless they renounce these security deposits in advance.

Such renouncement may be restricted to part of the security deposit

providing it shall not be less than the equivalent of one third of the debt. The

renunciation shall be mentioned in the minutes of the session.

2- If one of the creditors mentioned in the previous clauses participates in

voting for composition without indicating that he assigned his security

deposit wholly or partially, he shall be considered as assigning the whole

deposit guarantee.

3- In all cases, Assigning the security deposit shall not be final unless the

composition has been arranged and the court ratifies it.

4 If the composition is annulled, the security deposit included in the

assignment shall be restituted.

Article 668: 1-The composition report shall be signed in the session that

witnessed voting on it, otherwise it shall be null and void.

2- If one of either majorities as prescribed in article 665 of this law, the

deliberation shall be postponed only once for a period of ten days.

3- The creditors who attended the first meeting or were represented in it and

signed the composition report may not attend the second meeting. In this

case, their approval of the composition as given during the first meeting

shall remain existing and valid in the second meeting, unless they have

attended this meeting and reserved or modified their previous approval, or

the debtor has introduced a substantial modification to his proposals

concerning composition during the period between the two meetings.

Article 669: No composition shall be held with a bankrupt against whom a

court ruling was issued inflicting a penalty to bankruptcy by fraud. If

investigation begins with the bankrupt in a crime of bankruptcy by fraud,

consideration of the composition shall be postponed.

Article 670: A court judgment inflicting the penalty to bankruptcy with

omission shall not prevent reaching a composition therewith. If investigation

begins with the bankrupt, in a crime of bankruptcy with omission, the

creditors may consider reaching a composition with him or postpone

considering it.

Article 671: 1-The composition may comprise granting the debtor a time for

settling the debts. It may also comprise clearing him of part of the debt

obligation.

2-The composition may be concluded providing settlement is fulfilled if the

debtor grows wealthy within a period to be determined in the composition

contract, providing this period shall not exceed five years from the date of

ratifying the composition. The debtor shall not be considered as growing

wealthy unless the value of his assets has exceeded his debts by the

equivalent of at least ten percent .

3-The creditors shall have the choice of stipulating the introduction of one or

more warrantors to guarantee implementing the composition conditions.

Article 672:1- Every creditor having the right of participating in concluding

the composition may advise the bankruptcy judge in writing of the objection

he has to the composition and his reasons therefor, within ten days from the

date of signing the composition report.

2-The bankruptcy judge shall, within three days from the expiry date of the

period prescribed in the previous clause, send the composition report to the

court which declared him bankrupt, to ratify the corn position, along with a

report from the judge on the status of the bankruptcy, and his view on the

composition conditions, in addition to an indication of the objections made

to the composition and reasons thereof.

Article 673:1- The clerks office of the court shall notify the bankrupt and the

creditors who presented objections to the composition, of the session

scheduled date to look into these objections and request for ratification of

the composition.

2-The court shall pronounce a final decision in the objections and the request

for ratification of the composition, in one Court ruling which shall be final

whether accepting to ratify the composition or refusing its ratification.

3-The court may refuse ratifying the composition, even if no objection has

been submitted in respect thereof, if it finds reasons related to general

interest, or if the interest of the creditors justifies the refusal.

4-The court shall appoint in its ruling for ratification on the composition, one

or more controllers to supervise the implementation of the composition

conditions.

5-If the court refuses the objection made to the composition, it may

pronounce a judgment inflicting on the objector a fine of not less than one

thousand pounds and not exceeding five thousand pounds, if it transpires he

premeditated delaying the conclusion of the composition.

Article 674: The composition conditions shall apply to the creditors of

whom the group of creditors is formed, even though they have not

participated in the composition proceedings, or participated and did not

agree to it.

Article 675:1-The court ruling issued ratifying the composition shall be

declared in the same manner the bankruptcy ruling is declared. The

summary to he published in the papers shall comprise the name of the

debtor, his domicile, his entry number in the commercial register , the date

of the composition ratification ruling and a summary of the most important

conditions of the composition .

2-The bankruptcy trustee shall, within ten days from the date of issuing the

ruling concerning the ratification of the composition, record its summary in

the name of the composition controller, in his quality of proxy for the

creditors in each real estate registration office within the circuit of which lies

the realty of the bankrupt. This entry shall result in establishing a mortgage

on the said realties to guarantee the rights of the creditors to whom the

composition shall apply, unless otherwise agreed upon in the composition.

The controller shall delete the mortgage after implementing the conditions of

the composition.

3-The bankruptcy trustee shall, within the duration mentioned in the

previous clause, record a summary of the ruling issued for the ratification of

the composition, in the name of the controller, in his quality of proxy for the

creditors at the commercial register office within the circuit of which the

trading store of the bankrupt lies, and also in each office for the said register

within the circuit of which the bankrupt has a branch, office, or agency. This

registration shall result in establishing a mortgage on the trade store to

guarantee the rights of the creditors to whom shall apply the composition,

unless otherwise agreed upon in the composition. The controller shall delete

the mortgage after implementing the composition conditions. The provisions

concerning the trade store mortgage shall apply in respect of this mortgage.

Article 676:1- With the exception of abatement of the rights referred to in

article 588 of this law, all bankruptcy effects shall disappear with the issue

of the ruling concerning the ratification of the composition.

2-The bankruptcy trustee shall submit to the bankrupt a final account and

this account shall be discussed in the presence of the bankruptcy judge.

3-The assignment of the bankruptcy trustee shall terminate, and the

bankrupt shall receive his property, funds, books, and papers from him, by

the virtue of a receipt. The bankruptcy trustee shall not be accountable for

these objects if the bankrupt does not receive them within one year from the

date of approval of the closing account.

4-The bankruptcy judge shall draw up a report on all the foregoing, and if

litigation arises, he shall decided it.

Article 677:1-The composition shall be invalidated f after its ratification , a

court ruling passed indicatin the bankrupt in one of the bankrubtcy with

fraud crimes .

2- A composition shall as well be invalidated if; after its ratification, fraud is

established to have existed by hiding the assets of the bankrupt or

exaggeration of his debt In this case, the request for invalidating the

composition shall be submitted within six months from the day the fraud is

detected, otherwise the request shall be unacceptable. In all cases, the

request for invalidating the composition shall not be acceptable if submitted

after the lapse of two years from the date of ratifying the composition.

3- Nullification of the composition shall result in clearing the obligation of

the warrantor who guarantees the implementation of the composition

conditions.

4- The court that passed the bankruptcy declaration ruling shall be concerned

with examining the action for nullification of the composition.

Article 678: If an investigation is initiated with the bankrupt in a fraudulent

bankruptcy crime after ratification of the composition, or if the criminal

action is brought against him in this crime after ratification of the

composition, the court that passed the bankruptcy declaration ruling may,

upon the request of the Public Prosecution or each interested party, order the

adoption of arrangements necessary for maintenance of the debtor’s property

and Rinds. These arrangements shall be annulled by rule of the law, if it is

decided that an investigation is labl filed record, or determined that there is

no reason for lodging the case or passing a judgment acquitting the bankrupt.

Article 679:1-If the bankrupt Pails to implement the composition conditions,

a request for its rescission may be submitted to the court that issued the

bankruptcy declaration rule.

2- The rescission of composition shall not result in clearing the obligation of

the warrantor who guarantees the implementation of its conditions. This

warrantor shall be charged to attend the session in which the request for

rescinding the composition will be examined.

Article 680:1-In the ruling passed for invalidating or rescinding the

composition, the court shall appoint a bankruptcy judge and trustee for it.

The court may also order the seals to be placed on the property and funds of

the bankrupt.

2- The bankrupt trustee, within five days from the date of issuing the ruling

that invalidates or rescinds the composition, shall publish a summary of that

ruling in a daily newspaper to be defind by the bankruptcy judge .

3-The bankruptcy trustee, in the presence of the judge or his assigned

delegate, shall effect a supplementary inventory of the bankrupt’s property

and funds, and works out an additional balance sheet statement.

4-The bankruptcy trustee shall invite all the new creditors to submit their

debt documents to verify them according to proceedings of verification

debts.

5-The new debts shall be verified immediately without refunding the debts

that were already accepted. However, the debts that were paid in full shall be

discarded, and the debts that were paid partially shall be reduced.

Article 681:1-Disposals made by the debtor after ratification of the

composition and before nullifying or rescinding shall apply vis-à-vis the

creditors. The creditors may not request these disposals to be non-executed

toward them, except according to the provisions prescribed in article 237 of

the Civil Code.

2-The action for non-execution of disposals, as prescribed in the previous

clause, shall abate with the lapse of two years from the date of nullifying or

rescinding the composition.

Article 682:1-After nullifying or rescinding the composition, the debts of the

creditors shall be restituted in full to them, with regard to the bankrupt alone.

2-These creditors shall participate within the group of creditors, with their

full original debts if they have not received anything yet of the amounts

determined for them in the composition, otherwise their original debts shall

be reduced by the measure they have received from the said amounts.

3-The provisions prescribed in the two previous clauses shall apply in case

of the debtor’s bankruptcy once again declared before a ruling is passed

nullifying or rescinding the composition.

3- Composition with Dereliction.

Article 683:I-A composition may be held providing the debtor shall give up

all or part of his property for sale and for distributing the relevant price to

the cridotors .

2- the provisions on judicial composition shall be followed in connection

with the present composition terms , effects,nullification,and rescission.

However the debtor shall remain prohibited from disposing of and managing

his direct property.

3-The debtor’s derelict property shall be sold and its price shall be

distributed according to the rules prescribed for selling and distributing the

property of the bankrupt in case of the Union.

4-If the price resulting from selling the debtor’s derelict property exceeds the

debts claimed from him, the excess amount shall be refunded to him.

4-Union Of Creditors

Article 684:Creditors shall be in a state of ‘Union’ by the rule of law in the

following cases:

A. If the debtor does not request a composition.

B. If the debtor requests a composition and the creditors refuse it or the court

refuses to ratify it.

C. If the debtor obtains the composition then it is nullified.

Article 685:1-The bankruptcy judge shall call the creditors, soon after the

establishment of the state of ‘Union’, to deliberate the bankruptcy affairs and

look into keeping or changing the bankruptcy trustee. In this stage he shall

be called the Union Trustee. The creditors who have in kind security

deposits prescribed on the bankrupt’s property may participate in these

deliberations and vote without consequent abatement of their security

deposits.

2- If the majority of attending creditors decide changing the bankruptcy

trustee, the bankruptcy judge shall appoint another trustee forthwith.

3- The former bankruptcy trustee shall submit to the Union trustee within the

date specified by the bankruptcy judge and in his presence, an account on his

management, and shall notify the debtor of the date the account will be

submitted.

Article 686:1-The creditors’ view shall be taken during the meeting

prescribed in the previous clause, in the subject of determining a subvention

from the bankruptcy property for the bankrupt or his dependants..

2-if the majority of attending creditors decide determining the subvention

for the bankrupt his dependants , the bankruptcy judge after consulting the

union trustee and the controller , shall determine the amount of the

subvention .

3-The Union trustees, exclusively, may challenge in court the bankruptcy

judge’s decision concerning the determination of the subvention amount. En

this case, half the subvention shall be paid to him pending final decision in

the contest.

Article 681:1-The Union trustee shall not continue in the debtor’s trade,

even if he is authorized beforehand to do that, except after obtaining a

mandate to be issued with the majority of three fourths of the creditors, in

number and in value of debts. The mandate shall indicate its duration, the

power of the Union trustee, and the amounts he may keep on his hands to

operate the trade.

2-The mandate to continue in the trade may not be implemented except

following its ratification by the bankruptcy judge.

3-If continuing in the trade results in obligations exceeding the Union’s

property, the creditors who agreed to continue in the trade shall be

accountable with their own property, but not jointly for the increase,

providing they shall result from works lying within the limits of the mandate

issued by them. The responsibility of each creditor shall be in proportion of

his respective debt.

Article 688:1-The Union trustee may sell the movables and trading store of

the bankrupt and fulfilling any rights due to him, but the sale of the

bankrupt’s realties shall only take place with permission from the

bankruptcy judge.

2-If no execution has begun to be levied yet on the realities of the bankrupt

before instituting the state of the Union, the Union trustee solely shall have

the right of execution thereon. I-Ic shall begin the execution within the ten

days following the emergence of the Union status, unless the bankruptcy

judge orders the postponement of execution.

3-The Union trustee may consent to composition and accept the arbitration

in all rights of the bankrupt subject to the provisions prescribed in article 644

of this lawW.

Article 689:1-Selling the movables of the bankrupt shall take place in the

manner defined by the bankruptcy judge.

2- Selling the realties shall be according to the provisions prescribed in the

Civil and Commercial Procedure Code concerning the sale of the bankrupt’s

realty .

3- The Union trustee shall not sell the bankruptcy assets altogether against a

total amount, except after getting permission from the bankruptcy judge.

4- Interested parties may each challenge the decision of the bankruptcy

judge regarding the determination of the method of selling the movables of

the bankrupt or the permission to sell his property altogether against a global

amount. This challenge shall result in staying the execution of the decision,

unless otherwise ordered by the court.

Article 690:1- The Union trustee shall deposit the amounts resulting from

the sale of the bankrupt’s property in the treasury of the court or with a bank

to be defined by the bankruptcy judge, at most on the work day following

the collection of the money.

2- The Union trustee shall submit to the bankruptcy judge a monthly

statement on the status of liquidation and the total of deposited amounts.

These amounts shall not be with drawn except by the order of the

bankruptcy judge or 1w a check to be signed by the judge and the Union

trustees.

Article 691:1- The dues and management expenses of the bankruptcy, the

debts of the group of creditors, the subventions determined for the bankrupt

and his dependants, and the amounts due to Lien creditors shall be deducted

from the amounts realized from selling the bankrupt’s property. The rest

shall be distributed among the creditors in proportion of their verified debts.

2- The proceeds of disputed debts and the temporarily accepted debts shall

be set aside and kept pending on the decision in their respect.

Article 692:The bankruptcy judge shall order distributions to be carried out

among the creditors, and shall determine the amount of money to be

distributed accordingly. The union trustee shall notify the creditors of the

intended distribution. The bankruptcy judge may, in case of necessity, order

the distribution decision to be published in a daily newspaper defined by

him.

Article 693:1-The Union trustee may not settle the creditor’s share in the

distributions unless the creditor submits the debt bond duly annotated as

verified and accepted. The debt bond shall be marked with annotations of the

settled amounts.

2- if it is practically difficult for the creditor to submit the document of debt,

be bankruptcy judge may allow the payment of his debt after ascertaining its

acceptance .

3-in all cases, the creditor shall give a quitclaim on the distribution

statement.

Article 694: If a period of six months lapses from the date of establishing the

status of Union, without fulfilling the liquidation, the Union trustee shall

submit to the bankruptcy judge a report on the status of liquidation and the

causes for delaying its fulfillment. The judge shall send this report to the

creditors along with calling them to convene in order to discuss the report.

This process shall take place as well whenever six months lapse without the

Union trustee accomplishing the liquidation tasks.

Article 695:1-The Union trustee, after completing the liquidation works,

shall submit a final account to the bankruptcy judge. The bankruptcy judge

shall send this account to the creditors along with inviting them to the

meeting to discuss this account. The bankrupt shall be notified of that

meeting, and he is authorized to attend it.

2- The Union shall be dissolved and the bankruptcy shall be considered

terminated by rule of law after ratification of the account referred to in the

previous clause.

3- The Union trustees shall be responsible for a period of one year from

termination date of the bankruptcy, for the books, documents, and papers

delivered to him.

Article 696: Upon terminating the status of Union, the right of levying

execution on the debtor shall be restituted to the creditor to collect the

remainder of his debt Accepting the debt in the bankruptcy shall be

tantamount to a peremptory regarding this execution.

Chapter —6

Curtailed Proceedings

Article 697:tf it transpired after the inventorying of the property of the

bankrupt that its value does not exceed fifty thousand Egyptian pounds, the

bankruptcy judge may, on his own, or upon the request of the bankruptcy

trustee or one of the creditors, order proceeding with the bankruptcy

procedures according to the bankruptcy provisions prescribed in this Part,

modified as follows:

A.The dates prescribed in the first clause of article 649 and article 651, as

well as the second clause of article 652, the second clause of article 653,

article 654, and the third clause of article 655 of this law shall be reduced to

the half .

B. All decision of the bankruptcy judge shall be incontestable.

C. No controller for the bankruptcy shall be appointed.

D. In case the debts are disputed if they are verified, the creditors shall be

called to meet for deliberation in composition, within five days from the date

of issuing the decision of the dispute.

E. Composition shall become enforceable upon approving it at the meeting

of creditors. The bankruptcy judge shall ratify it during that meeting, and no

objection thereto shall be acceptable.

F. The bankruptcy trustee shall not be replaced in case of establishing the

status of Union.

G. Only one distribution among the creditors shall be carried out after

complete sale of the bankruptcy property.

Chapter —7

Bankruptcy of Companies.

Article 698: The provisions prescribed in this Part, and the following rules

shall apply to the bankruptcy of companies.

Article 699:1-With the exception of joint ventures, each company assuming

one of the forms prescribed in the Companies Law shall be considered in a

state of bankruptcy if it discontinues paying its debt following confusion of

its financial affairs. its bankruptcy shall be declared by virtue of a court

ruling to be issued therefor.

2- The Company may be declared bankrupt even if it is in the stage of

liquidation.

Article7OO: 1-The legal representative of the company may not request

declaring its bankruptcy except after obtaining permission for it from the

majority of the partners or the General Assembly according to each case.

2- The initiatory pleading referred to in article 553 of this law shall be

submitted to the clerks office of the court within the circuit of which the

company’s head office is seated. if the head office is located outside Egypt,

the initiatory pleading shall be submitted to the clerks office of the court

within the circuit of which the local administration office of the company’s

is Located.

3- The initiatory pleading shall comprise the names of current joint partners

and those who quit after it discontinued the payments, together with an

indication of the domicile of each joint partner, his nationality, the

date/month in which he quit, in the commercial register.

Article 701:1-The company’s creditor may request declaring it bankrupt,

even if he is partner in it. Non-creditor partners may not, in their individual

quality, request declaring the company’s bankruptcy.

2- If the creditor requests declaring the company bankrupt, all joint partners

shall be litigated against.

Article 702:The court may, motu proprio/on its own, or upon the request of

the company, postpone looking into the declaration of its bankruptcy to prop

its financial status for a period not exceeding three months, or if this so

necessary for the good of national economy. The court may order taking

whatever measures it views appropriate to preserve the company’s assets.

Article 703:1- If the company is declared bankrupt, all joint partners thereof

shall be declared bankrupt. This shall comprise declaring the bankruptcy of

the joint partner who quit after the company discontinued its payments, if the

request to declare the bankruptcy of the company is submitted before the

lapse of one year from the date the partner in the commercial register quit

the company.

2- The company shall pass a ruling in which it pronounces the company’s

declared bankruptcy together with the declaration of the bankruptcy of the

joint partners even though it may not be concerned with declaring the

bankruptcy of these partners.

3- The court shall appoint for the bankruptcy of the company and the

bankruptcies of the joint partners one judge and one trustee or more.

However, each bankruptcy shall be independent from the others in terms of

its assets and liabilities, and its management, the verification of its debts, as

well as its termination.

Article 704:1-If a bankruptcy petition is submitted for the company, the

court may also pass a judgment in bankruptcy for each person who under

cover of this company carries out commercial operations for his own

account, and disposes of the company’s fund and property as if they were his

own funds.

2- If it transpires that the company’s assets are inadequate to settle at least

20% of its debts, the court, upon the request of the bankruptcy judge, may

decree that all or some of the board members or directors, jointly among

themselves or severally, shall pay all or part of the company’s debt, unless

they establish that they exerted in running the company ’s the company’s

affairs, some the discretion the caution and careful person does .

3- The court, motu proprio or upon the demand of the bankruptcy judge,

may pass a ruling decreeing the forfeiture of the rights prescribed in article

588 of this law, of the company’s board members or directors who have

committed serious errors leading to confusion of the company’s works and

discontinuation of its payments.

Article 705:The Legal representative of the company which is declared

bankrupt shall represent it in all matter for which the law requires taking the

bankrupt’s view or his attendance. He shall attend before the bankruptcy

judge or its trustee whenever he is asked, and to give any required

information or explanations.

Article 706:The bankruptcy trustee, after getting permission from the

bankruptcy judge, may require the partners to pay the rest of their shares in

the capital though its payment has not matured yet. The bankruptcy judge

may order that this requirement shall be restricted to the measure necessary

for settlement of the company’s debts.

Article 707:The loan bond as issued by the company shall not be subject to

procedures of verif4ng debts. These bonds shall be accepted with their

nominal value after deducting the portion the company had paid therefor. If

the payment of a bonus on settlement is stipulated, the bond shall be

accepted with its nominal value, in addition to the portion maturing of the

bonus until the court ruling on declaring the bankruptcy is passed.

Article 708:1-The composition proposals shall be set with the approval of

the majority of partners, or the General Assembly according to each case.

2- The legal representative of the company shall submit the composition

proposals to the creditors assembly.

Article 709:lf the composition concerns a company that issued loan bonds

for a value exceeding one third of its total debts, it may not be granted the

composition unless al the composition terms and the conditions are approved

by the general assembly of the group of these bondholders. Calling the

creditors to the meeting for deliberation in composition

2-if a composition is reached with the company, and the bankruptcies of the

joint partners ended with the institution of the Union, the company shall

continue to exist unless the subject involved in composition issues is for the

company to forsake all the property.

3- If the company bankruptcy and the bankruptcies of the partners came to

an end through composition, each composition shall be considered separate

from other parties. Its terms and conditions shall not apply to the creditors of

the related bankruptcy.

Article 711:The company whose bankruptcy ends with the Union shall not

be dissolved. However, this company may be dissolved if it transpires that

the remainder of its assets after liquidating the Union is inadequate to follow

up its works in a useful way.

Chapter —8

Commercial Rehabilitation

Article 712:With the exception of the case of fraudulent bankruptcy, all

rights abated from the bankrupt according to article 588 of this law shall be

restituted by virtue of the law, following the lapse of three years from the

date of terminating the bankruptcy.

Article 713: A court ruling shall be pronounced rehabilitating the bankrupt

even though the time prescribed in the previous article has not expired yet, if

he settles all his debts, comprising the original amount, the expenses, and the

interests, within a period not exceeding two years .If the bankrupt is a joint

partner in a company for which a court judgment declaring bankruptcy was

decreed, he shall not be imperatively rehabilitated by discharge in

bankruptcy unless he settles all the company’s debts, comprising the original

debt amounts, the expenses and the interests for a period not exceeding two

years.

Article 714:A court ruling may be pronounced rehabilitating the bankrupt

even though the time prescribed in article 712 of this law has not expired

yet, in the following two cases:

A. If the bankrupt obtains a composition with his creditors and executes its

terms and conditions. This ruling shall apply to the joint partner in a

company for which a court ruling was passed declaring it bankrupt, if this

partner has obtained a particular composition and executed its terms.

B. If that bankrupt establishes that the creditors have cleared all of his depts.

Or they unanimously agreed to rehabilitate him .

Article 715: If one of the creditors refrains from collecting his debt, was

absent, or it was practically difficult to know the whereabouts of his

domicile, the debt may be deposited in the treasury of the court, and the

certificate of that deposit shall stand for the quitclaim regarding the

rehabilitation.

Article 716:1- No discharge in bankruptcy shall be granted to a bankrupt

who was indicted in court, in a crime of bankruptcy with negligence, except

after executing the penalty ruled against him, or the issue of pardon, or its

expiration by prescription.

2- No discharge in bankruptcy shall be granted to a bankrupt was indicted in

court, in one of the fraudulent bankruptcy crimes, except after the lapse of a

period of five years from the date of executing the penalty ruled against him

or the issue of pardon of the crime.

3- In all the cases mentioned in the two previous clauses, no discharge in

bankruptcy shall be granted to the bankrupt except if he has paid all the

debts claimed from him, which constitute the original debt, the expenses,

and the interests for a period not exceeding two years. or ? he has reached a

composition in respect thereof with the creditors.

Article 717:A discharge in bankruptcy shall be granted to the bankrupt after

his death upon the request of one of his successors, according to the

provisions prescribed in the previous article.

Article 718:1- The request for discharge in bankruptcy shall be submitted

accompanied with the documents in support, to the clerk office of the court

that pronounced the decree declaring the bankruptcy.

2- The clerk office of the court shall immediately send a copy of the request

to the Public Prosecution.

3- A summary of the request shall be published in one of the daily

newspapers that are issued or distributed within the circuit of the court, at

the expenses of the debtor. This summary shall comprise the name of the

debtor, the date of issue of the decree in bankruptcy, and the method the

bankruptcy is terminated, along with notifying the creditors to submit their

objections if deemed necessary.

Article 719:The Public Prosecution shall deposit with the clerks office of the

court, within thirty days from receiving a copy of the petition for discharge

in bankruptcy, a report comprising data and information on the kind of the

bankruptcy, and the judgments ruled against the bankrupt in bankruptcy

crimes, or the current trials or investigations related, in this respect .

Article 720All creditor who has not received hi full due rights shall submit

an objection to the petition for discharge in bankruptcy within thirty days

from the date of publishing the petition in the papers. The objection shall be

submitted in the form of a written report to the clerks office of the court

accompanied with the documents in support.

Article 721:The clerks office of the court, following the lapse of the period

prescribed in the previous article, shall notify the creditors who submitted

objections to the petition for discharge from bankruptcy of the date the

session scheduled date for looking into the petition.

Article 722:1-The court shall decide the petition for discharge in bankruptcy,

with a final ruling.

2- If the court ruling is passed refusing the petition, this petition shall not be

submitted afresh except after the lapse of one year from the date of issuing

the court judgment.

Article 723:If, before deciding the petition for discharge in bankruptcy,

investigations were carried out with the bankrupt concerning one of the

bankruptcy crimes, or a criminal prosecution is filed against him in respect

thereof, the Public Prosecution shall notify the court forthwith, and the court

shall stop deciding the petition for discharge in bankruptcy pending on the

end of investigations or the issue of a peremptory judgment in the criminal

prosecution.

Article 724:If a court judgment is passed indicting the debtor in one of the

bankruptcy crimes after a court issuing is passed granting him discharge

from bankruptcy, this judgment shall be considered as null and non-existent.

The debtor may not thereafter obtain a discharge in bankruptcy except by

virtue of the conditions prescribed in article 716 of this law .

Chapter —9

Bankruptcy Composition

Article 725:1- All trader whose bankruptcy could be declared, without

however, having committed a fraud or an error that does not emanate from

an ordinary trader, may submit a petition for bankruptcy composition, in

case his financial works are confused and are thus likely to lead to

discounting his payments.

2- A trader who discontinues honouring his debts, even if he submits a

bankruptcy petition, may request a bankruptcy composition, if the conditions

prescribed in the previous clause are fulfillef thereby and he submits the

bankruptcy petition within the period prescribed in article 553 of

the law.

3- With the exception of joint ventures a bankruptcy composition may be

granted to each company fulfilling the conditions prescribed in the two

previous clauses. However, this composition arrangement may not be

granted to a company in a stage of liquidation.

Article 726:1-The petition for bankruptcy composition shall not be accepted

unless the petitioner has exercised trade continuously during the two years

prior to submitting the petition, and during that period he has fulfilled all

requirements imposed on him by the provisions concerning the commercial

register and commercial books.

2- The company may not submit a petition for bankruptcy composition

except after obtaining permission therefor from the majority of partners, or

the general assembly, according to each case.

Article 727:1- Those to whom the trading store devolves by inheritance or

by legacy may submit a petition for bankruptcy composition if they decide

to continue in the trade, and the trader was of those who could obtain this

composition before his death.

2- The successors or the legatees shall submit their petition for bankruptcy

composition within three months from the date of the death. If the successors

or legatees do not all agree to the petition for composition, the court shall

hear the statements of those opposing the petition for composition, then

decide the dispute according to the good of interested persons.

Article 728:The debtor, during the execution of composition, may not

submit a petition for another bankruptcy composition.

Article 729ilf a petition declaring the bankruptcy of the debtor is submitted

to the court and another petition for bankruptcy composition is also

submitted, the bankruptcy declaration petition may not be decided except

after deciding the petition for composition.

Article 730:The petition for bankruptcy composition shall be submitted to

the clerks office of the Court of First Instance which is concerned with the

declaration of bankruptcies, in which the petitioner he shall indicate the

reasons for disturbance and confusion of works, the composition proposals,

and the execution guarantees. If the petitioner is unable to submit all or some

of this data he shall explain the reasons for that.

Articie73l: The following shall be attached to the petition for bankruptcy

composition :

A. The documents supporting the data and information mentioned therein .

B. certificate from the Commercial Register Office establishing that the

trader has fulfilled the requirements imposed thereon by the provisions

concerning the commercial register, during the two years prior to the petition

for bankruptcy composition.

C. A certificate from the Chamber of Commerce affirming the continuos

exercises of trade during the two years prior to the petition for bankruptcy

composition.

D. A copy of the balance sheet account and the profit and the loss account

for two years prior to the petition for bankruptcy composition.

E. A global statement of personal expenditures during the two years prior to

the petition for composition.

F. A detailed statement of the movable and immovable property and its

approximate value, on submitting the petition for composition.

G. Statement of the names of creditors and debtors, their addresses, the

amount of their debts or rights, as well as their security deposits.

H. Evidence of having deposited one thousand Egyptian pounds in the

treasury of the court, for account of publication expenses of the rulings as

issued.

2- If the petition concerns a company, a copy of the Company’s article of

incorporation, and articles of partnership, duly authenticated by the

Commercial Register Office, the documents establishing the quality of the

petitioner, a copy of the decision of the partners or the general assembly to

submit a petition for composition, and a statement of the names, addresses

and nationalities of the joint partners shall be attached to the petition in

addition to the aforementioned documents.

3- These documents shall be dated and signed by the composition petitioner.

If some of them are practically difficult to submit, or to fulfil their

particulars, the petition for composition shall indicate the reasons therefor.

Article 732:1-The court examining the petition for composition shall order

taking necessary arrangement for the maintenance of the property of the

debtor pending on the decision in the petition.

2- The court may take such proceedings as will enable it to become aware of

the debtor’s financial status and the causes of its confusion.

3- The court shall look into the petition for composition summarily and in

closed session, and shall decide it in a final ruling.

Articlel733:The court shall pass a judgement refusing the petition submitted

for bankruptcy composition in the following cases:

A. If the petitioner for composition fails to submit the documents and

information prescribed in article 731 of this law, or submit them incomplete

without justification.

B. If a court ruling was previously passed against the trader condemning him

in a crime of fraudulent bankruptcy, or a crime forgery, theft, swindling, fail

of trust, or issuing a bouncing check (without consideration for

settlement),defalcating public funds and property, unless he has been

discharged in bankruptcy.

C. If he retires from the trade business or resorts to absconding.

ArticIe734:lf the court judgemnt as passed refuses the petition for

bankruptcy composition , the court might sentence the trader to a fine of not

less than one thousand pounds and not exceeding five thousand pounds if it

transpires to the court that he intended to imply falsely that his trade

business was suffering from disturbance and confusion, or he premeditatedly

generated that disturbance in his business.

Article 735:1 If the court ruling provides for accepting the bankruptcy

composition , it shall also decree the opening of relevant proceedings .

2-The court judgement shall comprise the following :

A . Seconding a judge of the court to supervise the composition proceedings.

B . Appointing one or more trustees to undertake and follow up the

composition proceedings .

3- The court may decree in its judgement for opening the composition

proceedings that the debtor shall deposit with the treasury of the court a

monetary security the court may rule the cancellation or discontinuance of

the composition proceedings if the debtor fails to deposit within the time –

limit the securities appointed by the court .

Article 736:1 If the court ruling provides for accepting the bankruptcy

composition , it shall also decree the opening of relevant proceedings.

2.The court judgement shall comprise the following:

A. Seconding a judge of the court to supervise the composition proceedings

B. Appointing one or more trustees to undertake and follow up the

composition proceedings.

3. The court may decree in its judgement for opening the composition

proceedings that the debtor shall deposit with the treasury of the court a

monetary security the court may rule the cancellation or discontinuance of

the composition proceedings if the debtor fails to deposit within the time —

limit the securities appointed 9 the court.

Article736: The composition trustee shall be appointed among the persons

who are authorized to exercise the profession of bankruptcy trustee .

2- The provisions prescribed in article 572 of this law shall apply in this

respect .

Article 737: The provisions prescribed in articles 579 and 580 of this law

shall apply to the judge supervising the composition .

Article738:l- The clerks’ office shall notify the composition trustee of the

judgement passed for his appointment, upon issuing it.

2- Within five days from the date of notification, the composition trustee

shall record the court ruling for opening the composition proceedings in the

commercial register and publish its summary coupled with an invitation for

the creditors to convene, in a daily newspaper to be appointed by the

supervisory judge.

3- The composition trustee shall, during the time-limit referred to in the

previous clause, send the invitation to the meeting along with the

composition proposals, to the creditors whose addresses are already known.

ArticIe739: 1-Following the issue of the court ruling, the supervisory judge

shall forthwith open the composition proceedings by closing the books of the

debtor and affixing his signature to them.

2- The composition trustee, within twenty four hours from receiving the

notification of the court ruling, shall embark on the inventory proceedings in

the presence of the debtor and the clerk of the court.

ArticIc74O: 1-Following the judgement passed for opening the composition

procedures, the debtor shall remain in charge of managing his funds and

property with the supervision of the composition trustee. he shall have the

power to carry out all ordinary disposals as required for his commercial

works. However, the donations given by the debtor after the issue of the said

ruling shall not be used against the creditors.

2- Following the issue of the ruling for opening the composition

proceedings, the debtor may not hold a composition or pawn of any kind, or

effect an act of ownership alienation that is not required for his ordinary

commercial works, except after getting permission from the supervisory

judge. All act otherwise carried out shall not be used against the creditors.

ArticIe74I:1-All prosecutions and execution proceedings as directed against

the debtor shall be stopped upon issuing the ruling for opening the

composition proceedings. However, the prosecutions filed by the debtor and

the execution proceedings assumed by him shall remain valid, along with

introducing the composition trustee in them.

2- Following rendition of the court ruling for opening the composition

proceedings, the registration of pawns, liens, and particular liens as

prescribed on the property of the debtor shall not be invoked against the

creditors.

Article 742:The pronouncement of the judgment decreeing the opening of

composition proceedings shall not result in maturing the debtor’s debt or

discontinuing their interests and yields .

Article743: If the debtor, after submitting the composition petition, hides or

damages parts of his property or, in bad faith, carries out harmful acts to the

creditors, or acts constituting a violation to the provisions of article 740 of

this law, the court shall, motu proprio, decree the cancellation of the

composition proceedings .

Article744: 1- All creditors, even though their debts are not mature yet, nor

guaranteed by special security deposits, or established by virtue of

peremptory judgment, shall deliver to the composition trustee, within ten

days from the date of publishing in the papers the summary of the court

ruling decreeing the opening of the composition proceedings, the documents

of their debts accompanied by a statement of these debts and their security

deposits if any as well as their amounts valued in the national currency on

the basis of the exchange rate announced at the Central Bank Of Egypt.

Selling, closing, transfers, or currency notes if there is no exchange rate for

transfers on the day the ruling is issued. The statement and the documents

may be sent to the composition trustee by special registered mail .

2- The time-limit as mentioned in the previous clause shall be thirty days for

the creditors living abroad.

3- A time limit for distance shall not be added to the deadline mentioned in

the two previous clauses.

Article745: 1- The composition trustee, after the lapse of the time-limit

prescribed in article 746 of this law, shall set a list of the names of creditors

requesting participation in the composition proceedings, and a statement of

the amount of each debt separately, as well as the documents in support, and

the security deposit guaranteeing it, if any, and whether he deems accepting

or refusing the composition.

2- The composition trustee shall request the creditor to submit explanations

on the debt, complete his documents, or modit3’ its amount or qualities.

Article746:1- The composition trustee shall deposit the list of debts with the

clerks’ office of the court, within at most forty days from the date of issue of

the ruling decreeing the opening of composition proceedings. This period

may be extended, if deemed necessary, by a decision of the supervisory

judge.

2- The composition trustee, on the day following the depositing, the list of

debts shall publish in a daily newspaper to be appointed by the supervisory

judge a statement the list of debts deposited. The composition trustee shall

send to debtor and each creditor a copy of this list of the debts and a

statement of the amounts he decided to accept of each debt.

3- Interested parties shall have the right to view the list deposited with the

clerks’ office of the court.

ArticIe747:The debtor and each creditor whose name is mentioned on the

list of debts shall have the power to litigate the debts mentioned therein,

within ten days from the date the publication is inserted in the papers about

the deposited security. The litigation shall be submitted to the clerks’ office

and may be sent by the registered mail, cable, telex, or fax message. To this

time limit no time for distance shall be added.

ArticIe7481- Following the lapse of the deadline prescribed in the previous

article, the supervisory judge shall set a final list of the undisputed debts, and

mark his annotation on the debt-related statement affirming his acceptance

and the amount accepted thereof.

2- The supervisory judge may consider the debt as disputed even if no

litigation is submitted in respect thereof.

3- The supervisory judge shall decide the disputed debts within thirty days

from the date the dispute deadline expires.

4- The clerks’ office of the court shall notify the date of the session to the

concerned and interested persons, at least three days before holding it. He

shall also notify them the court ruling as decreed in the litigation, upon

issuing it.

Article749:1-The decision issued by the supervisory judge discontinuing the

acceptance or refusal of the debt may be challenged in court. The challenge

shall not result in the composition proceedings unless the court decrees order

their halt.

2- The court, before deciding the challenge may decree the temporary

acceptance of the debt at a certain amount to be estimated by it. The debt

shall not be accepted temporarily if a criminal prosecution is instituted in

respect thereof.

3- if the dispute over the debt is related to its security deposit, it shall be

accepted temporarily in its quality of ordinary debt .

Article750: Creditors who have not submitted the documents of their debts

within the deadline prescribed in article 144 of this law, and those whose

debts were not finally or temporarily accepted, shall not participate in the

bankruptcy composition proceedings.

Article751: On completing the verification of debts, the supervisory judge

shall determine a date for convening the creditors to deliberate the

composition proposals. The call to convene shall be directed to each creditor

whose debt has been finally or temporarily accepted. The supervisory judge

may decree publishing the invitation in a daily newspaper specified by him.

ArticIe752:1- The composition trustee shall deposit in the clerks office of

the court at least five days before the date scheduled for the creditors’

meeting a report on the financial standing of the debtor and causes of its

confusion and disturbance, together with the names of creditors who have

the right to participate in the composition procedures. The report shall

comprise trustee, in the conditions proposed by the debtor for composition.

2- All concerned and interested party may request permission from the

supervisory judge, to view the said report.

Article753:1-The supervisory judge shall chair the meeting of the creditors.

2- The creditor may delegate a proxy to attend the meeting on his behalf.

The debtor shall attend personally and shall not appoint a proxy to attend

and represent him except for an excuse acceptable to the supervisory judge.

3- No deliberation of the composition conditions shall be accepted, except

after reading out the report of the composition trustee referred to in the

previous article. The debtor may modify his own conditions for the

composition during the deliberation.

ArticIe754:1- No composition shall be effected except with the approval of

the majority of creditors whose debts have been finally or temporarily

accepted, providing they shall hold two thirds of these debts. The creditors

who have not participated in voting shall not be counted in these two

majorities. Neither shall their debts be counted.

2- If the composition concerns a company which have issued loan bonds. the

provisions prescribed in article 709 of this law shall be observed.

ArticIe755: 1- The ban prescribed in article 666 of this law shall apply to the

bankruptcy composition.

2- The provisions prescribed in article 667 of this law shall apply concerning

the participation of creditors with in kind security deposits in voting on

composition.

Article756: I. The bankruptcy composition shall be signed during the session

in which voting thereon takes place, otherwise it shall be null and void.

2- If none of the two majorities prescribed in article 754 of this law is

realized, the deliberation shall be postponed for a period of ten days, without

further periods thereafter. The provisions prescribed in the third clause of

article 668 of this law shall apply in this respect.

Article757: 1- A report shall be drawn up on the steps and decisions taken

during the composition session, to be signed by the supervisory judge, the

composition trustee, the debtor, and the attending creditors.

2- Each creditor has the right to participate in the composition deliberations

may advise the supervisory judge, in writing, of the objections he might

have to the composition and its reasons, within ten days from the date of

signing the composition report.

3- The supervisory judge, within seven days from the expiry of the deadline

prescribed in the previous clause, shall send the composition report to the

court which decreed the opening of the composition proceedings to rati& it,

together with the judge’s report on the financial status of the bankrupt, the

causes of the contusion and disturbance of his works, the terms of the

composition, and a statement .of the objections submitted against the

composition and their reasons.

Article758:1- The clerk’s office of the court shall advise the debtor and the

creditors who submitted their objections to the composition of the session

scheduled date of to look into these objections and the request for ratifying

the composition. Each concerned and interested person may attend this

session.

2- The court shall decide these objections and the request for ratification of

the composition in one judgment, and its ruling. whether accepting or

refusing to ratify the composition shall be final .

3- The court may refuse to ratify the composition even if no objection has

been submitted in respect thereof, if it finds justifying reasons connected

with the public good or the interest of the creditors.

4- If the court refuses the objection to the composition, it may pass a ruling

against the objector inflicting on him a fine of not less than one thousand

pounds and not exceeding five thousand pound in case it transpires thereto

that he premeditated delaying the composition.

ArticIe759:1- The bankruptcy composition may comprise the facility of

granting the debtor terms for the settlement of his debts. It might also

comprise clearing the debtor of a part of his debt.

2- The composition may be concluded, conditional upon settlement if the

debtor becomes solvent within a period to be defined in the composition

terms, providing it shall not exceed five years from the date of ratifying the

composition. The debtor shall not be considered solvent unless his assets

turn to exceed at least ten percent the debts built up on him.

3- The creditors have the right to stipulate the provision of in kind or

personal guarantee for the execution of the composition terms.

Article760:1-The judgment decreeing the ratification of the bankruptcy

composition shall be registered according to the provisions prescribed for

registration of a bankruptcy declaration ruling.

2- The summary that is published in the papers shall comprise the name and

domicile of the debtor, the number of his entry in the commercial register,

the court that ratified the composition, and the date of the ratification

judgment.

Article761:1- The bankruptcy composition shall come into force and apply,

soon upon the issue of a court ruling decreeing the ratification of that

composition, to all creditors whose debts are considered ordinary of once

according to the bankruptcy provisions, even though they have not

participated in its proceedings, or did not approve its conditions and terms.

2- The joint debtors with debtor or his warrantors for his debt shall not

benefit from the bankruptcy composition. However, if the composition is

signed with a company, the partner who are responsible with all their finds

and property for the company’s debts shall benefit by the terms of that

composition, unless otherwise prescribed in the composition agreement.

3- The composition shall not apply to the alimony debt, nor to the debts

created after the court judgment was issued decreeing the opening of the

composition proceedings .

ArticIe762:1-The court that ratified the composition may grant the debtor,

upon his request terms for settlement of his debts to which the composition

does not apply, providing the terms granted by the court shall not exceed the

term prescribed in the composition.

2- Ratifying the composition shall not result in depriving the debtor front

the terms that are longer than the term prescribed in the composition.

Article763:1-Upon a report from the supervisory judge, the court, in its

composition ratification judgment, shall decree the composition trustee to be

kept, or a censor among the creditors or others to be appointed to control the

execution of the composition terms and notify the court of the violations to

these terms as they occur.

2- The censor shall request the court that ratified the composition, within ten

days from completing the execution of the composition conditions, to

pronounce its resulting decreeing the closure of the proceedings. This

request shall be registered in the manner prescribed in article 738 of this law.

3- The ruling to close the proceedings shall be pronounced within thirty days

from the date of publication in the papers. Its summary shall be recorded in

the Commercial Register.

Articte764:1-The bankruptcy composition shall be nullified if after its

ratification, evidence of fraud is established on the part of the debtor. Hiding

finds and property, inventing debts, and premeditatedly exaggerating their

amounts are considered fraudulence and deception in particular.

2- The petition for nullification of the composition shall be submitted within

six months from the day defraudation is detected, otherwise the request

shall not be accepted. In all cases, the request shall be unacceptable if

submitted after the lapse of two years from the date of passing the

composition ratification ruling.

3- The creditors shall not be required to refund the amounts they collected

from their debts before the court judgment nullifying the composition was

passed.

4. Nullifying the composition shall result in clearing the warrantor’s

obligation from the guarantee to execute the composition conditions.

Article76S:t-The court, upon the request of all creditors to whom the

composition conditions apply, may pass a judgment repudiating the

composition in the following cases :

A. If the debtor fails to execute the composition conditions as agreed

upon.

B. If the debtor, after ratification of the composition, acts in a way

alienating the owner ship of his trade store without acceptable

justification.

C. If the debtor dies and it transpires it is not expected the composition

will be executed, or its execution will be fulfilled.

2- Creditors shall not bounded to refund the amounts they have collected

out of their debts before the court judgment repudiating the composition

is passed.

3- Repudiating the composition shall not result in clearing the obligation

of the warrantor who guarantees the execution of its conditions. The

warrantor shall be summoned to attend the session during which the

petition for repudiation of the composition will be examined.

Article766: 1- The judge supervising the composition shall estimate the

remuneration to each of the composition trustee and the censor, if he is

not a creditor. The decision of the judge in this respect shall be deposited

with the clerk’s office of the court on the day following its issue.

2- All concerned and interested party may submit in court an objection to

the decision within fifteen days from depositing it. The judgment to be

pronounced by the court regarding the objection shall be final.

Article767: The court may, motu proprio or based on a report from the

composition supervisory judge, decree in its judgment the closure of the

composition proceedings along with paying a total compensation to the

censor if he is one of the creditors and it transpires he has exerted unusual

effort in his work, and the financial status of the debtor permits this

payment.

Chapter— 10

Bankruptcy Crimes And Composition

Article768: The provisions prescribed in the Criminal Law shall apply to

criminal bankruptcy cases.

Article769: The following provisions shall apply to bankruptcy

composition offences:

1-The debtor shall be liable to a penalty of imprisonment for a period of

not less than six months, if:

A. In bad faith he hides all or part of his property and finds, or

exaggerates in their estimation with the aim of acquiring a

composition.

B. In bad faith he leaves or enables a creditor with a bogus debt , or an

illegal creditor , or a debtor with an exaggerated debt to participate in

the composition deliberations and vote thereon.

C. In bad faith he overlooks mentioning a creditor in the list of creditors.

2- A creditor shall be liable to the penalty prescribed in the previous clause

if in bad faith he participates in the composition deliberations and in voting

thereon while he is prevented from this participation, or his debt is

exaggerated, or the debtor or any other person determined for him special

benefits in return for voting for the composition.

3- The composition trustee who is in bad faith submits or declares incorrect

data and information on the status of the debtor shall be liable to a penalty of

imprisonment for a period of not less than six months.

Article770: Instituting the criminal prosecution for bankruptcy with

omission and fraudulent bankruptcy shall not result in any modification of

the provisions concerning bankruptcy proceedings unless otherwise

prescribed in the law.

Article77l:1- In case of instituting the criminal prosecution against the

bankrupt, the bankruptcy trustee shall submit to the Public Prosecution or

the court whatever bankruptcy-related instrument, documents, information

or explanations it demands.

2- The said instruments and documents shall be kept with the Public

Prosecution or the court during investigation or the trial, and shall be

returned on completing the investigation or the trial to the bankruptcy

trustee, or to the debtor or his successors, according to each case.

Article772: If the crime is connected with an agreement concluded by the

debtor or any person with one of the creditors to grant this creditor special

benefits (particular lien) in return for voting in favour of composition, the

criminal court may, motu proprio, pass a judgment decreeing the

nullification of this agreement and compelling the creditor to refund

whatever he laid hold on by virtue of that agreement , even though the court

might acquit him , the court upon the request of the concerned parties , may

also pass a judgment decreeing the payment of compensation if necessary .


Legislation Amends (1 text(s)) Amends (1 text(s))
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WIPO Lex No. EG053