Counter-security is security provided by the arresting claimant to protect the shipowner against losses if the arrest later proves to have been wrongful or unjustified. Whether it is required, and in what form, varies significantly between jurisdictions, and Egypt's approach is one of the more accessible in the world for claimants, with one important regional exception.
The General Rule: No Counter-Security Required
As a general rule, Egyptian courts do not require the claimant to post counter-security before granting a precautionary arrest order. A claimant with a qualifying maritime claim under Article 60 of Egyptian Maritime Trade Law No. 8 of 1990 can file an arrest application and, if the documentation is in order and the claim is legally grounded, obtain an arrest order without first paying any deposit or posting any guarantee.
This makes Egypt a relatively accessible and efficient jurisdiction for arresting claimants compared to jurisdictions where counter-security is a standard prerequisite. A bunker supplier with an unpaid invoice, a cargo claimant with a damage survey, or a charterer with outstanding hire can move quickly without the added burden and cost of arranging security before the arrest is even granted.
The Alexandria Exception
Important: Alexandria Economic Court
The Alexandria Economic Court now requires claimants to post counter-security before an arrest order will be issued. This applies consistently across matters before that court. Claimants instructing Egyptian counsel for arrests in Alexandria or El Dkheila must factor this requirement into their preparation from the outset.
The amount is assessed by the court and varies depending on the nature and value of the claim.
For arrests in Port Said, Suez, Sokhna, and Damietta, the general rule continues to apply and no counter-security is required from the claimant at the time of filing.
Wrongful Arrest: The Claimant's Exposure
The absence of mandatory counter-security in most Egyptian ports does not mean the claimant faces no risk. Egyptian law provides a remedy for wrongful arrest under Article 163 of the Egyptian Civil Code, which establishes liability for damages caused by fault.
If an arrest is subsequently found by the court to have been unjustified, the shipowner may bring a claim against the arresting party for losses suffered as a result, including lost hire, port dues, and consequential losses.
In practice, wrongful arrest claims in Egypt do not frequently succeed. Courts have generally set a relatively high threshold and have been reluctant to find against claimants who acted in good faith on a genuine maritime claim. Nevertheless the exposure is real and the decision to arrest should always be taken on the basis of sound legal advice and well-prepared documentation.
Key Takeaways
- Egyptian courts generally do not require counter-security from the claimant before granting an arrest order.
- The exception is Alexandria, where a cash deposit is now consistently required before the order is issued.
- Wrongful arrest claims are possible under Article 163 of the Egyptian Civil Code but rarely succeed in practice.
- Claimants should always proceed on the basis of a well-documented and legally sound claim, regardless of the absence of a counter-security requirement.
Considering a Ship Arrest in Egypt?
Our team at Essam Moustafa Law Firm advises claimants on arrest procedure and counter-security requirements across every Egyptian port. Contact us at essam@essammoustafa.com or +201034381771. We respond to urgent maritime matters promptly.
Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. Specific cases may involve different procedures or requirements depending on the circumstances. Always consult a qualified maritime lawyer before taking action.