If a native creditor still wanted to bring his action against a native debtor before the Mixed Courts he could garnishee a foreigner who allegedly owed the debtor money.
The new rule did not specifically stop that practice,although it clearly achieved what was intended so far as assignment was concerned.lt was only when the Native Courts improved that natives stopped using all manner of devices to proceed before the Mixed Courts.
A further provision of the decree of 1900 made it clear,so as to avoid further litigation,that the reference in the Codes to persons of the same nationality in relation to
g
real property meant foreigners only and not native subjects.
This point had already been well covered by decisions of the Mixed Courts and the new provision simply followed and codified the jurisprudence on this matter.
Generally therefore the theory of mixed interest had settled down by this time,but one more relevant case remains to be discussed.In 1905 the Egyptian Railways were sued by a
native in the Mixed Courts o and following previous decisions that the Railways were covered by the mixed interest theory the plaintiff could confidently have expected to proceed in the Mixed Courts without d i ff i c u lt y .The court however
declared itself incompetent because since 1904"^ the receipts from the Railways(and also those from the Telegraphs and
Alexandria Port)were paid direct to the Egyptian Treasury and not used to pay off foreign creditors who had a charge over the receipts.
The natural consequence of this was to remove the mixed interest element from the Railway Admin is tr at io n,and thus it was held to be a native b o d y ,organised by the Egyptian authorities to run a railway,and in its dealings with natives could only be sued in the Native Courts.This case is interesting because it demonstrates objectivity in reasoning.The Mixed Courts did not simply gather to them
selves all important litigation regardless of whether it belonged in the Mixed Courts or not,but they heard all cases that the law allowed.When the Railway receipts were
used to pay off foreign loans the Mixed Courts were entirely justified in hearing any railway cases because the circumstances showed a direct and actionable mixed interest.When this was no longer present the Mixed Courts just as swiftly declined jurisdiction and obliged the plaintiff to seek a remedy before the Native Courts.The result was a clear and objective application of the law, based on the Codes and jurisprudence,and it showed that the rules drawn up by the courts themselves to limit their own
competence to hear cases were properly applied,regardless of the consequence that as large and important a carrier as the Railway was no longer within the jurisdiction of the Mixed Courts.
Government Sovereignty and Immunity.
The Dongola Expedition.
1896 saw an event which almost destroyed the Mixed Courts by upsetting the delicate balance of i ntern
ational and domestic support.lt concerned the Caisse de la D e t t e fand basically revolved around the question of whether the Egyptian Government was entitled to spend the surplus money of the Caisse as it pleased.
It will be remembered that the Caisse was set up in 1876 to regulate the repayment of foreign loans,and to channel certain government receipts into the
Caisse for transmission to its bondholders.As such it was a clearing house for the money involved.
After some years the Caisse annually received more money than it needed,and the Egyptian Government was faced with increasing costs and no available resources.
Accordingly in 1 8 8 3 ^ , on the advice of Sir Edgar
Vincent,the surplus money of the Caisse was placed in a Reserve Fund,to be used to reduce the standing debt
when the fund reached £2K,but in the meantime to be used by the Egyptian Government for any extraordinary
e x p e n d i t u r e .undertaken with the p r e vi o u s , consent of . , the Commissioners of the Caisse 12.This provision was to cause tv e difficulty over D o n g o l a .Before a detailed discussion of the case it would be useful to consider the background of the expedition.
After the Mahdi and his rebels had defeated British and Egyptian forces in Sudan,the country had gradually
fallen into anarchy,and was seen both by the British and the Egyptians as a potential danger on Egypt's southern b o r d er s .Apart from the necessity to maintain law and order in Upper Egypt,the loss of Sudan had denied Egypt a huge trading area,and it was generally agreed that Sudan had to be r ec on qu er ed .The problem was to find the money to equip and send a military
expedition large enough to capture Dongola,strategically the most important town of Sudan.Whoever controlled
Dongola effectively controlled Sudan,and plans were set in motion to send an army,mostly Egyptian,south to capture the town.The money was obtained quite simply.The Egyptian
Government was mindful of its right to draw on the reserves of the Caisse for extraordinary e xpenditure,and applied to the Commissioners for 500,000 LE on the 19th.March 1896.This was agreed in principle on the 26th.March by a majority of
four to two,and 200,000 LE was paid over to the Egyptian Treasury.On the 18th.April a further 150,000 LE was paid.
The first p a y m e n t ,which was apparently in simple compliance with the rights of the Egyptian Government,unleashed a
storm of protest.A syndicate of b o nd ho ld er s ,in the main French subje ct s,sued the Commissioners of the Caisse and the Egyptian Government in the Mixed C o u r t s ,seeking a declaration that the money should be repaid.The two
dissenting Commissioners,the French and Russian delegates, issued a writ seeking a declaration that they were not personally liable for the action of the majority,and the French Commissioner of the Domains Administration also
formally intervened and protested against the payment, although his locus standi is not clear.On April 13th.
another syndicate of bondholders joined issue,but this time to support the government and approve of the advance.
The case was closely watched.lt was clear that the decision to advance the money was made routinely by the four
Commissioners who agreed,and with the complete approval of the Egyptian and British Governments.Nevertheless France, whose own ambitions in Sudan had led to unsuccessful
attempts to infiltrate her forces there,was adamant in opposition to the payments and a diplomatic row broke out.
It was hardly helped when judgement was given against the Caisse and the Egyptian Government by the Cairo District Court on June 8th.Before formal notice of the judgement had been served the Government appealed,on June 11th.,and this appeal was heard in D e c e m b e r ,well after successul military operations had ceased but amid continuing concern at the initial decision.
Firstthough,what were the legal reasons behind the finding against the Government and the Caisse?The judgement started by setting out the procedural points necessary to elucidate the locus standi of all the parties who had,by the hearing date in the District Court,become parties to the action.
The rest of the judgement may be split into two parts:
competence of the Mixed Courts,and the reasons for declaring the advance of money illegal.
As to locus standi,in establishing the Caisse de la Dette the Egyptian Government and the Capitulatory Powers had agreed that matters relating to its legal position should be justiciable before the Mixed Courts,and that the
Commissioners were the appropriate people to sue and be sued on behalf of the Caisse 12A.In this case however the majority of the Commissioners had approved the action and thus were defendants in the case rather than plaintiffs.Who therefore could sue on behalf of the bondholders represented by the Caisse?The rights of the individual creditors had been subordinated to the Caisse,and the appropriate articles indicate without doubt that individual bondholders had no locus standi.Nevertheless,a syndicate of them had sued and the court declared,in a deliberate attempt to give the syndicate the right to bring the action,that the Commiss
ioners were only agents of the bondholders and thus their p r in c ip a ls (the b o nd ho l d e rs )could sue in their place.
This was not in accordance with the relevant articles,and can only be explained on the basis that a rejection of the action on technical grounds at that stage would have been an unnecessary and inconsistent adherence to strict
procedural r u l e s ,especially given that the Mixed Courts did not generally take a hard view of procedure.In fact,as the Mixed Court of Appeal later decided,the relevant articles could be interpreted to allow the minority Commissioners a right to sue on behalf of the bondholders,and so this
procedural error could have been properly adjusted at first instance without stretching the law.It would also have
dealt with bondholders taking action in support of the Caisse.
As to competence the Egyptian Government claimed that the request for and receipt of the money was a sovereign act which could not be judged by the Mixed Courts.In their turn the Commissioners of the Caisse claimed that in exercising their rights to advance money they were carrying out a political act akin to the spending of money by a p a rl i am en t,and thus were immune from censure by the courts.
Professor Dicey prepared a long opinion on behalf of the Egyptian Government which tried to define the G o v e r n m e n t s military action as one of sovereignty,but in fact this was not the point.It was the advance of the money and not the decision to reconquer Sudan that had been challenged.Clearly, in sending a military expedition to Dongola the Egyptian Government was exercising its sovereign right,and the
expedition itself could not therefore be challenged in the courts because of that.The jurisprudence of the Mixed Courts, it will be r em em be re d,declined to allow judicial control of sovereign acts.
The advance of money was not a question of sovereignty, h o w e v e r ,because it was an advance by the Caisse,which was not a parliamentary authority but a group of Commissioners paid by the Egyptian Government and nominated by the
Capitulatory Powers to supervise the orderly repayment of E g y p t fs foreign loans.Consequently it was held that they could not claim any immunity on political grounds13
The question then became one of interpreting the decrees establishing the Caisse to see whether the advance of money was within the Commi s si on er s1 powers or not.To commence,the court declared that the totality of a debt guaranteed each part of it^^,that is to say that no part of a debt,however small,could be dealt with if it prejudic
ed the whole.It is not clear what this statement was meant to add to the issue.The actual question was the interpre
tation of the 1888 decree,and thus the statement fails to have an obvious place in the judgement.Despite that it did form part of the reasoning of the District Court.The real
point was whether the advance was valid,and this depended on whether it was for extraordinary purposes,that is
purposes over and above the usual day to day necessities of financing the Egyptian administration,in short-des depenses extraord in ai re s .
This caused the court to decide what,for the purposes of the case,was an extraordinary purpose.lt might be thought
that the financing of a military expedition was extraordinary, but the judges had in mind more domestic matters such as an unexpected flooding of the Nile,or the loss of government buildings by fire.The Egyptian Government and the majority Commissioners stuck to the idea that extraordinary should be given its usual meaning,and reaffirmed their view that this naturally covered financing a military expedition to reconquer Sudan for Egypt,a venture clearly out of the ordinary pattern of events.
The question of benefit to Egypt was also argued.If it is accepted that the b o nd ho l d e rs 1 interests were paramount,it is necessary to assess the benefit to them,directly or indir e ct ly ,of recovering Sudan.In fact there can have been no doubt at all that the retaking of Sudan was of great material benefit to Egypt and thus indirectly to her
c reditors,but this should not have been the question.lt was nonetheless argued by both sides and it is safe to say that only the bondholders who disapproved of the advance,and the French o b servers,were prepared to deny that recovering Sudan was a material advantage to Egypt.
The next stage was to consider the evidence in favour of interpreting the phrase fdepenses e xt ra or di na i re s1.Kow was the court to decide what was extraordinary expenditure as envisaged by the 1888 decree?The answer was to treat it as a matter of contract law and establish what was the intention of the parties at the time the Reserve Fund was established.The court considered a wide range of evidence, including the writings of Milner,and the exchange of letters between the Egyptian Government and the Caisse.Its conclusion was that the Reserve Fund was for fortuitous accidents only,
and not for deliberately planned military expeditions, especially as no express mention had been made of Sudan in 1888,
Against this simplistic view was a great deal of counter evidence.Cromer stated 15 that it was always contemplated in Government circles that Sudan should be recovered and that the Reserve Fund could be used to pay for an army to do so.!!ubar,in a Circular to the Capitulatory P o w e r s ^ suggested that the Fund should be 'destine a parer a
+
17toutes les e v e nt u al it es * and in another Circular
clarified his statement and said that the Fund would, be for all extraordinary expenditure which might otherwise upset Egypt's balanced budget.The weight of this evidence was ignored by the court and judgement was given against the defe n da nt s,together with interest at
5i
per annum from the date of the advances.It is submitted that the decision was neither in tune with the spirit nor the letter of the law.If one accepts the matter as one of contractual interpretation there is no need to deviate from a straightforward and natural inter
pretation , and this leads on to an examination of the type of extraordinary things permitted.This inescapably allowed the Egyptian Government to draw on the Reserve Fund for expenditure out of the ordinary which would otherwise upset the balance of Egypt's budget,and this must have included the Dongola e x pe di ti on .The court was,of course,quite right to reject the defence of sovereign immunity.
Could there have been political reasons for the decision?
The President of the Cairo District Court was Casimir Prunieres,a Frenchman who had been appointed a judge in 1884-.Kis fellow judges were de S toppelaar,an ex-judge from Holland,de Sande e Castro,an ex-judge from Portugal,and Ismail Bey Serri and Youssef Bey Aziz,both well qualified Egyptian judges.It is hard to imagine that they would all have been subject to political pressure against the Egyptian Government and its British ally,but as verdicts were by a majority it is possible that P r un ie r es ,assuming he followed
the dogmatic French line over the money,was able to persuade at least two of his colleagues to agree with him.Dissenting judgements were never given,and so the political question can not be finally settled.Leaving aside the judgement how
ever let us examine the consequences.
The decision caused a storm of protest in England.The
Chancellor of the Exchequer himself was of the opinion that the Mixed Courts had overstepped their mark and had
-j o
!usurped authority which ought not to belong to t h e m 1 The decision also caused astonishment and resentment in Egypt,but in time the criticism abated.It is worth noting that the c ourt,although it may have decided against the weight of evidence,was perfectly entitled to judge the matter because it concerned the Caisse which was expressly, by treaty,within its juris di c ti on .The court had no j u ris
diction to hear disputes over sovereign acts,and the
criticism of the Mixed Courts for interfering in a sovereign matter was illfounded;any criticism should have been directed at the illogicality of the decision and not at the competence of the court.The Egyptian Government's right to recapture Dongola was not in issue.
The political consequences for Egypt and Sudan were more i mp o rt an t.The Eritish G ov er nm en t,seeing the likelihood that the appeal would fail,felt bound to promise the Egyptian Government the money so that it would not get into financial difficulties.The day after the Mixed Court of Appeal upheld the Cairo District Court 19 the full sum in dispute was handed to the Egyptian Treasury by the British G o v er n m e nt .This was to be the signal for a much more overt involvement in Sudan by the British.lt would be incorrect to suggest that the British had had no interest in Sudan at all.On the contrary,it had been the English
Advisers who had helped Egypt plan and execute the reconquest, but British assistance had been on behalf of Egypt,and
Dongola was seen as a purely Egyptian affair.When the Mixed Courts' decisions forced the British to pay for the expedition by way of a nominal loan to Egypt it was felt
that an overt and much greater participation in the new Sudan province was justified and British interest,now as a partner and not just a s u p po rt er ,manifested itself in the 1899 Anglo-Egyptian Condominium Agreement to rule Sudan jointly.
It is fair to say that without the spur of the Mixed Court judgement the British involvement in Sudan would probably have remained in the background,but the two decisions and their attendant publicity allowed Britain to take an active and obvious role.
Although Sudan was ruled by Egypt as a joint partner the Agreement specifically excluded the application of Egypt's treaties and usage to Sudan,and thus the Mixed Courts had no authority at all in the Condominium.Although Sudanese law developed along joint English and Egyptian lines it cannot be said that Sudanese law was directly influenced by the Mixed C o u r t s ,although in later years some Mixed law was used in appropriate disputes 19A
Other Government cases.
Apart from the Dongola affair there were two other cases of interest concerning government responsi b il it y.In 189o
Apart from the Dongola affair there were two other cases of interest concerning government responsi b il it y.In 189o