The judge asked Sawiris in his capacity as the owner of an Egyptian satellite channel, ON TV, if he would hire an unlicensed reporter and if laws permit his channel to broadcast from the official "media city" outside Cairo or elsewhere in the country.
In addition to the media city, TV channels can get permits to broadcast unfolding events on site, Sawiris told the court. "There is no law that forbids this. ... And up to this moment, there are channels that broadcast from hotels."
Fahmy, Baher Mohamed and Peter Greste were arrested in Egypt in December 2013, accused of supporting the Muslim Brotherhood and broadcasting footage -- including video of clashes between police and protesters -- that portrayed the regime falsely with the intention of bringing it down. Fahmy and Greste were arrested at their room at the Marriott Hotel.
The journalists have said they were just doing their jobs, covering all sides of the stories in Egypt.
At the time of their arrest, Egypt was mired in political turmoil surrounding the coup of President Mohamed Morsy and his Muslim Brotherhood-backed government. After Morsy's ouster, the military, which had staged the coup, declared the longtime political party a terrorist organization.
All three were convicted last year on charges that included conspiring with the Brotherhood, spreading false news and endangering national security, but they have maintained their innocence.
The three appealed their convictions, and in January their attorneys announced that Egypt's highest court had granted them a retrial.
The judge expressed reservations about Sawiris' statement that journalists would be allowed to broadcast from anyplace.
"We've realized a year ago, when we first walked into court, that the judicial community and the prosecutor were pretty much clueless about what it means to be a journalist, the details of what restrictions and what rules are required to be a journalist in Egypt, and I think they were picking up on it as the trial went on," Fahmy told CNN outside the court.
Defense lawyers will have to explain to the judge the laws that regulate print and TV journalists' accreditation and limitations to the press syndicate membership.
The main charge in the trial remains terrorism.
Sawiris testified that Fahmy -- accused of being the ringleader of what the police and the local media describe as the "Marriott cell" -- is not a member of the Muslim Brotherhood, which is designated by authorities as a terrorist organization.
"I knew Fahmy when he worked with CNN, which interviewed me repeatedly. They used to work from the Intercontinental Hotel," Sawiris told the court. "I can say that Mohamed Fahmy can't belong to the Muslim Brotherhood, and this is based on general discussions and, to my knowledge, his participation in the January 25 (revolution) and the June 30 protests before getting rid of the (Muslim Brotherhood) regime."
Sawiris was called as a character witness, drawing on his fame as one of the main opposition voices against the Muslim Brotherhood during and after its control of Egypt's government. He repeatedly told the court he is not neutral and his personal views would conflict with his opinion about professional journalism practices.
He explained that the role of Al Jazeera English was different from the "incitement" of its sister channel, Jazeera Mubasher Masr. The defendants are accused of working with Mubasher Masr, which was banned by an Egyptian court and was later shut down by Al Jazeera management during attempts at diplomatic reconciliation between Egypt and Qatar.
Confusion arose about the case of Greste, the Australian journalist who spent over a year behind bars following his arrest in Cairo. He was released and deported in February
and returned to Australia. He was the first to benefit from a new law allowing the president to extradite foreign defendants and convicts held in prison.
It's not clear how the law would be implemented when it comes to an ongoing trial, whether Greste would be tried in absentia or if he could be put on trial in his home country. The judge told lawyers that there is nothing in court documents about his current status.
The judge ordered the prosecution to provide proof that Greste has left Egypt and to obtain documents from the State Information Services on whether the journalists were accredited and had permits to broadcast throughout Egypt.
The trial will resume on April 28.