January 28, by Piyali Syam As lawyers know, legal systems in countries around the world generally fall into one of two main categories: There are roughly countries that have what can be described as primarily civil law systems, whereas there are about 80 common law countries. The main difference between the two systems is that in common law countries, case law — in the form of published judicial opinions — is of primary importance, whereas in civil law systems, codified statutes predominate.
In most cases contractual relationship is subject to private law and courts that deal with these issues Most PPP arrangements e. It is important to seek local legal advice to check whether these rules apply in a particular civil system.
It is also Common and civil law legal systems to note that in a civil law jurisdiction, unless the contract specifies that the parties have agreed to arbitration, the contract will be enforced by the administrative courts.
Some of the key administrative rules that apply to delegated management arrangements are listed below. Governments may wish to include these rules in the arrangement, and when they are part of the underlying law it may not be necessary to repeat them in the contract.
But relying on just the underlying law is problematic because the rules are sometimes ambiguous. A contract that takes a background administrative law principle and spells out exactly how it is to be applied will generally be effective.
But, changing or overriding an administrative law principle may or may not be legally possible—that would need to be checked.
For example, it may not be possible to completely remove the ability of a contracting authority to unilaterally change service standards. Some civil law codes also contain mandatory notice periods before termination for breach of contract that cannot be avoided or overridden. Rights of contracting authority that may override contractual provisions Right of unilateral modification The contracting authority may, as in France, have the right to modify aspects of the contract unilaterally when it deems the change to be in the public interest.
Right of unilateral cancellation The contracting authority has the right to cancel the contract early although it must compensate the operator. Right to continuity of service The operator in an administrative contract may not suspend the execution of its obligations under the contract, even if the contracting authority breaches the contract.
Under a concession or affermage-lease, the operator is deemed to assume duties relating to operating a public service, even beyond those included in the contract such as investing to address increasing demand or adapting to new technologies.
For example, when the contracting authority imposes a unilateral modification, it must also adjust the financial terms of the arrangement so that the operator is not worse off for example, if the contracting authority required higher service standards, it might also have to allow a higher tariff.
Relief under fait du prince requires the following conditions: The operator is entitled to compensation for financial difficulties arising from large and unforeseen changes in economic conditions that render execution of the agreement financially hazardous.
The adverse economic impact of these events must not only be exceptional but beyond all limits foreseen by the contract. Force majeure Unpredictable and uncontrollable events that render the performance of the contract materially impossible exonerate the operator from its obligations.
For example, a spill from a chemical factory causing permanent pollution of the only water source would be considered force majeure.
Natural phenomena such as hurricanes and droughts may also be considered force majeure. Similar concepts exist in Mali, Tunisia and Algeria, for example.
Gross-up clauses Under the French tax code article quarter gross-up clauses related to indemnification of withholding taxes on interest are not to be binding on French tax administration when the debtor is a French entity. Bankruptcy In Common law jurisdictions, such as England and the US, the emphasis when a business gets into financial trouble is on seeking a reorganization rather than a liquidation to keep the business as a going concern eg US, Chapter 11, UK administration.
In Civil law jurisdictions the process focuses on liquidation although reform of some bankruptcy laws such as France and OHADA countries is now permitting reorganizations of debtors before they become insolvent. Security interests and syndicated loans Common law systems have greater flexibility in granting different types of security over assets - an important feature of PPP arrangements involving commercial funding such as BOTs.
They also have the concept of trusts, which enable security interests to be held by a trustee for lenders in a syndicated loan situation without the need for formal transfer or re-registering of security interests in names of new lenders. Civil law does not have such a concept and so security interests generally required to be re-registered in the name of the new lender involving additional registration costs and notarial fees.
France is in the process of introducing a trust law which will resolve a number of these issues. In OHADA countries, however, filings involving public notary are required for formalizing security interests.As lawyers know, legal systems in countries around the world generally fall into one of two main categories: common law systems and civil law systems.
There are roughly countries that have what can be described as primarily civil law systems, whereas there are about 80 common law countries. Common Law and Civil Law Legal systems differ considerably in criminal procedure and civil procedures.
Although some systems, including the Common legal system, let private individuals to bring a criminal prosecution against others, prosecutions are nearly always started by the state, in order to punish the defendant.
As lawyers know, legal systems in countries around the world generally fall into one of two main categories: common law systems and civil law systems.
There are roughly countries that have what can be described as primarily civil law systems, whereas there are about 80 common law countries. The legal system in the United States is a common law system (with the exception of Louisiana, which has a mix of civil and common law).
Customary law systems are based on patterns of behavior (or customs) that have come to be accepted as legal requirements or .
common law and civil law legal systems, with the hope of filling any knowledge-gaps about these systems that practitioners may have.
This should provide a good starting point for the practitioner to understand a particular common law or civil law system and how it operates.
D. Disclaimers There are two disclaimers that should be noted before. Legal minds in civil-law jurisdictions like to think that their system is more stable and fairer than common-law systems, because laws are stated explicitly and are easier to discern.