Journal of Ethiopian Law Vol. 8 No. 2 (1972) [Part 2] by jahrastafari89

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>'f -- . }\rif�tr : l f ;:-J f : : ..nlhzl\. fL � (1D1/�(D4'{lfl-r : 1_.tl, � ,,o,-: : �(D- :: { OJ�( � : f .l : A : 11 : � : ,,�nro"� : /l/f...<1: �-�:I· 2 1" 'i 1ii� : l 11lL J: •'1 "7lIJ 1: :1,{'.-f't\f�: �-rc 10 n v f ., :i; l\ f. °1 D ' ;l. ? 'l > f h ll" ' ' 1 t\ ,f,( � tD t\(I h hti. :� t\.t.Cil , f"'l.-:f-A = l 'i ti ' r } , i 'l o ' h ' l;;>.:' h .tf m• on �� (l tD• .' " , n f _ {IJJ , /;\ ht\ "'l. ' }' V•t\ ,t,11OJ< ' f.1'1" . �,, ,,y.. = .r1"'" OD,<;.:,. ;,1;,'l! = ID" ,11,f ,1� 'i . : ..efll h�,... q :\.. :: !l u •n ""''�:ID• h1>;m : "' : { ,,!U;i"�1'" «il' hon,:o n ' � .. : 1'lD ltiJ : ''l( [t : 'P;, () f.•/.. � '=?1: 1'ilh,f-ht\ht\• 6y u G -. ¥ 'P ,:J : ft\:fOr�' : (107..,'lt\•,r : f;J-0:J! : ,.!.e-o f 'f : vf 6Q,OTJ6 : t\��:,, : j,,-,� �• I r:.,,ro-1 = :J"A = nrr:1�?° = n�•l\'1 ...c(t = �ort1"1A tryroth hll&.. 1\1. = �ro· == ''n.. & (\Ul/1" 1• : flP/,.;Pl\lD•9u : hf.-llJ-< : i\f; : 'lOJ"r :: •4'tl."} � d\OTJ..OD"h"l'ID• : &fr: ,A t\.&, Cil : fiP/..1�A : (l'lA = 'P;J : fl\,ftlD" : lf' : �;D...fPA ·" ;ff,i\... = n�l.h +/\��.. : rh°i Dr == � fl ro.. = i'11 f..." = f.-·c1 :1•• • 1,If» p'f = m,fl'I' : ,<>l\ 01•1-: Ai �i· = n� ?t-9° = ,1J"J),h hovtODt.('tD-1,·: q>;,: rll,t\lD" : i)f,�1: n�c� ..� it1:: nh t\.: <p;, :ffbf\�.; -.. : : t. atJ J-t 1.., m' fl � : lfi OD CQ .;1 lD' l tw NJ.;• (lJ,a Ii 1, ODtr )· : (l.1 I\ 7"' 'i' :;: h't �' U•9° : : f f,w '" 1: 0J"ffi:,.rf::g., : °1'} : 9:0lL�:J..fm« 1 o:i·• : (L.f.l"l : '1(lh,J-httht\fl1··.:: 1.tL : f�il?,�• .., 11 < il : .. OJ � �� : (lm.'1 = ;rlD-q, = °h1J?.OI/.LPb''l:i m : t\ {ID;B roirt? : 1'x 61; u :: 'hlLlr: t)f; Y' il:,...: tJ<j:t\�:f : f;on'J ],� �\�0"9"° � }&'J '�� (D.. : h00;eont,Pm•: l'J°C: qr:i = fl\,t\Or = ,r,u� CPJl\:i:· = 'l-J�... = .:r1l.1 .�A�(ll mf,'r. m•at:l.. : 1\,;; Aom : (t.1.1'1: u,n,f';;:m, � Ul/1�ro�9° : �1C. : nn!l:!J:o0• : O,;J... m:,,9° : :Ptt-: 1:•f.'l\ ,1: o ODYJ,1: = r � n 1.. 0r'i' = ft. (Dc = 1,1' Jtu " 9° = n ODtJJ..ro« 1,_, 1-i : roiz.o(nlI)< , (I}-ffi.-r : 0.,h fl h PL : ',{JJc :: Y' ll..,..,;� w� 'i : rOD{,M,l 'lu" (D : �C1J lfP : .{\ OD{J;l.(D·• : 1.tL : 11:F : m·m:J., = >\'"1•�'f,t\T = fi"hi\.hl\ : lf 'f : hrf·•hn h i\ n:i, 1..1·i Ot!.1· : f} (1�..:,--1 : m-m+71, : (loo•fl· : fU11fi�h· : {L lf1 = ',ID• :: (void exnunc) fit.,} f-k.r : :i�n:F : ,11'? : flli.. U· : {lY,{l.-f... �lD- : tJ<j:t!\ : . .eav,.e,.qt\ :: fn.:,.. f-kf : "1"l : ll l\ : .."J ·fl:P : 1�,.f..'i\ ,y.":f : 0 OIJ•..rlD It flT : 1..1 L : ' 'nullity'' fOIJ../\CD-"} : .4>A : flY'ilrf-�CD-: -n�A = ,\,f".!W�{lllr : dtlt--0 : fltw<pp{l: itf,m 12 4'9°0:,'"9"° :: f;111;; =· 1--f:{\ :,_.. ,: h'/11,:f''i" C h�;e : ;JC. : 7t..(l{� : foo��:J-. ,)·· : t'l° 13 fi� : 9°TI'}f-t- : lf'i : '1,t;1j"tp{\'} :: (l�,l•.'h : •{ltfh� : rl1°} : {/DlJ.'lrl•: ''f OD'J.:J'•r : 'I'!1:'' : f°tf+cow· : fOILl\(D• : ,., 'l (}/,\ : O•A : ·1..1·1. : f;J•fl:11: 14 0 f U·•t;rsi>�f: 'll\ODmfl.4 nh"A ;J·t' l '! .. tD(l :,:a,« : fltlA�J!.: : (f1 : f ( : : 1' L .

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73. f�:,.ch : 1ldi.C : ,11°1 : �'T'C I if:ii: :: 74• f�-l"ch I 1ltfi.C : ,l1°1 : cl!'T'C : ifil·fi : , 75. f�.."f"ch : 11"1.C : ;,,a, : ,cf:'T'C : jfj% :• 76' ' ' 111 ?"t\.7i I cj.OIJ./L : lb1Y: : ;,c.� J1 o.,rr : p..(-'' ! hl\.e: (1"7{l;J•a.,7'i': �i ! �'T'C: Ir: ht;:A I J:' . .f ,"m cf>fl :: 77' i rm ° =hi�;= tj::f?° x = 9 111.1• �.'ic = ,)n · :J· 'h = ?°11111 = ?° ?D l\rof.-k:,.. = r;,11:1= f = 'hi-�.: � • 1 i : rr1•ou•: f,f•m(l� : f,tr'if.\ :: J'tC : �n.:�- : (l«ry{l;:J--a.,7f : 'l!'!! ! 1g:: :li: = f+,m4'(ltD-1 • til!\+.e.l�I 1•ouA.h:,.. • '}

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94· htt_fa>-: <k'l'C : iffi•J:(ii) 'hCi � (I) 95. hH.fa>- : <k'PC: %ft;·E(r.) 96, h.¥°: 'T'\«if.A: 'l,Ci': JC. 6TC:,.. ! h'\f,, 1 O"IC'I.: IP/il:J'OJ"if • cf?. :i� : +.m:i»(1"1A:s iiAf.'/° 1 I . . i �- l it� :t . 97. f� cnn'i" = .v.cfln = h•c = �"'-r.A : '1.°1-1•1:/\c x �i1il :;: ui.,e, = � = I.iitG"R = Pit\o11: li7f.�xG"g 1 ht;:A g: "l�: ��: fi,f•,n«l'(la,. : 1'-Jif,,: (l(l.:,•r--'P: f"11ll: P';, : "111•}'1·: /\OD&.'t,.'/° : f°t fill-A : hm• iltlJ'e : ltlJ!l. :· flbi\ : (lODlf�- : �C.(": (1,f: : (l.:,, : Ci·), : hOl//\-1' : f,A:i» : 'h1f.. : m 1.r.- 1 f�,r�mc: c;-:,..: fl.A= mil$:A == <;::c�--=·n�,f: •(Ly,-,..:,..: ;,11.r = (l'lA: '11.� • m1.('.. ·c;- s f.trt;A: h1X- : l\:,.. : foY..'PY�O,r: il/\lf} : OIJ..{l:,•f'P: fl..:'f·: 0"7:,•lf10'1·: ..,.tL: ·q>;,:·fl.ll: • :!}�.A :: ftLU1': -r:J>t--�: OP,�: '1'�: (h·C = ·Y..: titifl.V" 1�t--1ll11hT6A :'. i: Iilff.: (P,fto11- i 1/9. 1 h�A : � : 1g- : .f.fj?.; 1) f,ou/\h�tA :: �c� = '1� = fflmm• = a,.Vf), = 1,1?.1.('..' = · fK;J--:·oo1-f..A : fl."l� : V·t:J··m• : f"lill : P';, : «'l11:)';I.. : /\ODt..'/i'/° : 1,1\0D,rt\ : f.'11\A � fCPJ.,/;\ = }m,, ,: <t:CX': (1rf: : ;,11;1: = ·l\...e..l"l: fD?.1:/\llJ•: 00-/\•1·: -r·_!l,t,.� : i:J··?J:f: (IIJ(fj,'} s /tf ,h_r_- = flcl'lfll\:I" : "i'Prf, : "11 : "'1.ll·l· f'P : ?t1f..fl.;t-: :i•cfmt--1'\·..1• : ·O�A :: 98· v ft..(.'} 1,; : f,h"I: fl.if,:.}: : t1�-'1'1: l"'."J: h1'P.1..f.": a;1c =· f(IIJ ..J,f..A : 1'-�f.: flllrflD:': ·f·:J't •· l-• !;'' : .1,1\m,,: l,1S:-tT'Jf(t.)"m· : •l•illT'J9°,f•'PA :: htl.tJ : /\f.:'f• = ..<'/\: Olttill"-: f\f.: t\.'\ : '/°An:r• ·' :J--r-� ' .e'rcn:1· · :i, A 99· '�::c I1 �fjji : il,)1•1·:i•: •f•1J. C•l:f.\ : rorJ.f{l ·f..)·1 : 9''ti1f·f•:.1·-: Om'lO· : m{l5:1�'PA : (t4!'rC I �lli (m) oowt.•l-- : {l;,, ..,.:,:: t,ll : fO'l.Ol\ar: ''OU1J••e10•:r--: rtm· = n1.Ci = w.e9°'·c)m·'l-l· = titi:,. : 1'1im•9° : .f"'lfla:f.: (lw• =· f..'l!: JP;J: f<'llffl•: OJ/!,'/°: f�li.'1 : P';J: "11"f.'l•l·1' : fari,e:f..A : ll"'f: il"l� : ',OJ«., ''J!,tJ''? =· h!D•,f,: °1"}1 ·'1:1- : 1\1\01�:l°l: 1'91?'1. : nt/lt �'-K� 1 ' >t.e,aut\h,')•9° = fharic;;:61)• = :,,��: '1 '' .;..tia = P' ;1 = OJ1·_r-.-,:,•:> , ft(IIJJ.?�_'1" = �:�e":i·t:\=: "1 : f 11 t\A :s .e.u� = r�tio. = P';; = UDqv:1-•� = ?tt;: ?1 'i"l,\'l:1·9°: 1\9'°0.·1·'1'1-"I-- i = 'i.1•'/"c · fµ1 :J t.\l\A .

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VOID AND VOIDABLE MAR.RIAGES IN ETIIlOPIAN LAW •

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by Katherine O'Donovan*

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I INTRODUCTION Js there a distinction in Ethiopian law, between void and voidable marriages? 1 the that Civil Code when dealing h argt1e with w defective. marriages, will riter T e foresees . and regulates only voidable D?-arriages of different degrees, but that tl1e �oncept of a marriage void ab i11itio may be profitably introduced to ass_ist· structuring thought a�out Ethiopian marriage law and deal with cer:tain · problem cases not specificaIJy dealt v.rith by the Code. The terms ''void'' and ''vo,idable'' are fou11d in the Common Law system. They have their counterparts in the laws of Coutine11tal El1ropean countries. I·n both legal systems the ter1n.s used· lack a clearly defined meari.i11g and the tr·ans position of a terms from one system to another is virtually i mpossible. In the Amharic version of t· he Civil Code there is no exact term to convey the concept ''void'' or ''voidable''.2 Nevertheless these terms will be used since they are the most apt terms available for elucidati11g the law, as will be shown.

Visiting Assistant Professor of Law, Haile Selassie I University. The author is indebted to Mr. Peter Winship and Professor· George Krzeczu.nowicz for their helpful criticism and comments. -·-· l. An objection could be made that marriages which are defective and can therefore be dissolved should be called ''dissolvable',. BL1t all marriages are ultimately dissolvable, by death, by divorce 01i because they are defective under Civ. C., Art. 661. . 2. Terminologr, is a problem. The French version of the Civil Code 'is fairly consistent in the use . ?f languages but the ..English and Aml1aric translations are inconsistent and occasionally POSJt1vely unhelpful. Where the Frencl1 version declares certain acts ''sans valeur au regard de !a loi civile'', the English translation is ''of no effect under the civil law'', and the Am.haric is '''P;J = f t\.t\m-''- Civ. C. Arts·. 18 and 44. In other cases where the French declares an act , "n·ul'' tb.e English remains ''of no effect'' and the Amharic is ''4.&--7i :'' in ·Arts. 313, 387, 639(2), 640(3) ancl 638. The word ''nul'' in French is translated as ''null'' in English and ''tt&--7i 1'' or ''f"7!,1a'i :'' in · · · · Amharic in Art. 707. . "La nullite'' in Arts. 314(1), (2) and - 369(3) is translated into English as ''nullity'' and mto �haric as ''4«&,.7i ; ''.. '' �' an.nulation'' in Art. 623(1)� (2) and (3) is translated into English as ''the annulme11 t'' and into Amharic as ''UD� �il :'' in (1) and ''o P'qC •'' in (2) and (3). ' Bu.t in connection le'' ''.annulation'' ·and ''nullite'',, are ''annu cts with of law contra the · transIated as ' 'invalidated'' or 'invalidation', tl1e Arnl1aric being ''t .�(I ='' or '' oatj!�il 1 Ill ' Art 169 8, an.d 1701 : Art. in ='', :,. � 1699. � or, ''oa :'' In is ''�l Art. lation � ,, oo.,.��.,, 1700 , tl1e trans . . .rnwc•.,.,.,..,�.,, 9 .v,· · and ''��lil 1'' in Art. 1808 ''tt�(I :'' and ''fllll •'' in Art. 180 it IS ,,uand n Art 1 t ab l l v , Tec e e ess Tad 18 1 Ato t of '' i p i : 0 ouf1�11 •'' The author ac knowledges he l1el the Amha r1c text. · •

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1e not 1ie" acl s doe hat t v' it It . act • set pty em ail out to s t _ac 'd voi A do. It d Qt1o '' . ces ue11 1 seq l11-n con 111.1l est l lega d ilde l inte ' nul . ti . 1 eve �I ts . does not acu Proct m . 1n th ere t xb· h .uc c: c \\' e1e 1s d a so uc1t to due fun d 3 voi dam is act e A n nt . . . t as al . effectum.,, '� ct '' A defie 1nay in� k" a J U st1c act eith . e 1: t� 1s x � ry e v s it f . o t c a e er ·� deprive th v � 1 o : � � ,, _1 ; d 1s o e c t e t' ti ., f a h t v e e 1 "'.' u s � e is t � fe I_ gal rest1lts c l e d e th If .. le b a id . o r vo o 1e T con d . l v n t 1 t, o , v 1on b e a l to wisdoin c n . . t en1pI ated, theil th- e ac.t 1s said . 011cer 01 0 . . ll t ti�; b . ' S . J . l , _ at · c }s ot e�1e 1 ega _s 1 tr1� tl no has r 1t so as the . ctg the void act is that � � l1 suc as or, act tll of OS.; tl1e cr 11 by 1 see1 al ore nin pro e t1o ay have effects unf � c s ut the h abo n poi d voi act e Th . act is t n the t of ity at oal ille a it the mb ecaus . e of . o s:l c 1 eves 1 d conseqt1ences an 111so1.ar as t h.ese are conc ern . 00 part of its iiltended legal ect it . bas 110 effect and can be ignore d. A voidable act is an act whjch, altl1ot1gl1 it contains a defect, bas its intended legal effect. The defect .in the voidable act is not so seriot1s as to prevent it from coming into effect. ''An act that is incapable o_f taking effect according. to _its apparent purport is said to be void. One which J?lay t��e effect b11t 1s liable to be deprived of effect at the option of sonie or one of the parties is said to be void able."5 The de f. eet contained in the voidable act is su :fficie11tly seriol1s to enable the act to be subsequently attacked by one of the parties and declared void by the courts. If, however, it is not avoided tl1e act \Vill ta ·ke effect as a valid juristic act.6 One learned writer bas suggested that tl1e correct way to view the voidable act is as ''an a�t which gives rise to the i11tended legal co11seq11ences, bl1t at the same tjme gives rise to a counteractive right which may ne11tralise those consequences in so far as one of the parties is co11cerned." 7 A void marriage, if sucl1 exists in Ethiopian la\v, is one to wl1ich tl1ere is such a serious objection in law beca11se of a grave defect tl1at, sbo11ld its existence be in question, it will be regarded as never havi11g taken place and can be so treated by all affected or interested parties. Any cot1rt declaration n1ade would 1nerely l1ave the purpose of affirming that the n1arriage never existed and of clarify ing the sta t�s of the parties as 11ever havi11g been married.8 A11y person havi11g an interest tl1ere1n could petition for a declaration of 11on-existence of tl1e marriage at any time, even after �1e death of the parties. Si11ce tl1e parties 11ever l1acl tl1e status of husba�d and wife none of the 11ormal legal conseque11ces of m,1.rriage \\i'Olild follov,. For

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· G . R ipert and · J. Bo�l.anger, Traite cle c/roit civil, (Paris, Lib�airie geuerale de droit et de juris. ce, 1956), vol. 1, no. 1369. prtiden G. W. Patton, Jurispr�dence; (3rd. Ed. by D. 'P. Derliam), (Oxford U11ivcrsity P�ess, 1964), p. 281. F. Pollock, , Jurisprudence ancl EssaJ s, (London, ·MacmiJian, 1961) p. 89. · . . t righ · ) th e Fo r ex a · tative I mp c· e, ivt1. c0.d e Arts. 313 and 314 give the n1inor (or. I1is ·represen · . . does . or min · to appJ� for nullrfi:cation of an act perf If the s. pov, , er l1is orrried of in exces s n ot nullify the act 1t r�mains valid. . . . 31 . 7 · :· � Newark, "The Oper�tion of Nullity Decrees'.' . 5 (19 4 , ol. Mo ev. d. L. R , v , 8 , 5. ) p �OJ . . a e · wheth · r · • •. 7?4 - · 0 f · the ·c·tvi · · 1 Code provides: ''Only tl1e court is con1pe teot to - dectde sugge5l · 8. Art to marriage has been ·contracted and h ms . see · • of This • ,, . 'd val1 h on 1s w · et er st1cl1 marriage tat1 rifi that all . ca. ses -even tliose . ge cla . Of vo1d ,. marr1a ior c ouit ·r. . tl1e . must to be e d ' '· refen· th, e pos1t10·0. · 3· . 4· · 5· . 6·

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comm unity no of prop be erty, · so the ··surviving. spouse could woul d .nstan e t· h er e . c 1 a e ter f h death of the other spquse. Any. marriage cont.,. t share her or bis 0;m · not c1 � · · mar 1age wou vo1 Id not come into �ffect. The wife w�uld ct h t to prior : � made _ r,act The cl11ldren w �uld �o� be the c�dren of the marriage d0Illlc1le. o,vn her retain ve tl1e1r pr dot1bt fil1at1on as no der1v1ng f1·om an irregtilar could � they ough . alth be raised a as defence 111 oth r could legal actio�s since all matter e th � And . . _ n unio . _ themselves concern with a void marriage. may parties .. sted 1n . . tere A voidable n1arriage is qt1ite differe11t fron1 a void marriage. The marriage will ti11g ma�·ri�ge. unless and until it -is attacked. As t?. subsi valid · a as ded � regar be _ _ n1arnage a d1st1nct1on 1nt1st be · drawn between a marriage the effects of a voidable 10 is never attacked voidable, and ther�fore never avoided, and a which, althougl1 marriage which is avoided. In the fo1·mer case tl1e marriage will be valid and all the normal legal conseqt1ences of 1narriage will follow._ I11 the latter case a further distinction must be made between those marriages whicl1 are declared void retros pectively and tl1ose marriages ,vhicl1 are give11 effect 11p to the day of avoidance. It is here that the t1se of the word ''voiclable'' may· be criticised. It fails to dis:.. tinguish between the act which i� not void qb initio but is .declared void retroactively by a c.ourt, and the act ,vhich is· deprived of all f11fure effect by the co11rt but � · ' which retains st1ch· effect as it· bas had up to avoidance. 11 •

Three categories then emerge. The marriage which is 1 oid ab initio, that is which never came into being or had any effect; the marriage which is void retro actively, (ex tune), that is which came into being, ,vould have been valid had it not been found out, but is now deprived of_ ati_ . etrect; a11d the. marriage which is void ex nt111c, that is which is deprived o_f effect for the future but '".'.hich _holds · law clearly good for the past. The only category •into �hich _the ·Ethiopian n. 1 art.iage · · · · · · · · · · · · · falls is that of void ex nunc. . T he Ethiopian law relati�g 12to def�ctiv.e · m_ arriag�s does not us_e t�e.. term '' nullity'! m reference to such marriages. • Defects are. 9la�sified along with d,eat:b. and. divqrc� 3:8 a cause for the dissolt1tion of marri�ge·.1� The words ''application for dissolu: tlon'' as ''a sanction of the _. conditiQns of m(\.rriage' ' 14 •. are used in the Civil Cod� for what is traditionally called n11llification. The significance of the · Cjvil Cod� terminology is most important. Dissoll1tion of defective marriages has much the same •

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9. E_ ven if no n1arriage took place� the court must be given the ·opportunity .of clarifying the situation. See G. Ripert and J. Boulanger, cited above. at note 3, vol. 1, no. 1319. IO. The ight to attack � a voidable marriage is generally limited to those closely involved. The que �t�on of who has the right forms the basis in French law for the distinction between nulhte absolue and nullite relative: The reason is that where the •de.feet is not serious only the parties have the right to avo id the marriage. 11 · Writers on void and voidable marriages are aware of the ambiguity. See Newark cited above at note 7, and the letter it inspired· by Latey, M.L.R., vol. 11, (1948) p. 70. ·See also_ the �rk � by D. Lasok,. D. ''Approbation of Marriage iri Engllslz Law and t/1e Doctr11ze 01 � a relation'', Mod. Rev., Vo 2 (1 · l. 6 963) p. 249. 12' : �ptions t? this are Art. 369(3) which uses the word ''nullity'' in reference to m�rriage; . , � 7 whlc� uses the wo d ''null''; an Art. 623 which deals with of t 1lmen 'annt the �. � . religi · us marriage by the religious author1t1es. · C 13. iv. C�, Art. 663. 14. lei., Subart. (2).

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11tag adva e, the i o�, ing avoid has This tlle s · · pr0blems . vorce 1 d s a s e c n e u . se.q co.n , . ·· . .. A 1te ·, ng 11· r1.11 11u o cco ·r . to t cep con h1 Rip the h c w ert B gh oti thr a n w a 1 1 1 d c . n e o aris-e 1n Fr u . : Jan . . _ _ . . , led nu a1� 1t . · ger. 01 ll 11 u n_ ca no r�d cla de long er pr o d s 1 e ag rri ma a ''\Vhen uce ed dt1c p1o has llp to 1t tl l1 h1c 1 v, ie11 disa ppene ar a'.c t ·, and all those any e11e . . . . d The a t " . e . e 1anc . J}:>ea. I ex1s o f ave , h 1 to egiti er nev . ted macy wh'1c11, • repu since 1•t 1s • . e11 to . . 1 f 101 e o t · h u11 se the g1v s per s ha on 0118 is retro. ati ebr cel of t C f: a e . . th . . . 11t 1ne 1nce not , o, · pro f 11u111ty. • d 1c1a I Jll the Qttod nullu1n e . by ed troy des act1vely st ,, 16 nullum producit effectun1. . fit into the category of marriages . to seem would law 1.he French ,, 0d actively. In order to get � round this difficult� a tl1eory of pt1tat ive m arr;ag :e�: introduced for those marriages where . one 01 both of tl1e �pauses had acte d . 1� to re de h theory of the r t n _ 1s e putative effect good faith. The marriage void nu,1c vis a vis the partner in good fa1tl1. Such a theory 1s 11ot 11ecessary in Et�x pian law. A �eliberate de?isio11 w�s ta�e11 b� th_e clrafts1na�1 to �'leave Oltt all t�e gives to r1s� n1a11y d1fficult1es, and wliich theory of nullity of marriage, wh1ch. in ?f the exceptional effe ause be t of applied any case is rarely the theor y of putativ � � e . of and 11ot nt1ll1ty, d1ssolut1on, 1t of l1as speaking In marriage. bee11 po 5sible to 7 avoid the theory of putative marriage." 1 Good faith is relevant to . Ethiopian law not in determining when tl1e dissolution will l1ave effect b11t only in determining the consequen.ces of dissolution. 18

II THE CIVIL CODE PROVISIONS ON INV A.LID MARRIAGES Invaljd marriages regulate� by the Civil Code are those _which hav e been cele brated despite some obstacle or impedim�nt to the 1111ion. Such impediments wer� known to tl1e Fetlia Nagast and covered obstacles to the 11n1on · arising ·rron1 prior relationships, from pre·vious marriage, or from age: Also incli.1ded were defects arising from the ceremo11y itself.19 Sucl1 - marriages were prol1ibited · and in some cases gave rise to penal sanctions.20 Many of the imped'iments found in the Fetha Nagast have been retained i,n the Civil Code�21 But those relating specifically only to the rules of religion have been dropped.22 15 · 16·. 17 · 18. 19 · · 20. 21. 22.

I�., Art. ?96(2) orders the court to be guided by t]1e rules for divorce in dissolvin g a defec · t1ve marriage. G. Ripert and ];.Boulanger; cited above at no te 3, vo]. 1, no. 1369.. R. Davi_d, Le droit de la Jami/le dans le code cii,il ethiopie,,. (:N1ilano, Guiffre, 1967), p . 57 T:anslanons of Frenc9 texts are made by. th wr iter .. e . C1v. C., Art. 696(3). . • ·un.pedin1ents _· Nag':st, (t_ransl-ation, Fetha · various Ab�a Paulos Tzadua, 1968), pp. 134--144. Tl1e . ations ip foster I by b consangu1?ity or a �n ity ; other· relationsl1ips, st1cb as �hat ?et,;e�h ist1an· ;��e: god.parent and r O lack godc l11ld , slav e, guardian and war · · · s pre,110 • u s1v · d ' master a11cl , ·' · . . be..a1e :1 ., f o'f one par tY,. ·Impoten time ce· · 11.age · party 111arr1ed tl1ree onse nt · no one party a nun• woman agea' bigamy·' disease·'· one f c � over lack si od; who ty; d \.vido of 1,erio r x . · ch, the chu · (woman to be over' twelve yea · · by rs, man to be over twenty)·' Jack of forn1 required Id.,, pp.· 297 - 299. : · See st It was the iate· ntion of ti1e draf · t be 1.;e -c,11za Naga . . tsn to n a · le poss1p conserve as far as R . Dav1·a, ·c1• ted -abo.ve, at note 7 �_ 1 p. 5 · An , · r · Forms of mt�:r ·•::if _un de the .'. . . Y• · rt.· 57 7) are: civil, !·el1�1ou and ' �storna r C1v11 Co�e (A t unde on error as to · �for d15� J u i gion � one•s spouse 1s a . . -, groun d for an appl1cat1011 Art. 618. ...

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VOID AND VOIDABLE MARRIAGES IN ETHIOPIAN LAW

in the n1arriage C�vil Code fall i 1;1to thre� categories. Firstly t nts dime � Impe _1mped1m nt o tl1e cele ratio of t 1e n1arr1age w t h does no ? ! ?� 1:1 _ _ � ! _ � affe?t th ere is the type this of 1mpe i , IS . �1ere]y proh1bitorr, Conta111ed 111 ment val1d1t � nt eqt1e y its subs 23 and marriages celebrated celebrated desprte oppos1t1on marriages are _ this group . 24 . In b wido hood. of of tl1�se case� the obstacle �o the oth _ � within the pen?� fan11ly, n1arr1 ge by cl1ssolve d on less months s1x tha11 previously), oppos1t1 ( e � _ rriag ma . . t ge fron marr1 ak111g ; plac t take does l1ov✓cver 1f he tl1en place, eve11t p � � _ _ � uld � � sho � . . 25 teh marriage will be ,,al1.d, d.esp1 i:e tl1e 1111ped11ne11t. A cr1m111al sanction may be the celebratio11 and to the spouses and applied to the at1thority 1·espo11sible 2for 6 tl1e in 111arriage. B11t t11e 1narriage cannot be a.voided beca in,,olved other parties use of a prohibitory impedir11e11t. It is valid after celebration. The second grot1p o·f i111pedi111e11ts contains tl1ose vvhich 011ght to prevent tl1e marriage from taking place a11d which 1·e11der it vo.idable27 if it does. These are relative i1npediments. The distioguishi11g aspect o.f this gro11p is that the marriage, although voidable after celebration and thus open to dissolution, can be subsequently validated. Th· is mea11s tl1at t11e 1narriage vvhich is voidable after its celebration d11e to a defect therein cat1 subsequently become valid through the ex post facto ren1oval of the impedi1nent or by the passage of tin1e. This process is �nown as validation. Those marriages wh.ich are initially voidable but capable of validation are thoss invalid for non-age,28 bigamo11s marriages,29 m.arriages of incapacitated persons,30 marriages contracted under duress,31 and n1arriages contracted in error.32 The concept of validation comes from Canon law. 33 Where a marriage contained a d.efect but the defect was later ct1red by ce5sation or dispensation, if the parties renewed their consent to the marriage it became valid. In practical tern1s the conti nuance of the couple in living together was often sufficient to c11re the defect i-f the impediment was not publicly k110\-V11. The reason for permitting validation \-Vas the desire to give stabilit)' to marriage where the parties had shown their constancy. In secular law one can observe validation iu operation in E11ropean co11ntries and in Ethiopia. 34 The Civil Code pro·vides that a marriage wh.ich is voidable for non-age 35 can be dissolved on the applicatio11 of any interested person or the public prosectitor. 36

l3.

24.

26. 27· 28· 29. 30· 31· 32 · 33·

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Civ. C., Art. 592. See R. David , cited above at note 17, p. 57. Id., Art. 596. Id., Arts. 619(3) and 620 (3). See F.C. epoux B. (Cour d'appel de Douai, Fra., Dec. 28, 1908) Dal/oz, 1909, pt. 2, p. 102, for an example from French law. Id., Arts. 619(1) and (2); 620(1) and (2). "Voidable'' is used here in the se.nse of ''capable of being dissolved'' at the option of certain person s. Civ. C., Art. 581. Id., Art. 585. Id., Arts. 587 and 588. Id., Art. 589. Id., Art. 590. �- J. Sheed, The Nullity of Marriage (New York, Sheed and Ward, 1959) p. 30. D. Lasok cited above at note 11, p. 257. por e a pl France, Poland and Switzerland, The doctrines of approbation and sinceri.t)' in e m x Common Law h.ave par tially the same effect. D �der Article 581 the age of marriage is cigl1teen for a man and fifteen for a woman. Civ. C., Art. 608(1).

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. a 1.1cat·1on can· 00 longer b e bro ught onc e the defect has b . ee But th. is pp emoved valid ed is by h the marriage at r · 37. n v remo The me · al of t by t he p assage of t 1 e defect d perso11 v1ho is m arried h •· · s·1°:1:1.1 r1 y •n the case of at1 incap acitatel1as .1 out te � ; ted pa t rmi11?. lity disabi the he the 3s � 11 i � once ca n5ent cit c e approp . on Pers ·e � 1 si ths mo for r afte ion 1 x tl1e ol diss t1t for ter t ly ap, it) at1011 . 40 has tl1eiiarJght o p y 39 on l t l 1e e . r1ag to m�r d e se�t con may ha,,� y appl ld shou wf10 for on pers The diss o}u . hon 110 and 111 only, case 1t of after the disabilit within six mouths . of learning has Y ceased.41

42 and error43 tl1e right to apply for duress dissolu In the case of tion is 1.1m1ted · . . . to. the v�cti�, and _I1e or she h as a two _ye�r n�ax1mun1. p eriod_ 10 whicl : to make t�e application w}11 �h must be made w1;lun six . n1_�n�hs of_ t�e cessation of the violence44 . or tl1e discovery o� the er�or. . The I1m1tat1on of time recognises that the marriage has lasted despite the 1n1ped1ments a11d s11ggests tl1at the defect is :Jrued or accep ted over time.

The bigan1ous46 ma rriage is voidable at the instance of tl1e co11sorts of the bigamous spouse or the public p rosecutor.47 It is validated on the day when the former spouse dies.48 In tl1ese cases of voidable yet validatable marriages criminal sanctions are appli cable to these persons who knowingly celebrated or took p art in a marriage cere-

)

37. 38.

Id., Art. 608(2). A minor needs the consent of his gt1ardian to be married as pr ovided in Art. 309. This requirement would seem to apply only to female minors as a male n1inor (under the age of eighteen) cann o t be married except in the very unusual case of a dispensation under Art. 581(2). A judicially interdicted per son is reqt1ired by Art. 369(1) to l1ave tl1e consent of the court. 39. Civ. C., Art. 615(1) and (2). 40. Id., Art. 615(1) and (3). 41. Id., Art. 615(1) a.nd (3). Tl1ere i s a con1plete cliscrepancy here between Art. 615. and ,.\rt. 369(3) on tL1e invalidation of tl1e n1arriage of a person who is jt1dicially interedi_cted. Art� 369(�) provides th_at any interested person may apply for a_ declarll:tio_n ?f n_ulltty of �� / marriage at any t1nJe. Art. 615 seems to be the correct version as 1t 1s in lme \\ttli other provisions in the section on invalid marriage. 42 · J?0 re�s }nvalidat_es. conse�t, and i deemed to ex is t, wl1ere consent is giv�n i!l o rder t.� P��1:; � tl,e victim or his immediate family "fron1 a 111 enace of a grave and 1m1111nent . e, 11 . de c. . - · Art. 589(1) and (2). For an. example i11 French JaV, see tl1e decision in Pietro ni Math11 Serpaggi (Cour·ct'appel de Bastia, Fra., June 27, 1949) Dal/o , 1949, p. 417. z use spo er 43· E 1 i rror inv O 1 · a}"d . ates co_ns�nt wl1ere an error f st1bstance a� to _the pe�s?n o f tt1e t "bodily � . 591 l1m1ts thes d 18 niade. Art. an e errors to n11 ·1ar rcl1°o1on ' health t1tv as stake . t s o 1de11 . ' . · . ', . 11 s1n is co mormat!on · It 1s not clear what is co l 1. . 11c l ,v law. Fren ch 11ot. vere wl1a e d and t i s otenc imp · llas been _mterp_reted to c<?ver �ases of mistak:es as to na.tio11ality a11d past histo� y, aod genuine mistakes of 1dent1ty. See the no 42· Da Es by P. z te l/ n1e in , o , 1955 P· . 44 Civ. C., Art. 617(1) and (2). 4.� .. , !d., Art. 618(1) and (2). er •• I{owev '' · · · 46 · ''Brga� · otis in the Civil Code is o yga po ts. und i oub inc ted lud ly nte to nde o Ar d e '' l m f� · · th f tu1g f9r th� _ objection �l1at po�yga dra the in my l1as not been f oreseen . . . 611ea�� r�ff 1

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47. Cjv. C.., , Art. 612(1). 48. Id., Art. 613.

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VOID AND VOIDABLE ,'M·ARRIAGES ·IN ETHlOPIAN LAW .,

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49 �espite the· .. �riminal · an im� e diment. was s· tl1e�e a tictfon th� which to . onY for the sake ?f ensuring th�1r · stab1l1ty by . e°:abliilg �hem validated e can ges ? :arria _ e fect has the d disappe red or no er significant. · w�en 1s long a va!1d ome . to · bec ents form tb.e third cate gory. Thes e obstacles are so grave that o ped1m 1r lute Abso er �e cured ��d th �refo�e tl1e n1arriage ca11 n �ver be validated. Only ev can � they elute, tl1 �t wl11c11 preve nts the n-1ar�1age of �hose w_ho ar· e_ � 1s ment mpedi � i � one . 50 related by consa_ngu1ruty �r affi�ity. If � co11ple are marr1e� �esp1te tb1? impedi ment their marriage re mains vo1clable. It 1s open51 to an appl1cat1on for dissolution or_ tl1e on er public prose e interest � any �trtor. Since t �e impediment can never ? p by 52 1t 1s 1n1poss1ble for tl1e marriage to be validated. Here too th ere is oved, be rero , for tl1ose who kn e v or should l1ave known of the impediment sanction inal crim a and \vho assisted at tl1e marriage.53 Both the marriage to wl1ich there is a r elative impediment and that to which there is an absolute impediment are voidable under Ethiopian law. The former . is voidable until validated, tl1e latter is always voidable. If a marriage in either of these categories is dissolved its prior effects are retained and it is void only ex nzin,c. The consequences of dissolution for invalidity ar e very similar to those of divorce. The regulation of the matter is l eft to the courts who are exhorted to regulate the dissol11tion according to equity, to be guided by the r11Ies for divorce, and to take into account the good or bad faith of the parties, ,vhether the marriage has been consummated, the interest of the children and of third pa.rties in. good faith.54 Since the voidable marriage is treated as valid until it is dissolved and since the effects are similar to divorce the dissolution is purely prospective. Even in the case of a bigamous or incestuous union the marriage retains its prior pr� sum·ption of validity after dissolution. There is no example that we could discover of a marriage which is voidable and if dissolved retrospectively void. The policy seems 1 a simple and sensible one, since questions of prior stat1s are avoided..

m 'I'HE STATUS OF THE BIGAMOUS MARRIAGE

The bigamous marriage, as previously discussed, falls into the category of ma.ri ages which are voidable yet validatable. To th· ese marriages a presumption of 49 • Id., Arts. 607, 61 I 614 616. The case of error is an · exception since this is a person· al matter. The criminal ' sanctions referred to in the Civil Code are those laid down in Pen. C., Arts. 614 and 615. But tl1e Pen.al Code does not provide for all cases foreseen in tl1e Civil Code. It is possible th.at in some cases where the Civil Code says th�t . a penal sanction will be applied that the Penal Code makes no provision for such sanction.� The policy,· of. provid.ing such sanctions is a curious one as i t will deter the parties involved from .bringing an application for dissolution. \ so. Id., Arts. 582, 583 and 584. Compare the three versions ;,of th� Ci'vil. Code. The English a11d the Amharic give effect to the bond of consanguinity to the seventl1 generation whereas the French version says ''degree' . Tl1e bond· of affinity l1as effect to the third degree. ' 51 · Id., Art. · 609. . 52 · Th e o·riginal draft of the Civil Code contained a provision wl1ereby the relationship by affinity .would cease upon the dissolution of a marriage. This provision was changed in Parliament resulti1;1g in Art. 555. See R. David, cited above at note, 17, p. 51, f. n. 1 and G.. Krzec :�owicz, Tw_ enty-fo u: Problems in Familty Law, (1�70, unpublisl1ed. Library, Faculty of Law, atle SeUass1e I University), problem 2, and ''Quizzes'', J. Et/1. L., vo]. VIII, (1972) P· ,203 _ 53. C1v. , C., Art. 610. 54' ld. , A d : . 696(1), (2) and. (3). In Swiss law, the consequences of nullity are those of. divor�; i . co e civile suisse, Art. 134. 1

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. . . attached tintil avoided by dissolution. Nevertheless the biga111 o . is . us . . 1Idity va . . tn r b t me a co . t OLl . t a11 . no at1 om cally after · a r1age . u i ue in that its validat1011 does I pse of the rs of a a n C atl1 e spouse d. t fi tl1e pon . 11 ertai occurs �� pro 61ems ' t1n1e'� 91t's ,,alidation . · . t ·\1r tl ues 1e 1011: q 011 1v hat is the sta tur11 a y Tl1e re . ity. lliar pect this by d t raise . . f ti s h 1 o . Etl11op . so e a •t· oes oen 1 I ? D 1 t . motis. i narr.iage 111 1t e · "' i" f . a,v 1 ron 1an . the pre · sun1pt1on f . b1ga 0 validity? Article 585 states: ''A person ma y 11ot co11tract 1narriage so loilg a is �e : e . 1 r iage s ss l1ele �ert li11g N e � ' prec r s0111 � 11 of a c e s n boi1d il tbe pers o bou d by 1 t i l11le st ll 1age bo1111d to another s t s �dy \V married go th:o i .gl1 a ceren1ony of n1ar1· po e i e al Code for l1e e e der ?11e who _"b in g ti d I� P n -� this li appe 118 1t 1s �n offe�ce 11� . 6 Y racts co11t ally a11otl 1t1on 1nte1 1er iage, marr i 1narr val1d a age . of bond tbe be"o · l' re the . 55 · .1 pa o e r · I d '' B tI t · 1es to . the b1gainous union first uru? 11 bas bee1 1 cl1ssol_ ved· or · �1111:1 . p tl e b 1� -�e 111 1 �na 1 Cod� 1s ''cases wl1ere 1� . isI1able. . An except1�n_to t are pun poJy. . " garny 19 recognised 111:der c1v1l law 1n. co11fo1n1.1t� vv1th tr�d1�1011 or 1noral lisage. "56 Since 110 sucl1 except1011 \\1as 1nade 111 the C1,11I Code �rt1cle 585 holds sway. . 1 t� 1nake _s11ch. a11 drafter excep. t 1011 �f the wa_s tl1� int�11tio11 for the Mti slim popu� lat1011 1n T1tle XXII but due to _the ove1work of the translators tl1e draft of tbis title was never tra11slated, never discussed a11cl 11ever proposed to Parlia111ent.57 Thus tl1e law of Etlliopia recognises only monoga111011s inarriage. 58 If a couple are married bigamo11sly eitl1er of the co11sorts of tl1e bigamist or the p11blic prosecutor may apply .for dissol11tion of t11e 1narriage.59 The b11rden of proof is or1 tl1e applica11t to s110\\' tl1at the first co11sort v,1as alive on tl1e day of celebratior1 of tl1e second 01arriage. 60 Tl1e la11gt1age of the Civil Code is ver y imprecise here. First]y the proof required on a11 applicatio11 for dissolt1tion sl1ould be that tl1e for1ner spo11se is alive at the tirne of applicatio11 for dissol11tion, not at the ti111e of tl1e bigamo11s marriage. This is beca11se Article 6 I 3 provides: "The marriage contracted by tl1e bigamo11s spo11se s11all beco111e va.lid 011 the day \Vhen the forn1er spouse dies." Thus the forn1er spo11se could be alive at tt1e time o f celebra.tion of the bigamol1s 111arria ge, yet dead at tl1e time of applicatio11 for dissolu tion and the marriage ,vould have become valid in tl1e inter,1al. If dissolution of tl1e second marriage then takes place, it is by divorce. Secondly tl1e wording of Article 613, altho11gh quite clear, raises the question of what bappe11s whe11 the for mer marriage is dissolved not by the death of tl1e former spot1se as foreseen �y 1\.rticle 613 but by divorce or as a sa11ction of the co11ditions of marri age. \Viii this have the effect of validating the bigan1ous 111arrin.ge? The logical a11s\ver ,vould •

55.

56. 57 ·

58. 5 9.

60 .

Pen. C., Art. 616. Id., Art. 617. ,, R · Davi·ct , cit� · d above at not e 17, p. 8. The proposecl Article on bigan1y .rea d s fo!Jo,vs: � of the Art: 3487· Bigamy. 1) where the h11sband is tion religio11 the dissolu of Ml1slin1 the ( rr e may. be pronounced only at the uto� . pro t sec req p11 ue bli st of c the . excep ;) ��e pub!•� prosecutor may not 1a,v, by fixed date make tl1c an until applicatio11 wh ere_ th e Minister for Justice ha s m ad e a special request " J{ dis . t . Bt1t since the Mus, by the a . lim · popu1 at1on ers • ma t al continues to be 62, person 1n . gover11e d o , N d C Sh ari., a our ts under the Kadis and N a � aib s Councils Proclan1ation, 1947, pre· repeal of G eg. _ az., y �a r �' no. 9, monogamy is no e11 irely tl1e rule in fact, desp ite t e t t M· usIim Law rmplied by the genera l repeals provision of i11 Art. 3347 r ight to . • c ng t. havi T l1e of tion big. a m n ist JJOsitio en is ( . left in tl1e awkward att a;; trie o l) o f the bigamous ·a " jy ��r �_1ssofulfion t ma rriage · Il- e could bring t l1e n1atter o . 'l the publ1c pro · secutor and r·1sk a cr1n11n al prosecut .i on. Id., Art. 616(2).

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VOID AND VOIDABLE MARRIAGES IN ETiiIOPIAN LAW

havi11g been impediment re1noved there the is no since obstacle in yes, be to

s ::m which e Polish Jaw Th to is . c loses iage. f · the ar Ethiopian law on the � o � � . . way . 01ts 1nar:1ages pern11ts val1dat1on regardless of the of b1ga1 dat1on val of !1 ter � mat . at1on of the prev1 ous. 1narr1age. 61 It may be that the Eth.1 . �lie op1an law use of term1n with tl1e y w Polisl1 whole. ]aw beca use of the critic�sm the hich go � not :W ��es . . . t wl1ere 1e ?n 1 at1dat. prev1011s n1arr1age had e11ded latter. 1n divorce ! y the owed foll . 1 larly repugnant beca11se 1t was tho11ght to cr1t1cs as part1ct Polish by d regarde was 62 . e c r o encourage div Looki11g at the law on voidable n1arri,tges as a whole the validation of the bigamous linio.n fits into the pict11re very well. Yet the law is fairly revolutionary. Bio-amy is a crin1e and tl1e biga111011 s 111arriage is a n11lJity in most countries. The policy reasons for validatio11 of stability and reward for co11stancy are less obviously present ,vhe 11 there is not e.ven a reqt1ireme11t of good faitl !. Swiss law will perm.it . validation, \vhere the non-b1ga1nous party acted 111 goocl faith. 63 In French law a bigamous marriage can never be validated,64 altho11gl1 the marriage may be puta tive as regards tl1e party i11 good faith. Neither Polish 11or Ethiopia11 la'rv look to bo11a fides before validati11g tl1e marriage. It is the bigamo11s marriage wl1ich is neither fish nor flesh, not having been valida ted, nor yet annuled \1/hich raises problems of persona) status. If the second spouse of the biga.mist leaves him and marries agai11, will the second marriage be also bigamous? Other countries with sin_ lilar Jaws ge11erally allow the invalidity of the first marriage as a defence to_ a charge of bigamy. 65 If the bigamous spouse dies \Vhile the bigamous marriage still subsists can tl1e marriage be subsequently attacked or vrill both surviving spouses be legitimate? Fortunately tl1ere is no problem con cerning the status of the children of the second marriage who can prove their fil.iation without difficu] ty. 66

61. The Polish Family and Guardianship Code (translation J. Gorecki, in D. Lasok, Polis/1 Family Law, Leyden, A.W Sijtl1off, 1968), p. 266, Art. 13 provides; ''S. 3 . A marriage cannot be annulled on the ground that one of tl1e spouses is a party to a subsisting n1arriage if the previous union has come to an end or· bas been annulled, unless the previous union has come to an end by the death of tl1e person who had contracted tl1e bigamous marriage.'' 62. D. Lasok, cited above at note 61, p. 262. 63 • Code civil suisse, Art. 122,. provides: :'There is no nullity in the case of bigamy, where tl1e precedi11g marriage has been dissolved in the meantime and where the consort of the bigamist acted in good faith." 64. An application for nullity can be made after the dissolution of the first marriage. There �s no analogy with the validation of other defective marriages: bigamy is considered too serious a defect to allow the situation to be reg11larised. M. Planiol et G. Ripert, Traite pratiq11e de droit civil, (2nd ed. 1962, by A. Rouast, Paris, Librairie generate de droit et de jurisprudence) vol. 2, no. 266 . 65 · In French law tl1e bigamist can raise tl1e n11llity of the first 1narriage as a defence under Art. 189 of the Frencl1 Civil Code whic·h provides: ''If tl1e new spouses oppose tl1e nt1llity of the first marriage, the validity or tl1e nt1llity of this n1arriage must first be decided''. Art. 124 of the Italian Civil Code is similar. 66· \be children can clain1 to be tl1e cl1ildren of a marriage un.der Civ. C., Art. 740. Alternatively � ey can . claim . to be tl1e cl,ildren of an irre�ular t1nion tinder _Civ. C.,. Art. 708 c111!1 Ar_t. 45 (l). The writer favot1rs the former . solt1t1on becat1se even if tl1e b1gamot1s marriage _is :: tacked it_ wil] be valid as regards tl1e past, and because Civ. C., Art._ 708 defines an ir gular un10 as. ''the stat of fact created v.:I1en a man nd a woman.li,,e _toget11er as lius � band and � 7 wi fe w itl1out 11av1ng contracted. marriage''. The bigamous marriage 1s a case where m . arriage has been contracted.

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of tl1e Civil Code tl1ere was no doubt as to th e ta tus of · stat 6� the l g1. e irre hav an of us to 1lar was 1 n1011. . . bee11 reta1necl t here wo11ld. b, e an easy ans wer to If . the co11sort. As 1t 1s tl1e q11estion is 1e questions d on the sec ft open. . 68 Tl1e r s l1t lig to 1 le1 ob . pr t l 1 fac ica typ a ht ug r bro we e as iollo . A reCent case . . · . �s. c 1 w t · A two e h t 111 1 ot rti 1ed pa �J.:. � e es op n 1 bee app g vin . eared cl 1 A probate file 11a . _ m a ccd 1ff d11 111t pro pla o tw e TJ1 . sed cu cea do de the of n me e vvif ts 0f \vh, . • to be the · ing · · ·. h � 1 ) I a C h · (Et · 0 194 d ull1J?ort e at d te ca of ifi rt ce �e l1er claiin. Tc . one was a 1narr1a _ � .he c;d l1e t . eas . of c�ec l1 e v11t wif the J1er be to five med clai childr en defendant also 69 �gl1. tl1e I Ito Co11r�, the Cotlrt held d change be�n having ventle heirs. The th:: 1 cl 011 tl1e ease is dec bas of the inarri age of tl1e \.\ 1fe l the plaintiff· was the lega r . cord · e 0111·t d.1scot111'te d ev1'de11ce t h at the p and tlie evidei1ce of ,v1t11esses. · Tl1e C laint1'ff ·had · · · f� · .. r�1g1 1 Af- airs ,vl1en applying for declared 11 er&elf a divorce t? th e M1n1stry of· .F � _ a pafsport to go to Gh�11a with. another ma11, tl1at 1t . w�s alleged tl1at the plaintiff b_ad 1narried in Ghana_ a11d the fact tl1at_ tl1e pla111t1tT had r11n a bar in Jimma. None of t11ese facts i11 itself was held to constit11te a ·divorce. Tl1e Co11rt sa id:7o ''As can be gathered frori1 the C.ivil Code Arts 666 et seq:, an act of divorce, like that of 111arriage m11st follow certai11 legal procedures . Art. 665(3) states tl1at divorce \Vo11ld take place unless it is done i11 accordance \.vith the rules laid down by tl1e Code. If tl1e plai11tiff e11tered into a 1narriage with a11other person l1efore l1avi11g dissolvecl l1er first n1arriage witl1 the deceased, then sl1e \Vot1ld be held liable t�or biga111y; the second marriage, ]1owever, ca.n.11ot invalidate tl1e first one. Moreover, Ci vil Code Art._ 585 provides that 110 111arriage ca11 be entered i11to as 1011g as the bonds of a preceding n1arriage are i11tact. The fact that tl1e plai11tiff l1ad ow11ed and was engaged in ru11ni11g a bar can11ot be dee1ned eitl1er a procedure for or evidence of a divorce, althot1gh it is admittedly a disrep11table and anti social trade.

• •oal draft t he or1g �t s �t1ion · It t he l b1gan1ou providing h.ad ar· tic.le so . concern111g the rights of

, • I

•

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What the plaintiff wrote to the 1'.1inistry of Foreign Affairs (declarii1_g her self a divorce) ca11not by itself constitute a divorce eitl1er, si11ce 1111der the lav1 the 11nilaterial rep11diatio11 of tl1e l1usbaud by t]1.e wife or the 'vViie by the 1111sband is of no effect. I11 fact, unde1 · Art. 665(1) of tl1e Civil Code, eve11 divorce by 1n11tual conse11t i s not per111itted. For all tl1ese reaso11s, tI1e plaii1tiff's marriage was valid t111til tl1e deatl1 fo 11er l111sba11d; tl1ere ,:vas no legal divorce at all." The Court the11 declared tl1e plai11tiff tl1e legitimate wife of tl1e dece ased, aTI<l gave her permission to bri-ng an action to claim her sl1are of comn1on prop erty.

67. P... D�vi� cited above at note 17, p. 57, f.r1.37. Tl1e f.l rticle was: "Tl1e n1arri�ge . c�n��c:�� . by_ th.e big�mous spouse prod uces tl1e effects of· irregula 1 t1 r l1e the union On r . t te m n.� ° for h uruon t e Judges will awa'.1 cI d amages to 1 1, . · ta1t good · 1n \vas 52 l1e tl1e new s1,011se, if , note t . l1a.s st1f inat:.r1a• 1 t1ardsb1.p 11e a ove ab fered ." See also G Kr z e czuno\vicz cited lem 6 and "Qtiizzes'', J. Eth. L., vol. V.I[I, (1 972) 1), 204. ' ; � Cas1;, "No, 68. e etsl,acheJv Benti v. Walde A 1. ega l . Civi , Court . J, M . I-Iigl1 a . ege 11te , (Ad ba dis A b , 1584/60) (unpttblished ). 69. Und er Civ. Pr0. c., Art. 31. 70. Translation by Ato Ayaiie\v Wassi e. - 448 -

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---------VOID AND VOIDABLE MARRIAGRS IN ETHIOPIAN LAW 71 the Court held that St1prem e Cot1rt, the to . . since the plain al On appe 72 d t) a n h e d n tiff (now respo ''abandoned her co11jugal .re�idence and lived like a prostitute, applied for a passport s�yi�g sh � \.Vas divorce?, said sl1e was di�orced to me �bers of her commt1ruty 1n ed1rs and mot1rn111g l1011ses, 11ever obJected to the bigamous marriage of her l1t1sbarid' ', slie .could ..not be considered tl1e legal wife of the deceased. I11 dealing with the judgn1eut of the I-Iigh Co11rt,_ tl1e St1rpre1ne Co11rt said that tl1e plai11tiff's evidence ·'does not in a11y way te11d to prove tl1at she was 11ot divorced a11d tl1at she bad lived ,vitl1 tl1e deceased t111til tl1e time of 11.is death . . . It is obvioi1s tl1at marriage a11d divorce l1ave legal proced11res. But, it m11st be k110\v11 that, in_ accordance \Vitl1 tl1e law, i11 tl1e abse11ce of the instrument - pronoui1cing tbe divorce, it 01ay well be proved by i11trodt1cing circt11nstantial evidence. · In · vie,v of tl1e fact of 1·espo11de11t's v,;ay of life, cond11ct, o.nd actions we l1a,,e not f 011nd tl1e state1nent of the I-Iigl1 Co11rt that tl1ere \-Vas no divorce according to legal procedure, to be appropriate." '

The Supreme Cot1rt was satisfied that the clefendant (now appella.nt) ha.d been married to the deceased in 1957 (Etl1. Cal.) a11d declared l1er the lega.l wife. It is st1bmitted ,,,ith dt1e respect that botl1 cot1rts were wro11g. Both took the view that there c·ot1ld be only 011e legal wife. But if the view of the High Court that the first marriage was not dissolved is taken, the11 the second marriage, bene fiting from the presumption of validity since it was never attacked, is also valid. There are three modes of clissol11tion of mar1·iage, of wl1icl1 dissolt1tion for invalidity is one.;3 Both 1narriages no,v having been dissolved by deatl1, botl1 wives have ari equal claim to the common -property. 74 Even if the first -wife could attack the second ma�rriage after the death of the bigamist the effect of clissolution for in·validity \Vou]d - be an -award of common property to the second wife.75 In any case it is extremely do11btf11] tl1at a11 application for dissol11tion for invalidity can be brought afte1· the death of one of the spo11ses. If the first consort dies tl1e second marriage is va.lidated under Article 613; if the bigamist or the second. consort dies makes a specific exception �he second marriage -is dissolved by deatl1. Polish law 76 No s11cl1 exception is made died. I1as bigamist allowing n the wl1ere nullification � 1n- Ethiopian la\v where- the causes of dissol11tion are treated eqt1ally . . •

. T'ne criticism of the St1preme Co11rt decision is that the burde11 of proof has shift� d to the plaintiff to prove that she was not divorced a virtually impossible task under the· circ11msta11ces. 77 This is a discordant with Article 707 which provides: • 71 · �/olete Aregay Megente v. Beletsl1acew Benti, ( Supreme Imperial Court, Ci,1 il Appeal No. 62-62) (unpublished ). ., 72· Translation by At o Asfaw Seife. 73 · Civ., C., Art. 663. 74· Id., Art.· 689 75 · Id., Art. 696. . ;� - The· Polisl1 Fa.mily and Gt1ardiansl1ip Code, cited above at note 68, Art. 13, 3. s. · · A�thougl1 it is intended to require registration of marriage at some time in the future f�1 is �ill._be of lin1ited t1seft1lness tLnless I101nologation of di,1orce is also reqt1ired. See R. David, cited above at note 24 p. 53. ,

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111111 or l1as been clis l is e ag 1·i ar m a at th s ge le al so vect sh ''The person. ,vho all Pro '' Ve 811 ch allegation. . 11g Y �t tli r . ?l ba ro Tw is o or even mo re l1e ted es � gg su g . � in be What is re c 0 n st. n11 o ga b1 Tw a or son of r ses n1o ot1 sp e al leg sp e tli be s ou to ;m es can . 8 . can Cl 1 ?. E-•t··h 1op1• i� I a.vv t,:tkes a libe t aon c i1o y Wh ty. per pro n n1o com � ral of . ey e _ r_. tl1 a share . atti t d o e u ,tr r11 l1e bo t et wh to of ss le e rd th ga re w ife O t1 e tl e rights of children78 con. i : ge h t ha r 1na re a sha o of ve n na dre h chil wit er, c fatb � the ildr n 1ts c bine of 1d of e tr11e ses? 1 b� 1. spo �lso Tl1e _11ot this � 11ld obje sho y Wh ctio e. riag n m mar . he ar . �11l 011, 1rre un1 an s a _ 1s e nd 1!1g r r_ 1�te n1a � ed ous a1n big b a y the d a made that fts. m 1 11 of sol 1n�1 011 1 _ d1s the al d_ s 011 1?n �1s pro � the a at arri ge should maii. A glance . _ be . . t1 ges t 11 s11g 0 tl1a tl1e the and ion ect am obJ b1g 0118 mar·riage h sufficient to a11swer that · · · · as 1c t rr11 . h h 1s 1t s d · 1 1 e _ a n1e 111v for 11 1 as l11t sso 1 d Di �vorce and the � � . no legal status. 79 Tl1e ma�r1a�e, sucl1 . e_ prospectiv p11rely effects are _ as �t \\,as, 1s valid for as lo as it lasted. Termi11atio11 of 1rreg11l �r 1101011 1s _q��1te � d1ffe�e1 �t matter. No comm�; 80 and tl1e highest expectat1011 1s 111a111tenance created was property for the woman for six montlis. 81 Two serious objectio11s may be 111ade to tl1is co11clusion. In practical terms it 1na be difficult to allocate common property bet wee11 two spouses of a bigamist or to apportion a pe11sion betwee11 tl1em. Com1111111ity of property starts from the day of mar,riage82 a.nd so the common property wo11ld b. a ve to be apportioned according to length of 1nat"riage. N11merous difficulties a11d argt11ne11ts \V011ld follow from ih is. One car1 im.agine only too well tl1e claims that wo11ld be made concerning the time of acqt1isition of the more valuab]e property, tl1e allegations that would be made concer11i11g personal property. It is also doubtful \vhetl1er the section on pecuniary effects of marriage l1ad s11ch a sitt1atio11 i11 vie\v \Vhen drafted. The second objection is that the policy of tl1e Civil Code as laid down i11 Article 585 is against bigamy. Although tl1e draftsn1a11 recog11ised that there was frequent bigamy in Ethiopia a11d atte1npted to deal with tl1e situation ·by giving it tl1e status of an irregular union,83 this solution was rejected or dropped ·by tl1e Codification Cornmis sio11 probably because there was a desire not to recognise bigan1y at al]. If this is so then the last situation is worse tl1an the first. 84 <'.) u.i

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Howev_er tb.e . a�thor does n?t agre e wi_th t�e view ofte11 expressed tl1at tl1e1:e i s "0. ille , t�� m a � tn Etl11op1an law. Article 72.J (�) 1s qt�1te i out e born 11ldre11 s th_ a d clear t c rc;;Ja l � ed for 10 provid by tl1e Jaw su?h �� m arri age or 1rreg11lar t1n1on and wh� l1ave . not b ee? c., l edged or adopted have a Jur1d1cal bo11d 011ly witl1 tl1eir n1otl1e r. It 1s po ss ible t1 D<lc! Civ. . .ee h t Ar. t. _ 770 for a _child to prove his filiation by i1ossession of status. On proof of fi a i(� �6) 9 III, l. v czunow icz, "Tl,e Law of Filiatio,1 uncler 1/1.e Civil Corle", J. Eth. L., o � �e 79 • S ee5 p. 14 above. 80. Civ. C., Art. 712. 81 · Id., Art ' 7 1 :Cl). The Ao1l1aric version of tl1e Civil Code sa)1s ''tl1ree n1onth s." . 83. R. Davi d , cited above at note 17' p · 57· 0f . • blem . . ro . nce on the here is a curious relucta 84. . part of Etl1iopian co11rts to deal with t_he Ab ba none J s Addi gam y..10 thre� �se s of criminal i11 Court prosecution in tl1e Avvraja ! ...vas no � lted 1\ convic r rc� . that 5t tion. � ence t at the firs In cr�m. case 453/61 (t1npt1blisl1ed) tl1e cot1rt J1eld ublts��;d) the fir t m ari:1age ever took place. In crin1. case 30/62 (unp c the court 1 ca · l11 cr11n. case 218/61 unpublisl1ed it was erroneousl l 1 1d p d t _ y 1 li !1i-atioD, B5�)t tt· ;� tl1 !� i�i · � ·, o b arred the complaint 9/ · period O 17 11100th with · its · tl1ree o tn a1 :N . prosecutor v Haile T/Med-110, ppe · A al l · · 1n r1n1 C e (S t1pr !Ile !mperial Court ! d, (tinpublished) a �entence of three nfiro,e · co was n1ontl1s 1111pr1sonment for b1gan1y

78 ·

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VOID lVIARRIAGE .

Many legal systems contai11 a co11cept of void mar.riage generally referred . to as n1arriage inexistent like a oid . 111ar1·jage is �1�1pty of effect._ Both,_ in An istent. � inex . theory, have 110 need of a cot1rt d,ec1s1011 to render them completely 1ne.ffect1ve. They are themselves void ab irzitio. However, as l1as bee11 said, there is always a title ·or an 5appearance to be destroyed by the cou11 in co11firming the inexistence 8 Not all writers wo11ld agree tl1at tl1e act void ab initio is the same act. the of as the · inexistent act. N1any writers co11sicler tl1at tl1e disti11ction between void and voidable marriage is tl1e satne as the distinction bet\vee11 n11llite absolue and nullite relative in Frencl1 or S\viss la,v or that between nicl1tige Ehe and aufhebbare Ehe 86 B11t in its trt1e and original sen.se a marriage void ab initio is law. G in erman · 87 · no. marriage at all. · In French law tl1ere is a co11cept of ''marriage i11existant''; in qerman law ''Nichtehe'' is ipso Jure void and produces no legal consequences; in Poli�h law, in Italian law and in S\viss law ''non-marriage'' can be observed. ·Toe French were obliged to introduce the notio11 of 1narriage_ inexistant to deal with cases ''v.1bere the law does not declare a marriage to be null, and where on the other hand it is logically i1npossible to a.dmit that it is productive of effect.'' 88 The theory comes to the resct1e in cases· of identity of sex and wa:r;it of form. 89 Planiol, \vhile critical of S<)me applications of the theory, finds that it is justified in those cases ·-where there is not even the appeara11ce of marriage."9° Cases of inexistent marriage are not regulated in the Fre11ch Civil Code, and the theory is the product of jitrisprudence. Polish law, ,vhich is simil,tr to Ethiopian law, makes a distinction between voidable marriage· ,1-nd non-marriage, the latter being reservecl for marriages ''absolu tely void for lack of a civil ceremony, that is a marriage celebrated solely according to religious rites or in the absence of a registrar. Also a civil ceremony in which '

85. Tronchet, in the discussions of the French Civil Code before its enactment said-: ''Jamais un marriage n'est nul de plein droit; il y a· toujours un titre et une appar'ence q11'il faut detruire''. Fenet, IX, p. 53, cited in M. Planiol et G. Ripert, cited above at note 64, vol. ·. · 1 No. 256. . . . . 86· D. Lasok, cited above at note 61, p. 53. E.J. Col1n, ''The ·N11/lity of n1arriage'', L. 'Quart Rev., vol 64, (1948) p. 324. Tl1e distinction bet\veen nullite absol11e and nullite relative is based on the right to petition for nullity. The distinction between nictige -Ehe and aufl1ebbare Ehe is that in the former case tl1e effects of nullity can be retroactive, wberec1:s in · the latter the effects are ex 11unc and the same· as divorce. W. Muller-Freiofe]s, '' Family Lalv a11d tlze Law of Succession in Germany'', Int'l and Comp. L. Quart., vol. 16, (1967) .P· 409 at 432� 87 · English law and Continental European .law l1as got itself into diffict1lties with tl1e various categories due to the influence of ecclesiastical law and. tl1e realities of life. Etl,iopian Law having had the benefit of these experiences l1as simplified --tl1e· matter admirably by having only -one category; that of voidable marriage, in the Civil Code. The recognition tl1at a . marri age can also be void ab initio is a purely logical addition. gg_ M · Planiol and G. Ripert, Treatise on tlze Civil La•v (12th ed. 1939) (translation, Louisiana St ate L. Inst., 1959), vo 1 10 no 04 1, l. pt . . 89. Ibid . 9o. Ibid. • •

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) lf\N LAW - VOL. VIII - No. 2 O.l HJ JOURNAL OF ET

d a a1 wo n1 u] 1nan as d de 11 ra wo ue 1 as m d q x se presum a bl e m sa s e i tl of on ers P y be a • . ,,,1 non-1narr1age pt a c once is of og11 re 11 tl1at n-m arriage, ems syst � . the of � � t mos In .· . . ceremony or of proper legal for111al1t1es 1s a. . case of non-inarr· lack9 of a . .1 c1v1 . . . . .111 Etl. uop Th 2 , .(:' 1age r n1a s 1 101 1t1e h ere w 1o i , s r 1a rr ma e cas e iag e i tl be h not . · . wouId ave a very t t ·a ·us 11s1 1 1 po s· c1v o res bl · f cer ffi o e . tl1e for If . law a tJ1e in l ce pla civi r no mi ar iage ll be ired e li ,�j le �1e_ � litie qt , ma t for � � � � a crimin ; � � does not follow th� legal . 3 If a 1el1g1ot1s _1na1 anc. d. vali e r1�g be will 1s e riag mar aniiuled by tion but the th_ e _to e u d. so°:1e or d1m 11J1pe form of ent lack for tllis will c religious aut11orities tt l ge a 1·.1 b w1I 1nar I1e ,;alid but rce � divo in the eyes 0 � � � tute a serious cause for . . _ e 1 u n 1 a of an e11t ntil1n a to c 1 g1ve1 : be a \Vtll stom ry 1arriage law.94 No legal effect 95 Y . ies rit tho the custon1ary au It seeins likely that a n1arriage where both parties \Vere of the same sex , uId be considered . void by _t?e Ethiopia11 co:1rts.. Although t�is �ay be eonsid e;e� a ptire]y academic p r opos1t1on cases of tl11s 1011d have ar1se11 111 other countri es. Planiol says: ''But jttdicial records show that the difl1culty co11ld arise in practice . . . It is indisputable that n1ar1·iage asst1mes that there is a differe11ce of sex between the two persons joined i11 \Vedlock. It is 1·adically 111111 ,vl1en a mistake has been made regardi11g tl1e sex of 011e of the1u, or, \Vhat amo11nts to the same thing, wl1en one of them is not of a specific sex. I.f there be incontestible identity of sex tl1ere is not eve11 tl1e appearance of marriage." 96

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In France a marriage has been declared nul] beca11se it did 11ot unite a man and a woman, 97 but care must be taken not to conf11se this with in1potence or error on the person.98 While it is true that the case of identity ot� sex wo11ld seem to be covered by the Civil Code, an exami11ation of the releva11t article will sho\v that this is not so

91. D. Lasok, cited above at note 61, p. 53. 92. In Franca, Germany, Switzerland, Poland. 93 ·

Civil C., Arts. 621 a11d 622, provided tl1at the definitional requirements of Civ. C., Art. 578 are satisfied.

" · " include any 94 · !d,, Art. 623(1) �nd (2). The word ''some'' i n Civ. C., Art. 623, is inte11ded to

the sense of 1nobservance of any religious condition or forn1ality. 95. Id., Art. 623(3). 1R

96. M . Planiol et G. Ripert, citGd above at note 64, vol. 2 no. 1005. 97. Darbousse c. Darbousse (Cour d'appel Montpelier Fra M�iy 8 1872) Dal/01, 1872 ��- � p. 48· e court

. In this case the wife had no internal sex 'org�s and �as said by til and more lik e a man than a woman. The cot1rt i d 1 �ce marriage is a union o f a rna;arne sa . tl at si wom n can ot be �alid wl1ere tl1e wife is 11ot a wo1nan. Bt1t see, per con�fii h he ld c �· c., � · ( �Ollr . �e_ cassation, Fr�., 5 39 d April 6 , 1�03), Dal/oz, lo(4, 1:;,t. 1, P• ' ' ad1n itte t u� absen�e of certain sex organs Ill the wif c Th e e. po ten c a e to im of be � cas hel a t e th d 1a t 1_11a rr1 age u can �e contracted only between tvvo persons of tl1e opposite sex, . in this ca se the wife was recognisably a woman. oes d set one 98. The French authorities seem to agree of ns orga t sex m tha of a abs enc ere · e t • ·ve 1·s required, no ma · k e a person a mem • b er of the other sex. Sometl1ing more posit i

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VOID AND VOIDABLE MARRIAGES IN ETHIOPIAN LAW

Article 591(c)99 deals_ with the c�se where an error has been made by one of the spouses on ''the bodily co�ormat1on'' of the_ other ''who does not have the requisite organs for the consummation of tl1e . marriage''. Although the effect of marriage is 1 on dependent way no consummation, 0� the person who was married u,nder the in apply can for error d1ssol11t1on on the tl1eory that his consent such of ence influ 1 1 not d wo h ave h that married had in e ul 0 a known he the , d truth. But vitiate ws sex tl1ere is obviously no marriage, whether a mistake same the of are s partie the if has been made or 11ot, and the so-called marriage is void.1 02 German law considers it a case of Nichtehe or matri,nonium non existens where no agreement takes place at all.163 It seeu1s probable that· such a marriage vvo11ld be considered void in Ethiopia. Article 586( l) req11ires that ''each of the spouses shall personally consent to the marriage at the ti1ne of celebration." Marriage by proxy is not permitted.104 Related to tl1e q11estion of consent are the cases of voidable ma.rriage w'hich we have seen earlier, 11an1ely marriage of incapacitated persons, duress and error. But in all of these cases specific provision is made for application for dissollttion of the 111arriage. No provisio11 is 111ade for the cas;e ,vhere a person had absolutely no intention whatsoever of bei11g married, as for instance where one of the parties did 11ot 11nderstand the nat11re of the ceremony. 105 The laek of understanding might be due to lack of acquainta11ce with the ceremony or to a befuddled state induced by drink or dr11gs. Also included in a case of comp.. lete absence of consent would be cases where one of the parties answered 'no' at the ceremony or did not answer at all. It was the intention of the draftsman to deal with this question by including a provision makjng invalid a consent to mar riage given by a person ignorant of its meaning, however this provision disappeared. 106 The consequences of a void marriage have been outlined above. Since there is no marriage there are no effects.

99. Article 591 makes a restrictive ent1meration of errors. 591(c) covers ''error on the state of health or bodily conformation of the spouse, who is atfe.cted by leprosy or who does not have the reguisite organs for conoumnation of the marriage.'' This does not cover wilful refusal to consummate. But the Aml1aric text use tl1e words ''or is unable to consummate the marriage'', which words cover cases of impotence and possibly, wilful refusal to consu.mmat. 100. Civ. C., Art. 626 provides: ''The effects of marriage shall in no way depend on the real or presumed consu.mmation of the marriage.'' 101. Id., Arts. 590 and 618. In X.c.X, (Tribunal civil de Grenoble Fra., March 13 and Nov. 20, 1958) Dal/oz, 1959, p. 495, impotence was held to constitute an error as to the. person vitiating consent. 102. The marriage will be void because it does not have the appearance of marriage. If the appearance of marriage is present, i.e., the parties seem to be of opposite sexs, then the marriage will not be void. 103. E.J. Chn, Manual of German Law, (2nd Ed. London, British Inst. of Intl. and Comp. Law, · 1968) vol. 1. no 488. W. Muller-Freienfe]s, cited above at note S2, p., 431. I04. Civ. C., Art. 586(2). Dispensation can be given for good cause. lOS. See K lly (orse. Hyman) v. Kelly (High Court, Eng., 1932), T.L.R. vol. 149, . p. 99, where � th� bride thought the wedding ceremony was a betrothal cere�ony. !he marriage was held void ab initio. by an English court. Valier v. V-alier (orse. Davis) High Court, E1;1g., 1925), L.T. vol. 133, p 830, was a case wl1ere the bridegroom, a foreigner did not_ realis� _t�at a ceremony of marriage was being performed. This marriage was also held void ab inzt,o by an English court. 106. R. R. ve David cited above at note 17, p. 54, f. n. 21. See also G. Krzeczunowicz, cited abo at note 52, problem 4, and ''Quizzes'' J. Et/1. L., Vol. VIII, (1972) P· 204

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ior to e pr tl1 · pia 1 hio mi Et co in 1g n 1ow k: into fi r e s wa e ag rri ma d • V 01 11 ° � of t h 101 t a gl1 ab I-Ii Ab l Co dc is e 1rt th A by ed cid e a 1 arr1ag . C:1v1.1 code • In � case de •. . . e I

11 ma r�·1age "'as celeb c1v a se. !l1e . e 1· we \Vas ts f�c · l1� T io. i11it ab e rat d voi _ d l1eld b et l e a. ar \1:ee 1es ba _ s n 1 dd who > A 0 p of T wer A i � e � t lie parties at the Mt1n1c1pal1ty 011 Eth _

i 0 P1an d ter · . by ree let ag to y nt1 8 11e rr seq n1a st1b d. y. I1a d an e d Th roa ab . re h ad ID.et . d to t1· 1e pet..1t10 p s ond 11er w h �nt o rr1 s ma wa be to a rl< \Vo bab � is dd jng A in A arrived in . EL �h10. e11t ond resp e val tb. \Vas · ar h o 1erv r e of t us men mo aiid, at : � �_ pia. From the . _ the . �st, 11 ed. arra eve as I-Iow e 11ag ma1 due 1 \V'Jtl � to tigh tliro � the situation refused to go of 11ds e fr1e ssur sl1e pr the did and elf get inarried o h l1ers d foun � she ch whi in e t 1 w co o e � used rnat s11m re 1n tl1e sl1e 1 t f petitioner. On the honeymoon . arriage h ic \Vas thereafter. Tlu·ee weeks later she left Ethiopia · havin g .sent a never co.nsum·m.ated '' · e111·ba.ssy. 1 1er to e rc 1vo d' f o ion at lar ec ·'d of letter

ctk

itzitio sayi·ng: ''tl1e respondent The High Court held t11e ma1·riage void ct·1 at tl1e time of celebration Tb .� not ha.ve the intention to const1mmate tl1e n1arr1age . 1S . being so one of the essen.tial elen1ents of· marriage was I�ck"111g." If this c�se were to occu.r today tl1e co11rt wo1tld have to loqk to the Civ'I Code in order to deal witl1 it. Since cons11m.mation l1as 110 bearing on the effec:s of n'larriage108 and this is not a case of i11ability to co11s11nuna.te bu t of ,-v il ful 109 the provisions o� the C!vil Cod.e would not provide . an _answer, ex_ cept al efu � � possibly to l1old the marriage valid for lack of a text declar111g 1t defeetive. In that case the marriage would l1ave to be dissolved by divorce. It is also possible that the marriage co11ld be he_ ld void ab i11itio for lack of i11te11tio11 to . marry, which, however, would have to amount to complete lack of conse11t.

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·,'

I • I

V CONCLUSION Only voidable marriages are provided for in the Civil Code of Etluopia . \Vl1ere a. marriage co11tains a defect and it can be dissolved on tl1ese grounds, it is �oid able. B· ut unles� and u11til it is avoided sucl1 a 111arriage is valid. I� it is a�;oid� d _ _ the . marriage will cease to have effect 011 tl1e day it is declared void. But it will reta�n all the effects it previously had. Tl1e court declar�ttion will be p11rely· pros· pect1ve. to al ogic Void l marriag es is are It 1 1ot directly allucled to i n the Civil Code. . introduce the Goncept to deal witl1 cases where there is 110 n1arriage because of a . fuo<lamenta] defec t in the 11nion. The co11cept m11st be limited to case� ,vhere the •

107.

Th orso� v. Grayson., (High Court, Add'l Abab a, c·IVI.1 Ca"se N. o. lSl/51 , comn1erc1a· 1 ·Division) . (unpublished).

108. Civ. C., Art. 626, text given ab ove 'at .note 100 · 9t (fJ t 109. Inability to consummate due to Ar c · , , , by civ . ouse coll a · lack covered of sext1al is . organs where an errO r ·has been made te.xt given 5p · a wl1er e the case The abov 99 e note at · · · ince 5 consummate the marriage bu t f r, eve How •rtY d . covere directly 11ot is to uses re so do i Aml1aric text refers to . ab'l• tute oabt I 1'. ti 0 �o .� 7 Eth. L., vo of. · a. Krzeczunowicz , C•-?ted1 ity to consummate, refusal might be l1eld. zes • ' t above at note 52, problem 8, .. and ''Quiz i . vm, (1972) p. 230

-454-

---------VOID AND VOIDABLE MARRJAGES IN ETHJOPIAN LAW

nature and p11rpose of marriage are frustrated, for example where there is no · nsent to marry or no appearance of marriage. The void marriage has no effect g. 11 ei to b in e m ca r ve ne it ��ce Tlie law, in regulating defective n1arriages, n111st limit itself to these two cases. There is no reason to introd11ce tl1e notion of voidable marriages which can be retroactively decla�ed void. Such a concept p11ts personal rights in jeopardy and is undesjr ab]e for this. reason..

•

- 455 ;asD

) .) I

r; ll = = rrftr.tll : '¼ = 'l° f1«?�· = a1'? it�. , hfB1:J'l\f. = fll'� = p1,J!- 1 °7 nc , th°l : ill1.:'J'-v«A·.r = &.ml =1 flf,tJ?" = f.'J1:J'" = q.,._,_,, = ,.!'l'?Y.· = Ol/",n�":(.111 ., f"tOD/\brf: : m:'f1i\It = f�"} P1:1c; = ODootf?' '! ! X _l!lt,fl:o1" = J11l- : ;,c : ;far'} , "l't):�T'i" , f"'l.&.'1'?--f•'} 1 h1'Pi 1.?: ; MC: 1· ' OD,f-'}-f•'} , }m- n {� c 0 : f 2.:J...f-:} = ?·»P,f-f : f141R.. = 11110(!1+ : hh4"6 dJ(lfar : "711&--&f : 0:-\i\ A 1 -c : : ( � n;,l-, : f(lar : OIJ,flT : ill\OD(!m:j rpl•OJ() ;}o\t 1;?.rt1',' = 'P<i : 111111'} =�9° C') 1 f7iCnt; : 01/�, nc : 014/A; mPl\'1 : fhODLPt--.l:i-.. : f..1fl'f� : illt: OD�l� 1 ; 5 'iTllr :1 OFt. : i'tll hJ��Tt; : {l f./t,fl : <l!"r'l'C : lt,e : f°l.w�:i• = Of,�1· I Jl., n-:f � tiA ,i-ao1.ao �9° 11

=�

TC�oi :- f"}"lY: : th"I : '1.1 11'?i : �!I : V1'1Y: : 01 s�nc1 : h1-.e.ttU I f,t l1,oo'P A 1 ''IPl'iTw•'J° = n7ich'i = il9'°?°�:,- = oo,.,_,l:i-- = foittJ:tJ:'I° : 01/"lnc. • f7iCn'i· : 81/"'l nc : (IJ•/,\ : °1 ll.:i_.. : ''U•· l\ :i� : mf,']° : 111-g. = (}9'14..: (]Df '511 l tt.'f'-T,t-(Dc = 11'11.e:�;i-«c; : 0",-0l-T : fi'hll'rOil : ,f--'1'1C : fflllr 1 ,,.,&- : fl{IDjJJ �T'i" : h°t11CD· : TC'i!� : tr� : hll2 .0D"}l& : 0� : yl•titi-._e. : /\{llJlf7 : ffll/.� 111jon«fl;i-« : (D•/A : �(Ir �,,2

�

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�,,.. : f1iCh'i : "'l",OC : OJ-A. : n+Y..l1 : «?1'<ilJJ•9 ° : 1,lt'i" = "'" r +t.tii I f,1fl:f.. : hhlt--'i": 1,�tf.U : ..e.:}fl1--: ,1--o:i..A.,rlD': h,r1"f.. : f1'?..<!': 0110c: : fiif �A =1 il9°9'°�·,J: = fOJJ"'la� = ODIP/.T = }ro• 'l1c = -i1 = 87--)n�- = hil?11?11�-l:' 4 01t_e. , �ro- :: ih1-- = r1'1.{!' = "7"'ln�:r, = r 0ioo"" = 11tt· = Y:1,:1i?1� t1 ! 12 ' U9 r : h� tl '° 1lt 9':i5 : Oil9°V°�,J: : /\...t\Wm- : (h. q'q it-) : fOI/_e.:1�n- : c;•1 (JJ• 1 = h,,1ioo-c U1J-1nc = n�c = r 1ai1: : Ol/')Ol!1:f = noo•l\- = n,n'? = rftm· (JD,fl,r i\ti:fro- illltLU9° = f1'1.{!' = UtJ"'lnc = n·ncn'i· = 01--·,nc = ro·A f1-{]Pltitl 1· �1C : '11 : hl,C(l. : f+fl f : fJ!" C�:'J-- : '¼f.},}• : h��c = hfllD• 1'1� : °7'i:fro-va = ii.a\ : 11"/"'lOC : 011,9° : f(l?1:f : i'l"Oltl1 l M°l,f: : tPJ: 0C 1 i'lJP-:f· : -fl ;PTw◄1 = fl..o•�T : r Ol/..f1= '1:1--:,:ar1 :, CD_e.9" : fotJ..fil';r:fco-1 .

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- 456 -

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A r1�,: = OIJ1nc = Af,. = roitr�(J}« = : !Y-c;, , i,�LP?i f'P :f, = = e �1 t;: I "'l'11T: il/\J.T� : �OJ- TC�?° : fL'lA : f'l"}Jf•fl 00'} X,. :i• : f : h1 : 1 �J ftC ?°C!' : 'P:i»srn : hf,�/\'}° � fOI/10�--: i'1'11t --i•, ' 'P:P9° I r nh : lt'l! OJ�'J° : i 3 = : : .. ..J'J!..c1,,. noo�+� :'' r1,tl•O : �f\ 1o .f\at/OCh T: ''�m'l (ihti'i"'i.) }a"}<; ;J•:ft»·1' , tT'/0:lf\:'f•,9" = f,�'l°t- -t\ :, 0

f1''111:: "7'�0e'f : n_e.nA 'P : fDILOD�.:i- : 01'?1..' : ,n'? : �/\rl•'<'l : ODK" tht;; = �0r b'h'PC = �f.I -gr.�i =.r /\w- = ru-f\,l"'�: = oo�t11� = h�t!\ = nv,l\·9°, fot'A'I- = m:tilt\ ' Y:1;,1,9'-:f, = _e.1·11',A == ,1-h;.1-- r--:fi = "114111.1· = r,1·0.rv.. = r, ,,: , "'I,., o el-1 = roai ao il h,1: 1 ill\oo" a1 T'r = il"oo 'P,11Y..-- x �\ 1fi;., u-?° = r(D«fiLb , 11,c I r·L;J : rv·� : f"}'1,.e: : °1'�ne:1:1 : f"?.ooflh,� : t\f,. 1 f..'1,:J1,?J"":h , f.,tl'PA :i

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-.. n = f,f'fli "'i1 e1 1 °11o c , � il:i- 1 '' :i•c c::.1·1 = /\«rJ.,-�-:i- = (Df,'f° , ttoo h4'&..A: l}f,1.1'1 i i'l11:' ro·m.!J": llOI/'1"7:r: Ou•/\:'f� = (Df_,'J° : 0111·1.. : fl9'i� , 4 ontihA I f°t'J:.'k'J° : il•flO'l : �w- :=.'' a7,•,nc.11· : /\ilti· : TC� : /\"1fil11- 2 ,-.�V'1� = IL*'J:oo- 1 Y,1�1tl\... rilrc:i• = "'l,.,nC'1· ;: rhcnc = hn-o 1 f:.l-?°uc-1- , (l,fiq{1 j fDDl�,T : OJJ1nc J. 1,1J;.U•9° : (bfl 1� : 9°ltfb9':f.. s 'i·:fro· :: hi'1..:'f,r·A·,,r 1'CTP-TI'1'eT 2 {L,t-tiCili:!, : n+c : f'/1,UIJ'i:i- : il1lltl1?J:f... ;: fil(}tt�!FT(D«"} 2 r1111,o = rr:Pr = /lODhl\hA = mf,'J° = I\,.(!- = frf•mo� = rqo,,,f = Ftr.. = 1'1f..�(l,2 l\{1Dff1 1 f,t-!t:!t:ao- = il·OIJ.119':f = nAi = ,n11'- = IJA,t-OD�.. = n+c = i1..e.. 1 °11 OC':f : f,�m�t\1i 5

=�

a,1oe:r-- = n�:;•dt = -Od1,C = ih'? = -h'l'C = �II-!?£iri • 1'00 &-.tr =� h�tLU , •

1:1:,19'-:fc;: r1oix., = ch°l = v-1\,�=1 = 00�,11� = f,J-cf\.ff.'i = 1,�/t:f(D•1 1 r:Ftr c;far � fi.1i9°: h'l'lA : 9°"}9° : }\'}l).: r,°11:: d1d/: 4?'PC: III : (,;) I r1 A' : "If: °710C1 : n7ichc; : il�9°�:J· : f"?.9:*'/° I ''IT'J ',OC'' 2 �m- : •fi{\o : n,+ l1--ouw•9° s 1'ar �+r: lf'i: 1,tl't-.t\ :: f,IJ?° : oou,:oobf 2 t..'41"11?,'i: g-Jt.tj:2 ti.e = ft,t-m�oo-n:i, = :PA = Of,OA'i' = :.t-hh/\.� = ntr�OJ.i = :i-c=1ai = 001.Pt,,:}� � ''il1lltf1'' : CP/l\1: : �(D• :: 6

"?1ne:r... = :.t-c� = f"1'11T = qf\OIJ = fi\,l\:fm· = il/\lf.,..'i = f1'11: = °110 r:l 1 /\Tc� = f °1...IP?- = n oolf'iTOJ• = n+l\f i = Y:1,::,1,9'-:f- = 1,ao&..tr :: ill\lf ,,., 2 Ol/ ,nl!'1".. : n1t1c : '11fT: OJJ.tll.'1:C : fl01/1fll!':Y..: ?i"il1&.T: n,:i, : cl!�'l'C• ��

3, 4• 5• 6•

f� �"' • 1lm.c • ,"f1°l s �'f'C • §f� • (i) • f�."f·t11 11"1.C , ,"h°l , "h'rC = or ..........o.. • f�."f·,h I 11"1.C I ,"11°1 I «f:'f'C = §fj I 0�1v.1,.e� • ll--l·�t..m4 f1"lY�· , ;,1°1 , onODAh:'f· = f 01/.'iC•fl1- = tiJt = .e.. • tiaicil I f.. 1 f\1.,'I" �! 1.. Inf.� , (;rtil • ll,:r{J;.:( ! J.uf�·�) x (l.rr1- • /l'i!:,•,h , 11th.c • m°l , "°''I" , i-i.� , �'fl� • 1.. 1 lltt.9;,T.� , .e.. , 1,...1:r·--c , ,_ • 1.iif.� • (.r&il • {\,�:-'-=.:( 1 Y..Ux��) �m• 12 l\>tlP/c:� ' K�rb.G:l• 1 f9°'}BDflh•f•tJr 1 01,·f· 1 hOY.. • t}v./t, • Olt•Y... = 'li1l?- 1 (1�4• 1 O·f•f..l1�:i- ' 'hC,V,;J ·?'-:f 1 Or SJ 1'.1-', f..,. V" l ..,.. J

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- 457-

�1ll1--'f; f!i!f2t = '¼ = 9° : ilt\"�ill:'J·· : P't" = tJE/"�ilC : fma, c i'i'P� :12 h1+K' : !! : f,,.,-OlT : ;-•' �1 : fL+t..7-9° : '''P'i' : '¼I\Ol/'i : "J(}:,:m. roih+ trT1 = = �ro· = y,,aA :, . t\l11.\!"C : 11tf,0 : f°thLt\ar "} : m•(lf:c; : ihi\9° : m61}'.: aoot�ll 1

iii

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ilP't. = a,.m:'Jct; : ('T��h7i1) : hl\.'l! = '11�1--1 : ilOJ/'11..,:,., = rai.f� &..A.1ID'1 = roo"ft..f?'l-1'a· : fti1A<1tt :i.-- : 'P.;11 : fl0l1tp7{11 tt1Y: : lte& = 11�ro•1 = fl..1Pt-- = h.. = 0t1"t\(D•1 = 1-�;l•'i : n.vt� : 01-0l:.i' : fiouti�.. A : ff"}.�"}..�1 , (ltD• : "J,J'i:'J--c; = t1"it.'} : fioo+�il I

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Y..ciln:i--· r

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- 458 •

: /JlD44':,• : nFt- : l\f. : ilOl/'Pl\. : f°tfil":i."ir = llYot'l--1 , 1 l1 i · f,f;h 9./ 1'')� it�4-- : n°1f.•l°l 1 mf.'J° :

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fl,ft. 1"'1° : h�tl.U "} : foul}{lfr:'/•"} : IfYo9l:f : U·lt· : nooh+l\. J 0,.,•{1 -lP l OD :J 'l! : ,hlt•(l'i" : {\"�•fll,f" : (l,O : :,,t,tJ·/\� ,. lT : P't- : r ,. ° = 0 = XJ..: ,e. v ).;:J = r�-c� = Y.. l�"}'i = rt-1 = h'i: = ll."'11: �:;•,'h = tr'r Jl 't,."} : W•lflo T : ("fc>J;h7i1) : /l"'/ � : : : 11.f!o l O,J·ti"/\ l '11 1,1 f U·'J° l "'•.,,.:,. = ",,�.;:A = otJ ,f.'l"l = �m• :: 0

'P:� :

nP-'&, : l\f. : hoo'P tr : O&..'l- : ,-,,o f111l'1· : P'6- = Ol/"i OC : h l:'1- I tt.!f:'k'J° : ftr£J.l•/\(lr : OOI/.,lP t,.OJ• : /Pl,..: o.,e.�:i-.: (oolPlT) : "t,"}1' : "'i,., °1 • : : : 01 01/"'IOC '?f. "} : ..�- : 01/"�(lC : '¼.,e,):r : /l.9:!l:'J° J :: �oc i,1Y.. OJ1,'J° = oc : {\tJ1/flch:i• : «l?m{} : (i't.P'i°2.) : >,"} f(PJ.,fftlD' : ''fhfl�:i:, : f11H•n : TT'J° 13 h1f..tr� = �nc f.1i'1° = n.,e.nA,r = fortooa,'oJ. = 0111 J;.ff.C� • rt.+1' "" "} OC: i',cri: : i', ,:�ft : !! : '}°'fl : h'i:A : �'i : !{ : h,J'm�(t-:,... : lT: Fir.: OIJ"'I P'"'fl-:,_-.. : ;JC : �(Jr :l f,1i (IJ•'J°: ft,(1..l!"C : 111111 : fOIJ.. ht!./\OJ•"} : 111f1l'i' : lbft'J°J 11 (TC1J;n·li1) : hi\4! : �1�:f"} : i\at/'?1T I � 2 ou+�rtc; : /lP't- : OJ"mT'i f"'l.Jil6../A10r1 : fh1A'?ll T : 'P;J1 : on+'l{l : c;:fw· :i

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f111lT : "1/"'IOCTl--�:f : WlJJ.. : �1(tro• : 1"}lf-{1 : ft"10Ch'1...: (t\oo�m11) : f"tl-h-fi.P : h_"}�u : 0011x-- : (\Ol/"�n� : OouP:,t,.;'J• : <Df,9° : ll:P9':f.1 : h°11 n� I (10D"Jlf1': aJf,'J°: f\OJ/"�fi'J--: (10Dfl"r : �OJ•:: f,TI'J°: fl°11(t:;: n•lif61b 1 l\�: ffl.W·"} :. f+ilf : �ll)t,c; : ''1�r'i : qlif}» :'' fm4,'PA

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ft_9°i\lb : t11J!: : (llIJc : J\1f: : h�ti� : '14:ft : OJ:i?°ti : "'11,,.l;'J° : h°11'i: aJc9° : tt!rn·A:'J-- : fl·� : �11; A: i11fiA :: fh1,nA:'J-- : f\·cJ? : 'lt\O:.:'J" : h_'}.t;."} = h..ho : 111:ft: h1n1oar: ilf, : (l(lt'\lt : l)"},f:9°: 111 : }\'}OA:: hOl/.�l(l)c : '/f: '11 t9° : IIJcillfl : hll� : '111:9° : (ltD-fW• : no•«#? : ooop�,,: : f(lt&f(D• : ro m = lf'f = h.F?.1 = "'l1,t;9"° = ,,,,,.. = :,,c� = f:t,r'PA = h1'0A n11.v9° = ODlP,l"r 2 11tt - ll<t:I\ = n..e..9'1"' (1119'1..) = +ilOIJ9°+(1Jc = '11:I\ r"to"ri.' = f"'l.111 , ,.,_,f: = r�,-r1l1� = 01'/"'lnc = O.f*4!(JD« = 1'.<11-1;1.v.:fro• = hi't1� = tt.� = fl<tl\ , ftf, : it P'c : ti'} ,f:9° : IL.f,f-C.4--: .,e.-:;.,,fti\• :: 67"'l n ?- : h1nto ar : I\ f, : h1-�-1 2 h..l\o : Oni\ti : lt1,,t9° : Y.. lt-fl : .,e.11-1A:: fOI/10�9° : m{;tl. : 111'.-l-rnA:,... : ()•ck : {}ft.{1,}: ;,c: hh·A: �OJ· :-i,"}flA: .,e.1im·9°: n1-t1�: .. h./\ i'tP'C : "11-t9° 1 OlJ/\T • �«Jc � �1c : °11 : TC� = foiro·{l�.. : f(!.� = flt\111-- = (11r'i = 7ilifl») 2 il/\lbt\ : f1,,t1l1: : °110C+'q-1.. : }'�"},,<;."} : h.f\o : ll<f:ft : 01'.9° '1 : "1'1�9"° : h00"1•1"1-: f,A.:,, = Oi'tCll : lt1t9'1: Aaf11• : f,1..1\tt.• :: mf,'J° = "�"Ol,f:: 1'11�'1 2 h..fto : 11<1:I\ : ntl9°lt : lti,,l:9° : if'° : :,..c�, : (h1'f'}P,")..t;. : ti..� : l\f, : i'tP'C : l>f1��: fOl/.. lf}OJc'}): (ll¼DD,f:: ODQ;l,l�: l\f, : /li'tflt\o:,5 : l\,.fhll"�t\ : f.":f"..ftt\ :J +"It = ar m-1: = t,1f.' : �w- 1,1.J.!lbl\ : 9°ltit, : 1'11.. r:': f-O..r:c : ,.,,fllir1 1 6 100Ah·r r11�·c = "'1- 0l:i• = '¼l\"'1 = l\01/"�nc,1··�:i: = '11h = m.e,'r = /\,t\ = hO�t = f:C�T : hOIJ.(lmro- : roll�· : 0011lt�il : r1111-o : -o�c : ou(l,n.J-- = "' m (f l. ,,4'e& ,9° : <pft:,-«t;: h}{l,1 ..'i:: l\..lf1 : .,e.·.,la..l\A ::) '11h: t\1,.C'1Pr �(De:: 1� : +O.i;t : lfm� "' - � C : "�•0/..rf: : h'l : hoo-f.. : mflX.• : .rllhtj: ft/,\ : 1,101!\. :::· ffl

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ss. f'i:Tm : 1l,J1,C: chTC: f;fqj?;-l;f�fi : 'P'i : 7i,nt..:i•: CL:J..:f-<& : Om-61.1".: '11C: flf� : Oih"l = fflm- = 00 11:,.. = f-t-flllJ:f!<& = J!·c�,y.:f : Ot1.·l·Y-A"f = m•ilrr , "7'i:far•}9° = P'&. = oop,1,.:,.. = hoo1oo �:,::(Dc : O&.·r: h1t1c: "1•1:,-: CPJ..�ili:C: L:J>J!• = 'h1Jt'i&.=J:m..: fil·1��t!\ :s 'h1.e..1tu : �,e.}:,-: t.J: >Y..·: t,,X: : 'LI.,, : n,1 ·1·r: fit1C: °llfT: "7..).{l,f:C : �C�i: : l\"7..w&.:t=ar: P'&, 9'f: h.w o, : l1oo;r[\c',' : {lOD7"JP'•l·: :,-t,1111 : ilt.\lf� : n+c : f"'/f,1•f>"l1>il: '}1}l,l· : 'll\U ,n.:,. : ll00lf, : lifloo:Ftr : O•l'C : A h = 1,1f!.. : J-1.:i•Y-A"f'I! = tl.;J : rf�•�"l'C!" : fct:·l·dt : 1lth.C • (f'"/10&.'l! I �C!') : 00,0..y.:1. : ()OD•t\-- : .e'i�r·;J·•fA 11 ?t�ILU : �'};J"l.9-'l· : 01"JX- : "7... nt::f I 00 1.c;:1,:r-tIJ.c,· = hfloo?ir,;1,:1:m. : °lt.\?i = hJ?,1".h9° == f1°1�" = 01J•)nc>°f9" = O,"h"l , foll>' • • oo11.:,. : f-t-(111J:far: X•C"'f:·Y ·":i· : 'i:f ar. :: f11"1X-: ,"11"19° : lD'il"r ; fOJ•tif.b : l11C : o9-'l· : f"7 .e11>tt.1>il = 11llT: flllU•O."J• : (lfloo1rr.:fm• : f0?.'i1C: 9°,9° : .e..-·} ,;11. 1 fll9° == Oh.I\ = fl h·A. 1 f..°]qo : r�:,..,,l : 11,lhC : ,"11 "1 : cf:"rC : Ofi: : (ii) : r1"JX; : "'J•){l(!"-:;.. : (lm�i\i\(D• : 01"1 � J 1 ° r = f,l\f.\ == f,U9" O-t-al.01 /t9° • ,J?,'i1C9 �t == = , oofif!..:i» : J?,},1 = q · , illl1,1YJ u ." i f..oo = �.,, · 1 O °IY.. ·c; : f1,.,P,.(l:,-t : P'�9-';1., : ill\"'/il(TIJ'tf1·0 : fmnJ : h'P� :; (h;J..�-:. : flltD•''t : '1'/ll:J" :iii : 1•<n>Ah:l·) : fl,°IJ!": ,"l,°l : '1:TC: l;.f:li I l;f:lil : {TDLJ.1/.:,.. : J-1.."J·Y-k'.<' : tD'{l"r : P'&._ : ".• : fW•"ib : J-1 1C : l·l,,;J : f(f� : f'}'?.e_-: "'/'){l{!'q- : 01"1.e:'i' : h.. ,P,..{l:,•t r OTJ.7.{l,f;C. ..,_":;;:00 111 ' 001110· : h1.';.10·) : fr-: 0 ( f,1!!..�l\·:: 59. -iTc I (t) ! hP ' � = cf!"l'C : fit§ ! Iiir.:1§ I };Jt,)· : ,;111,n1 : 'ti�,;: J q{lfJ,.,.. : •P.'J'C ■

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AN INTRODUCTION TO THE LAW .OF BUSINESS ·ORGANIZATIONS ••

by,· Everett: F. Goldberg •

•

'The Commercial Code of 1960 created a new� and· comprehensive law of business organizations for Ethiopia. It is · the purpose of this article to describe the general provisions and principles concerning business organizations, the.ir relation ·t o other laws and some of the problems they . create. After an i11trod11ctory discussion, matt�rs considered are tl1e classification of business org�nizations, legal personality. -(i11:cluding the concepts of limited liability and capital), an� the partnership agr ee-: ment.1 Gen.eral for�1ation formalities, dissolution; and operational rules, such as those pertaining to management and accounting, are not examined. .

1. In General

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_ Definition. Article· 210 _of The. C_ommer_cia1 Code defines a business organization as ':'any association arising out of a pa,rt11ership agreement." ·A· .partnership agr ee ment is ''a contract whereby · t\\'O or more persons who -i11tend to join ·together and to cooperate und�rtake to bring toget�er: 9_ ontrib,utions for the purpose of· car ry _ ing out. activities of an _ econo�c na{ure ·and of participating in the p rofits and losses arising out ..tl1ereo( if. any.''2 .. --' · Whenever a valid partnership agfeeineni· is made· and other required fo· rmalities, if any, are performed, a bt1siness ·organization exists.. The _·agreement is at the heart of the organization. But th·e organization is more· than the agreement. The law contains numerous provisio11s which regi.1late business organizations, many of which may not be modified by tµe agree1ne11t. Also, except for joint ventures, ali busi ness organizations hav . e legal p erso11ality. TJ1us, a business organization has an insti tutional 'aspect with �n existence dependent llpon:�; bµt separat_e from, the pa.rtnerslup agreemen,t. .. . ·. .Like any other organizatio_n or association ·of- persons,· the business organization enables p eople to do things which wo11ld be difficult or impossible for them to do alone. What is unique about the business organization is thftt its object is the making of profits . By ''profits'' is meant pecuniary gain, not spiri�ua� or jnt�lle� tual benefit. It includes satisfaction of the financial interests of· t· he_ organization's �e_mbers _"by placing therr:i �in . a posjtion to. sa�� .. 1n9��)'-'.'3 ... • - • : . .. . ., . . . . . . .:• . . . . . . . . Business organizations are govei-ne � _ primarily. ,by Book . II of . t�e (;ommercial Code. Article·s 2i0-226 of· ·B ook. II cont_ain· generar· provisio11s applicable to au:· and -

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,. .' ::,., . . . .. . . . � .. , ,.. '. ·' .. ... . ·, . A..Jthough the dr�fters of tl1 e .'cod. e d·.r�w u'po� over . �he -text; the g preparin · iQ sources m�ny _ �IJ P, attern of tl)e qusiness .•organization provis • Title:: 5, of 5, B9ok closely rn9st les �sernb ipns--r t�e I_ tali�n �ivil _ Code. s��- _l(�/ian .�aH, of· fJompanies1 • �aboi,r Enterprise. a11d Eco11prr1it •.Orga. . , n,zatz.o,z (trans. V. Venturini; Deventer, Holland; I(luwer, 196'/). . _, .., . . ,: ' '. Comm.c., Art. 211. .. .,, . - . • , Civ. C. , Art. 405(2). '

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- 495 -

JOUllNAL OF ETI-IIOPIA-N Li\W - "/OL. \TJII - i'>l'o. 2 �

ing tl1c various J,in ern les nc 1·t1 co l cia spe in 11ta co es icl art ds tl.ie 5 bseqtient u a11d on, ign b ?f 11,1.ti sines fc,re 1ga1 ama a11d n bt1si n ess ersio conv " .., 0 -rgan1zatio s. s � t'ons 1 , orga111za n . . . . _ 'a ,,. gro��p_1ng fo�·n1ed be t wee1 A ssociations Distin�u��d. �1� �ss_ ??I a.t1 �1�. is · t\v n t1lt o a. 1es 1er 1 111g -ot. a1n n obt rl1a to or t w he vie a se · ··. · · h \.vit ur· c s · son more_ per n · or . sha g. i . r1n� d �1e f : .-f·�1 ,l _ �a.r1et�. of' 11on�p ·or1 b e . Y ffi:a s tion ocia Ass ."4 fits rofit Ur� ses, · of pro gr g t a de b, cl11 <a. 111 n, y t1o l:;, a. rar 1z 1te an org a � rts spo oup, a � 1 � a exa mples are 1 a r tab le 11 tl1e tl1a er 11 oth p1a l11o t1ps t E. gro t1s igio Rel hod Ort ox etc. Churc11 ' an Organization ' · · d b Cta fi ' l ers 1Ja11 n1em _e1r t . ··h d res 111te fen e _ d ts to ed or form . to re present · O,ro-a • o nizatioi1s . • • . .. . . a 1 t x s, _to eJJt .1e 1ou t 1 exc c1at asso as e te11 ted trea e are t ey 1 no, 1 cal] · ular ar · ect , • b . goyer . . . P artic • ' . . . n 5 , ,vs. la py special ·. . . . · ' 408-482 es of the Civil Cocle. ··These prov1. , .. Associa'tions are gover11ed by ·_Articl . · . d C 1 are .dep��d�11t of eacl1 _- other. 11' e 1a Con�n1�r _ the of II s�ons and Boo� � � _ One does 11ot contain general or spe�1al 11Lles of t1Je otl1e1. Tl11s 1s trt1e . despite the tact that • Article 210( I) of the Co1nmetcial Code _ defi !l�s a bl1siness orga11iza tion · as n ''associatio11'' based on· a partnership ag1·een1e11t.' It r111eans a ''grot1pin�0': a moa - re acc11rate translation of the term t1sed i11 tl1e original l::;,rencl1 text. G Becat1se associatio11s do not have an. object of 111al<;:ing profits a11d business . are· st1bject- to differe11t· scl1emes of reg11latio11. Thus ' assoorganizatio11s do,. they qiation� are su1)ervised by. tl1e office of assoc!�tions of -the Jv'.fi11istry of Interior.1 Business organizations ge11erally fall u11�er tl1e. 1\ 1inistry of Con1merce and Iodustry.s . What if a . gtot1pi11g is formed for a 11on-1Jrofit · · J)11rpose, b11t in fact regularly carries o·n profit-n1aking activities? This· wo11fcl be a gro1. 1nd for judicial dissolution of the associati0n, on the applic,1tion of t11e associatioi1's board of managen1ent of one-fifth of tl1e members or of the office of associations of the Ministry of fnter ior.9 Tl1e Comn1ercial Code expressly JJrohibits a11 association from .carrying on a trade, one of tl1ose profit-maki11g activities listed in Article 5 of tl1e Con1mercial Code. If an association does carry on a trade, it is subject to dissolution under Article 461 of tl1e Civil Code.1° Eve11 if an associatio11 carries on a profit-111a]ci11g activity, it n1ay find it diffi cult legally to get those profits to its men1bers. The 1no11ey and oti1er JJrope�ry ow11 ecl by an association n1ay not be clistrib11ted to its 111embers wl1e11 it is dis· sol,,ed. 11 No provisio11 states \Vhetl1er or not st1cl1 profits i11ay be distribtited to 0

. 4. Civ. C. Art. 404 5. Civ. C., Arts. 4,06' 407. . 6 · References to the Frencl1 text of tl1e Comn1ercial Cocle are to Code de coninierce •de L-d'' �,n�re _d'Etlzicpie de 1_960 (Paris, LGDJ, 1 965); of tl1e Civil Co�e, Code c_iJ 1il de 1';�11 :�ist· _ d eihzopie �e 1960 (Paris, LGDJ, 1962). References to tl1e Aml1ar1c texts ru.e base ance provided by Ato Kebede Kassa and to Sl1ibrL1 Scifu. A Not. . Leg 7 · Civ. �-, Arts. 468-482. See also tl1 e Associatio11s Registration Regulations, 19661 No. 3_1, Neg. Gaz., year 26, 110• l. . . the 8 · Tl1e powers 0� t!1 e two ministries .differ. See, for exa1111)le, Civ C., Art. 473, r � e ws· �ffice of as�oc1at1ons to be notified of the general . meetings of an asso�1.at1o n an �:;b send an o t .. · : it to prescri}:>e measu�e� to enst1re the ''good fL1 nctioning'' of tl1e �1eeting au�c,:;fS, · · o�server to it. The Ministry of Commerce an Ind po� such give n not is d ustr y · · · 9. C1v. C., Art. 461 (c). · 10. Comm. C., Art. 25. •· .. , ·. 11. Civ. C., Art. 467.

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AN INTRODUCTION TO TI-IE LAvV OF BUSINESS . ORGANIZATIONS

life the of� asso the ciati o. n , but . g it seems inconsistent vvith the . spirit durin _ e. r s rob and: e�� ed provi�io 4?7, ns, . do to: _ 407; so. · _ Of cot1rse .;. �n _associatio1. 1 . � les :_ rtic :�A act1 V1t1c artic _ fro s ular t1 p �· � r cy ca. '. _ � �e to �i1ne ,.in o�der to. a�qt111·e 1noney ·_ tq roay n_ nor� o n-pro al fit obJec ts. But . its 1t may not 111 · engag e -0bta . rn. profit-making it help . o11 a r�gular basis. · . ·. . ·· · · .: ties . .. activi . . Cooperatives.

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.. of ._ l 969 1� �

Article. 4 . of the_ Co-operativ� Societies Procla1nation . · .. de��es � c_9operative society as one · wl1ich l1as as i�s ·''pri11c�pc1:l_ p11rpos�s n11d <?P�. , .

je�ts''.

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., ·· the promotion, i11· accorda11ce witl1 co-ope·rative pri11ciples and tl1e reqt1i i-e-· .. · · nients of social justice ; of better living, better busi11ess and better methods of productio11 by such means as: . ... . . . . · · . . ·. · (1) reducing the cost of credit; (2) reducing the cost of goods and services for pr6ductio11 a11d · const11nption; '. individual impact of risl<s and t1ncertainties; (3� · minimizi11g and red11ci11g the . improvements; or of practical technical (4) · �reading knowledge . . . . . (5) may other'rvise contribute to achieve. the abov�-nientioned purposes and obj�cts. · . _ � . -Before the adoptio11 of · tl1e · Co-operative Societies Proclamation, a co-:-o. perative would theoretically ha,1e ·had to be formed ·either as an · association· or as a busi ness organization, according to. its activity. It would have tp be formed as a busi ness ·or.ganization if it tended ·to ''satisfy the financial · interests of their members by plac.ing them in a positio11 to sav� mo.ney." 13 This would occur in parti9t1lar with: those activites - specified fn.. pai-:agraphs (1) - and (2)', of Article 4 of the Co, operative Societies P'roclamatio or services. the cost .. of credit, goods n; reducing . . '" . . . One way in wluch tl1e mempers of a cooperative might ct1t costs and sav� �oney is by working for the organization ·or . acqt1iring · �terns f�om or selling them to the organization.- This eliniinates the .. separate employer and the ;'middlema,n'' . · in the buying ·and· selling process·. ·· . · .. . . . For example assume that, a perso11 could buy be. ans for futy cents per kilo in any vegetable store in Addls Ababa. Asst1me also that ·the owner of the store paid tlie farme·r thirty cents for that kilo of beans, _and out of the twenty cents �emairiing uses ten. · c�nts .to , pay ":for the . expens�s · of op\�rating his store and keeps �en Qent� · as profit. If under these circtirilstances :many bean consumers got together and agreed · to forrµ a cooperative . to bt1y anq. sell _b_earis, they could each save ten �e�ts .. on each kilo of beans. The coqperative -wot1ld buy b�a:ns from , the far1ner at t�rty · cc'nts per kilo. It wot1ld ·prob_ably have expenses similar to tho�e of . tl1�· owner_ of the. vegetable ·store; say, ··ten cents per . ]plo� But since th�re is no store own�r •(the ''middleman:�) . to ··tak. e ·. a· pr_ofit, · the members of the . ·cooperative c=a� . aequire th.e beans ·for forty cent� per kilo instead of fifty cents. pr, th cooperative· � may . sell at fifty cents per .. kilo, and' divide up tl1e· surplus (representing .ten ·cents ,

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r;�c.

. . . 12· No. 241, Neg. Gaz., yea.r 25, no. 24. See also the Coo.perat�ve · S9.cieties . Regul_ations; 8, Leg.. Not. No. 337,. Neg. Gaz.,. year 27, No.. 11. · • , · · 13· Civ. c:, · ·, : ·: ·.. · . .. Art. 405(2) .

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- 497-

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1 \ 1/ ...:.-•fGL. '\'If.[ - No. 2 ,; LA JOURN.AL OF ETI-lIOPIAN

·;.·

e e11i...1 · of the year at th rs be em n.1 .. e th 1g or am · s) an be Th e each. bag •or . 11et'r . on . · .,. . c 011 • e · 1 1 ,.._ 11s , ::, f . co 111a 'd.. 1 . o e, I p d am ex cr� . esult rt coope at1v er oth ail As me · . · sa • . . . 1s the r e 1 y e11c · 1 nG to ro mo 1ts T 1s e t1v mb era he rne op e • c· . ers dit cre a . Of at . purpose a rat e an h c 1 b 01· . l ot 1e er t l1ng by 1e11c of . · rge.d cha i ii1st .l. ll. tere t tha ttlti o . st lower. than . I 11S. . . , , , . t ( 1y ma �or k an b es 1rg e h c11" may � Say i Ind ty.) t1r1 sec u vid less e uir al req also b ers rrow w t a er coo 1v abl be y rp. e e t di_ � e cr_ 1J e to Th . � bor ro f nine per cent interest. t he l1 r 11c � �g \¥I la rfO b r IS r g� 1t e us ca n:i be Sll te ra er . low of a at. � ? bink_ n� mo � . ith� pr�b a a ed ) 1n c bor 1dl 11: 1ub cl1 av O\: .r ed � ]d l1 wo� ar1 s ber n1em all d its c n si1 m � � �, � ly · l c that n1e ass rate r us owe et 1s u e r1ty. . L sect1 seve 11 p r e nt · · offer better over-all �he ers its mb to 1ne at, ney mo d len ', n Sa:) the eig can 1 tive '. 1 · t a per per credit- coo cent. The , . · · · · tl 1e sev_ e 11- per. cent 1t· owes tile bai t e \V_ ':: �11 _ b .1.11er�11ce r.r.d 1e_. l t tises cooperative lk and w111g b orro its b 1n�m f ers :ron1 ves to cover its exp the eiglit per cent 1t recei . enses f 1 or ce11� 11n1se • If, s111ce l1e 011 Iy inust The bor·rowing member has saved one IJer a 7 � wl11c he \\ ould have had to pay y for an amou11t 011 . h ei0o-ht per • cent i11terest nine • .. per cent interest 1f he borrowed from a b ank . y

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Any cooperative· wbicb. has the "pt1rposes a11d objects specified in Ar ticle- 4 of the Co-operative Societies Proclamation n1ay be forn1ed accordi11 g to tl1at procla ma tio11.14 A cooperative formed 11nder tl1e_ proclamation. wo11ld be registered· with the Registrar of C_o-opera�ive Societies of the _Mi11 istry of Nati'o11al Comri11111ity Develop ment and Social Affairs and beco.n1e s11bJect to t]1e regti]atory sc11en1e of tI1e pro clamation and tl1at Mi11istry� According to Article 59 of tl1e JJroclamation, the pro visions of .tl1e Co1nmercial_ Co�e wotild not a1)1Jly to s11ch a cooperative: except in so far as st1ch .1Jrovisio1• 1s. are · consistei1t with t11e p11rposes and provisions . of tl1is Proclan1ation, and, in partict1lar, b11t \\7itho11t limitati9ri, [cooperative] societies shall not b· e st1bject to ·any requiren1e11t of· organiza �ion, registration· or i11ternal n1anagement other\vise applicable to trades_ or busi 11ess organizations 1mder the Comn1ercial Code.

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It should be noted, however, that registration t1nder tl1e Co-operative Societies Proclan1atioo is optional. Persons for.n1i11g a cooperative \vl1icl1 enable its members to save money may still create it i11 011e of the for111.s of . &11siness organization pro vided by the Conunercial Code if they wish.

_ Other Organizations. If two or more perso11s form a group \Vit11 a view to �ecur!ng or sharing profits, their gro11p is s11bject to tl1e provisio11s of tli� Corn· mercial Code concerni11g business organizations. If tl1 eir. group is for111�d vvith �uy. otl1 er purpose in mj11d, it is subject to the IJrovisions of the Civil- Code · conce rning tI(?ll · s and . · t1ons. • . 1s · .• cia �ssocia lI o'V\:'ever 1 asso , tha1 special otl1er laws rotlJJS may create g. · · · · · b1:1s1.·ness orgau1zat1ons. Son1e of tl1ese laws p rovide r11les for tl1e for111 at1on f paru1 i li tt � lar �)'p�s of groups. Others are cl1arter s of . specific orga11izations. In t e C �f �ode_ it_self, we _fi11? _pro·visions regt1Jating sy11�icates of joi11 t ow11ers, vvhere J r a btiildrng are 1��1v1d11ally owned ,1.11d pa1�ts j_oi11tly ow11ed (Arts. _I 293-l30S)'J� �(Jri· �ts. rs u n c }tural co;mmunities (Arts. · 1489-1500) a11d otlicial associations of Ja11dow e a am 6 1 ?Ol-1534)· 1 O titside the Civil Code, tl1 e1·e are (he Co-oper�:1.tive Societies Proc

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14. Comm. C., . Art. 212 (2). . . · 15. Civ. ·C., Arts. 404: 405. • · ,.. , . · · Dellts and o\Vl 16. Compare. the Civil Code provisions- on ; p end _, ation desti n ro er.tv • \1/itl1. a specific trusts: T1tle III, Cl1ap. 3.

- 498 -

•

AN INT RODUCTION TO THE LAW OF BUSINESS

ORGANIZATIONS

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. . and the Imperial Savi11gs a11d Homefi Owner ship Public Associ ation Proclaination.11 · · · · t1on there are severaI non-p1·0 t organ1zat1ons chartered by H . is In1perial tion, addi 1J 18 of the tion . adop Civil · Code the b efore jesty a Some a11thors have suggested tl1at the codes leave a ''gap'' for. ct1�tomary such as n ;1c11h, a11d that the organizati ve � � r �xist Olltside the regt1lation of erati coop 19 In the op1111on of tl1e �)resent a11tl101·, tl11s 1s 11ot true As stated above,. s. code : tlle . Articles 404 and 405 ?f the C:,,11 . Code prov1de rt1les g�ver111ng e�ery ki11d of ''O'rouping." A cooperative orgaruzat1on, ct1stomary or not, 1s a gro11p1ng. P11rsua11t t; Article 3347(1), a11y c11sto111ar·y r11les pertai11ing to s11ch a11 orga·nzation have been replaced by the Cod�, except as they n1ay s11rvive f ?r previo11sly created r!gl1ts and sittiations under Articles 3348-3351. St1cl1 a11 orga111zat1011 falls 1111der P.1..rt1cles 404 and 405 and, at least i11 conte1nplatio11 of t11e code, is either a11 association or: 5usiness orga11ization, llnles_s formed p11rs11ant to tl1e Co-operative Societies �rocJ� mation of 1966 or s001e otl1er ]aw. Even if a Cl1stomary cooperative is view· ed merely as a contract, it wot1ld be governed by the Civil Code provisio11s on cont_: racts and not by ct1stomary Ia,v. 2. Classification of Business Organizations •

The ConJn1ercial Code classifies business organizations i11 tvvo different ways: first, according to the particula1· fo1·m of organization; second, aceording to wl1ether it is commercial or non-con1111e1·cial. It may also be, hel1Jf L1l to disti11guish orga11iza tions according to how mt1cl1 tl1ey· emphasize the role of particular i11clividuals. Form of Organization. The Code recog11izes six forms of b11siness organization;

ordinary partnership, joi11t vent11re, general partnership, limited part11ership, share company and private limited company. · The following paragraphs s11nu11arize tl1e basic characteristics of each. (1) Ordinary Partnersllip (Arts. 227-270). This is an organizatio11 t1s11ally of . t be a com111ercial b11siness organi a relatively small n1m1ber of perso11s. It may no z�tion; that is, it may not carry 011t any of the activities specified in Article 5 of the Commercial Code. Since Article 5 mentions most profit-making activities, tl1e use of the ordinary part11ership form is extremely limited.. The members do 11ot have limited liability. Membership interests are not, freely transferable. (2) Joint Venture (Arts. 271-279). This organization is usually formed with· a

rela !ively small number of persons for a limited purpose or short period of time.. Unlike all the other forms of business organization, the joint venture is not a legal person and its existence may not be disclosed' to third persons. Membersllip is not freely transferable. The liability of the members depends on the memorand um of association. 17 • 1962, Proc. No 188, Neg. Gaz., year 21, no.. 11. 18· For example , the Chamber of Commerce, GeIL Not. No. 90 of 1947, Neg. Gaz., year 6, �0- 8;_ Ethiop1a n R.ea Cross Socioty, Gen. Not. No. 99 of 1947, Neg. Gaz., year 7, no. 2; -th10P1 an l-Iorse Racing Club, Gen. Not. No. 230 of 1957, ·Neg. Gaz., year 17, no. 6. 19 0 r · ,- K ze czunowicz, ''A New Legislat ive Approacl1 to Customary Law: Tl1e Repeals Pro:1isio,;i �( the Ethiop ian:, Civil Code of 1960,�' J. Et/1. Stt1clies, vol. 1, no. 1 (1963); J. Vande1;l1nde n, a An In_t.r�d□ ctio� to the Sources of Etl1iopian Law," J.. Et/1. L., vol. 3. � 1966), � 244. For description of 1kub, see ·Asfaw Damte, ''Ekub," B11/let1n of the Etl111olog1cal Society. ••

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T]1is (;�·g.11!izatio11 trstrally ). -295 280 ts. (Ar ship ner Part is (3) General for e e b 1 s. o 1 d With ers_ 1o of 1 s r e t y Jp freel �rs] ? b � n11m !� � _ � l a i·elatively smal tra � 11 ; ._ fe abl e t tl is e ino. 1l1ty t 1�� J 1n te� com 1 t !n1 on s I � l1av � � or f _ � not m do : '. : of n1embers b d e111e gov is It by . usiness a 1l1ty li�.b subs ted l1IUJ 1 ta11t otit al with n11m organ1·zation b er . ordi.nary par t11e1.s111p . . of I . as , 11 we as Ar· . tic 1 t1e es 0. 28 ng ni er i1c 295_ provisions co ited e . Tb. I,i1n 303) 296s. (A1·t p ne })art l1i 11ers rsl1ip is b as1 Part jted Lim (4) . . · . caIIy . th 1 o1 1e e ce 1t 1 1?t . e . 10 o _ 1 1 ), e J! s er �n or ar l ra i11 l or ne ( e u ge no 1e tl s � a b � ; , � . �ame . t t al!) � of its members liave l1m1ted 11ab1l1ty. Membe1sh1p l;:, 11ot freely transferab] e. _It is es tl e n r11l o· l of 1cra er ge1 mb tn par n11 tial 1 stan sub jp ersh a by ed govern ai,d partner, ship. Articles 296-30�. ad1 !? _th�se . 1:l1les rriodifications ,vl1ich are re qii:�f �Y Y the presence of members w1tl1 l1ID1ted l1ab1l1ty. (5) Share Com.pany (�rts .. 30�-509).. T�1e �ha�e comp�ny is f11nda1nentally diffe 111 that all of 1ts 1nen1bers e11J·oy d, rent from the forms previously d1sc11sse . 1.1nu'ted . liability. It may, altho11gh 11ot 11ec�ssar1 1 y, consist of 1nany men1bers. Membership is Sl1are con1pa11y 1s tl1e form 11suaily cl1osen to operate enterpr ises freely transferable. . which require vast sutns of money. (6) Pri,,ate Limited Con11)any (Art. 5 I 0-543). This org3.11ization is a 1nixture of . the sl1are co1111Jany a11d the partnerslli1J. It is lilce the share con1pa11y in that all its members e11joy lin1ited liabilit)'. It is lil<.e the partners]J.ip i11 tl1at iL usually has a small number of n1embers and its 1nembership i11terests are not freely transferable. According to a11 tu1official co111i:,ilation of statistics, there \Vere aboltt 389 bt1siness organizatio11s registered at· the l\1i11istry of Commerce a11 d I□dl1stry in 1965. Abo11t 108 of these were ge11eral }Jart11e1·sbip, or ge11eral partr1ersl1ips and limited partnerships. (It is 11nclear Vlhethe1· limited part11 erships vve1·e i11clt1ded or ,vhether there \\'ere j11st 11one registered.) The total declared capital of tl1ese organizations Vias Eth. $7,324,000. Abot1t 106 of tl1e registered orga11izatio11s \Vere share com parties, with a total declared capital of Etl1 $218,781,000. Abo11t 17 5 \Vere private . limiled compa11ies,,. with a total declared capitci.l of Eth. $34,775,000.20

It s11ould be noted that the word ''partnership'' i s tised i 1 1 the 11an1es . of _b� siness orga1Jizations i11 Article 212(1) in a 111a1111e1· differe11t fro111 t11at i11 wl 11ch it 15 used in Article 405 of t11e Civil Code a11cl /-\.rticle 211 of tl1e Co111111ercial Code. Wl1e11 it .is 11sed in the nan1e of a bl1siness orgar1ization, it is 11sed. eitl1er f�r ,va�t of a· better word or becat1se the form of bt1si11ess orga1uzatio11 bei11g described 15 closest to the type of business orga11ization in the E11glisl1-Iangt1age Con1i11011 La_\v ,vb.ich I1 as that name. Wl1e11 it is used i 11 Article 405 of tl1e Civil Code and � Article 21 I of tl1e Co111mercial Code, it has the same n1ea11iog as the gener phrase '' bt1siness orga11ization."21 nes . • . defi de O C Comm_erc1al �us1ness Or?a11�zatioI1s. Art�cle l � of tl1e Co 1n111erc1 al _ rneino· e com nde ercial a bt1.s1 11ess orga111zat1on as one 1 1 1 \Vh 1 ch tl1e ''obJects 11 r tll ·r,,d ·n m rail�tim of ass?c.iation or i11 fact are to carry 011 a11y of tl1e activiti�s SJJeci 1 Article 5_ of this Code." Share co1npa11ies and >rivate li111ited con1parues a�� a�,va�� 213, J e l tic AI commercial ''whatever their objects._',. This definition is st 1pplen1e11ted b)' 20.

21.

cal > cti pra nd l . l Con1panies u11d S �la�lu Bekele, Pri. l,ate Com1nerc1a a . . i,. Leg a1•11·versity). er Ethiopian LaH': The u �•'te, Sig,iifica,tce (J966, unpublished, Arcl1ives, Fac t1lty of Lavv, Haile Selassie 1 1e soc; JS Tl1e word consistently used in the , ion niza t orga Fren bus cl ines vers s ion for 1 -

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ORGANIZATIONS

the six or?anizatio11al _of any forms that_ spe?ified in Article 212 vides pro . ch whi 1al _b11s1ness org�111za!to11 except_ for a11 ord1n�ry partnership. The comm� rc a be roaY and y ord1na1· a11 tl1at 1s 213 10 1)artnersl11p not may Art1cles be a. of ct effe t orga11ization (and_ tl111s 111ay. 11ot c�rrr qn any o� the activities s busi?es cial roer ��m __ sba1·e . c�n1:pa.�es a_11cl J)r1vate l1In1ted COl�P�?Ies are. alwars , specified. in Article :,) ; their 11ot or a11y 111cl11de obJecls of the act1vrt1es specified 111· ,vhether erc1al, orom �ticle 5; general partnerships, limited parlnerslups· and joint vent11res may or may not be commercial, depending 011 -vvl1ether or 11ot one of thei1· objects accordi11g to the memora11dum of associatio11 or i n fact is to carry on any of tl1e activities specified in Article 5. If a comn1e1·cial b11siness organizatio11 is created i11 tl1e form of an ordinary part11ershi p, or if � c�111m�rcial busi11ess orga11izatio11 �s created a11d its form is not 22 be to dee1ned 1s orgaruzat1on conm1erc1al a , fi partnersl1ip. general tl1e ed speci The distinction between commercial and non-com1nercial business organjzations is very important in the Frencl1 versio11 of tl1e Commercial Code. It is less import ant in the E1.1glish version. It is even less i1n1Jortant in the Amharic version. In the French version, only commercial b11siness orga11izations are req11ired to keep accounts and to register and be publicized. Only commercial business organi zations may go th.ro11gh bankr11ptcy and only commercial bt1siness orga11izations are ge.nerally subject to the pro,,isions governing traders.23 In the English version, only commercial business organizations are reqt1ired to keep . accounts and only they may go thro11gh bankruptcy. Bt1t all bµsiness organi zations other than joint ventures m11st register a11d be publicized and all business organizations are subject to the provisions governing traders. In the Amharic version, only commercial business organizatio11s are req11ired to keep accounts. But all business organizations other tha11 joint ve11t11res must register, all other than joint ventures may go thro11gh bankr11ptcy and all are subject to the provisions governing traders. The Role of the l11dividual Men1ber. In so1ne bt1siness organizations, the parti cipation and identity of a partict1Iar member are typically more important to the other members than they are in otl1er business organzations. T11is helps explain some of the business organization provisions.

In t·he ordinary partnership, general J?, artnership, limited partnership a11d joi11t venture, there are t1s11ally a relatively small n11mber of members and the . importanc.e of_ a partic ular men1 ber is great. Except for limited partners iµ a li1nited partner s�p, the members normally work in or for the 01·ganization. They must . get alo1.1g Well together if the organizatio11 is to ft1nction properly. 111 addition, in each of e�e 0r¥a°: i�ati�ns there are persons witho11t lin1ited l�abili�y. A person witl1out .nuted l1ab1I1ty 1s m11ch more concerned about the q11al1ficat1ons and character of

22·

. 23

femm. C., 213(2). The French version contains tl1e pl1rase ''expressly or implicit!y'' befoouldre 0

r d '' specifie d.'' Tl1e An1haric and Englisl1 versions omit it. Sound interpretation w w? � r ad It in, however . , · Co k(ban 968 . y); licit pub and tion istra C. (reg . Arts 223 63, 219, 73 ts); 100, , oun (acc ruP� cy); 3 (provisions governing traders).

501

--: ----:. IIOPIAN Lr\W - \'OL. "\TJII _ No. 2 ETl 01� JOURNAL . fellow n1 embers than th e perso11 with li1nite.d. Jiabilty. Tlie in1 h. 1 _ p 0rtan e a es r1 t lhn ch c of 1n su 1 i11 t· d }nal<: os:; s 1 ecte I g refl is i it u • as. , ber nem diffi l " . , 1 Il 1 VJd al _ '. • 1 • , t r:l1 C to · .en1e t 01 llD 111.ri1ot1s transfer 11 1 req � 111Jg sun pre �pp � s, � rest inte � l ova � members'hip of the 1 e1 t1on ol of d1ss tr1� ng u ttn11 pres orga11ization v.,,he11- n 11bers and s sion deci . or for maJ· ' a in ember . 1p 11 r1 24 t k b a es o g r o le ab p 1 ca j1 dies, becon1es

e\v s. a 11lJer just n1c1 e h�,, 011 tl1e other ha � may . pany com re a sh. A d n it '. a y 1re n1an acq11 and bers 1ne1r1 c p11bl1 � . the y I11 the Iatter s also sell ''sJ1ares'' to it n, uat o tant 111)or 1111i1 to often tl1e is � 1ber men rs otl1e • 111ost m- em b ers · the identity of any • ' • • .c- 1�vest11�g Joiu t 11e1r o� • r11011ey and take litt 1nea11s a as chiefly organization the l e r n 1 at1011 All e 1 orga1 111 tl1e be of o . m 1 1 z 1 1 l s managen1ent ave the in li part �. ited liabil' foro the compa11y's debts. Nia11y of tl1e sl1are co1n1)any prov1s1ons in the Cod ,treyfl ect this situation. Tl111s, death, i11capac.ity or ba11l<rL11:>tcy of a n1en1ber does nit result in diss0Jutio11, a11d 1nen1bership i11terests are freely transferable. 2s The private li�ited con1pa11y l1as so!ne aspe�ts _of eacl1 type of organization. It sts are 11ot normally l1as relat1,1ely fe\v 1�e1 �bers._ 1Y��111bersl11p 111ter freely transfer � _ able. But all m.e1nbers have l11n1ted l1ab1l1ty a11cl death, 111capacity or ba iikrui)tcy of a men1ber is not pres11med to result in dissol11tio11 . 26 Tl1e differe11t role of the i11dividual is reflected 11ot only in tl1e different rules f whicl1 gover11 tl1ese organizati911s, bt1t also i11 the dif ere11t role the partnership agreeme11t plays i11 tl1 eu1 . The JJart11ership agree111e11t is very importa11t i11 establish i.I1g tl1e internal rules of an org,L11ization s11cl1 as the ge11eral })art11ersbip. There are relativel)' few code provisions, and ma11y of tl1e provisio11s \vhich do exist 1na y be over-ruled by d i. fferent p1·ovisions ir1 the partnersl1 ip agreen1ent. This is so because the i11dividl1al is so in1portant, and because he ca11 be relied on to protect his o\vn interests. Also, creditors of tl1e organizatio11 do not need exter1sive protection because they usually have 011e or more men1bers \Vho1n tl1ey ca11 s11e if tl1e organization does not pay its debts. 011 tl1e other l1a11d, t]1e code }Jrovides ma11y rt1les gover� ing share cornpa11ies, 011ly a few of wllich 1nay be n1odified by tl1e partnerslup agr: eement. In co111pan-ies lvitl1 a large nt1mber of 111e111bers, tl1e i11dividual n1en1ber may have difficulty exercisi11g co11trol. Since all 11 1eu1bers 11ave li111ited liabilit�, n1 ore provisions are needed to protect creditors. An.d, fi11,tlly, since sl1are co111pa111es n,ay raise hl1ge amou11ts of capital, they may become 111ore i11flt1.e11tial i11 tl1e economy than the organization of persons; it becomes all tl1 e more j1nportant for the ]a\V to assure proper f11nctio11ing of the orga11ization. 3.

Legal Personality

. . . . D efin1·t·1?n pe,rsons ar� the s11bJ cts of r g11ts a11d o�l1g�t1ons. T l1ey r11ay be � � le, a . pared w1tl1 goods, xanip eo� For wh1ch are obJects of r1gl1ts a11d ob1gftt1011s. else; �Iiin chair ma_ y be �wned o sold by a l)erson. It annot itself o,¥n _somet � . . n1ake ; cont· ? _ ownership is a r1gh�, �h1ch only a perso11 may enJo y. Neithe r ca.11 it ract, a type of obligcl.t1on, \Vhich on ly a person 1nay i11c11r.

24. See Comm. C., Arts. 233, 250, 260, 283. 25. Comm. C., Arts. 333(3), 495. 26. Comm. C., Arts. 510(2), 523, 542(3).

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ORGANIZATIONS

.Article 1 of, ·_the Civ�l Code provides: ''The htunan person is -tl1e stlbject of :ri ghts f� on1 its b1r�l1 to rts death." !11 a 11t11?ber of sitticttions, ·t11e law attributes personality to. a thing . 01· a gro11p. l1t1s, A1·t1cle 210(2) of the Con1mercial Code provides tl1at ''a11y bt !�111es� o_ rgan1zat1on otl1er t!1a11 a joint ventt1re sl1all be deemed to be a leg�l perso11. Tl11s 1s a 27vvay of e11abl111g tl1e orga11zation to become the a11d obligatio11s. c 511 bje t of rigl1ts A business or �a11i �atio n is chiefly a collectio11 of pl1ysical persons and of pro _ perty. If tl1e 01·gan1zation 1s 11ot treatecl c:1S a · 1Jerso11, tl1.e n1embers wo11ld noramlly be joi11t ovvners of the property. A11y obligatio11s i11ct1rred in the co11rse of operating the b11siness \'\1011ld 11ora111lly be 1nade i11 the 11a111e of 011e or 1nore of tl1e 1nembers, and t11ose members \iVou1d become subject to s11cl1 obligations. WJ1en tl1e Jaw pro vides thc1.t tl1e orga11izatio11 is a legal perso11, the orga11izatio11 itself .n1ay ow11 the property a11d obligations n1ay be 1nade i11 the na111e of the orga11ization. In tl1e eyes- of the aw, it is like a physical person, distinct fro1n tl1e perso11s who are its 1nernbers. For exa1nple, say A, B a11d C are all physical persons, a11d tl1at A owns land an.d B ar1d C have 110 interest i11 that la11d. The positions , of tl1e three parties witl1 regard to the la11d are clear. I :f th.e sit11ation is changed so tl1 at A � is a blisiness orga11izatio11 with legal IJersonality, a11d B a11d C are members, tl1e resttlt is the same. A, a legal person, owns tl1e land. B ·and C do not. It 111ay be that B and C are agents of A, and as .such deal with the land; bt1t if so, they . . do it on bel1alf of A. As members, B at1d C may participate i11 decisions vvhich affect the land; b11t if so, tl1eir rights are of participation i11 the organization a11d not ownership of tl1e la11d. Tl1e orga11ization pays the taxes 011 the land, if any. It may sell the land, a11d does so in its own 11ame wl1en it does. A similar analy sis could be a1:>plied to contract11al and extra-contract11al obligations, a11d to j uridical acts in -general. · The principle ,vas applied by the 1:..Iigh Co11rt i11 Addis Ababa in tl1e case of Delboitrgo v. The Inland Reveniie Dep artme11t.28 The petitioners were a share com pany and tJ-iree members of the company. The Inla11d Reve11t1e Depa1·tment, in as sessing tl1e income tax of tl1e co111pa11y, l1ad ordered tl1e three n1embers to prod11ce the pass books and statements of their private ba11l( accou11ts. The co11rt held that the department had no povver to n1alce s11ch an order, becat1se the tax being asses sed was 011ly that of tl1e company, a11d ''tl1e principle remains that a company 11as a co1npletely different legal perso11ality from tl1e individ11al men1bers or share holders.' '29

The concept of the legal person is l1sed in many areas other than business organizations ...for example, it is · applied to the State and its st1bdivisions, the Ethiopia11 O·rth0dox Cl1urch a11d associatio11s. 30 27 · Battles have long raged v.s to tI1e nattrre of legal per.�onality. For . a discussion of tl1e v arious . 1. 191-26 pp. theories, see R. Pot1nd, Jt1risprt1de11ce (St. Pa11l, Minn.; West, 1959), vol. 4, 28 · Higl 1 Ct. Addis Ababa 1961 Civil Case No. 166-53 (t1 npt1blisl1ed). Tl1e case arose before the Com�erciaJ Cocle �a1ne i�to effect, bt1 t tl1e reasoning of tl1e cotu·t applies as \Veil to co1npanies forn1ed 11nder tl1e code. 29 · It should be noted that sinc e legal personality is a cr�ature of t�e la\v, tJ:ie la\V �1ay in _1s used to pei1Jetrate some circt11nsta11ces disregard or IJiec� tlrrot1gl1 it, JJarticularly wl1ere 1t fraud or otl1er unlawful activities. 30 · Civ. C. r... 1ple, ''body .1i exa for d11se nes eti1 som are es nam , rts. 394-403, 451-458. Different e es th n l1e w •c: • ly al er en G ' · · - •1cal person ' ' art111c · '' corporat e , , "Jt1r1d on ' ti ·a or ,, corJJoi ns perso ,, 1 ' 1a ' er• · ' · p a e ,..., b ' to -. w la · 1e tl b rtO.rds are l!lsed, tl1e grot1p to d . • Y · eeme d 1s \-vl11cl1 reference 1s n1ad· e ,on. capab le of l1aving rigl1ts and obligations.

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. V v . LA L, N JA \'O OP I-IT ET VJ;[ - No OF JOURNAL

i11g low fol e Th 1 ra1) g v, n. :P��r 1 s clisctlss s Per al Leg the � of Attributes 80 e f o to e renc 1nes the b11s 1·efe .A s ,v1th a org , ons 11 pers iza l lega of tion · s ·stie s char cter 11Y ref r1 . · otir e oi lud e ot i11c s, e11tt1re s , nt doe j n of ons zati ani org c tti a ss sine se, since th . ence ot . ey . ty li a n so er p l a g le y do not enjo 1its pern a perso11 to possess and law the ch whi to 11t exte The CapacitJr. e _ e x rc1se ' e11 ts' gl1 ,vh j ''1· d 1n r tlse te. he (T i11 ty. cap·aci tl.lis seilse Itlc ri·gllt".s is called his 1 · · Udes t I h s e · h en . d o W at1. ) i · · _ o bl a\v o f ves epr1 ng r1 11r · 1c 11 e t� h11n . . of rights or . . its co11verse,. � � , self I1e 1s l11m said 1ts for r1gl to have an incapa e rcis exe to n sio mis per the of c1ty. . . . The distiiiction bet,veer1 tl1.e e11J�y111ent of 1·1gl1ts �nd t11e1r exerci. se shotild be noted. When we speak . of the capacity of a legal per ��11, vve are o 11ly concerned with its enjoyn1e11t of rights. A legal person cannot by 1 f:s very 11att1re exercise any _rights by itself; it must act 1·hrougl1 age11ts. Incapacities 11orn1ally are imposed f 01· 011e of t\VO pt1r1)oses: protect ion of an i11 tl1e 1 discretio11, as case of 1ni11o_rs a11d i 11 sa 11e and ind.ividual against I1is 0\¥11 i1 infir1n persons, ao. d protection of society agai11st a perso11 it d1strL1sts or stispects, as in tl1e case of criminals legally i11terdicted a11d foreig11ers. 31 According to Article 192 of tl1e Civil Code, a pl1ysical person ''is capable of performing all tl1e c1.cts of civil life linless l1e is declared i11ca1)able by the la'\\'." Tl1e ca1)acity of a legal perso11, adds Article 197, is to be reg11Jated by the parti c111a.r provisions applicable to it. Article 22 of the Con11uercial Code enables a bt1siness orga11ization ''to carry on an)' rt ade,'' subject to legal prohibitions, valid agre en1e11ts prohibiting con1petitiori and any legal provisio11s regl1lati11g that trade. 32 B11t 110 law deals with the capacit:i of a business organizatio11 to e11gage i11 activities generally {as trade is only one of those activitjes listed in Article 5 of the Comn1erc.ial Code), to 1nake cont racts and perform other civil acts. In t.his sitl1ation, t]1e ger1eral rule provided for pl1ysical persons shot1ld be adopt· ed for bl1siness organizations by analogy. A bl1si11ess orga11izatio11 sl1 011ld be capable. of perfor1ni11g all tl1e acts of civil life co11sisten.t witl1 its 11at11re u11less declared. incapable by law . It is a sound rl1le, si11ce one to tl1e contrary, by n1aking the existence of capacity depend on specific Jaws or the content of tl1e n1emorandtm1. of association, ,,1011ld create uncertainty a11d i 11l1ibit co111111ercial activity. Specifi� incapacities if desired can always be created by law, as tl1ey are i11 t�1e_ case ot physical persons. This is tl1e basic r11le regardinO' associatio11s. ''A11 assoc1at1o11 may perform all civil acts which are co11siste11t witJ1° its r1att11·e."33 See gen.erally, Civ C., Arts. 192-393. !iog11e En�lish p hra?� in Art�cle 22, ''stib�ect to.sue� prol1!bitions or l awful . restrictioilSA�1 unfair competition as niay be prescribed" 1s sl1gl1tly in accurate. Tt1e F1eiicl1 a n� spe ak 0.f _legal prol1ibitions and legi timate agree n1ents prol1i biti11g con1petition. Tl1e t yprc n fair fl9u a� d c� nipetitton agreen1ents of tl1is natt1re are gov 158 , by Co111n1. C ' Arts. 30, ern ed C1v , Arts. 2589-2592. · Fran c.e. G· . . ons 10 33· c· v. C. A t · �5�(1). 1?}11· s a lso 1.s tl1e ul e for business organ1za!1 general r J 19 63-64); Ripert. , ,Ttai , 1;te, elementa1re de c ro t co,nmercial ( 5t11 e by Il. llo blot, ari , , t � P S d. LGD i: ' es crea it v01· l, no. 680- For a descr1pt1on of b lem pro the an.c l rul e res mo French a tricti,,I! re ; 1 t e j · scarra, ''�ome Points of Compariso11 Betw een tl1e Co1n1Janies Act., 1 948 , an ·d :r Trade , raw o� Compan es,'' Cambridge L.J vol 11 (1953) p 24· Great Brita in , Boa, i 13, 10Report of tlie c_ompan;: �aw Com,;,;.ttee · 2), 196 t SO , 1f M . 1f!' p,r L� sen ndo (Cm n, 174 nd. 9 e ) ( See also Ghana, Comm1ss1on_ of ·En qu i.ry into t he W orking and Administrati on of t· . 4 2 . . 41, 6' 3 Company Law of Ghana, F111al Report PP 19 61) , (Accra, Govern.ment Printer, · 31 . 32·

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- 504-

AN INTRODUCTION TO . THE LAW OF BUSINESS '

ORGANIZATIONS

�' organization has the capacity to Assumin g this . is the ge11eral r11le, a b1 �si11es 1e g1fts, and generally to perforin b s11e to rece1, 1d a s11e to � s, ac any � ! contr ! _ _ J)lake l1n1tations physical by 1n1posed 1ts abstract to 11ature and to rest s11bJect act, civil . w a y l b d e s o p im rictions Natt1rally, a b11siness organization, like 'a11y legal person, cannot do the things _ _ wbjcl1 de J?e11d 011_ tl1e l11 :1!1a11 11�t11re of the physcal per·son. physic al persons ca11 do On the other hru1d, it 1s not s11bJect to 1ncapac1t1es wh1cl1 depend on h11111a11 cl1a racteristics of physical perso11s; for exa111ple, tl1ose based on mino1·ity, insanity, and .. ty. i infirro Rights and Liabilities Ma11y attrib11tes are directly connected 'with the capacity of a legal person to enjoy rigl1ts. These i11cl11de, partic11larly witl1 regard to business organizations, the follo\vi11g : 34

(a)

The organizatio11 n1ay sue or be sued.

The property of tl1e organ.izatio11 is 11ot available to satisfy judg.ments against its members on their J)erso11al debts. A perso11al creditor of a m�mber who obtains a judgme11t agai11st ruin 111ay not l1ave it executed on the property belon ging to the organizatio11, even if the property was co.utrib11ted to the organizatio11 by that member. The member is 11ot the o\.v11er of such property, either alone or jointly. On the other ha11d, tl1e personal creditor 111ay IJroceed agaj11st the wem bership interest of the men1ber. If a creditor obtains a jl1dg1nent against the orga n.ization, he may have tl1at judgment exec11ted on property belonging to the organization. He 1nay proceed against property belonging to an individual 1nember only if that member does not enjoy limited liability for j:he debts of tl1e orga nization, a11d he may be req11ired to satisfy his j11dgment from the property belonging to the :>rg1nization. A personal creditor of a me1nbe1· wl10 obtains a judgment against the· member 1nay not have it exect1ted 011 the property belonging to the organization, even if t11e property was contribttted to the orga11ization by that member. The member is not th.e o,vner of s11ch property, either alone or jointly. 011 the otl1er l1a11d, the j11dgment of the personal creditor may be executed on the membership interest of tl1e men1ber. (b)

(c) There is no set-off bet\\ een debts owed to third parties by tl1e orga11ization and debts owed by tllird parties to individ11al me1nbers (or in the converse situa tion). 1

(d) When a me1nber dies, l1is l1eirs inherit no rights of ownership over the property belonging to tl1e organization. Their rigl1ts only i11volve the men1bershjp Intere st of the deceased. Depe11di11g on tl1e type of orga11ization a11d the provisions of the memo1·andum of associatio11, they 1night inherit the membersb_ip interest or be paid its val11e by tl1e orga11ization. Even if the 01·ga11ization is dissolved upo11 a member's death, the' hei1·s do not inl1erit its prope1·ty; tl1ey are paid tl1e valt1e of the propoiti.onate share of tl1e deceased me111ber j11st ·as if dissolution occ11rred wllile the member lived. An important res11lt of this is that if thG law or tl1e men1ora11dum of associa tion so pJ.;ovides, an orga11izatio11 n1ay have a ''life'' which survives that of its members.

34 · See. G. Ripert, cited above at note .33, no. 679

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JOffilNAL OF ETHIOPIAN LA,1.1 - VOI... \/fJI - No.

o t iI1t l(r t aG b p11 · be y cy 111a tpt on ati niz or ga or e ess 1 mploy a 1 11s1 b . A e ( ) e1-nclh,,-l\ scl1 35 t. of arrangeme11 ble ly lia ari in1 pr t<) y is pa n _ o ti_ tl1e taxes o . iz� an org s ies i si bti e (f) 1�b n 1 ts o s. : 1e Pr 1t v t1 c a le b a x ta d 11 a e 1 n o c perty, in Representatioti and Civi� Liabi�ity �ir��e a _,leg,11,� }J::;rso� ca n110t act b its.. Y lf� t1 s at ide rov ,L e oe 111e Co b11s 1al. ss erc 1111n Co : a p org nizat·1?n �ha Article 216 of tlie ll nts al age 111· ord :a.i::c 1ts l)y 1ce es iliti . liab l v1it llr inc 1 and the p lOVrs1ons acq ' t:t.ire rigl1ts . ,. . c e co1 I ·1 C IVI c· t1e t' o s t,L1 f ' _ t l1e general rt1le V' . XI le 1! T ? " y. n� _ e ag to � relating . � . � c . s " o . b 11e 11g r agenc)' in EtlltOl)Ia. Part1c�lar r 11les reg�_ cl1 . _ u01 s� 01ga!1za�1011s are provjded in. f the parts of tlie Commercial Cocle deal111g \1/1th eacl1 orga11 1 zat1on. These rul de l es l1as � one or ,v1 e n1or . a man r-rers chle:fly ,vith roa11a.gers. Each organizatjo11 o t ' 1 0 have . .. ge11eral po,;vers to re1Jresent the org,1�1zatlon. In sl 1are con111an1es, the mana gerne functio11 is split �et,�1een a boa�d of d1re.ctors a�1 d a ger1eraI n1a�1ager .. A rticles 28 of the Collllnercral Code, which conta111. particular rt1]es deal111g w1th coinmercial employees, managers of traders, co11 1111erc1�l �ra,,ellers a11 d representatives, com mer . brokers and com111 1ss1011 age11 ts, also apply to busii1 ess or com111erc1al cial agents, ganizations, except to tl1e exte11 t tl1 ey are expressly or i1nplicdly modified by the provisic,ns 011 b11siness organizations. 36

.il

In gener,tl purs11a11t to tl1e rt1!es of age11cy, a b11si11ess orga11ization is bound bv any -co11tracts or otl1er act made i11 its 11ame by an age11t acti11g. \Vitl1i11 tl1e scop� of his powers.37 It may also be bo11t1 d in certai11 otl1er circl11nsta�1ces; for example, i11 a gen.eral J)art11ership, ,1/hen a ma11ager acts i11 l1is O\v11 11 ame b11t for the benefit of the part11ersbip.38 A b11siness organizatio11 is s11bject to extra-co11 tract11al liability \vhen one of its agents or employees inc11i:s a liability in tl1e discl1a.rge of his dt1ties. ln sucl1 a case, the organization and the age11t or en1ployee are joi11tly a11d severally liable.39 The organization will not be liable if tl1 e perso11 who inc11rs the liability is not st1bject to its control or is dee111ed to l1ave ret�ti11ed llis indepe11dence. The liability is presumed to have occ11red i11 the discharge of d11ties if the damage is cat1sed �t the place \vhere or during the time when the age11t or en1ployee is normally en1p· loyed; this presumption is reb11ttable by evidence to the co11trary.40 Penal Liability. It is t111clear whether a legal person is stibject to pe11al liability, . in the absence of an express provision 1nakir1g i t Iiabe.41 Doubt as to Uability

3S · Comm. C., Art. 968(1). But see note· 23 above a11d accon1panying text. 36. Comn1. C., Art. 3. · the · unv 37 • Comm. C., Art. 216(1?; �iv. C., Art. 21. n o ry ta eo 11n n o C 89 ). Se e W . Cht1rch ' ''. A of Agency-RepresentatLoo rn Ethiopia'' J. E(1 tli . L., vol. 3 (1966), p. 303. 38. Comm. C., Art. 290(2). . 1 a d An har\ c n 39 . The Eng1·tsh version of Civ. C., Art. c� Fr:e n j01por· '' The liab 213 ''jo (2) le. i11t say ly s its are more ac_curately !ranslated as ''jointly and 00 ct:1 dist in The and lialJ le." sev erally tance are discussed 1n W. Church, cite d above at no te 37, p. 315. 40. Civ. C., Arts. 2129-2134, 2136. - .. niv . O 1 e ss1 . 41. P. Graven, A n lntr0duction to Etllio . Sella I-Iaile pian Penal Law (Addis Ababa' Faculty of Law, 1965) p. 58.

506 -

AN INTRODUCTION TO THE LAvV OF. BUSINESS

ORGANIZATIONS

. · . . sourc s f?ur . being First, least without nlind · or at Ii. r obs, · �legal person a � 'ses froni a n not have the infent or neglige11ce . in actio11 which must .exist .for a 'person. to··be Cao . . . 42 . · , .e�e th . e. ,,.. Se��n d 110 . 1 s pro,,1s1011 10 t}1�. Penal Co�e . si.mil_ar to cr1� a f o _ guilty _ _ _ persons c1v1lly J 1 �� 1e · for _ the Arti.cle f 12� ·. of t11:�. C1v1l Code" which . !nakes_ Iegal _ 9 d pl s. a� Tlprd ts ee em , A:rt1c e� le._ 689.' of tl1e· Pe11al Cod': states �g . · � acts· of .J their_ . that if ··a11. econor111c or com111erc1al offe11se defirted iri Article· 671-688 is co1n1riitted bo9y a t corporate, of u11isl1111e11t · the 011 _i1npose� . is �n1en 1nanagers, p maoag . the in agents� men1 _bers, director_�, al14itofs o� liq_tti �at?rs wh�. con1n1itted : the �ffense.43 . death· a11 · restr1ct1011 of liberty can11ot· be imposed p011rth, pt1111shn1e11ts st1cl1 as · d on· a legal· person .. Yet a punishment · sucl1 a · s a fi11e catr' be imposed on a legal person; And restrict��g ] �ability to pl1ysical : perso11s WOllld ig nore the reality that .the facilitie s of an . orga111zat1on· n1ay be t1sed 111, or be11efit .from, th.e perpetration of a the· o�gt111izatio11 111ay be tl1e·. bes.t way. _t o. . deter tl1e- crime. isl1i11g pun crime; . ... . ':: • . The ·Penal Code doe�· provide·' tl1at · a court· may·. 6r9er · closed or -· suspended of commit_ co�ssion the fltrtl1er or ap. �ny · ''undertaking or establishn1ent'' _ used t o . 44 . 1 offense \\ ruch·<endangers public se·curity.' ·,If the · offend·er has been pt1nisl1ed with sentence of rigorous imprisonme11t exceeding 011e year, the t111dertalcing or establish ment may be d�ssolv�d and \vound up.45 Si11ce legal. pe,rsons engage in t1ndertal,i1Jgs 'and have establishments, t11ese articles ·jn effect [m·pose liability on tl1em. But they: �(? not. completely -sciI,,e the problem of liability · of legal persons.- In the. first_ place,. they only contemplate. crimes v1l1ere a . 11atural -person. is . also liable. A.rticle 1·47 expressly provides that it applies in additio11 to the pe11alty . imposed on the offen der. In the second place, closing tl1e undertaki11g n1ay be · ordered only after crimes endangering public sect1rity. Finally, a11· order ui1der -Article 147 is a drastic remedy, even if· limited in· time and place. In ma11y situations, a fi11e· may be more ap propriate. = Whatever the case in general, a legal person 1nay be deemed to have comn,it-· ted a trime .. \Vhere expressly so stated. Only one Penal Code .provision appears to do. this. 46 Article 576 provides for. tl1e �· e vying of a fine 011 a legal persqn co� mitting an offense agai11st ho11or 01· reptttation. Closing or dissolution tinder Article 147 may also be ordered, and tl1e officers and other natural person� who com �ted the offense may ·be pt1nished as \Vell. Name. A legal person usually bas �- 11atne. Tl1e 11ame of a bl1siness organiza-. tion is cl1osen by - the members, sl1bject ·to ·any · legal reqt1ireinents. There ate no specific· requirements for the n'1.me of a11 ordinary partnership. The name of any_ �he other types of bt1siness organizatio11 n1ust contain the type of organization it is - ''General Partnersl1ip,?' ''Share Company," etc. In addition, .the name of a general part11ership m11st consist of the names of at· least t\vo 1Jartners a11d the. name of a limited partnership· may 011ly consist of the names of general · partners. The names of a share company and private limited con1pany may be freel)' chosen; 1

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42· Pen. C., Arts. 23, 57 . 43 · Tliis also aJJpli;s to ,petty offences. Pen. C., Art. 820. " , 44 · Pen . C., Art. 147. The scope of offences for ,vl1icl1 an order may be ma?e und�r· Artic�e . l4� 1s vague. Ho,vever, some pro,,isions, sucl1 as Article 689, expressly pro �1cle for t�s, appI1c� tion. Some others, st1cl1 as Article 364, provide for tl1e punislm1ent of closing or st1spens1on WJtl1ot1t 1)1entioni ng Artic ·. le 147.4s-. Pen G., "A rts. 147, 148. 46 · P. Graven, . . c1·ted a.bove at not e ·41 , p. 58 .'

507-

•

� . J.. I.JP ]:\f OL / W .. "+ A V PI IO A Il I-I J ET -' l o. 2 o· F. L N ...·, JOUR

·r

c- . m a o , r o .be e n e1n a o r. ' f o rem : s r · : s · · . me na . ter .. w the � o .. for exrunpIe,.. ith a '-ant a. · y, s _ e es l . b o s e n 111 1o at b • 1r1 m e c 1 a t ?r o , f f 47 s n o t1s se . tl . :i . indication· of the. ptirpb . . . . its 1�b ol e- cl1oice . o f. a,. �ha p� de tl� . Co l ia �c 1;e 1 m C? e th or 5' 30 �ticl� r� ·�� n � f ' _ or t}1 _ r1� e l1t s cy o o l !i� rcl l p a�t p c 1.es . l1 b "fh 11 s p h� · s Pa d y n e i is nam t . e whicll o:ff f b _: on y t bI a es 1 1 1s � �1e, s na!�r h 1 , t �s • tit · o . tI ent m _ 1e e. r�qtlir � specifi })rii1 a lace cipie . . . · P . WouI<l r . fD. on -so at1 !11 111z as ga o� bl es� pt1 s1n b11 i _ c ery v e . l)O. licy 1S co11ce . seen1 applicable • to . . . . . � . . rn. :; .Qf . t.·he c·1v1·1 Code, wl11ch l)rohib. its any . . d. it is embodied , in Art1cl� 20"10 one fr��lic Lb ity r. pt al or de pr s or m 1d 1 f¢ :ctii1g in a manner \Vllic11 .·of . .· .. . of s l riglit ti1.irc c i pecif s · ,:vit11 es parti deal� 1 , 1s o visio o r · pr us vario \Vro11 gs · h:: h' . . . ,v !C . � 11 ge1tera I , . a 11��n1� 1nay 11ot be . name a f . I o _ e 11s tl�e . b� done · ?e y ma chosen for _ . create co11fL1s1011 amo11g custo mei· . . to te11d would a business organ1zat1011. wlucl1 b .. . . . _ h , s WJt the name of a co?1pet1n� . us111ess o��a111zat1011d or tr ad4�r. If· s tl�h a 11an1e is .chosen· ��. r.ules concer�1qg_ 11n .1·�1r .. cqn1pet1t1011 vvou 1 - ap,r 1 Y. . I11 th,1,s sense, . t he �ame · aD1e, wlucl1 1s tl1e nanJe 1 1nder- ,vhic•h a a . btisiness orga�zat1on 1s ltl<e a. trade. n v bich cleary designates tl1e b 11si11 . d an· v b11siness his operates ess."49 . [trader] A physical person may not use his ovv11 11an1e i11 tl1e 11an1e of a business org�ni�ation con11ected ,vith his occupatio_n if it J1as '�t11e. object or effec� of c�using preJud1ce, by mean3 of a l1ar111fLtl conf us1011,. t o the credit or to the reputation of ' au actio11 in 11nfair con1petition or a thi-rd perso11. '' Tl1e C?ffender is subject t o defamation.50 A · busi11ess orga11ization may .�ot 11s11r1) the 11an1e of• any phys1 cal 51 . · he s11ffers har1n thereby. person in. su.cb. manner that .· . . . Head Offi<;e. The place of its l1ead office l1as co11sequences foi· the legal person sin1ilar to those of domicile for the physical pt:rson. Tl1e term ''bead office'' is not defined in the codes. In Frencl1 law, it mea11s tl1e place where tl1e principal organ� of administration and manageme11t of the organizatior1 are fo11nd. 52 l

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The location of · the head office is impo rta11t in proced11ral 1natters, particularly insofar as co11rt jurisdiction arid· service of pr ocess are co11cer11ed.53 It also is i�; portant in matters related to nationality. Nationality. One may I1ear b11siness orgari.izations, partic11larly share con�1Ja nies, referred to as ''Ethi9pian'' or ''foreign." In a \vay, it is inacc11rate to SJJe�k of nationality in this sit11ati6n, since a 'legal person cannot feel tl1e sense ·of alleg, a?ce a11d does not e11joy certain rights of citizenship (s11ch as th� right to vote) ,vhlch are . usually co�q_e �_ t� ,�1it�1 nationality. B11.t some laws d_o sp�ak,, of legal P��son �� . _ lits ri tl1e o busine�s organ1zat1ons wl11ch are ''foreign'' a11d or l1ave '' 11at1onal1ty, ,�ay ie son i11 <>�ligations of an organization, may • be differe11t if it is co11nected . tion in for � with a f�reign country. Particularly impoftant are th the · · governing 1avvs e . . ' .. . . . •. .. •

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47. 48 . 49· . 50.

Comm. C., Arts. 28 1( 1), 297(2), 305, 514. Comm . C., Art. 133(2) (a). : . · . · ,· Art 673 Co°!m. \·• A:t : 135, 137(2), 138(2). . · ·: · See also av. C.,. Art.._2057, a nd ··Pen.· C,. · �:al1qg with c�v1l .a1:1d pe al unfair· .com,p�tition: . n C1v. C., Art. 45. · Sl . .. ·. Civ. C.,-. Art: 46. · . ,' tl1e · ·aod 52. G • . �!P�rt, cited a�� v� '1:t note 33, no. 6 76; i.. Becker� ''Tl'ie · Societe Anon�� p. 842•, Soc1ete a Responsab1l1te L1mitee in Fra ce," New Yori, Un i,. L. Rev., vol ..38 (l9. ' _: .�:�, n · · 53. See, for example, Civ. Pro. C., Arts. 22, 97; Co · . · 3 216 Ar t. ( c., mm . ) .. . 1'.

508 ........

AN INTRODUCTION TO . TI-IE LAW OF BUSINESS

ORGA1'1IZATIO NS

�llSin�s : organiz . s ati o n, , , the a . right of genera . lly ' to rati0!,1 carry :'o n· activities · o pe d · n 54 : ·· : ,·. . · · . c .r1�l1ts' cl eserve. r . .o t spec1fi_ . Etbiopan citizens: . and .... . . •. .. . · pia �-,Ethio. . • . ' . . . ..· .. . .�·l r .•·, ;, , . · legal person vvitl1 its a l1ead office ple� in a foreigri cou'i1t�y, l1as s��h. In pri11ci :nationality·: as: is gi,1en-: to ."it \ _ by'. tl1e laws ·of· 'that. co1111try.�: It ·follows that . a legal · a d oJ�e:•· i11 �t11iopi�• is.. of �thiol?ia0; h� its · �atio11ality; · �ltho11gl1·. no·I_�v1 �th · n : perso· expres�ly so. prov1d:s: 111!-s abst�ac� ;pr!11 c11Jle.· 1s l11111ted. by conGrete rules· · concern1ng 111 .ge11eral ..ai1d. the formation · t- of rights 111 Etb1op1a of legal� perso11s the ·enJ0)1 men . 56: To summarize: Insofar : 1 bus i1 ess organizatio of .11s o1i i11 partic111 ar operati as . · and .the forn1ation �a11 ·d opei-ation ·· of a b11si11ess orga11izatio11 and its e11joyme.nt of ri.ghts - thiopia ·are concer11ed, tl1ree factors are: .taken i11.to -account: the location of its • in· E - head· .office, · the ·pTace · of its pri11cipal · object of busi11-ess· a11d the co11n-try under .,vl1ose Iavv. 'it · i. s for111ed. A b11siness orga11izatio11 witl1. its l1ead · office' ,in EtI,Jopia is :Subject .. to Ethiopian lavv ,vith respect to its forn1atio11.- .a1.1d ·operation. An orga11iza ,tion "''ith its l1ead ofiice abroacl is· . s11bject to Ethiopian la\v if_- it ·is formed in ac . _ thiopia.5? cordance ,vitl1 Etl1io1Jia11 law or if its principal object of business is in E An organization formed abroad. (a1}d, preslllllably� ,1vfth its 11�ad ,<;rffi.ce a_11d _pr_inc.ipal �object · or bt1_siness 'abroad) lllllSt 'register ·ill Etbfopi� and is. subje'ct to Ethiopian law with respect to _its Etl1iopian office s.58 Wherever its head . office is, a business organization is defined as ''foreign'' lI11der tl1e Bt1si11ess Enterpi·ises Registration · roclamation if it is ''· orga1iized or existing 11nder'' tl1e ]aw of a11other c·ol1ntry-. P S· ucli. orga�zations are ··reqtlired ·to·· register before engagi11g ·in activities i11 Ethiopia, ,vfth somewhat different.-_ req11iren1ents from :those in1posed on ''-domestic'' orga11iza tions.59 In addition to tl1e factors mentioned above, the existence of foreign interests (for example, in membersl,iip or �a,.nagement)· · may be ·taken iqt� account by special •

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civil (3d For brief discussions of nationality, see H., 1. and J. Mazeaud, Lecons ,le droit · Associations . ess 1 ed, Paris, Editions Montcl1restien, 1963), . vol. 1. no. 617; E. ChL1rch, BtLsi1· t11zder Fre11c/1 LaJv (Londo11, S,veet & Maxwell, 1960), no. 677. As to the . capacity of forei gners to- join Etl1iopian business organizations, see notes 100-107 and accompanying text, below. Civ..C., Art. .. . 547(2). . . .. Civ. C., Arts. 545-549; Con1m. C., Arts; 555-560. Tl1ese articles are substantially more de tailed tl1an tl1e sum1nary in tl1e text. Comm. C., Art. 455, states in the Engl1sl1 version that firms incorporated abroad are subject to the Code if their l1ead office or principal place of business is i� Eth _ iopia. The French and P.mharic speak of tl1e. principal purpose of tl1e- business, not the place.. Regarding the tapaoity of foreigners to join Ethiopian bt1siness organizations·, see n9t�s 100-107 belo,v and accompanying text. • • Articles 545-549 of the Civil Code r�qt1ire ''bodies corporate'' witl1 their head offices abroad t� obtain tl1e approvai of the Ministry of Interior before e11gaging iI1 any activities in Ethio �ia. Once st1cl1 approval is obtainecl, it enjo)'S civil rigl1ts as i( it ,,,ere of ·Etl1iopian nationa._ lity, except that tl1e Ministry of Interior..n1ay impose restrictions on its activities and it caI?, not own immovable property i11 :£tl1iopia ,vithoLtt an Imperiaf· Order. It is unclear wl1etl1er these provision_s apply to business organizations. Bu�iness organizations_ are ·bodies corporat_e, . an� the Commercial Co·cte · contains · no provision � deali�1g witl1 sL1cl1 n1atters as �,vnei:sl11p of �mm ovable property by foreigners. On tl1e otl1er l1ancl, Civ. C., Art. 405(1), provides tl1at business organizations are generally subject to tl1e Cotnmercial Code, an� tl1at . co� e _do�s not spca_k of suc}1 approval. Also, foreig11 b11siness orgaoizatio11s doing business in Etl 110P1_a are rec1t11red to register \vitl1 tl1e Ministry of Co1nn1erce a11d Indt1stry, pt1rsL1a11t to tl1e Bt1 s1ness .Enterprises Registratiqn Proclainatiqn (see note , 59 belo\v) ancl Con1111. C., Arts. 556, 559· Art. 1(2), Proc. No.. 184 · of :.!961, · Neg. Gaz., year 21, no. 3. · ,

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tio ss za iii ne ga 1si b1 or n a ; cu ir1 e os pp rs_ a contractt1 1 Su . ity bil a . Li . d ·t · L•1m1 e . . . . a 0 1 O d . . . . . 1on oe� zat a111 irot nave s11ffici org the and extra � n � io gat · l ' Obl ent f contractual n . s d U · . •, 'fil f o b c:t t to e m s d b e er t!J. em l m ? it e th ay M Per. n. form its obligatio . • bers mem t� ay be ns> izat�o rgan · o l:e�d liabie f��. . le�s busii . :� . � some · In deb a . 1 on fails to p ay t:lle debt itself. · zat an1 org t tl1e if n, o zati ani . org s Thi the or , Is true r.1or . a r th h 1cr _1o " . ge1 1 1p, ers 1J rtn pa art1 1 I e rs in a limited : all members of the genera . Part· · 11 ecessar1ly) for al! m en1b ers· of a11 ot n t (bu lly nia nor d an p shi · ry ner ordina . · Pa t r • . n1za t1011 s, the n 1eu1 bers are not liable . Cr d orga �s busi�e . her In t o nership e ito r s, ' may t 1 the f1·om e1 ts asse paym · of seek tl1e and 11 izatio orga . .. sue tli·e orga uiza·tI on.. The . n. . members n1 ay be made. to · pay . t·h e orga111 za t1on. any amot1nt of the1 r cont 1.b .1 remaining u11paid, but they· ma�' n?t b.e �sk� d to pay inore. The liabi lit; _: _ t? t!1e an101111t of their contr r.n1ted 1 I. s � z�t1on 1 . 1 orga1 rilembers for debts . of tl1e ibu. tions . They are said to · have 11n11ted. l1ao1lity. T}11s 1s tr11e for all members . share· company and private lin 1ited co1npany and f?r tl1e lin1ited partners fn a li�� partnership. , •

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Limited liability is· a great ad,,a1Jtage to a b11si11essn1an. I-le -may o perate his business without tl1e fea.r of losing all his perso11al property if tl1e business fails. In such a case, he will lose only wl1at he c_ontrib11 te d to the business o rganization. It also makes it easier for. l 1i1n to �btain more money to rt1n tl1e business, by obtaining new n1embers who 111ake contributions. Such 11e,v me1nbers may not be willing to invest their money if tl1ey themselxes will become liable for debts of the business. . · Limited liability contai11s obvious d·angers f· or creditors of business ·· o rganizations and the law contains a variety of provisions to protect them. Organizatioi1s in \vhich tl1e members enjo)' Iin1ited liability either m11st have, a specified minimum capital (share companies and private limited con1 panies) or must have at least one member without limited liability (limited pa rtnership). The share co1npany _is st1bject to a l_arg:e n�mber ·of. rule� imposed for the protection of creditors, such as limitatio n on d1stn0utio11 of corporate a.ssets to shareholders. The · private li1nited con1 panj has fewer such rules, but m�y find it more difficult- to _obtain cr�d.it without. tl1e personal guarantee of one or more mernbers. _Ca�ital. The co�ce:pt of capit�l . plays a large rol� : in tl1e. Jaw of busin(ss ex . comp are orga.nizat1ons, particularly those with li1ni ted liability� Its ran1ificat1ons 60 . _and req, uire greater . discussio11 , but a brief- expl�11ation · is appropriate her e Article, 80(1) ·or. the: C_ommercial C ode define capital as '.'the o�ig inal_ vf ��; � . the elements put, at the rs rtne 1 p, . . . disp osal e of · . the undertak111 g by tl1 . :th y. . ,v1 . rmed c c� Of . n . . b t 10 r1 : ut1 �ns. �n ca�h or in kind.�' , Eyery bl1siness o ganizat1on 1s· . � .. be _ . 0nt ? r1 �,ut1ons. Ea(?h .m�mber m11st transf�r to the orgar11zat1on so111��b.ing _ of value, xa' e, m p l e �. t 111-oney, land, qther, corporeal or rincorporeal property, or services. fo r. _ assume five men wish to form a •business organization witl1 cash. co ntribution· �·::11iey ! y is t · · 1 1 . . n an d ptib c1 ·d.raw up .the necessary •:. documents, complete whate, er reg1strat1o be . neces�<:3-�Y, and tr�nsfer th� money to the organizatio Th� n1or1ey ":.f 11 •u suaiiy n_. _ Jllber · J 1 n , . Ii . ' put in '� bank ac�o- nt 1n the name; of the organ1�a�10�. Assume �eac -� � . . . �. :: . . . .. .. . . . . . . .. . ' . . .. .. • . . • . .,... ., .. · .. · .._. . · :c5carra, ·60 .· Rega.ttlt:ng th� meanirig•�r capital, ( o o e see · . Ripert, c{ted -�bov� �t: not 33, n : ?lS;_ J� � , '; Cours de droit commerc1a/ €Nouve1Je·- ·ed.; .:P�ris, Si teY� J952), .no. 514. .·..::• ,

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AN INTRODUCTION TO .THE LAW OF BUSINESS

ORGANIZATIONS

0 ,000. The organ.ization will have in the bank on the day it is Eth.$1 ed i contr'but 0 ' 000. This is its capital. $5 · Eth formed money members contributed and the fifth four contributed land only if t Wha 000.? The same result ?ccurs. The total_ v<l:lue ?f the contributions of , 0 Eth.$1 worth Eth.$50 , 000. The capital of the orga111zat1on 1s Eth. $ 50, 000. is bers mem the Certain- parts of tl1e defintion of capital shot1ld be noted. First, when we speak n�t SJ?eak of cash or pr�p�rty do as such, but of its val'!e. The we al, capit of . capital of an organ1zt1on 1s · the same wl1ether 1t 1s made up of Eth. $ 5 0, 000 10 cash, or Eth. $ 50,000 in la11d, or Etl1. $ 5 0,00 0 in a combination of things. Likewise, it makes no difference if property originally contributed by a member is sold by the organization. The capital remains the same-in the above example, Eth.$50,0 00. Second, in the case of property which fluctuates in value, the calculation of capital is made on the basis of tl1e value when contributed to the organization. This is called its ''original value.'' For example, say we wisl1 to calculate the capital of an organization formed one year ago, in which one of the contributions was land, That land was worth Eth.$10,0 00 when the organization was formed, and Eth.$12,000 today. The calculation of the capital is made on the basis of land worth Eth.$1 0,000, its value when contributed. Third, only contributions in cash or bod (property, debts, etc.) are tak.en into account in calculating capital. In the ordinary, general and limited partnerships the contribution may be made in the form of services to be rendered to the organization.61 But such contributions do not form part of the capital. Only contributions in cash or kind do.

The capital must be distinguished from the assets of the organization. The term ''ass e ts'' normally means the value of all the cash, corporeal and incorporeal property and rights which the organization, in a general sense, ''owns." (The term is defined more tech11ically in Articles 74-85 of the, Code.) The capital may be more or less than the assets. Say the organization begins \vith a capital of Eth.$5 0,0 00 and that this also is its beginning assets. Assume tl1at after the first year of ope ration, the organization has a net profit of Eth.$2,0 00. Tl1at money or the property purchased with it is part of its assets, which \Vould now be Eth.$52, 000. But it is not part of its capital, since capital only represents the value of contributions by the members. That valt1e remains Eth.$50,000. On the other hand, if there was a net loss of Eth.$ 2,0 00, the assets would only be Eth.$ 48, 000 ; but again the capita� would remain Eth,$50,000. dt1ring of an organization . may be increased its . life time by addi The capital , . tional contributions by the members. In certain circumstances it may be increased or red�ced by 0th.er means. This is particularly i�porta11t with regard to share comparues, for which specific rt1Ies are provided in this regard. The capital of an organization is deemed to be· a general sect1rity for ·t_he i a�ment of th� debts of the organiz_ ation. No legal pro�ision expr_essly s��t_es tl�s_._ t 18 re ected de fl 10 two types of rules. Tl1e first is that wlucl1 proh1b1ts fict1t1ous d1v1. Ger1erally · speaki11g, a fictitiot1s dividend is a distribution by tl1e organization otls . to the me?1bers , . f of rom fi ts n1oney pro represe11t or does not otl1er whic11· property th perat on o sh�u�d t tl1_e organizatio11. It is called ''ficti_tiot1s'' becat�se divide11�s 11or1nally i only be paid out of profits. Tl1e seco11d .k111d of rt1le 1s tl1at wl11cl1 enables

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to io11 t1irc zat �'eq ani org . the me of e s mb r rs ato uid q 11· . to Pay • ' l ors or ered·t . .1butto11s rema1111ng 1111pa1,d·., . .. ·,; . :any up tr 11 o c ir e th f o t amoun .. . . . . Any money oi:· prop�rty _- distrib11tecl·· b� 'a11 · 01��,tt1izatio11 •to ·its mernb r . · u. c. es• . e d r s e its ors pay . dtt cr� to t B11 . le 1I�b ava tl1e law can· 111 amount . of its assets e r d r,, e i·es � e· ui b . t for e 11 ito � q cred ati anjz re . �rg rs. · e h : � T ?f h e sets s _ a ,the _ � ail rea� . � � . Pe ople l y 1 d 11q! _f �r1� one ':. �fit�. e �0�1]: ! r p 1nak� to _ 1� zatlon 11 orga1 if tll form aJl . . e 1 s t ?rg�111zat1011: ·; �he r�f �� _-;�,t� ! i f P!? h� o[ 11s buiio disq:i �� i�e e not r . ore,e�a-�oufd f om. � ' be d1st11buted. But an ainoti · · promise •ts reac11ed. Qen1une profits �1Ja) nt 0 · ne� · �� u _tet�i� e b_ st t1�e ��. _ _ 1� ap�al c tl1e i� to, 9r��n ' 1 l a _1 eq atio rty prope n at1� 0� t or. . . b� · · t1�11 111za ?r�� 1� !lie 111 e l , 'fb-1 ex ?ers me111 c 1ste11 tl1e to e . di�trib_uted (of. course . . . · � Ien :L:' 11,,� p�� eq1 pro _ _or to 1ts 1tey 1110 tlie _ e· los y _ n�a c�pit io� · : org�niz�t al -'as : .�a -;e- s�e . . . It . � . d the · f. a risk ss · 1s. b11s111e 1111s · ion� · . operat :wh i ness . ch 1 nust be .c . ... . . . .of norn1a . , -- l busi . .. cepted , . . · · · . · · · . . e 1. a ) . , by ' m-e�1bers a11d creditors ·1·k .. "_ · .- -� The princ�ple_ �s _ extren1ely. importa11t· .i-1 1 t_h e �rga1:iiz�ti?r1 i11 .\.vl 1icl1, all the members J:rav.1/ · liip.ited l!ab1.l1ty :-. th e. sl�at� c9m1)aI}Y. µ.11d }J�·1\1�te 11n11ted co1npany:: The prope rt of t_he · or- :gan1z�t1?1._1 _1 s · tl1p . only. plac. e a c,red1�or 111ay l ook·· to satisf y an unpaii �ebt of'. the organ1z3:t1.qn. ·�01 11plex. rt1l�s ar- �. prov1��d fo1· · tl1ese org�1Jizatio11s concern _ f divide1.1ds t? rr�e1nb��s. A d. d1t1011al . rt1Jes are provided enabling ing _distrib4tio�s o cred1t9rs or '11qt11dators to. · 1na111ta111 act1011s to reqt1_1re a member- .\-vho has not ret fully paid '=i11 his �co11trib11tipn to tl1� _orga11ization to; clo so. 62

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If tiie n1em hers do not l1ave li1nited liability, tl1e principle is not very. important since a11 unpaid creditor can al\vays SL1e· tl1e me11i'bers. Tl1is is true, for exan1ple: pf the 1�en1be1·s of a · general 1)art11ersl1ip a11d . t_l1e . g�_11eral partners in a limited partt1ership. Eve11 here, 11,0 ,vever, .tl1e princ.i l)Je is g_i\ e11 �on1e recog11i tio11 in Article 294, which. enables an action by_ ,i creqitor to be b�ou ght. directly against .'tl1e n1en1bers ,Nithout the necessity for a d_en;iand 011 the part��rship if it is au· action to force the members to .repay fictitious dividet1ds to the part11ersl1ip. 1'Tormally, a creditor must ':make .a dema11d again.st . the J)artnership before pr.oceeding agai11st. a member .. for an 1111paid debt of t_he partnership. . Tl1e �rinciple... aiso has some importa11ce for the limited partners in - tl1e. lim��e_d par�11ers·�1p. They may be. C(?mplelled 'by a creditor of the fir1n to pay tl1e1r c_?�tri· btit19�s if not yet ft1lly paid it1. Tl1ey also· 111ay be reql1ired to repay ficuti?u� dividends, unless accepted by them in good faitl1 after approval of the partµe:s_ liips balance sheet.63 1

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The Partnership Agreement.

h whic ent, · At the heart of every business organizatio11 is a p_artnersl1ip agret,m is a c9ntract. 64 Tltis means: · : t . · ntrac c · . • · · · o (1), A bus1n · ess organ1zat1on 1s not cre.ated unless tl1e ·parties have . Article . a whicl1 fulfills tl1e elementa of th e definiti·on of tl1e in · · t 11 e 1 n e e r g a ip b 1:>artners h, . 11c . 1 2 I 1 · Even- . a group111g ''for� 9- with - vie to securing or �har1�g p rofits�mm " ,v rcial . e under Art1cle -405 of the C1v1l� ·Code, �1s sub�Ject to tl1e prov1s 1ons of the C .. '

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AN INTRODUCTION TO THE. LAW' OF BUSINESS ·· ORGANIZATIONS

. : . organ" i zatiobs ness is ,: ·not · i a b tts busines s or. to . ganization un · ting : Jess it is rela · C de · ·1 .. 5 · � .� �i nt �s � · ne �i lid r�n t: va pa ag � fo�m ed out of :• • " •. ••· (2) The rt1Jes · . of · the ·con11nercal Code dealirig with the pa�trier�hip ·agreement tl1e �ge11eral · ru les _of: contract _ set o.11t 111 · Title XII of. the -Qf 9ns� � t1 appl1_ : _ ial spec are . . e .. , . Civil Cod .. _ As s_ugg�·sted _a bove,. �li� j�le�_.or· _c.pntract' . are':1:i1-qcli .mor:e .i!11porf�nt in" partne.,r� :. . i a · an· d trivate . li111i· ! ed co 1p_. ?, �ie� · :1�a� res i� s!1�_ r e fOn11:1 nf�s �ent1 I;�� n . . )oint l . ps s°It , and d1ssol11t1011 of a general partnership rules gover11,1ng the for111at1011, operation -of contract thal1 a:r·e. tl1e rules :go:v.er11i ng tl1e ge1: i eral rt1les to .tl1e related or� are pi . fo 1m ation, op�ratio n and dissol11tiQ11 of a ': share co1npany, :particularly a ··company. \Vith ma-ny �n1bers. For· exan1ple,• i'11 a· :sl1are _ company . of q1Je ht1ndred·. ·m-embers; it is diffict1l1 thinki11g ·. of· the . i ndividual sl1ar e. liolder: as ·a party to tl1e fundan1ental co·ntract of -·· tl1e .organization ... He · probably. beoame·. a ·member .by subscribirig to .. an @ffer· to sell shares: b)1 tl1e. fot1nders; of tl1e organizat i on ··.or b:¼- � buying s_omeone else' . s sharecs, and 11.is rights are· govertied · much ·more ·by .·tl1e, p1·oyisidns .;of· law·· ,co11cerning sha1e- con1panles tl1a1 J by tl1e f 1111damental ..cont1·att; Yet, ever;i in a ..sl1ar:e · co JnJJany; ih.ere mt1st be· a pa1·t11ersl1jp agreeme11t at its bas·e,. and the agreer�1e11t . perfor,ns many �f the .. s�e fLtnctio11s . y1bich are. perf�rmed · . by .the agreen1ent at .tl1e- :l1eact of anY _ . other orga.niz_ati_on,. · . ; . · '. · _ _. : : . : . . . - � .. Se,;eral provisi611s of: t.he Commerci al Code speak of a :''.ri.1en1ora11dtfin of -a� �qciation._". Th� __ terrµs '�1ne1nora11dun1 of _ass0ciatiop." and_ ''partt1er�hip..ag��yn1ent'' refer to "the saine thing· at the' heart of a bl1siJ1ess _Qf'!" . . : .tl1e fL111dam�ntar contract . , .' . ganization. There is no s11bst,a11t i ve distincfio11. One does not i:pake a sepa1.-ate part·nership agreement · and 1ne111ora11d11111 of association wl1e1i creati1;g . a bu·si11ess orga11i zation. The t�rm '.'memora11cj:um of· associatio�1'' is used by tl1e code in- refere11ce to the fundamental contract · 1i1iderly i ng a1iy b11siness organizat ion· otl1er tJ1_a.n ,L_11 ordi nary partnership.66 Tl1e tern1 '' partnership agree1ne11t'' is 11sed in two ·w ·ays: - in _teference to: the. basic· co11tract - underlying an ordinary partnership and i11 reference - ·· ,genera l-1y to tI1e co11tract at the hea1·t of any . business organizatio11. 67 . . . . . � . ,,. Some provi�ions· of the· Commercial ... Code· speak of· '·'arttcles of ·ass�ci�tion.'' · tb. e operation The Code uses this term g6ver11i11g regulations · detailed the -· denote to · of a share company or private limited con1pa11y. The articles of associa�ion · are drawn up in essentially tl1e san1e manner as the men1orandt11n of associat�9p, and · .. · · are deemed to form part of tl1e 111emorandum of assoc i atiqn.6-8 � ,

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Law'' J. Et/1. L., . ·· But s,ee �- IvlcCarthy,- ''De facto .a�d (:_ustomary_ Partnersl1iJJ in Ethiopian . '{OJ. 5 (1-965), p. 105. _ : . . 66· ·Com . C., .l\rts. 1il ci, a of ct contra . basic tl1e s denote also It 11. 5 · ; -313, 275(4) 298," 284, . �. · · assoc1at1on. Civ. C ., Art. 408. · · • . 67 0 m. C., Arts. 211, 23·3, Articles 221 (2) a11d. 224 speak only of ·tl1e me� or �ndt1n1 of asso · � 1:3 ciatio n as the contract to be deposited in tl1e co111111ercial registr)1; but tl11s 1s probab!y . be caus e o�Jy commercial business orga1J.izatrons, all of wl1icl1 l1ave n1e111ora11dL1111 of associat 1011, were originally intencled to be subject to tl1e registration_ reqtii.ren1ent. See note 23 above anct accompanying text. 68· Con1m. C., Ar!�. 314, 518.

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-------JOURNAL 01:; ETI-IIOPI;\.N LA\\' - V(;;L. VIII _ No. 2 r.1�1�:��?.k to to c:>opera!e and u; together join to intend brin g to get ; r ibutions for the purpose of carrying ot1t act1.v.1 �1es tJI. an econo · her cont. m of participating in the profits a11d losses arisir!g c,ut thereof, � ;:�re and

The· elements of this definition are disc11ssed in tl1r: foiiowing paragrap hs. Two or More Persons. At ]east_ two perso�s r:1ust be partie s to a a rtnership P 1o ss za.t ine an1 bus all org r1s for e tru ept exc is is Th the agreement. share comp ny, 69 a . ve fi t as le at be t us m e er th ch hi w for of two perso11s 1neans that one pe s t ren1en The minimum requi · · ,. on r can n t . 1 o e b ea. .. lf Th 'd t. mse hi . o a Y n uzat1o ?ne-m orgar an ess forxn a busin orga nizat·100 . rn_ a y of ges advanta at1o organ1z some but ns , anyway with illogical legal e seem may be very desirable to _t�e individual _businessman._ Thi� is pa r ticularl� r:�naltty limited liability and the_ ab1l1ty of the business t� survive his death.10 In ordie rir a businessman to obtain these benefits, he must. secure at least one assoc· t r to fulfill the minimum me�abers associate only an obtain businessman might e. h�1P · · 1 e :par t 1� · the ope:ation of the business. requiremen�, with t be _ass?c1ate tak'10� 1·ttl 1 wn1c 1s one 1!1 h tl1e primary busin essm n h formed However, 1f the organ1zat1on a he s If operates the be cautious. must t he organization liability, limited a if i we:s his own, without due regard for the appropriate operational ru]es, and if the orga� nization goes bankrupt he may lose the benefit of limited liability.71 There is no limit on the number of persons who may be members of a business organization, except in the private limited company where the number of members may not exceed fifty. 72 As a practical matter, the number of members in a partner ship or joint venture will normally be small, because of the close personal relation ship involved. On the other hand, the number of members of a share company may be huge. Intent to Join Together and Cooperate. In order for a contract to be a valid partnership agreement, th.e parties to it must have intended ''to join togetheer �d

to cooperate." In a sense, this means that they intend to form business organ1za• tion. More specifically, however. they must have a community of interest and an

69. Com.m. C., Art. 307(1). 7o · �ince_ a b�siness is a type of i ncorporeal property which n1ay be sold a�d, . pre� �m ;�� inherited, it may appear that there i s n o need to create a bt1si ness organ izatio� 1 d . 1• that the business will surv ive the trader ' s death · A business organization has ce rta in a va nay 1 der n r • t e, ages· ·in th' 1P a ·1s regard that the bustness alone does not however. For exan l a k' g the fear t�at :Vh en he dies, the parts of the busines s may' be sold separately with�ut ta ,nercial g oo �will into a�ount. This is particularly a danger if person s inexperie_nc e? 10. c o:� al\er 1 affairs are handl ing the succession. Th e goodwill may be destroyed, resulting tn the of lu amoun_t of �roceeds goin. g to the heir s a nd the los to tl1e econon1y of the v� � t u s b on �o fdwil�. Th.1s _may also happ en if the busines s i s o perated by a busin ess . o r�a niza e other ! s e�s lik ely. S_mce there must be at least two me1nbers of a busi ness orgaoiz ationh thvalue of t e t ere_ even_ if the organization is sure be to ne o assure o di sso lved a t the death of ��e b sines s t t 1�0 en is pr agre o tected. Arrangements hip r s bY partne ken may tl1e be in made t a n th at � t�e org�niza�ion contin�1es even be� � s ap l 1 P:r sha re on if _ , con1p� nY e member d ie s , l1i s ( his �1!1 a�tomat1cal l y an h � r. T 1 occur in a s bare C ompany and private 1 ,m tc mt11iss1on } e e 1 �o p�ov1s1on is made fo r it , "o N{a/aya n Gh a Se e � en t.) � in � th ag e partnersl1ip reem m, or o nqu1ry, cited above at no te 33 Re, Law ny p mpa , 7 · L ''C o . "" , . ow�r, G , . C B . L. Rev., vol. 4 (1962), p. 39. 71. Comm. C., Arts . 531, 1160. 72. Comm. C., Art. 510(2). 1

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AN INTRODUCTION TO THE LAW OF BUSINESS

ORGANIZATIONS

tent to collaborate on a11 equal footing.73 This is normally reflected in their right � control which each party l1as over the operation of tl1e organization. Tlie collaboratio11 inte11ded by tl1e parties need not be active in the se11se that they all inte11 _d to work in or f�r _the ·business �rga11ization . This wo11Id not account l1n11ted a of t11ers a partnersl11p sharel1olders or of a sl1are co:m 11ted li e � :p thos � for pany or private l1nuted con1pany wl1 0 become 1.11embers onl� for tl1e purpose of _ in,,esting n1oney. r\lso, t]1e col]abora��n 11eed 11ot be equal 1.n an absol t1te sense, since that ,�.,ould 11ot accou11t :for leg1t1111ate schemes of control in son1e orga11iza tions, p· artic1tlarly s.l1are co1npanies, wl1erei11 different grou1:>s of n1e1nbers have dif ferent rigl1ts. It n1t1st be eq.t1al, st1bject to regimes of co11trol permitted by law. . 1e11t exists chiefly beca11se of its aid 111 disti11g11ishi11g co11tracts vvJ1ich The req1lire n contain the other eler11e.rrts of the partnersl1ip agreeme11t.74 Examples are the contract of employn1ent in ,vl1icl1 tl1e e1nployee is paid a share of the profits, jf any, ar1d not a fixed salary or wage; the contract of loa11 in whicl1 tl1e le11der is paid a share of the profits, if a11y, 1·atl1er tl1a11 a fixed amo1111t of interest; a11d tl1e co11t ract of sale of a busi11ess i11 vi1hicl1 tl1e seller agrees to take a sl1are of the fL1tt1re profits of the bt1siness, if a11y, i11stead of a fixed s111n. Missing from these co11tracts is the intent to join together and to cooperate. The en1ployee is s11bject to the control of the en1ployer i11 111aking decisions affecting the b11si11ess. TJ1e lender a11d the sel.ler of the busi11ess 11s11alJy take no JJart i11 tl1e operatio11 of the b11siness. Contributions. I11 order to l1ave a valid partnersl1ip agree1ne11t, each 1:>arty m11st undertake to make a contrib11tion to the business organization. Contribt1tions are those things put at tl1e disposa] of th.e orga11ization for its use i11 carryi11g 011t its activities, i11 rett1rn for wliic]1 tl1e contrib11tor receives a 111en1bership i11terest in tl1e organization. Each contrib11tio11 n111st be so1netlling of val11e. I11 the case of any b116iness organizatio11 other tl1a11 a share company a11d private li1nited company, tl1e contribution may consist of casl1, kind or services. 75 Co11trib11tio11s to a share co mpany or private limited compa11y 111ay only be in cash or kind. 76

Contributions in kind are contrib11tions of corporeal or incorporeal property, including debts o,ved to the co11trib11tor, or the 11se of property. Examples are immovable property, movable propert)', rigl1ts of literary or artistic O\\!nership, i11dust rial property (trademarks, pate11ts, designs or models), a bt1siness, lease of mo, able or immovable prope1·ty, etc. Tl1e Code contains special r11les governing tl1e tra11sfer of such property to the organjzation. See, for exa1np1e Arts. 229-232 (co11tributio11s to ordinary, general a11d limited partnersihps) and Arts. 206-209 (cont1·ib11tio11 of a busin ess to any busi11ess orga11izatio11)._ The value of eacl1 co11trib11tion in l<ind is as agreed upon by tl1e parties and Writte11 in the partnersltip agreement . In the share company and private li1nited company, wl1ere all members J1ave limited liability, creditors of the organizatio11 1

73· See G. R.ipert, cited above at note 33, nos. 700, 701; J. Escarra, cited above at note 60, nos. 506-512. 74 · See the discussion on tl'iis ooint of tl1e Co1n1nission of Refor111 of the Frencl1 Co111111ercial Cod�: Travaux cle la Com1r1issio11 cle Reforn1e c/11 Code de Co111n1erce et cltt droit c/es so_ci�tes (Pa ris, LGDJ·, 1950-58), vol. 2, IJP, 393, 394; also, the discussio11 of tl1e sub-con1n11ss 1on VO·1 2, p. 114. Comm. C., Arts. 229, 271, 295, 303. · Comn1. C., Arts 206, 312, 338, 339, 512.

;!·

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JOURJ..J"AL 01:: ETHIOPIAN' LAW - VOL. vrrr - No. 2· 11e val tl1e at · tl� ot" the contrib11tio :e ass to io�1 tect pro � 11al itjo add ns need _ in also d neede 1s by . kind i� tion protec sl1ar . s 11 TI el . 1 o te accura ° • 1der . bly · s 1n , · · reaso11a 11ey n1ay 11ot ll ave 1011, s111ce .1 cr1pt s11bs ic publ a share by ed form compan � l n case of a contribtiti oeas� P�rsona1 1tor. ib co11t t 1e its I r t or property the t n access . _ · . . �· 1n k t nd =-Q p 1a 1 spe d a oc •d e 1 e pr 11 f . u o: e t u. e Code 1 to _ c a " ov v l ation. a shar e co111pa11y, th.e . In a ers the n1b of rr1e anl org the all to1 zat 1 any p i· · con · are ited o-uarantor . . pr1vate liill � · ' . o . 1& ,t s t 1er h h tp rt1 e t s to pa d m ee 1n gr 1 e o1 fix en tt lt1a . va e th of ns rso pe third The person who contributes l1is services or skill \\tor ks for tlie organ• t· n 1 ge but io , the ices {�� for serv l1e or ri � salar \\ cont . ed x fi a bute s is not paid � t he tl1a11 a more 1s loyee "en1p He . s_ pr�fit the ," in si11ce are 1 st a es receiv he 1 � , 0hts es t do ye 11o 1)lo ve. na em 11 t10 1za cJ.n org the er ov of control Cor:itribution in cast1 or k.ind a1·e owned by tl1.e b t1siness o rgani zation n1 3 e a l pe sonality or g not have l� <)n.ly the does _ f he s h r e ; ru1iz.ation i use o t t e org r t is contributed. I11 the case of a Joint ve ntt1re, e ;;1ch J)a.rtner O\.vns his o,vn cJ t�_y 79 (�rovisio11s pro"vided. �'otherv1ise'' wot�l� iilcl.tide j:/1�; other\vise lJution �nless ownersh1p by the members or ov1nersh1p by tl1e rnanager of the J0111t ve 11ttire.) P�pose: Eco11omic Acti,,ities. Tl1e parties to a va.lid part11ership agreement must i11te11d to carry 011t ''activities of ar1 econ?1!1ic 11at·�1re'': This l)hrase is quite broad a1Jd V✓ould scerr1 to cover aln1ost a11y act1vrty wl11cl1 1s or 1night be profit able. Tl1e ,Lctivities vvhich t11.e parties to a part11ership ctgree1ne11t inte11d tl1e organi zation to ca1·ry ot1t constitt1te tl1e bu.si11ess pt1rposes of f· he orgc1.nizatio11. Generally, a btisiness orgar1izatio11 may have as its p11rpose o.ny activity which is possjble of acllieve111e11t and whicl1 is n o_ t 11r1Iawft1l or i1ni1101·al.80 Purpose: Profits and Losses. The parties to tl1e agreen1ent m11st also intend to participate in profits a11d losses, if a11y. Of cot1rse, when the agreeme11t is being for1ned, tile parties usually thi11k 011ly of profits, 11ot losses. By an intent to share losses, the Code really requires an i11tent to sl1are tl1e risks of tl1e e11terpr ise.81 The shares of the members i11 profits and losses 11eed not be eq11al. Tl1ere m�y be in· equality not 011ly between 1ne1nbers, but also betwee11 011e member�s share in the profits and his share in tl1e ]osses. ·However, tl1e part11ership agreeme11t n1aY not award all the prospective profits to one part11er, or relieve 011e or u1ore part!1e�s of their share in the losses. A.11y stipt1latio11 in the agreen1ent providing for tliLs is null and void. 82 1 nt n1 agree � p General � Contract part11ershi Requirements. tl1e As a co11t1�act . a torro as ar SllbJect to the general provisions of Title XII of tl1.e Civil Code. I11sof e apa c : � tion of the_ contract is concerned, tl1is means that tl1e parties to it mt1st be ?f contr�ctt?g an�I give thei� consent free of de·fects, that tl1e object o_f tl�e15. co��:d; 15 sufficietltly def1ned and 1s possi'IJ]e a11d lawf L1 l, and tl1at tl1e contract

,::�i(]

77. 78. 79. 80. 81. 8.2.

Comm. C., Art. 315. Comm. C., Art. 519. Com.111. C., Art. 273. and o,v bel See Conu�. C., Art. 217(2); Civ . C., Arts. 1718 1808(2)1 1809; notes 109-113 accompany111g text. Tra.vau.¥,, cited above at note 74, vol. 7, p. 8. Comm. C., Art. 215.

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AN INTllODUCTION TO T.I:-IB LAW OF BUSINESS

•

ORGANIZATIONS

by law. Tl1e following sections describe these elements, insofar · presc ribed form the . . 111 . . se e s may b po d concerning bus11. 1ess orgaruzat1ons. em bl o pr l ia ec sp as Parties and Capacity. In genera], the following persons may not enter into contracts: 111inors, notoriot1sly i11sane pe1·s011s, persons \vith 11otorious jnfirmities a.ffecti11 g their ability to co11se11t, perso11s jt1dicially i11terdicted and perso .ns interdicted by Ja1vv. A co11tract 111ade by st1cl1 a perso11 is 11t1ll at1d void. I-Iov1ever, this n11llity may only l1e decla �ed by a co11rt at tl1e req11est of the i11capable person or his represe11t,ttive or l1e1rs. (1-\ contract 111ade by a person interdicted by law may be invalidated at tl1e rec111est of ll1e i11capa· b1e, 1f1e other co11tracting party or the 83 ) r. to ti c se ro p public Tl1ese incapacities deprive tl1e persons concer11ed of tl1e right to 1nake contracts or tl1emsel,1es, bt1t 11ot the rigl1t to l1ave co11t1·acts made in their names by their representatives. '"fht1s, tl1e tl1to1· of at1 i11capable n1ay e11ter into a co11tract in tl1e name of tl1e i11capable. If the tt1tor l1as acted vvitl1i11 the scope of his povvers, tl1e contract \vill not be affected by the jncapacity of t11e person i11 whose name it \,,as made. 64 ·Toe ,1alidity of a parti1ership agreement is affected by the inca1Jacity of a party to it in tl1e sa1ne man11er as any other contract. The Co1runercial Code adds some rules. Tl1ese arise 011t of the provisions of the Code prohibiti11g i11capables from beco11ling traders. The provisio11s dealing v,1ith tl1e incapacit)' to becon1e a trader also apply to the incapacity to becon1e a n1ember of a bt1siness orgaojzatio11 in which one has tl1e status of a trader. A general partner i11 a commercial general partnership or co1nn1ercia.l lin1ited part11ershi1J is deemed to be a trader. 85 rhe manager of a con1n1ercial joint ve11t11re also would l1ave tl1e status of a trader. Article 11 is the first article i11 tl1e cl1apter of the Code dertli11g with the pro blem. It does nothing ruore tl1an re-state the basic r11les stated above: a person incapable under the Civil Code n1ay not carry 011 a trade; if he does, c:1.ny of 1Jis acts, presumab]y, related to tl1e trade n1ay be invalidated pl1rst1ant to the provisio11s of the Civil Code described at tl1e beginning of this section. Articie 12 prohibits the tutor of a minor or interdicted person from carrying on a trade in tl1e 11an1e a11d on bel1alf of tl1e minor or i11terdicted person, except in tl1e cases provided i11 Article 288 ·of the Cvil Code.. This would p·rollibit the tutor fron1 entering, i11 tl1e name of a minor or interdicted person, a b11siness organization whicl1 wot1ld mal<e the mi11or or interdicted person a trader. Under Article 288 of the Civil Code, a tt1tor may carry on comn1ercial, industrial or other enterprises formin.g part of the estate of tl1e incapable if he is so instrt1cted by the fa1nily council. The family council must instruct l1im whetl1er to carry 011 th� e�terprise or to liqujdate it, taking into account the time for ,vhich tl1e tl1tor �hip 1s to last, the abilities and potentialities of the t11tor aod tl1e interests of the �ncapable. It seems clear from this article that tl1e family council 1nay not a11thor12e � tutor to e11ter into a trade (and, therefore, a partriersliip agreement wl1ereby t�e incapable will becorn.e a trader). It may only at1tl1orise l1im to retai11 or to . liquid ate a trade already part of the estate of tl1e i11capable. For exa ple, in the � 83 · C iv. C., Arts. 199(3) t 313-319, 343-349, 373, 381 t 387, 1808. 84· Civ. C., A.rts. 319, 358, 381. 85 · Conim. C., Arts. 280(2), 300.

517 -

\1/ - \IOL. '/I(f - No. IJA N IA Ol' HI ET OF L JOURNA

a trade ation organiz s 1nigl1t ·b econ1e bt1si11es a in "']lip er:s b-. _ 01en1 f f part case o . . · ,. . _ "? o . c nable .if: a genera 1er . . part e 1 n p .1al c co111mc1. cL 1n t th art 1 e a rs . . J1p d1 es . estate o_ f. an in - . " 1 h a s 11 . k " t s011 ta h. .e u., , . 1s tl1at h s pla e 1de c prov e ilt ai1d enle a()'re h' 1 1s 11p _ part11ers a son · · .,· t t h -1 at1 e . o t ct1.1 r1z tha 1o s n 'fi o f c · c11 e h ,• t s e 8 �s a 28 le tic u Ar 1 fau I so Al 1 . min� ' co un cil r or tl1.e er n1o f�tth of tl1e not ihe is :. '' is d chll r ttlto ,, e 1 tl e h�r e · d ,,v reqt11 l . tl1e t ut r e th h a 1 t 1 " a e 1. a .:1 p a d con1p 1 11 lete 0 it ' er th a1� 1 tho 1o p _ � rity to father or n _ is tl1e . . retain · u d--te. erlterp·rises for1111r1g p�trr of the estate of the inca pable. H 1 or .1q . a. . . . O\Vever •. .. _ : 1g . .. . , , 1rlto .:t er11 IL e11t 11cvv 111st aga r e11te tton l11b pro prise 'NOtlld tlie t t11a seem ld \vou p p l er e f a as a or ll s 011e r L? ,vho otl1 at V✓ s : e the m i is not, altliougnJy to a t 1..itor vvl1o 111to a 1p 1 lners rs 1)art e11tc agree111e11t in vi·ol t· wl10 r tL1to A ·. cleai less 5 1· this a IOU of · · · -¥.,er. 86 these prov1s1ons exceeds l11s po t

Article 13 adds a restriction.· to the 11oru1al · 1·ules cor1cc.r11i11g e1nancipate d minors • · d . 1n1nor f·�011� c�irry1ng o n a _ tr�de l111less autl1o rized t It prolri.ibits an en1anc1pate · d e add. r r1c ? e his est t1on prohibits an m do so in ,;vriti1Jg by the fam1ly cou11c1l. l fro1n i11g beco111 a party to a ��: pated n1inor v,,ithout su�l1 writte11. at1tl1orizati011 . _ ne·rship agreen1ent f orm1ng a b11s111ess orga111zat!o11 \.Vl1ereb)' l1e become s a trad Any part11.ership agreement to ·y:,1hjch a11 e1na11.cipated 111i11r)r becomes a party vritho��t the 11ecessary a·utl1orizatio11 is st1bject to tl1e s,t111e nt111ity for incapacity of a party as if tl1e minor \'✓ ere 11.ot emancipated. Tl1e rttles concerning i11capacity a1·e designed chiefly to protect tl1e incapabie. This is v·vhy generally only tl1e i11capable n1ay l1ave l1is coritracts invalida.ted. Ho,v e,,e-r the security of conunercial transactions req11ires tl1at tl1ird parties receive legal protection against t11e hazards of deali11g \-Vith incapables. ,L\.rticles 14 and 15 of the Corru,1ercial Code give sorne prot0ctio11, utilizing tl1e de11ice of tl1e con1n1ercial regis try. Under Article 14, if a nlinor wl10 co.rries 011 a trade l1as bi111self entered in 1·t1e comrnercial register as tb.c1ug11 l1e ,vere of age, ]1is rni11ority does not affect third parties. Th11s, the minor 111a.y 11ot have bis contracts annt1lled under these circumstan· ces. Article 15 contai11s a simila1· 1·ule for j11dicially ir1terdicted persons. is Their itJcapac.ity does not affect tl1ird persons 1111less notice of tl1e inca pacity . entered i t1 tl1e co1nmercial regi.stry.87 Part:ies: Husband an·d Wife. It seems clear that l111sband and ,:vife n1ay be members of a business organizatio11 as if they vvere not n1arried. Tl1is general proposition 1nust be modified in two 1·es1)ects ho\.vever. First, 011e spouse may object ''i11 the i11terest of the l1.ot1sehold'� to the other spo11se beconling a iue1n ?e: of a1: o�g�ni�ation which i.r11poses 11po11 the latter tl1r) status of trader. Tlie_ efle�l of this obJect1on 1s_ to restrict the liability for the bL1si11ess debts of tl1e trader sp?use to bis perso11 al proJ?er�y; 11ormally, s·ucl1 debts are deemed to be of tl1e marn:i� �'. and recoverable against tbe personal property of eacl.1 spouse and co1n.1.11on prop , ) · . f the (The 0. b.1�ct1 on does not prevent the trader spoL1se from becoJ11111g a 111e mb er � 1 organizat�on) · �t1 objectio11 is effective against tl1ird parties 011.ly if ent_ere� in t�: r. ed, cominercial regiSter. ff the trader spouse believes tl1e cJbjection is unJU st111

86. 87.

See Civ. C., Art . 320 • . r · or inte · · · a M th· d . � a ir pa rty wl10 IS not in good fai th (tha t is ,vho knows of the i11capac1tYp cations li p d IC t ton) t a k e a d van tag e of Art·1 l are a ' t f t of Article · • . c es . 14 or 15? Tl1ose articles ·111a ke clear tl1ey b ac s no1 121 d cte 12 e le �\r d ff� tina c ain ' 1 i ren f art ti h d ait goo in of p s r �lu � ?� �h o e�tered in the r:;s:liic n versi tl1e English version Tl1e French � omits the word.s ''in �ood �ai;�,,

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--------AN INTRODUCTION TO THE LAvV OF BUSINESS OF,GANIZATIONS

fanlily �rbitrators to have it set aside; if it is set aside, a 11otic� the to y appl roaY 88 . ed er st gi be re t us m to th.is effect rJ1e seco11d respect in which tl1e general J)roposition co11cerning spo11se m11st 1 tio11 sit i11 wllic�1 bot11 spo11ses are l)arties to t1 1e same th� co11cerns d � : odifie m be Co The e C1v1l pernuts spouses,_ before 1narri ,:'lge, to establish agree111e11t. � p Jerslli parti . a11d p c11111ary 1al rso cts e eff of JJe 111arr1age. their 110 1f ''contract tt1e act � � co11tr _ y b called, 1s 1s n1acle, tl1e code provides r11les to gover11 thei1· rt as ," arriage m of perso1:al a11d _pect111iary relatio11s. D11ri11g 111arria�e, 110 co11tract co11cerni11g th �_ir pecu111ary rel,tt1011s 111ay�9 be n1ade by tl1e spo11ses vv1tI1011t tl1e ap1Jroval of the far1i1ly arbitrators or a court.� If tl1e spol1ses are parties to tl1e sa111e part11ershi1J agreeme11t, tl1e approval of tlie co11tract by tl1e famil)' arbitrators or by a cot1rt may be necessary for it to be valid. i\rg11ably, Article 633 does 11ot cove1· the pa.rtnersl1i1J agreeme11t at rtll; or, if it does, only agreen1e11ts betvvee!l tl1e t\VO spot1ses alo11e or partnership agre€1ne11ts formi11g certain ty1Jes of b11siness orga11izatio11s. Sucl1 approval sho11ld not be req11ired for any agreen1e11t vvhere the relatio11ship bet\veen the spo11ses in the f busjness orga11izc1.tio11 is 11ot in seriot1s con lict vvith their relationship u11der t:l1e marital regime establisl1ed by the Civil Code.90 The solt1tion to tl1e qt1estion is n@t ,vithout dotibt, liowever. 91 Parties: Legal Perso11s. Wl1ether or not a legal 1)erso11 rnay beco1ne a me111ber of a business orgauizatio11 depe11ds to son1e exte11t on vvhat lcind of legal person it is and ,vhat kind of b11si11ess orga11ization it inter1ds to become a member of. In general, nothing prohibits a b11si11ess orga11izatio11 fron1 beco1ning a 1nen1ber of another business organization. 92 A11 associatio11 may not become a general partn€r of a commercial general partnership 01· co1nn1ercial li1nited }Jart11ership, since it ''may not carry on any trade."93 Wl1etl1er it n1ay become a member of another b11siness organization depends on whether it thereby acquires as 011e of its p11rposes the making of profits. If it does, it may not become s11ch a member. However, the.re \Vould seem to be nothing to prohibit an association from joining a sl1are company or private limited compa11y as a means of investing extra ft1nds or of acq11iring more funds to carry out its legitimate purposes.

Comm. C., Arts. 16-20, 280(2 ), 300; Civ. C., Arts. 645, 659. Comm C., Arts. 16-20, 280(2), 300; Civ. C., Arts. 645, 659. Civ. C., Arts. 627, 632-634. See Civ. C. , Arts. 647-661.. In France there has been 1nt1cl1 controversy as to whether two spouses n1ay be 1nembers of the same bt1siness oroanization. Sec E. Church, Bt1si11ess r1ssociations u11der Fre11c/1 Lau, ( London. Sweet & Max;ell, 1960), no 62; Trav1,a.."C, cited above at note 74, vol. 2, pp. 131-_136, 397, vol. 7, pp. 27, 28, 282. The maior question has been wl1ether or not tl1e marital regime is modified by tl1e partnership agreen1ent. Note that Art. 633, is some\vhat different in tl1e English than in the Frencl1 version of the Ethiopian code. A more accurate translation of tl1e French would be: (1) Contracts concerning their pecuniary relations n1ade bet,veen sp ouses during 1uarria_ge sl1all be of no effect under the Jaw, unless tl1ey l1ave ·been approved b y tl1e fa1nily arbitrators or by the court. ( 2) Notl1ing in this Article shall affect the contracts expressly provided in this Code, 9 2· As to tl1e capacity of business organizations and associations generally see notes 31-33 above aoct accompanying text . ,93 · Coinm C., Art. 25. 88. 88. 89. 90. 91 ·

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-------:> IAN "LAW - '✓OL. l vrrr - No. 2 IO I IET JOURNAL OF

er 111lJ 111e a of e a om bec in bt1s . y n1a t ess 1 . 1e1 . n org dow n e a n n Wh eth 1 ti o t ereby res Would the i ac ui it h purpo q n er wheth ·p � se � t� n o of end o a n se so 1 g Profits n i capac al s sa1ne a the m 11 asso a ty l1as 1t �1mer � ciati � � o11 a( It h ou . • 11 gener l , tl1e e11do gh t ade) 94 A r . a 11 1g 0 11 � s . �r a a c 1 11 prac ro no f it tical s it ib . 1 l ro p . ly 111a ss re p x tte law e r sh s 11e t1 )a1 ca 1111 co be d 1te , ares l11n c JJe e .1n s11are coinpan eX ,at i\ pr ted ::1 rid to ies · a n1a 1 (e . . . llp . . • f 11t n1e :s ow 1e 1 d e11c J 01n a11 Part . h 11c e TI1 ,�, of re t oti y'' i ert _ see rop '·p e ns to b of til _ _ e a_ 111e111� r o� a bt1si 11 s e n? co1 b a 1 1st t �1 a 11ot y � � 1: or er 1 etl wh r on � li 11 itation es or g � _ n1t � o ot1 l11c vv 1 � trust 1s f � ty �r OJJ 1)tl1e 1 1t, 1ne o� end �rm a11 � Lik ed inay :ery zatioil. : _ _ e J111 11ted co111pauie s. vat p11 a11d es an1 11p co1 re sha 1n res s11a n 1tai coi ll, \:ve As a gerieral rule, tl1e State l1as the rig l1t to e11ter i11t o a partilersi1• agre�of a bt1si11ess orga11iza.tio11, to tI1 e e,�tent ii nie11t and beco1ne a 1ne111ber t 95 to c�r�ai11 ]i1nit�1tions, _lio,veve�� is c_o11s!stent ,v�tl1_ its natl1re. 1:11is. is s�?j�c_t_. ji�� territor1al s11bdt�s1ons �f- tl1e , �tate, the -�1111st11es �I t�1e I1nper1al Etl1io pian Govern. 1 e author1t1es ct11d est.abl1sl1me11ts J1a,,e raL1, adm1n1st only Stich rig. hts 111ent, and public . · . . 1a\v. '' Tl . 11s a1 so 1s true of tli e Et'010• . . . as are '"\,ested 1n tl1e111 by t h e a dn11n1strat1ve · . I1.es a11d. 111011aster1es. 9G This means that . d'1oce�es, p,1r1s pian Ortl1odox Cl111rc I1 _au d its tl1e right of these bodies to e11ter 111to a partr1ersl1 1p agree111ent a11d to becoro e a n1 ember of a busi11ess orga11iza.tio11 n1ust be derived fro111 son1e rigl1t grant€d by a� admii1istrative la\¥. Presun1ably, tl1e rigl1 t does 11ot J1ave to be expressly granted, but may be ta k. e11 as inclt1ded i11 a general grant of t11e capacity of a pl1ysical person or as an. in1plied 1·ight ,vitl1 relatio11 to the carryir1g 011t of rights or po\vers expres� sly gra11 ted. Tl1eoretic�tll�l", tl1e n1atte1· is u11clear; as a practical n1atter, p11blic admi11istra.tive authorities, n1inistries, etc., do beco1ne members of bl1siness organizations partic11larly sbare companies, i11 ft1rtl1eraoce of their purposes. TJ1e second linJjtation is found in. Article 27 of tl1e Commerci,il Code: a11 adn1i11istrative or re!jgiou� i n stitL1tio11 or any ot11er p11blic t1ndertal<i11g 1nay only carry 011 a trade in the cases l)rescr.ibed by special la,vs .97 Eve11 if a11 adn1inistrative or religious institution or any otl1er J)ublic unde·rtakin g does carry on a trade, it does not thereby incur the stat11s of trader.98 A b1Lsi11ess orga11izat.ion orga11ized 1111 der the Commercial Code does not become a body corporate under pltblic law merely because the government or one of its n1 ent · has virtually all of the n1en1· govern gencies if the is a member of it even a bership interest. It rem.ains regt1lated by tl1e provisio11s of tl1e Com1nerciai Code, an� tl1� g?ver11mer1t or agency is a member like a11y other 1ne111ber. Tl1ere is 110 _ la\�' a� this t�n1e dealing s·pecifically witl1 gove1·r11ne11t participation i 1 1 business orga111 zation:s organized under the Co1nmercial Code.99 94. Ci,,. C., Arts. 483, 501. 95. See Civ. C., Art. 394. 96. Civ. C., Arts. 395-397. , ''shal · l 97. Tl1 e Englis_ h version omits the words ' casi;s ' by special Ia,vs''. It n1erely slates that tJ1e be prescribed.'' The term "by special laws" is in tl1e Frencl1 and i\1nl1aric. 98. Comm. C., Art. 4. corn Dl• . . )so 99. Compare c· . C ·� Title XIX, wl11cl1 governs acln1i 11istrative co.ntracts. Con1p are a of share· _iv C Art. � ::,2, wl1_1cl1 provides that in comprisi1 1g "several grou pa� least on e sl1ar e com pan ies ho'iders w1!h a different _legal statL1s," eac lect e to _ witb both righ t ave l1e h groUJJ must l1 t .representative to tl 1e board of directors." TI1is presu1nably assL1res tl1at con1 pa111es t ng each i iovernmenta.! c1:ncl n on-governmental shareholders l1ave at least one directo r represe�rticipat n i o r . o a. descriptioll: 0� the. special problems an d tl1eir s ol t1tions of govem n1ent�l .p se A, de in busu1ess or g��LZ��1 ons I.n Fr an ce, wl1ere sucl 1 participation l1as been subst ant1a l o e .9 , . 939 56 s Laubadere, Tra1te e/e1ne11taire de droit , n l. 3 administaratzj' (Paris, LGDJ, 1966) vo

520 -

AN JNTROPUCTION TO THE LAW OF BUSINESS

ORGANIZATIONS

Parties: Foreigne rs. Pl�ysical persons of foreign 11atio11ality generally e11joy and were tl1ey Etl �io1).ian. T�e . te1�m ''�ivil rigl1ts'' embraces 1f as rights civil cise exer . _ _may 1 er e oes 00 ?1se the 11ot 11 y p] cl part1c1pat1011 \.vh1ch x the 1n gover11ment. of � s riglJt , ll part11ersh1p a into e11ter agreeme11t he if as were an i11ay Et11iopian. 1er foreig1 a , �hus Bodies corporate whose l1ead -office is i11 a foreig11 cou11try a11d endo\vments, es co11stit·t1_ted i11 a foreig.11 co11ntry possess a11d n1ay exercise mitte i con: a11d usts tr bod1es ere \, cor1Jo.rate, e11 �0\v-1ne11ts, tr11sts or committees ''est t�eY 1� as � rights civil ,, bee11 c111tl1or1zed by tl1e Ministry of Interior to ablished in Etl11op1a, 1f tl1ey l1ave 101 . Etl1iopia Tl111s, if a11tl1orized to c,trry 011t activties, tl1ese 01 i11 ctivities carry 1t a bod ies corporate, e11dow111e11ts, trL1sts a11cl co1n111ittees l1ave tl1e sa1ne rigl1t to e11ter into a part11ersl1ip agree111e11t tl1at tl1ey wo11ld l1ave jf tl1ey were established i11 Ethiopia. However, tl1e Ministry of Interior 111ay prol1ib.it or reg111ate tl1e carrying 011t of regular acti,,ities in Etl1iopia by p,trtic11Iar foreign bodies corporate, endowme11ts, t rus ts or con1111ittees, or by classes of tl1e111. 102 Also, a11 a11thorizatio11 to carry out 1ol(ed for good ca11se. 103 be 1nay re, Ethiopia in activities Tl1e positio11 of tl1e foreig11 body, wl1icl1 vvisl1.es merely to become a me1nber of a business organization i11 Etlliopia vvitl101rt carrying 011t otl1er activities is 11n clear. Is enteri11g it1to a partnership ag,ree1nent the carrying o·ut of' 'activities," sucl1 that 1v1inistry approval is rec111ired? Must there be sometl1i11g 1nore, such as active participation i11 tl1e affairs of the orga11izatio11? Does it clepe11d 011 the kind of bt1si ness organization formed? A. s a practical 1natter, tJ1ese questio11s may not be too important at this stage since foreig11 i11vestors are Iil<ely lo participate in co11trolli11g the activities of organizations it1 ,:v11ich tJ1ey invest. B1tt tl1e sit11atio11 co11ceivably co11ld arise wl1ere a11 Ethiopia11 share co111pa11y sells shares to foreig11ers \.vho 1.ake little part in its activities, otl1er than voting at a111111al me1nbership meetings and receiving profits. Son1e laws impose restrictions 011 the right of foreigners, whether physical or legal persons to e11gage i11 specific ac1ivi1.ies i11 Ethiopia. These do not necessarily restrict the rigl1t to e11ter i11to a }Jartnerslup agreeme11t b11t may be in1po1 tant to a for eigner if l1e does so. For ex an11)le, eve11 if he is a n1ember of a b11si11ess organization, a foreigner pres·umably may not be an emplo)ree of tl1at organization unless he bas a ,Nork permit. 104 A foreig11er 1nay not ov,1n land in Etltiopia unless permitted to do so by Imperial Order or · b y tl1e terms of special laws, s11ch as the Investme11t Procla1nation of 1966. 105 A b11siness orga11ization may not be licensed to operate a bank in Etlliopia 1111less it is of Etl1iopian 11ationality and unless at least rJty-one per cent of its capital is o,¥ned by Etlliopians.106

·-·--·-

100. Civ. C., Art. 389. lOI · Civ.. C., Arts. 545-547. See also note 58 above a11d accompanying text. Tl1ese provisions specify that approval for bodies corporate is to be given by tl1e office of associations a11d approval for the other instit11tions by tl1e Ministry of Interior. The office of associations is part ?f the Ministry of Intirior. According to Arts 545(2) and 546(2) at1tl1orization may be w1tt1held if tl1e proposecl activities are ''contrar)' to the law or morals." It is unclear \Vhether at1thorization may be withl1eld on otl1er grounds. . IOl. Ci:'·. C., Art. 548(1). 'fhe French version attribt1tes tl1is povver to ''imperial decree," not tl1e M in1stry. 3 Civ. , Art. 549. St1cJ1 a clecision is expressly n1ade st1bject to court review. · �4· e Civ. C., Art. 389(3); Public Employ1nent 1.\dmi11istration Order, 1962. Art. 15, Order No., �� . Gaz., year 21, no. 18. See also the Foreign Nationals Employn1ent Regulatio11s, 1964 Leg. Not. No. 295, Neg. Gaz., year 23, no 25. . 'Neg 105. Civ. C., Arts. 390-393, 548(2); Jn,,estme.nt Decree, 1963, Art. 10, Decree No. 51, l\1eg. Caz. Year 23, no. 1; Investment Proclamatio11, 1966, Proc. No. 242, Neg. Gaz., year 26, 110. 2. 106_ Mone tary ancl Ba11kiog Proclan1ation, 1963, Art. 32, Proc. No. 206, Neg. Caz., year 23, .no 6·

!�

- 521 -

■-------

L W ' VO LA . V1II - No. N PIA IO I IET OF JOUR."NAL

. a 1ne n1e co n1 be ber . to of 11g shi wi a11 Et]1- 1op1an . b . F111a11y, a for-eigrier. . . . l 0 ge 1t1 a11 1 co1 , h exc .. 11t t1la o11 reg acc ls1n ss_ fJo to 111 e ns . e <. tal tist · \vh 111 · . cr n t· 10 ' IC h . . or aruza re · t· st J e E , 1 1 1 t' t�d' r1ct is 1t o 01 o 1ss c., 0n on 107 y 1 t h r p 11o e t op pr ia_ ts, ofi pr ke ta t t, s to righ e giv 1st l1is 1111 t ac 11tr 11se co co 11t free of de�a to ' rt) pa ell Ba iit. nse Co ect(), . th ts fec e de 1es Tl y s. 1na res du se ari or at t1d fra in .1s, v�,,. tt llOllt e ak ist 111 · i var o . 11s . , . . . . . , \Vay s p rn or 11. cl 1 F 1 e, t10 e)i za 111 ga or a n . rty s pa 1es s11 b11 a y of Ula on ati rm fo . b th.e e in1stake . .. . . type of orga111zat1o , f d b or e orn1e n e111g may b n be dece ived the as to �,.,:i to the j; . If a io11 i zat rsl1 a11i t11e org p�tr tl1e 1) agre erae iJt by 1 01 ried car be to ess i1 i btls b n 11 o tl e f to n 11 d o t �� 1 tl1e ers �t arty � c 011e 1 �� IJ to 11se rable favo l � : t o th � . tia ly les� . � _ _ I t t, I1c1ty SJJJ1}J 111s ,va11 of of e 11tag adva , 1n111d 1g tak.i1 by seiiility or a y was obta111ed i be e11t ted n m 11valida u agree the i 1ay. 1 1_ m as ie11ce, inexper a 11 ttsi ess 1 1 11 cons cion fest b able · 1s ed . affect wl11cb by act contr a defect j 1 1 the consent co11tract if J 11stice requires. A 10s · t. s ues hi at req ,. d on l y ·d ate of a party may be 111val1 Object. Like a11y co11tract, tb.e 1Jart11ersl1i1) agreen1e11t 111ust l1ave a Stlfficie ti defi11ed, possible a1:d la\\1ft1l ?bj�ct. 111 disc11ssi1�g ''oblect," the Ci,;il Code t;lk� p1·i111c1rily of tl1e rec1pfocal obligat10�� of tl1e 1Jart1es.1�9 111 a part11erslti1) agreement these co11sist cl1iefiy of tl1e 11ndertak.111gs of tl1e parties to 111aI<.e co11tributions and otl1er obligc1tio11s 1·egardi11g tl1.e perforn1a11ce of the agreen1ent. But the object of a partnership agreen1e11t also n1ay be i11terpreted to i11clt1de tl1e p11rposes of the bus i : ness organizatio11, tl111s requiri11g tl1at sucl1 pt1rposes be defined, possible and lawfu1. 110 Tl1e object of a contract is disti11g11ished from ti1e 111otive of the parties ,vbo make it. By ''n1oti'.re'' is n1eari.t the reason wl1y or p11rposc for wl1ich tbe parties enter ir1to tlJe contract. /-\rgt1ably, in a partnersl'!il) agree111e11t, this too could be intef]Jreted to iocl11de tl1e orga11izatio11's bltsiness l)llrposes. Tl1e Ci, il Code prohibits a co111-t from i11vestigating tl1e parties' moti, es i11 order to determi11e ,vb ether the object of the co11tract is t1nlawf11l or in1n1oral. Hov. ever, if tl1e motive of one or all the parties is l1n]a,:vf11l or in1111or:1l, and tl1.e co11tract or so111e otl1er docun1ent shows tl1is, the contract 111.ay be i11validated at tl1e req11est of a11y co11tracting party or i11terested tllird JJarty. 111 Tl1e disti11ctio11 bet\,,eer1 object a11d 111otive pro b ab ly is made to asst1re that the stability of contracts will 11ot depe11d 011 tl1e l111certuinlies of jt1dicial investigatio11 into tl1e state of mi11d of tl1e co11tracting parties. These ·r.,.

107 • _See tl1e Foreign Excl1ange :Proclan,ation, 1963 , Proc. No. 21], 1Veg. Gaz., yea� 23,, 00· e�; Jnvest111en� Decree, !_ 963, Art. 8, Decree No. 51, Neg. Gaz., year 23, no 1, In,e5 in1 P1�ocla111at1on, 1966, Proc No. 242, Neg. G_az., year 26, no. 2. Note .. Civ. _C., Art. 1808(1). I11. general, reg cl1ng corJsent, see Arts. 1696-1710 , lOS. ISOS�ISJS.a sub· ar th t in _a sl1are c n1pany formed by public subscri1Jtion, a clefcct ir1 the consent of 'to the � . an th sci�iber 13 more directly related to tl1e validity of the st1bscri1Jtio11 agree1nent memorandum of association. 109. See Civ. C., Arts. 1711-1716. t en e difl r t a · 110 .G· R'I�ert_, cite · d above at n�te 33, no. 711 (Frencl1 Law). Tl1e 1Jroble1n is_ �on1 ew I1 a cooof JU Etl1.iopia because the busi out g 1 i 1 ar1s ness orga11ization is clefir1ed as a grouping �sions tract, r�t her �ban a contract per se (as ode because the Civil .C . p�o:s not a in cl FrGL □ 11ce) , 1! conceri1.ing obJect . 0 f contr�c_ts e m1Jhasiz tl1 rec . ie i t he s of o11 s ob es� e i1Jr lig e orga· at oca l par � Hl s�em _ tliat t lle obJe.c t JJrovis1ons should b u b ere s so ho\� Iin1i l tcd ever, at least \Vl1 e mzat1on s are concerned. Jy o f JO· 111 · .c·1� · Ct:' Ar ts. 1717, 1718, 1808(2). t ie.le 1808(2) in t 11e Euglisr1 version spea ks.ho � forn1. It Ar va 1Jd a ion .f or _an unlawful or immoral �biect o1· for absence of the p rescr1 e b h Their t · ., ' · O . d oes 11ot ment10J1 1:11°_t·I�e. .H O\vev r; to er for er, tl1e A111l1aric and Fre11cl1 \1ers1011s re . . ne s r a efliect 18 to PC;ffil t inval1dation for unlawf 111 e sa a e tl1 i ul or 111moral mo · tive in m n . ul or 111unoral ob unJawf ject .

522 -

TO THE LAW OF BUSINESS N ODUCTIO INTR AN

ORGANIZATIONS

the when motives ated are r flected elimin in the terms of the cont- are � es ulti diffic they norJ?ally as wo�ld 1n _ t�� case of busine.ss purposes. docume!-1�, m e so a or r. ct s�me Code prov �s1ons deal. sp�c1fically _with act1v1t1es which may or may not org�n1�at1ons. Articles 22 and 26 of the Commercial Code business by out rried be vca carry may organ1zat1on on any of the activities specified in business a that ide as !ong as it _c�mplies with any special requirements for Code the of 5 le fr�ic 112 Private not proh1b1ted and from s 1_ r on. it carr-ying . trade limited that ca r ying on Article by forb1dde11 513. of the Code to ''und expressly are s _ ertake bank mpanie o fog insurance or any b11siness of a similar nature.'' Ordinary partnerships may the of any activities specified in Article 5 of the Com object their as have not' mercial Code. However, the sanctio11 for violating this prohibition is not nullity or of the organization as a general partnership rather •the organization, but treatment 113 artnership. (Nullity of the organization may still result if the ordinary p than an partnership agreement does not satisfy the requirements of Article 284, or if the necessary registration and publicity has not been made.) Other prohibitions may be provided by special laws. Form. In general, no special form is required for the formation of a valid contract unless expressly provided by law _or by stipulation of the parties. If a special for1n is required, a valid contract is not made unless that form is observed.1· 14 Technically, no special form is required for the formation of a partnership agree.ment. However, the Commercial Code requires that the formation of a busi ness organization (other than a joint venture) be in writing and publicized in news papers and by registration. Failure to comply with · these formalities re,nders the business organization null and void; it does not come_ into existence.115 The absence of the required writing or publicity in the formation of a business organiz.ation has the same effect as the absence of a required contract form: invali dation of the organization or contract sought to be t·ormed. There are no provi sions stating what happens when a business organization is declared invalid. How ever, the effect of invalidity of a business organization in many ways is like the effect of invalidity of a long-term contract. Thus, it would seem appropriate to apply the Civil Code provisions dealing with i11validation of contracts to the invalidation of bus iness organization for lack of form, at least when there is no meaningful distinction between invalidation of the organization and invalidation of the partnership agreement. CONCLUSION

The provisions described above are only a legal skeleton which will be fleshed out over time with commercial and admnistrative practice, judicial decision and S"cholarly interpretation before becoming· a living, truly Ethiopian law . This article h_as bee� written in the h·ope that a preliminary description of - some general prin ciples w1Il facilitate this process. 112· The English version of Article 26 says little more than Article 22. The French version states

113 ·

114 · llS ·

that a business organi ation whicl1 carries on a trade prohibited to it or for whicl1 it has z ot n fulfi!led the legal requirements_ is null. Thus, like Articles 23 and 24 for phys�cal per SOJ?S �:d Art�cle 25 . for associations, it provides a · sanctio�. Tl1e Amh�ric version 1_s closer to e E nglish. It 1s somewhat ambiguous, but clearly provides no sanction. . _Pro . omm : C., A.rts. 10, 213. Compare Art. V(2) of tl1e Business Enterpt_ises R�gistration � ama�io , 1961, Proc. registered business ts l11b1 pro h whic 3, No. no. 21, ., . Gaz Neg year 184, � or·gantzations from engaging in ''unauthorized business." civ. C., Arts, 1719, 1720(1), 1726. C · Olllln. C., A rts, 214, 219, 223.

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hiPtCD· : l �,,..;;_: ro . -1 = fl\ : ficl! : 9'1h1 .,f•1" : hP't-- : ()(l�{l,,.. : 'Lit : l-t"1= 7'1��h�A : f,f...�l10·1-- : 'P li·w• : 9'1h"} fT_: i',tJ.JtOJ· : h ,�.. u : : �·c1..:,.. : "' 1 1'1�1-,&.,g-9" : /\trr/ .f.. : ·-',OJ•�� h1F-.: /b/\0 "f": 00D0Af..O/ : 1\-f, : "h"}F-.OIJ..17� : i't1 -c:1· : V•ft- : t1..:i,r-A f9° : lD·il� = 1Pt,.,1,=;:1 : foo,1,n1tf : 'P;J : cJ,l\A : oo(f'J,.: fttrfr'I° : f;Jcm'f, : ',(D• :: nn.,1--f•A·.,r : OJ·il11 : t\.h&.A : fOIJ..1'lro•1 : ODtJ.Jl:J--'f!: fFir : 'P;,1 : fOIJ..CD{l") : ,l1'1 : fl{\oot;>c;. : u-�;J-•OJ· : t\.CJ'li'I : 1."-�A :: "hW·'I. ,�7/(Ir : 7-?,f, f,IJ : trc;> : ltl\ = hlj:T"f";;:ro.. : (00(.1,1,lij"ro·) : ,l17· : ftJTJ..fHOJ·"} = fj. : (rt�ll:,--) .. : CDC : }10/.\ : 0011 J..A. : 1-t(ltOJ· : fI\ : (l cf! : ?°n1,:,.. : hP't.. : t 1 -1 n = :J--'PA1? i,� ..fnc;,n:,.. = f1 ti(l-0 "ro-� (hf"lf.lir?' � t,il, t,J?,1: ) nil = = , 1tt : fOIJ.ht..t\ro• : i\flA : i'1'lil+r;;:-,.1-'i· : f+(l'i"fl,-1··1 : (lro• = floo+tiT : fl\m•: fLPt-,f-� : ,fftf,.)� : foo�•rd1>lD""} : .-{lij:',,1• ·: 'P;, : fi..fl : ff...C1'PA ::

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S OF sl\ ECT r�ns ASP Dis ,v L WITI-IOUT CAU LA L CIVI D AN PENAL SE 1 . TH E COlvJA1ERClAL .BANK OF 1 E N A ETJif. OPIA H R E B GETACHEW

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by Da11iel flaile:::

The plaintiff was disnlissed fron1 l1is job on October 28, 1964 by tJ1e re Bank � 11 the g�ound tl1at he and _ �tl1er en1ployees , of· . �-l1e Ba;1 k al Je? edJy sp �:��: , $ 12, 000 . I11 add, t1011, the pti bl ic ro and misappropriated a cheqtie of Etl1. p :�J in:�� oi' tl1e P and (b) a), o 656( cl s 36 nal Art der C u1 d them ed ! cbar nd : � � _ � � . ·. _ � 2 tbe. m. T\ve11ty-n111e 111011tl1s afte: the cr11n.111a1 case crJilliilal proceedr ngs against _ _ \Yas instituted, the Court decided that n? ca.se w�s establ1sbed aga1 �st . the pres c-nt Plain tiff a.nd clis1nissed the case on tl1e basis of Article 141 of tl1.e Cr1m.111al Procedure Code and acquitted hj1n. The Plai11tiff then instjtt1ted this civil suit i11 the l-Iigl1 Court and claimed a total of Eth.$ 11,468.5 0 as da111ages for loss of liis bac1<:-pay for tJ1e whole period that be was dismissed, llis a11nl1al leave, tl1e n1oral da111age l1e suffered and the legal costs be incurred. In additio11, he petitio11ed the Cot1rt to order the respond ent to rei11state hin1 to llis forn1er post a11d to co11nreract pL1b]jcly the defa1natory effects of its allegatio11s. After fi11ding tl1at the P]air1tiff was dis1nissed wjthout good cause, the co11rt awa1·ded l1i1n da111ages a1no1111ting to Etl1. $ 1550, b11t rejected his claim for rei nstaterne11t. The irony of this case leades t1s to two fu11damental q11estions. I. �vhether the Crin1i11al Procedure Code provides st1fficient pretrial re medies to protect people, like the present plaintiff, fro1n t1ndergoing the ordeal of a crimi11al p·roceedi11g? II. Whether the labour laws of this country duly safeguard th.e rights of ru1 aggrieved employee in cases of dismissal without good cat1se? I.

Pre-trial screening process under the Criminal Procedure Code ''The immediate efficiency and utility of any syste1n of Cri111inal Procedt1re n�ust be measured according to two goals each equally importat1t . to society: The ex �ent offen ing bri11g to which tl1e system facilitates the e�1forceme11t o:f the pen,11 la\iv by ders to speedy justice by lawful n1eans and tl1c exte·nt which ir111ocent citizens are left undisturbed.''3 Criminal procedure �s a ,vhole is basically a cor1tintious proce ss 1 1e t · tl1at t 0f reconc1·1·�ng_ these two apparently ac co11flicti11g interests. I11 view of tl1e f . . tuled present plaintiff was acq11itted twenty-nine months after the case l1ad bee 11 1 nst1

sor fes pro . . . . . . . • FacuI tY . O f· Law, Ha�le Sellass1e I Un1vers1ty, Addis Aba 1'he autl1or 1s 1ndebted t 0 ba Ronald Sklar for his very vaJuable and constru ctive criticisms of tl1e d.raft. . . Abab a · is Ad<l I. Getache:V. Berhane v. The Con1mercial Bank rt:, Cou (I-Ii gl1 Et of hiopia (S. C.) 1967, C1v1I case 1604-59) (unpublished). 1112· · • case 1 2. Publ·IC pros�cutor v. Seroum Dagne et al. (High t, Addis Ababa, 1967 c!·1mmaticle 36 tal�S Co ur 57) (unpublish �d). Article 656 deals with fraudule misre presentation, while Ar nt about accompl1ces. 3. Sianley Z Fis .her, Ethiopian Crin1ina/ procedu.re (1969), p. 1. - 532 -

-------ASPECTS OF DISMISSAL WITHOUT

CAUSE

1t e1 m 1r m of ot co e will be the second goal of the system: em th e th , m hi t ns · . . a.i ,ag cent c1t1zens are lrft undisturbed. J)O IU 1c _ h' h . w to nt te ex The 4 except o the dt1ty t tut s ins ti proceedi1 1 gs I1 prosect1tor when he is � A p11blic _ _ _ � 5 In prii1ciple, 1ns1rffic1ent to ev1de11 re JS e Jlistify tl1 a tl1at corivictio11. opinio � � � of the _ we do not disagree w1tl1 the tl1eo1·y of grant111g son1e discretionary power� to public prosec11� o!s or even t o tl 1e police officers �vho pre1)are tl1e �iary of i 11 vestigation i n . the dec1s1on of \¥110 sl1ot1ld or sl1ot1ld 11ot be prosect1ted. B11t 011ce we grant them �ucl1 at1thority the dev.isi11g of a 111ecb.a11is111 by w] 1 ich abt1ses can be curtailed becomes a m11st. U11der 011r Cri111i 11al Proced11re Code the opinio11 of tl1E.: public prose c11tor is tl1e 011}y criterio11 011 tJ1e . basis of which the decision to prosecute or not is made. Once tl1e prosec11tor decides to prosect�te, his decision to prosec11te aod commit the s11spected perso11 in1 mediately to trial is fi11al except where the crime involved is first degree hon1icide or aggravated robbery.6 B11t even here, since the prel.in1i11ary or co1nt11itti1 1g co11rt does 11ot l1a, e the right to discl1arge tl1 e accus ed,7 the opi11io11 of the p11blic prosec11tor is s11fficie11t to commit the acc11sed to trial. If the p11blic p1·osec11tor t1nds it to be befitting, eve11 for pt1rely sadistic moti ves, and decides to prosec11te, tl1e acc11sed l1as no other re1nedy but to wait until the prosec11tor's case is ftil.ly hea1·d at1d the co11rt dismisses the case on the ground that no case agai11st tl1e acc11sed l1as ·been n1ade.8 Dependi11g 011 tl1e nat11re of the charges, tl1e po.int i11 time wl1e11 st1ch a decisio11 is made may or n1ay not be at the early stages of the trial. 1

An examinatio11 of the record, of tl1 e present case sl1ows tl1at the public pro secutor had insufficient evide11ce to prosec11te tl1e defenda11ts. The crt1x of tl1e pro sec·ution's case was tl1e cheque itself,9 011 tl1e back of which appeared the fol]owi·ng marks: ''kno\vn to me," ''Seyourn," ''559/3'' and a signatt1re. At the req11est of the public prosecutor, the criminal i11vestigations department admi11istered a l1and writing test to tl1e defe11da11 ts in 1964. However, the res11lts of the test were not annexed as evidence in the charge th.at tl1 e pttblic prosec11tor filed almost ni11e months a f. ter\vards and wl1e11 tl1e ha.nd writing expert fi11ally testified 011 Jan11ary 17, 1957 he stated that tl1ere was no resemblance between tl1e handwriting of tl1e defendants and the hand\¥ritings ot1 tl1e back of the- cl1 eqt1e. Witl1011t showi11g a link between the handwritings, the prosec11tio11 did 11ot 11ave even a /Jri,na facie case against the defendants and defe11 dents sho11ld 11ot l1ve bee11 forceq to undergo tl1t, rit11al of a criminal proceedi11gs. The fact tbct.t no other n1echanism less than a ft1ll-fledged trial exists for the vindication of the rights of an innocent citizen who is improperly acc11sed is a serious flaw in our pre-trial screening proced11re. This ineq11ity becomes even 1nore apparent when one looks at the other si� e of the coin - the pt1blic prosec11tor'� ref11sal to prosect1te. The ref11sal by a pt1bl1c 4. Cr. Pro. 5. 6. 7. 8. 9.

c., c., c., c., c.,

Art. 40 Cr. Pro. Art. 42(1) Cr. Pro. Art. 80. Cr. Pro. Art. 89 Cr. Pro. Art. 141 th8t ed sh li b ta es ly n o y n 1o in st te The prosecutio11 could also produce five witnesses bt1t tl1eir the cheque reacl1ed tl1e Ban.k.

533 -

JO'URNAT,J OF ETJ-IIOPIAN LAW - VC,L. VIII' - No. 2

)

t n 1 j ina1 1pla con plai co111 ate priv 11t o tiie ffenc o tlest eilti es tO co1 d proseclltor . ; ,fer 1 · 1 l · . t 1p a1n -co1 s 11on e11ce 1 o:i. r' o s to case net a 111 d 11 clial a . n ler1 ,,e pr1vate pr·osectitio o th--- r . J) osecu � t. r i1 o c . _ 1 i1 n io is c e d tor's ly ate qLt i11g ade by vid J)ro de, Co r_ 1 for l )re-trial 1. e 1 ced Pro al 1 1 i 111 Cri · Ottr 1ned1 e � t1te scc to ls pro s fai tiv r ega 11to (N se(? � pro e in c bli IJti tis Ab the ere l es) wi cases 1p . th �aci� co11 b�1t te c av1 l abs� ,� pen i ce the o_f of � 1e11t � rcen enfo � Stiel� tlle �� tate re:!�tes . � _ s 1te to. e Jd. s�cL 1n dec 1'Jro 1 ct1to ot1t st J)ro �'ILh l1c ptib i tl1e strff e · :t cie · cases wlle · t · n ., ev1de 1 s 1 1 c1t t1 e11 no ce bl r · e l to 1z sc � t 1 es _ �11� c 111 e u1a l s) (Posi ive Ab11se due � �p . � . �1 _ � l 1 a assm1 nt. _ Ltto1 pr osec l1c s IJt1b 1 eft1sal to prosectit the t a _ tl1 1act t11e tes 110 011e wllen e 1 �h ifts tlie burde11 of prosecttti11g fro111 tl1e state to tl1e pri\ ate co1nplaii1ant a �nerely es !o d _ ! )lOt teri ni11 ate t� e st1i�, while his de? isiot� to _prosec�� t� co1�111lit? ai1 i ildiv it I . criillitlal �ro�eed111g v11tl1 all !lie soc1a: st1g1na _assoc1 ,tted wit�:- 1� a11d ttie a ttendan� psyc11olog1cal effects tl1e 011e-s1ded app1oacl1 adopted by the �1 11ID11,1.l Procedure Code becon1es even. n1ore 11alpa�le. · Tr11e if the accused is under ''restrai11t'' he ctt11 file a11 applicatio11 for hab corpus i11 accordance· to Articles 177-179 of. th� Civil P.rocedtire Code. As Amharic text of Art. l77(a) sl1ov1s, the appl1ca,t1011 of tl11s ren1edy is liinited to cases \Vl1ere tl1e i11d vidt1al 's 1·ight of. 1noveme1.1t is C\Irtailed or \Vl1ere l1e is arrested or i1nprisoned.· Si11ce tl1.is piay not al,vaY,S be the case tl1e argL1me11 ts for the right to cl1allenge t11e prosecl1tor's decisio11 still· re1nain valid.. Tl1e abse11ce of pre-trial re1nedies does 11ot, of coL1rse, IJreclude other ren1edies. If a public prosec11tor proceeds to prosecute \vl1e11. 11.e sl1011ld not l1ave, the aggrieved party is certainly e11titled to. instit11te eitl1er a cri111in0-l case in accordance \Vith Article 414 of tl1e Penal Code or a civil st1it 011 tl1e basis of the extra-contractual liability _provisio11s of the Civil Cocle. 11 /\..- co11rt IJroce½'di11g by its very nature tends to be. a11 ardt1ot1s process and 011e can vist1alize l1ovv o.rd LlOLts it can tur11 out to be when tl1e lJarty to be j11dgecl is Mr. Prosecutor l1i111self'. Besides, tlle 1nere fact tha1 the accused is foL111c1 11ot guilty is not it1 itself st1 fficier1t to establisl1 a case of alJuse of powers. li1 addition 011e ]1as to sho'.v beyo11d reaso11able dot1bt or, in a civil st1it; by preponderance of cvide11ce tl1at the pt1blic prosec11tor acted ,�itll intent . to proc11re ar1 t111l.awful ad va11tage or to cio i11j11ry: These factors comb1ued rr1ake such a remedy practicall)' u11e11forceable. In our opinion tl1e Crimi11al Procedt1re Code shot1ld have 11rovided a ren1edy that is l?rve11tive in orientatio11 .. Vlitl1ir1 the _f�rao1e't\'Or�c or· tl1e Cri1ninal Proced��:� _. Code th.1s cot1l� _l1ave be_er1 satisfied by n1ak 111g the r1g}1t to ch,1lle11ge .the . pu . prosectltor, s dec1s1011 applicable not only i 11 cases of ret·11sal to prosect1te but to cases v1l1ere he decides to prosec11te on i11st1ffi.cie11t gro1111cl. ., .w_e are fully aware of the probkms that such a remedy may create - a:; JUSlice and · 1 he harassmc11t of the p11bl 1c prose c11tor...f Iowever, st1cl1 res11lts -

��!

Art. 44- - Effe(� t Art. 42(l) ) ..

. ro e edings un�er

?f re fLIS�I (1) Wl1ere the pl1bl1c. �roseculor ref11ses l? 111st1tute // authorise � � 10 in rela�t n to an offen�e pun1sl1able or1 co1npl�t111t only_, l1e s ecution. A ·in writ og the app.ro�ria��e persou t11ent1 t1ed in pro s at� priv e a · add d) con duc t Art 4.7 to . o � a u a PY 1on sl1all b r s at t f � c ) W�er! � e �� 0s ut _ � se11t to_ tl1_e COLlrl l1avi1:g juriscliction:t. (��ll� (�) io rela: r reft1ses to 111st1tt1te procccd1r1gs uncler Ar . . erson·me� ?� � o tion to a n ffieP e l 1c 1 s ot p n s le o11 co1nplaiut on!)', tl1e appr?pr1ate f he publlC � i hab � w 1 1 v,1•.ithin t tion. ed i11 A�t.' �� may, o n io decis thr1t�, days fro1n l1avi ng rece1 ved the · · p� osecLitor, apply for an order that tl1e pt1blic pr ose· ..cLLtor i t1stitute proceedings. 11. C1v. C., Arts. 2032, 2033. 10.

-534 -

ASPECTS _OF DISMISSAL WlTB-O·ITT . CAUSE cl1alle th 11ge · clecis.io11 to prosecufe is not· graiited- atito: to right th� if � ed void · _�h� acct1sed fi1·st ·create reasonable _ � · �Ol1bt. that lie. is. being. J)ro�atically but after _ s. 111 add1t1on, the I)ll bl1c prosecutor, at tli is s_tage ser1ol1s grol111d t l1ou wit ed cltt .' . . se . d I bl t 1 011 1s Y a JJr111 :a fi 1 .ct es a ze to case · and 11 t to req111re l)t�oye t1is case · be � ? ild shol tl1e . do 011ce 1b co11rt 1s sat� sfied _of the ex1ste11ce of a strfficient le reasona b � a � yond b6 _ · th� })roceeclt11g to per1111t co11t11111e 1n tl1e sl1011ld . . 11or1nal fa,s1 1 i011. it groui1d i.I. Dismissal ,vitl1out

good ca11se: S11fficiency •

of rernedics.

As· already statecl, 011ce acq11i ttecl of tl1e crin1inal charges against him, the plai11tiff petitioned the I-Iigh Cot1rt, i11te1· c1lia, to orcler tl1e res1)011de11t to pay hin1 back p·ay for the period dt1ri11g �vhic�1 l1e was_ clis111issed a11d to rei11state hiin in his former post.· Tl1e Col1rt, bastng its reason111g on Arts. 2570-74 of the Civil Cocle, stated tl1at ''tl1e ernployee vvl10 is clismissed_ witho11t gooct cal1se is entitled to three montl1s saJar)1 as con1pe11satiot1 bl1t there is no legal gro1111d tl1at entitles hjn1 to be reinstated," 12 and avvarded · the plaintiff da111ages amo1111ti11g to Etl1. _$ 1,550. Shocking as it 111ay- s01111d,. tltis st�te111ent is 11ot far from the correct stateme11t of the law. Article 2573 of the Civil Code gra11ts to an e1nployer the right to dismiss an employee witho11t good cause. I11 s11cl1 case, ·the e111ployee is entitied to fair compensatio11 \vhich 1111der any circu1nsta11ces ca11not· exceed one· h.t1ndred and eighty (180) times the average daily wages. 13 One may arg11e tl1at a contract of employ111ent bei11g a special contract the remedies e11visaged by tl1e ·co11tracts section in ge11eral tl1e remedy· of specific per for·m.ance in pat tic11Iar are available to a11 employee disn1issed vvitl1011t . ca11se. Io order for. specific performance to be granted, ho\vever, t\¥0 eleme11ts .mt1st be ful filled: Tl1e contract m11st be of special i11terest to the party reql1irjng its. perfor m.an_ ce and it m11st be 011e that ca11 be e11forced witho11t affecti11g the perso11al liberty of the creditor. 14 An order .of reinstatement 1111dol1btedly affects. the perso11al liberty of an employer and tl1t1s tl1e argument fails o.n the facts. 15 Of course, as long as the law thro11gl1 othe1� means can d11ly a11d efficaciol1sly protect the rights . of the dismi?sed employee there is notl1i11g sa.cred about the right of reinstatement. But when the .remedy provided. pay1nent .of a very low severance pay happens to• be notl1ing b11t a to _ ken remedy, ·then it is � tragedy. The dis he where: pay severa11ce pay : rationale employer the that req11iring for . misses an employee witho11t good ca11se is to deter tl1e employer from engaging i-n �ucl1 a practice. It is common knovvledge that _the cost of· labo11r · �11 Ethiopia, as �n most. other developing co11ntries, is cheap.· This sit11atio1i is aggravated even more tn this co11ntry by the total abse·nct of legis1ation fixi11g minimum wages. Tl1is .. . '

•

12· But in cases in·,olving discrir11ination by the en1ployer Linder Art. 30 of tl1e Labotir Relations �roclam ation (Proclamation No. 210 of 1963, 1Veg. Gaz., year 23, No. 3), tl1e Labour Re�c1: tions Board · 11a�t orcl�red reinstatem�L1t and its order -was affir111ed by • tl1e St1pren1e In1perial _Court. See , S�ra Mikael Briel< Factory \'. Tl1e Association . of Demissie Esl1ete et al. (Su1J·. . lnlp. Ct., 1964), J. Et/1. L., vol. 3, p. 13. 13 Minim um Labot1r Conditions RegL11ations, 1964, Art. 9, Legal- Notice No� 302, Neg. Gaz., ' Yea.r 24, No. 5. 14. Civ. C., 't . 7 6 Ar . 1 7 15• R. David E t n io at : an sl an tr . ed dr in . K 68 0 (1 11 v e / . , :-cp a11at1011 I ' T t e . 1·t Coc.l d C01111ne1ztary Eth1or11a1i CIv unpublished, Library, Faculty of I.Jaw, I-Iaile Sellassie I U11iversity), P· 71 · ..t\

535 -

.,,

JOURNAL OF ETHIOPIAN LA \V - VOL. VIfI - I-Io. 2

tl1 en pay111e11t of a Lix rnonth salary . 1ld wo1 h, tr11t the maxirn t�e nak . ed . be1ng ti.. �. f r rom 1 aye emp a11 n 11ss1 d1s11 r dete g an emplo e . Utn to ce suffi law by d -provi•de u h Wit e Y o ill v i t 1 tha I1e t. 1 r1o io1 i1 ,v op t t the ery 1 of low We are ? d at . wa ise c . g . goo · es co r . u 1 '° d e 1s..,1... a 1s111 d. lace rep ee d . P to loy emp rve rese t red ur Jce labo th e larg · the h e t w1 deterr ence . •. · e. e rc a f:· . er m a to y d 1e n re e th power of OfJi · devel otl1e1 of g co� ntries will better laws r Iabo11 of � review A illu t�ate _ e , ''A \¥01·ker wl10 be11eves he has pl exam for , Tra11 11 1 t. poin been } 1 Ollf mo��: �� s dischar ged a11d wl10 l1as worked for . tl�e ��J?loye; �or 3 _continuou _ intermittently for 6 months, n1ay protest w1tl11n 1 -' days of the d isch,trge· t 1le Factory Council. If he wins his case at tl1is level, or by a1)peal to the Boar� � the settlement of Disputes, h e may be awarded a11 a1no111.1t tip to tl1ree years wa �; in add�tion to ·the regt1l�r severa�ce . P�Y-_ Howeve1·, 7 the �:31ployer has the optfon of paying t11e compensat i on or re1nstat111g the \Vorker W1Ll1 pay for the_ days he 16 (empl1asis aclcle d). 1 ." ork \\ 1 fron d nde e was susp

Si1ui]arly in Mexico, ''An employer who discharges a worker without just cause is obligated at the option of tl1e worker to fttLfil the contract or to pay him three months wage as con1pensati on as well as ft1ll \Vages from tl1e date of dismissal until a fu1al decision is reacb.ed''. 17 Let alone by foreig11 standards even by our ow11 Civil Cocle standards i e find tl1e remecly to be u11satisfactory. The employee wl10 is dismissed without good cause js entitled to tl1 e meagre compensatio11 presumably Oil the theory that the employer h as failed to per·form his contractt1al obligatio11s. If this is so, should not the employee at least be entitled to damages equ.al to the damage which the non-perfor1na11ce wottld normally cause to l1im ir1 tl1e eyes of a reasonable pesorn l 18 · nless one is to mal<.e tl1e u11realistic pio• as is generally the case i n co11tracts? u positio1J tl1at i11 the eyes of a reasonable person the n1axi n1t1n1 length of tjme that a dismissed e.mployee needs to find an equivale11t job is 011e h11ndred a11d eighty (I 80) days, the remedy fails to 1neet even tl1is test. Tl1e prin1ary aim of 011r Jabour-laws presu1nal)ly i s to 1nai11tai11 a harn1oniu�s relationsl1ip bet� een the employer and the employee so as to facilitate economic �owth. Th11s the balanc e m ust ·be str11ck to achi eve a11 opti111un1 bet,veen th e intarests of the two parties. But as tl1is case clearly de111onstrates, tl1e ba]a11ce seen,s to have swayed in favo11r of the employer to the <.i.etrin1ent of the employee. To for catlse abolish this good imbala nce a the req11ire legislator shot1ld e .itl1 er alvvays · · dism i ssi?g an employee, the solt1tion pre ferred by tts al1d recorr�mec1 ded . b_}., thef . Internat ional Labour Orga11ization 19 or shottld enact lugl1er max11n uo1 lin11ts. 0 com · p�n· sation for dismissal withot1t good ca11se to be assessed in ligl,t of fact o� elop dev h as trial t e bargaining power of the two parties, the le,,el of i11cl11s � _ :;:; _ nt, non existence of unemployment 111 surance or benefits, etc.

16· U.S. Department of Labour, Labour La�vs a11d Prac e tic i,z Ira,, (1964), P· 42 · 17 · u_. S. Department of Labour, Labour Lau,s and Practice i,1 1\1/exico {l 963), P· 65· 18. C1v. C., Art. 179 . . · 11 9 ih 1·9 · J�Ie 2(l) of International Lab o iz Org R our mme ,1dati 1z Concernin1u::r; f��) eco an n atio /. o I: oy; ent �t the. ir1i�iative of the E1rzp/o er (R�commendation No. 119 of e e is ; val id r y prov s t at, Ter�1na�1on of th ss unl e r based pla emp ce loy 1ne k nt tak e o d sho not l1 r l e reason for su�h term1n�t1on co nnect r o t!1e of � ct ed condu . o.;n the opera tiona l requirements of the with the capacity or m under taking, establish ent o r service.

536 -

I I

ASPECTS OF DISMISSAL WITHOUT

CAUSE

Relations Proclamation20· · It 15 ,vorthy to note, howeve�,. that both t?e Labour 21 Reg Cond1t1ons lat1ons L�bour M explicitly. J?fOvide that where. � and th e inimum employee(s) the tl1an to ble the ones provided ou law by :� are fa� stimore s term of employ1nent, staff rule, collective agreement or contract al 1nd1v1dt1 an in ed . ulat arrange1nent_ tl1e ter111�. of tl1e. latte� shall prevail over the Jaw. legal otl1er �nY Until th e law catches up. \V !th t]1e re �l1t_1es �f _ life tl11s ca11 be used to serve as a stop-gap meas 11re_ to m1n1m1ze tl:e ex1st111g, imbalance. As a matter of fact, there so1ne 1n te11dency, tl1e of rece11tly concl11ded collective agree 11ot1ceable a y alread is ments, to 11tilize tllis device to ,1cl1ieve tl1e abovt>--stated goals. For example, the ,collect ive agreement co11clt1ded betwee11 tl1e Etl1iopian Petro1et1m Refinery workers union provides tl1at, ''22A11 e1nployee shall 11ot be dismissed, suspended, or transferred " . Sin1ilarly, i11 cases of clisn1issal withot1t cause, the collective e s t1 a c d o o g t u witho -acrreement conclt1ded betwee11 the Etl1ioJJian Airli11es (S.C.) and the Ethiopian Air for the payment of severance pay that is li;es Employees Associatio11, provides 23 . law'' by provided g tl1at er than i h h '-'

CONCLUSION Within the framework of the case we have attempted to critically analyze our pre-trial screening methods at1d our labour laws deali11g with termination of a con tract of employme11t witl1out good cat1se. The pre-t1·i�l screening methods we found to be adequate to facilitate tl1e enforcement of the Penal Law ·b11t deficient wl1en measured by the other equally importa11t yardsticl<: The extent to which innocent citize.ns are left undisttirbed. As a. remedy we proposed that the right to challenge the pubic prosecutor's decision gra11ted in cast"'s of ref11sal to prosecute be made applicable also to ca�es where he improperiy decides to prosecute. Ot1r labour laws dealing with termi11ation without good cause we found to be lopsided jn that they empower the employer to dis.miss an employee at minimal expense. To sway back the balance of justice we proposed preferably to make the requirement of good cause a sine qua non · for every terminatio11. But failing that, if the Jaws purpose is to deter an employer from dismissing his employees with out good cause and enhance the sect1rity and stability of the enmployee's position it should provide a more severe and stringent remedy than the six month's maxi mum seve1ance pay that it grants. We do not ventt1re to propose a specific figure because this would require a careft1l stt1dy of all the factors that affect the labour conditions in the country - a study tl1at is so wide and so complex as to be beyond the coverag� of this short case comment.

20 · 21 · 22·

L� b ur Relations Proclamation, 1963, cited above at note 12, Art. 35. ? Mtru mum Labour Conditions Regulations, 1964, cited above at note 12, Art. 10. 01!ective Agreement concluded between the Ethiopian Petroleum Refinery (S. C.) and the th10 P1_ an Petroleum Refinery Workers' lTnion, January l, 1971, Art. 4(a). 23 · <;ollec tive Agreement concluded between the Etl1iopian Airlines (S. C.) and tlie Etliiopian Arr lJnes Emp loyees Associati on, January I, 1971, Art. X(e).

- 537 -

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=:;,°le= = = • ·4

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° : nil+ ff,f-:f : l\.�1(j: : · ,e,:1:ttA :: Ot't }�•: Ot : 9 o : Ylt,n ., f\ l\ �l(ltlr ' f : � : = f : ll,�9° h� : 'lt\ : v..1;1-- : flPt\lli',(Dc : Tc> fDcil.T ;: "'" � (lf.ll (L . : A .,t ":J. k7i'i/\'l!lD' = fih'1 = oq>4!9'�- = tJij:A = ..�t..ft. = ftr'I = ttil+1.r:i_.. ,_- = fij:-}•u : tt,t -- rf : 1, A :: 'I f· L l\ 0r ° tJ » -t 1..11 , : ti A +"1 1-1 ii. ,f if· ·l· " : v.. () (De : w• l : il : 9 .i:\ -- = :, = tt,e, J?.tr'I° :: rmd/ = o'P.:t.w• = nil·+.rr:,.. = 1,1 � = q,e,., = 11: ,r�* = ;,c _tt _ . : t 1 Y.. : ,11d/ = P''I : :cq..:1,1 : 004,.m'} : 1,1.';.U•'J° ? 1 '1-l· 'i" i,C"lmi1 : ihdJ f .ovh'i'tD1 : ,e.iJJ,9"°&-A :: · t 'i11· «u :· 1t ilrf' ff..f1- : f..�'1° : hoo1l\1t:Fro• : fl&.,)-- : .. 0'/ ,e,,·r,: OJ : = {ll} ' P , f.C dJ /,\7' ' 1\. (l.91:1.. �,l tJ JtiJ.,f = : Jt,e,f..h.·9° :, - ;,, 1 �.. : = ,fl rr : ,,n;-: : f,f--ro(r','} : 't!CX.-- : Wf,9° : hti7is- : • ODLP : flf:.CtJD h'P'P. /. : . fihdJ : 14 -• ,t-blt7i: fl{\l\�(l.-) : f,�w111'} : lj:{:f.; , � ,),tJn/,\· : ',OJ• : "fifto : IP/OD'} : hfhff: "Jl{JJ•9° := .r A,,.l-- 01/llD· : (ltD•· : ai1 : (l}\'}f.',1·1.u. : 0,f,',,f;t: : OJ•l}),?J1'".. : 1,hti" : f,lJ''iA ::: lfc;»9° : flh,-l-- r- A�.r : 'i!-l--�-: l\f, : ,,f flro• : f ,-,� : O'Pc/!9>:y..c; : f,111# O· : . ., -- : 1 : l 'i" i·l\t!\1°" : f,l1'? : O'Pcl.!!P:l: : i.l ft't!C�: 11:1-· : W·lti; tt(l,t-ff1' : A.�.ti1 $111'" : ,,fl\:fOJ•: itil,f-ff 1': h,)11·f{l": i'1l'l,1--.er:,.. : ;JC: '1.'}f.': ',(l)c :: ll9°ll.lb: .,.P.tJA ; h1J.':. : ,fa,,f 1f : fl:f'.� : 00 wl:1,. : ;}t\&..',,f:1 : oo+flA : i',/l(l,)-- : ,11� : · -. 1 �: � ro+ : f : = . ,11 ,)--6 1'111: ?°h1_r:1. : U?ilm1Y..· : fllfl-l-'J°�: flA:J :,l\k�i:1 01' ,flt\CD' : rf {l '1 (\-a :! f,IJ : --l··ll h IA : hi.I'� : <i:C..(!- : CL,f1�1 : ;1, 1-• : f01/..tOJ \ ·1' : nA,f..h,f--1\-:f u--9° : ,{lt\ ODiirc/'{l: 04!: (L(f"} :,.'ttY,1--A'J° :: ·OJ-,)�.f:rro-: f\'}>;_e,7ic : <Df,'J°.= fl{1IJ,tth.,f.:f : 0 °tLP(j!� : fO 'P rJ!fP":,f : �--,h..� : Jl.'}� f,<D + O.· : (lOl/ (}::r(l : OJ f.6, :i:- : nttf t1Jc = fl+'Pt\-- 9° : l,1 '1. : ?..',-h..4,.:-f(D• : fm It</.> : t\., lf1 : '11f, . TA 'J° :-, °1 Y.:l°l : f°1.1'1TlD•: f,f.. flt\ -l': }-i'}4>i:f.. :: flDm•fl;J,1- :· _ �lJ'}f,)-- : ODDJ(\1..' : �lD• :: t\,t\ : l}I\OIJ : iif,'i t.ar : t11;J'l! : 1·19° �'i" : t\oo<;:mC: fOJ"19° : "1.'1 : 1,'}\\ : fi,lf'} ,: ntt�9° = ii fLJ = r,b°l = JP� = Fcq:,.., = f°t,,rcti--T1 = n« lf1 1 }, ., 1-1.u-- = J,t-ti:far }i(t�f\1.. = °ilt01/?J1-- : ill\lf).. = ,J--f..;,&.. : 'ic&r :: lf'i?° : i\f, = t\i'} = {l '}Ol•t\h;l .. ·= '1'1'9'1 : f. l'bi:\ flDc : ruioofl(\-- : 1}jf•f'>":,f : ,11 '1°-:f· : }-irf-h•t.'} : {l'}ODj\h;r:far :_ · ou,n1--1t; : '?fo;J..1 : f°1.LPffi" : tr'IW•: 'hC. . 1�::fcpfl') :: °'lilT"I° l fa-z.ootth'f:,)· F� : P'CL}!.},'} : �rl:J! : ltf,lf'} : fl ,fatpcp�:�9'° � <;:;l... U1 : .f ft1� il-- :: /\lLU1° ·: ,,/til, - = , hoirr�:r it 1 r...c;:w· = · fOILLP,n-:1- 011 iltn1+::l!f = .,w• =", h1 Y: = '?Yu :-t1 = f°!'l'flA : ()01" : h'i: : f ll : '11C: ro·il1' : ooc1Jl},f:'} : 0011,-111 : itf\(l,} 1 h'}Jtv-9° : ·n�•t': �-• il'P : 111f..'l°'iflD· : hlf-� : •fl1·1◄ : 1..1-1,: fl�ilnl!''f: oot-ih A: hou��l?° : f,A:i, : fl.PA : ,J,fl"i,. : oo{lm,.� : f,cf.1'/\A. :: lli'1cti'f°t ,: 'PC. '.:, flf� 15 16 UJ.'} : rant,:,-., : 7if6J!>'i : fi. t.1:'r :, 1..1,1, : flJl/.,f:,f..T'} : lD·ll�"f-- .= f,'i!1',11 : fl ch.?.= ;,,oi : rOIJ.f tiar : n1-1u, .. : �h 1.f·).. : 'Iw· .::_ . O'Pit;.t-c;?'-1 : 1.,.,-1, : O.lf1 : �u : r,n1°':,·. : 07 ilm1.«17:,, ;· P't- : f,J--/\ f : itil lt\1.�,)- : il./\ar =� 17 f'Pil:,•t; : lD·A : J.'..l-t01/'1-:l-- : '115.'.."'} :· (lm- : l\.t\,t\ : �t\&, :

•

14•

•

hti1ir, = •t·hti·r. = �1,1.:,.: n11'1,e,1,cn·o:,. = 0-1;1, = i\.e = r,:/0...y..:1: = rr,:."f•,11 = 11"1.C = P''i = P'C'¼.:'f·1 1 11--1· = ''Causes h7<#>;1..:7.: fl.P'�: 1'J?,: fOl/ftD•l\•11:l·: 1-P,.e ! P,.. } t\: 1·0C: : l1.P,'}'}·: •f•aot\ . = O.·�· : "�. �- �; uc:, : '1 ·r f,1 f i ,•'ii' 1,Ctif 1 ,) r u1 A;J·--f• 1 in I,[if.{t ( '' Jelay Court, o : . � {i _ f-).ncf\,,·l;) i 1�·: :f.--:jE J },'i: 1t\--O :·P,r,:I\ 1· ''Causl�S and mechan1s_ms of Del ay ln Cou� IufttP. = (YA::t-,,..;;, 1 ,;i:,1.e.r. i r,11'?: :1·9°uc:i· = n�:,� I,,:,.::}.,�,. f.�'ii'co.--1:) 1 1�· = §-� ,: f't:,)•<fl : •0"1.C : }'1'}4>7,.· : �a.iftf� : 'h'i : h'},c;.,J•9° : h1•1•7'· : j;il:1;x,?;·,: :: f'i!•)·,11 : ·Om.c : l,,cf>g- : liif.X..r.t;·?; :: f't!,)•,h : 11,lbC : }','}tj;,7a : {i7f.:i;f�?;(V)1 1 ,f•(JJJf.\11·1· :s 0

•

. IS 16. 17•

� 541 -

?.l\&-.'11:·

f : : ', �.lfrotd',O.J:ffli'; �}iu:nll_: ht-.o• : cl?'f''l'C: � f'Pfl· 671:l?:· : OJ• :: r : (lro.. • ;iii\&, �'ia 11 � )i) !l.li!Dl� 61.1 : lD O · : � f1) : :}·'iOJ• • <p{l 1 ', :: ilt\flu9" ' flf OJ· : 1 n,,., fl >: : f. A :h : l\ m· ' "} 1 w· 1 il = o If. : ,.e.. � ·l· � 1i /\ 01 ' . q,{I• 0"1 � f : tr m -u �fltr : : .. flf\ nt : , V f � • A :i ft : : "J, : f'l �t. m OK'.-h•'i: : J,1'};.lf1 ,n ' : h ,; � i'l1• t , l\ = 1C b:i' :!1"i' i\ ' ll, <J"li '' a>1 'P � = t-'11 hm : '� 4! oo( JC J : �' : 0 . c : : : 0 1' : lD : A m : t,1 0fto 11 �� (Pll.!yV� f (\ " l\t, 111 ov "{l If htLJlf' f tD : : • : {l (l. 7fi . "l't : 1,IJ : h{l,t-J'f:,. : v·A'l. ti. : ·l:h A : '1.f,lJ'? ' IA " r'P(I. : "1 h'lt\6�(.Jr = '?Yv:r = ,;1c = fttro·lt� . ftJIJ.00 caf1A • hur i, • n'J°o.,,-- = ..0�, = ntt 001:�tf.: ii(!Om• , 1\,1'. : T : w : 11 • {16J!' 'i" 'l'll 01f.f , J'T 0 : ml\�: 9"h1 -- f a : \ f,�I\A :: ilflH..lJ : 'PO· : nil4'J.'.''I° i UC/f,;J ro � � hl'4fi" : cJ!'T'PC : W•6[}• : nrr 'I ro· : 1--P. f, : t:l'f..1': f,(,TJ�'J° �A = "7 n. i:· : 'I lD" ::� io-f-� = f"l1'ff,f1 : ODm" : h ·1 ft! r K' �n� .. �:, : (r) : : fni �7LJ1 }: onwo, : h14' :o tif\OT : fO'/..f\f.Jr: 1'�tl.. l11' : ":f-°1� ..,-.: : t\UCJilm1�.. : OUD/n,n : �ro• :: °'/1t,}9u: a l : n = : .. 1,1-'?� .,q,v 1tt.:1- = 'laJ• :: ,,eu119° : itilcl-f:dfD "11'·: 'Po• : f01J..1t1n:r""'} = �� nDI/�l1-- = th,-. = n'Pil-:f'c; = n h· A = �:,..,11-o"'"?. = h 00 :J--m,,. --'}l: = nfut rA� nl (l}-1 : P''l : FC'l ;:1,-e t,!l:9° = ,,,1;: = /if,l.f'}� = f°t00lPC l w·• 1�u..� : .rn -, F-.-0 : (l. 911' : 0, .t1' � �:_,.. : r'I {l l(D•'} = r'P it;1,r; : t, flIT,.. It (l.,:fl1- : n ni 9'1 : f,ft m• mq> A : OT/1\-:l-- : 'lw, :: ,,f,tJ9'1 : r+S!l1ro• = n '11';J fl.. : �h1"r..£,1� : �ar :: r>.; -- : +1- ?!7f..ur.tl : (r) : ODOD/;f : 1,tJ: (l,11'1 = h��r'1OJ· :u �c� : {1,)·• : h1<f>i.: flit1 f.' : ftrt-llJ (l. � : o� : 'llD· : l"\ 1'}?;: : t\,f•,,C':)�f : h.f,lP&-9 : (L A : fll'J.'POW•: rih ·1-1 1t'l;,1c ,,n;: = ltf.l1'1' = ,,1+1t.. = i\t-o• = f,f--oowl+n:'f,1 = Jrtil,t-lln·O?°: ',(I)• :, >,,�..far : +f1f1 : J\(t<J» �qu : ll.frm· : 0 °'!Y,7fi\OJ• : '11C : lD'll'P : 1'1f.1 h1�f1'1 = ODh/\h� = 001\m : i'tilt...11.1..'i : c1JA�'I° :: �OJ·:: fit1..\7 : f,t-l\ouf.. : q.1,'1:.t- : 6� : aom'} : (fl.?11 '1t\, : h7iJ'6I1' : m·A : flat/. 1� : "lYu:J-- : "h1'f."tlf1 : ao,fl-:f"') : hmt\� -: mf,9° : hl11llD' : ovn11 : fUIJ..t\ cf,(1)- : h1�1..(' : 1.tt : 11:J! : 'Im« :: il/\l·LtJ : tp(l.. : l\°7.1'lfi,)'" : '?.�;J.. : Ah : f,U 1 : ODffi1 : 1,1f..ODOD/;,f : hf..'"C1° : ll,lDitf..m· : ,,-:,--.1\A :: flit"}�: {lhcA: �'?'I° : nh+n JmC : (Ir/A : 'L.11, : "'<l»llJtlD· : {l<f»ITJtlD" : l\f, : flI7.J'ODt1JtJJ•'} I ,,,_.�T = nil+ f:CfD = f\00100:i, : hi1'l-A9° == t\9°ltn, = ftJA = •1,.�,f:: = ++aitm·: 01--hl\hl\(I}- : fl:J-- = ct:tf&-- : n..f(J;),il = fi19° ;rt,D•i = ,.,;_,.. = .r :J'�rA = ,er!c;A 1 h1JtU : f{\(Dc : 1•�"1• : 11'11111 : fOl'LfODl\tJT : itf,f,,.t\'}0 :, . l ill\ tU9°_ = f/\1114-r = !i7f.i!t?i·g : (r.) : fl'11'..(' : nro· = ,t•.r1,· = (111": '. ° 1 • 9 • : : 11· nf-1� : fillJ 'Lit; ,f f f· P'lr: a;ar:: (lp>7t".. : f,tJ1' : i',,.e...,;J : ltf.1'il·f{l•: 11 "' : 1 �"}lf'i"l\1 : "fl{\(Dc : +iltr-- : f.OflJ/\• :: 1,·111 : hOtJ.filf,C::}!f:lD.. = �"IC: 1t'tr ;� �(De: fln1f:: P'&--: ftt,11· : tfoo.f?:: rof_,9 w,v,:�:: 1,9',0..: D'/l\�: {1,)1-0l f' (lfl' : H"} ..f:." : f"'l..f ilhti-- : ilfllf� : �(D• :: h1-'ttJ : {}{\(De: U•l:r : m.1·: 'P0·19o : ll''i : ,f..,,f"lt-:1 : f"t1'10t1': o� '. ou m"}: t,il+f:'l°: h1.Pz..lP.W•: fD1'/.ff..C:"IW·1': ff)P,Or: .fltJ,}.. : 1,1,�.f,f.. _ "'IHtl· : i--hh/\� : �1C : �m- :: �l D ilfltl.tJ9 : m:,»l\.e, : �Ct." : (L,f: : nhti"li � 1/IT'/C,,f'l° : t,aP"}..f; � ,:f•hll. 11 ,1:fbtioo-tlb7i1 = 1s hit= ro•il'r = ,-,·fi1). = nil ..1·.r :i, lln�·,&. = ,t-4''1f- �:, itll(J} r =

lf', �

r,-��

l\.lt'i:1;

.. = = ,\

f F,,; ·:

)

1 •:

- 542 -

,,.,,r�:i- : h._11: = ay,:l'? : nti'/f il .-f A =

°'�t

;rUIJ� : tiAIF� : ,f•cf'llJt : (l(D• : P'� : h1-'tm11:,, : = f,,.. (l lll·T = rf'i:C.l!' = 111: = h il+..rr,r..-;y.. : n tlu : �.e., : l'J A:t"(1D). : ,,...,,"1 t. 9' f· : ht-IiTro•"} : ii ODm n:,, : f°7.&.A1· : +"1t.JP"f : -9° : : : : f lf'i f,lf'1A 1if..�1il : (fidelity f«O"r :J OIJ��:,. i'i. insurance) 19 : h ,e {to-'t:•4-71:F-:fm· ., Oo:1tD•flJ1.· : '1,�ti:fw·1 : l\...mir(l«J: : �l-'lit- :: 't,1,(lf(D-9° .: 1100,:ootfm- : f,l,_\:J, � f+7r't\: H.� : h<IDlf)-9° : O'lf,, = f-t-f1f19° : If� : r+ "111Jt lD'19° : 1' 1,t U•9°: f�11"1 t (D•1 = �I\ 1°·r : f ''J..It/A +llJt OJ· : Jt'1f..++llJt (I}-: ail'ft\lD· : h,f,.f'tf : 11110·1·: �,°7.f1� : h f./;\:,» r"'I�: iic1if◄. t.a l\f,lf1 : : h ; ?fl· : 01/'?1T : nnt\m : f1"l;J1m : /,lf1t\;J--A :: ffODf_• : ffl,i\(D•9° : Ft. : Ll\'l. s ,,...r,r : tif oollJ = t\00 4>,nc : .e,:-f..lt.A t)P,9° = fi..oollJ = P'�fo = 111\m• = ff. tl4:t- = ft,..1 cf t--1 il = 00P' t.r = n,..y..:y. 1,hr;-:1t.A· = i1:-t = ,, ..,,r�:,.. = rai,ra 1 n�"lD'' = 6>; = ttil<l'f:'P = t\ODlP,:,-- = r(1111,-:f"w• = 1c; = (l(D« = r, = '61l'<'fA = -0"1' : +f1f : f°tlf�ro· : (lro• : hf.h�A9° : Ul/ll:,.. : �JD• �

�=

·=

•

- 543 -

--�--------•

•

.' <

oNS onsERYATi S01\1E •

•

crva CODE

ON Art.1922(3) OF TI-IE

COMMEN TON GEBRE .AfA.RIAM AMENTE v. TELECOM!vlUNICATIONS · · ,'' by Brurz-Otto Bryde* .'

tor 1 . ) guara1 (su1�ety a whicl1 by . Suretystup �t se co11tra . promi a _..:... s to a crect·1to . r ' . . l?Q . c·1 ':'1· 1 Code) - is f .L'-\.1 A ·t • 1 (7-. �o guaran, tee _ ·tl1� . ·.obl1g.at!on of a. d_e btor . (-�: a ver _ c.omm�r�-- device f�r se?uf·1 �g;. a d_e�t �11 Etb:1�p1a. Tl1e ap�l1c�t1on and 111te rpretatio� of Articles 1920-195� of tl1e Etl11op1a11 C1v1l Code are tl1e1efore of great pracf 1 importa 11ce. A pr ?�ision '-"'hich has .created. mai1y _ problen1s i 11: the past is Art:�fe 1922(3) of tl1e C1v1l Code. It re9-111r�s for a val�d st1�·etysl11p that tl1e maxinium 111 the docu n1ent)t of aroot111t for whioh the gu�raote� 1s given be �pec1fied gua. _ _ ra11tee).2 Tl1e proble111s ,vl11.ch arise are 11ot pr1mar1ly problems of interpr etation_ the language of tl1e Code 011 tl1js po-i11t is not arnbigious - b11t they arise because n�t previously tl1e Code co11tradicts. Etl1iopia � practice. It not only req11ires a form _ necessary b1tt \vhat 1s more important e11dangers one of tl1e n1a1n social functions of suretysl1ip. Guarantors it1 Ethiopia are 11ot 011.ly ttsed to secure a specinc debt (the ''wass'' of Etluopia11 tradition) bu t also to gt1arar1tee tl1e good bel1a viot1r of a perso11, especially a·11 en1ployee (''teyc�ji''). 3 In the latter case it is nearly impossible to tell 11pon enteri11g into a contract o,f su1·elyslup wl1at d.amages the JJerson gua ra11teed for 111ay cause in the f11t11re. So the applicatio11 of Article 1922(3) reqt1iring a specification of the n1axi1n11m amo1111t of tl1e guarantee, to this kjnd of guara.ntee n1akes it, if not obsolete, at least of doubtf11l value).4 Given the widespreacl use of suretyship to sectrre a11 e1nployee's lo;,ralty it is hardly astonishing tl1at there have been attempts to avoid this result of the new Code.

The fa.ct that Article 1922(3) is not v. ell suited. for a gt1arantee for a pers�n led to the argumen.t that the lawmaker in the Civil Code provisio11s on suretyship had only intended to regt1late g11arantees for specified debts (tl1e traditional ''wa� tna''). Tl1e guarantee for a person. (''teyaji11et'') according to tl1js tl1eory was st1 �1 governed by custo1nary rt1les. The Higl1 Cot1rt of Addis Ababa follo\ved tl1is argun1� nt. Therefore th.e St1preme Imperial Co11rt 11.acl twice to 1·everse decisior1s by tlie High Court of Add,is Abeba wh.icl1 h.ad confirmed tl1e obligation of a ''teayji'' to p a)' for the damage caused by unfaitltft1l employees . tl1011 gh tl1e n1aximum an1oui1t of 1

--�---*

Dr. Jur. ( IIa - n1burg), Fact1lty of Law, I-Jaile Sellassie I University. !i 1 · A _contract of suretyship l1as to be in writi11 rr (Civ C ode l 7'J 5) '\r1d be attested by t\VO wi·tne·ses (C1v. Code Art. 1727). for unt 2 . ''T.he contrac · an1o t of gu·arante·e sl1all be of no c· ax1 , ·mu1n 1n e fl t ' es 'fi h ect s1,ec1 t111 css it 1 wh1ch tl1e guarantee is give11. '' t apphca? · . . . 3 0. ne m _ ay eas·1IY fimd Job · adv · ert..1se · r11ents IO the Addis Ababa ne,;yspapers in which tI1e Radio a is as k �� to supply a guarantor, in one rec en t x m a n 1 oin e a ple even· for an app tn c t s T ec h n1c1an. ar�1 res: 4. Problems arising out of t hi,,s si·t.tiat·ion f ·1 in a . . . · ai t e d · or . ch1ne J Ivf ,· a p bY . •H'�,.,; t-;a� A �fa ,: 9-uara.otee for public age11c1es are d1sc-ussed 1n ent Go,,erom Fidel t11e ity · in of Emp loyee s �; �ih·.1op1a, ( un1Ju�l ished, Arc hives, Fac ulty of Law.) •

'·

- 544 '

SOivJE OBSERVATIONS. ON A;RT. · 1922 (3) OF ·TIIB CIVIL· CODE

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5. ·I1� botl1 cases· been not l1a speci:fied). · liabjJjty � tl1 e s"fipreme Court 's · . tor 1 i tiara e way no to evacle !s ere t�1e "''Ord� of t4e '�o'de ·which · makes t tl1at lear � it _. . . � . !ak!s k11 1d of obl1 gat1on the g11arantor t11 1dertakes · to· ouaranfee tl1e to as o11 ncti d'sti . . 6 in tl is m tter miglJt well end the· on discus�iotj �s f;e · Couri decis � ! i nd � s:co . _ ft� h.is very l11c1 d Jt1�g_me11t seel-.s. to a11swer every possible argtime111.. _ to support in t , s dec1s1011. · · rt u o C h jo H t he b But tl1e fact tl1 �t tl1e S11pre111e I1nperial Cot1rt l1ad twice to overturn the I. -Iigh 1 1e,1. �·Iy _ t11e sa1ne argtune11ts is i11 itself .inter�st�1 1g . _e1 1o1igh to w1tl1 ns decisio t's Cour • ,, jtistjfy son1e further exan1111at 1 011 of tl1e proble1n. Article 1922 of the Civil Co_de is headed ''for� of suretysllip'' an.d (al'��ough the importance of Art. 1922(3) 1s by 110 1 11ea11s restricted to tl1at· of ·a form re quirement as \Vi11 be show11 shortly) tl1e I-Iigh Co11rt's .persistence in clisregard ing t11 js provision can be take 11 as a ft1rther exa 1 nple of tl1e relt1ctance of part of the .Ethiopian jt1diciary to decide a case on the basis of technical · p·rovisions of l-h.e new codes. T11e n1ost prominent of tl1e cases ill11strating tliis tendency was Avakian v. Avakia11) .1 More recent exan1ples are a decision granting succession .. to a child adopted after promulgatio11 of tl1e Civil Code tl1ough _ the require1nents of tl1e Code (Art. 804) had not been con1plied with)8 and a judgment · of the Supreme - I1nperial Court in Asmara e1 1fo.rcing a co11tract for tl1e sa]e of land..not concluded j 1 1 the prescribed form).9 Tl1ose cases are intersting for various reasons.: First, they show that disregard of Code provisions is 11ot confined to one col1rt or· a category. of courts (e.g. the lo\ver co11rts): in the Avalcian qase the positions \Vere exactly .con trary to the ''teyaj'' cases, there tl1e !Iigh Court defendecl tbe Coq.e-provisio .ns) 1.0 \\1h.ile the St1preme Im1Jerial Court disregarded them. Seco11dly, they may not . be simply dismissed as exa1nples of ignora11ce of the lav:1 or i ns11fficient·· training· on part of the judges: on the cont1·ary the co11rts were l't1lly aware of the .releva11t Code-provisio11s and tl1e argl1meots llsed to get a�ot1nd theJ11. demonstrate a higl1 9uality of legal reasoning) 11 (perl1a_ps more so tl1an many �ases . �epjded corre?tly · in the final analysi5). · . . . , . .. . . Tl1e basic rationale behind all tl1ese decisions was obviot1sly tl1e feeling that adbera11ce to for1nalities v:1ot1ld -lead to inj11stice.. This feeling is · e.a?y : t.o .11nde1·s tand. Not only tl1e layn1a1 1 bl1t also tl1e lawyer b.as diffic11lti�s copin_g· .with · tl)e. i�ea that a will or a co11tract sho11ld be held invalid for fail11re . to -fQl�o,;..r' fqrmaljtje� despite clearly and u11do11btedly expressi11g the intention of. the parties. T'his attit11de •

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5 · Ketema I-Iaile v. E.ELPA, 6 J. of Et/1• L. (1969) p. 38 et seq.. Gebre J\1Iaria:m Amente Telecommunications Depart1ne11t, 8 J. o.f Et/1. L. (1972) p. 30 et.. seq.. . ..

·Y.

6· Gebre Mariam Amentc v. Telecon·1mt1nication, cited a bove at note 5). 7 · 1 · f. of Eth. L. (1964) p. 23 et sec1. Tl1is case l1as been ,videly ?iscussed and pt1blicised, e.g. J. Vanderlinden, /11trodL1ctio11 at, droit de l'Etlziopie moder11e (Paris �971), p. 73 and by tl !,e . _ same author: ''Civil Law and Co111mon La\v Influences OLl tl1e Developing L.aw of Etl1iopia , �6 Buffalo L. Re�., �1?66), p. �50 et. s_ec1• at p. 264, and ''qt1e!�L1es. aspects fonda111�11t0.ux _ u developn1ent Jur1d1que Eth1op1en'', Ve1fassu11g t111cl Rec/11 111 Ube, see Vol. 3 (1970) P· 167 et seq. p. 174_ B. B.igh Court is Ababa, Emet Jejeb v. Dessie A.bdecl10, Civil 1-\ppeal l307-60 · (tulpttbl�shed). Adcl 9 · S upren, 1 94-� . J\To. eal App l Civi a, i Ted Imp 1 eron Asm v. l eria le � Court Asn1ara, Berhane fiai ( unp unl1sh d e ). 10. er. supra note 7. ll. T his is especially true of the Supreme Court decision of Avakian ''· Avakian ao<l of tlle I-Jigh C ourt dec1s1 · ·on 1n th "t e eyaji'' cases.

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to i A�r or a ca.- or eve11 to ''d iopi Eth to d ricte rest ns mea e . is lJy . n� el o o a to v 1ng y t r) q ts id co l1arsh v p cons r 111· e ue ces 1 o . . . · . . t1-ies co u11tr1es . Also i·n other cot1n .Whi 12 B d 1n · 1 tal 1t. lea d Ill dL 1v1 1g 1n ch se ca 11 10 v1s ro s.) -p rm fo of · ut on · a· I. t • . · the app 1ca h ere . . . 1te act . . . .1 E are t re 10. mo �op10.. problem I the re e . ? making the Co many reasoils des 1 1 1 re a s co d fli 11se 1 11 r s re. � 10 g ll we u k1 1vv e t 0 nc °:s � . .. � e of Art� � � . � new, their provisi� . _ 1 S tl1at u11fa1�l1ar.1ty �v1tI1 tl1e co le . sho\\ e . Cod des l Civi 18 110t 1 . 19,22(3) of the te 11el tys p r al s11. i11,1 o[ s by 1d ract �t co1 t1 �� 1 e h bot � � i � Sui) � rem to th.e uneducated: e _ P · m o ti t1es 11 1 l eve l aut o anc blic ne 1 10 h p11 wit f d e . l clud e con e C wer · aJ or ban ks r1a1 ourt . . .r.-o r 1_oa11s IlOL•. c 1np 1 y1:J g with Art. . �ts . _ tra 1 co� mfor s use aba Ab a � 1922(3)_) 13 i Addis 11� ex,�t1se - 1s tiz derstan dable 11)le c pr1n_ n Je w aw l _ the of � ce ign?ran � So iil the � _ . Ethiopian set-tip. This °:1ay ten1p�� the J:1dges_ to _. t1 .y to l1el1? tl1ose who cam e in di·fficulties by not observing forms prescr1lJed 111 the Code. . '"fhis attitude is probably �upp�rted by additio11al factors_. Ir1. a ful!y developed legal systen1 the higb.ly profess1onal1zed class of _lav'?ers _l1as it� ov.rn values ai1d its o,vn co11cept of justice. Tl1�se are _ n ot_ ne�essar1ly 1cle11t1ca� vv1tl1 tl:1ose of the lay , man., because the lawyer s 1dea of Justice in.eludes �1alues like certainty of the lavi1 and speed and efficiency of the legal process- values w]lich 1nigl1t 11ot be ea.sily under stood without explanation by peop'Ie not co1111ected professio11ally \Vith tl1e adiniais tration of justice. A lawyer in sucl1 a syste1u will l1 a·ve 110 difficL1lty believing it . ''j11st'' to decide a case on the mere basis of forn1, date or to gi\ e an e.tparte judgn1en. t wl1en tl1e parties fail to appear ,) 14 °\Vllile a layma11's idea of jtistice might will be hurt by those decisions. Most likely, in Ethiopia the differentiation between the popular and the lay\l/er's concept ·Of j11stice has not yet progressed so far and eo many lawyers agree with tl1e po1Jular judgn1ent, e.g. that a guara11t or sl1 ould stand by his \1/ord and not be allo\ved to s11ealc 011t ,vith tl1e hel1J of some obsct1re Code-provisio·n. . . . If this is true it will. hardly be sufficie11t to scold tl1e cot1rts for not comply ing ,vith the Code-provisions. Even if they do so i11 the f'11ture i11 order not to ha,,e their decisions repealed (or criticized in scl1olarly jo11rnals) their conversion will be only superficial. What seems to be necessary 011 the contrary is to explain the rationale behind the provisions. Even form-provisions which l1ave 110 other purpose tl1a11 to evide11 ce a legal relation beyond doubt and therby to enhance the · speed of legal proceedi1 1gs are supportable because those are important aims in their ow<1. rigl1t. .But n1any P:0· visio�s which seem to be only te-chuical on tl1e first glance l1 ave ratJ1er su?stantive. functions. (In other words, they not only serve the cert,1inty a11d expedi ency ot the legal process but are also inte11d.ed to do justice bet\vee11 tl1e parties). ?ne s�ch substantive '!�unction is that of warni11g: the person 1111 dertaking an obliga: tion shall be advised that he is doing so1netl 1ing serious, a 1 1d it is a niatter 01 I

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!hus in Germany Art. 313 of the BGB (Civil Code) wl1icl1 asks for a \ alid contrac t o f s al; 0 immovables to be attested by a cot1rt or a use beca ete obs ol notary l1as becotue partl)' refusal of the cou rts to enforce it if th e result WOL1ld be contrary to e qtiity. 13. The gt1aran d no an tor for a lo�n al o �1as to guarantee ault . de for f inte res t � tl1e pos sib le . maximum amount for thLs obl1gat1ou is stated. o, � d 14. Conce ing the failure of the Courts C ft � to apply the provisions of tl1e Civil Proc edur � � � s �; ( ��':;j�Jie ar�c�_of the parties see Daniel Gebrekidan, ''Cat1ses of Delay 1n "i uses un d a c · tves, Facuity of Law H s I u) p 8-41 and Ghele b D a11a, . rsfCT) ' 1 · and Mechan·1sms of Delay jn Co '.'J. La \1/, · Llrts'' 1971• ( unpt1 . · Faculty ·of · · , 1ves, 1e b·1 h� . 1s 1· re ' ct A p. 4-8. 12·

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ON ART. 1922 (3) OF THE CIVIL. CODE SOME OBSERVATIONS

. ce that persons are . 111ore likely to pro1nise sometb.i11g by \Vord of mouth . . . . . sses. It 1s exper1en gn a docu1�e11t 111 t b.e prese11ce o f w1t11e for this reasOil that si . to than pre�cr1�es a wr1tte11 contract fo1· tl1e sale o� land as the good of Code Civil tlle 15 a11d for 11npor tance, ) co11tracts creating long lasting on11c · obliga·eco11 test rea g) 16 ilie . t1ons. 11 is also o .f special importa11ce in tl1e case of suretyship.)11 ft1nctio s v ar11ing h , i T contract of st1retysl1ip lies, i11 tl1e fact tl1a_t i_ t . is a g11arantee for a of er dang The .. perso11. 111e ex!e11t o_f tl !e gt1arantors l1ab1L1�y depends 0 a11otl1er 11 _ the of_ debt the or1ns obligat1011s lus 1)e�f tor de �11d ther�f ore 111 facts wlu�h are pr1n1,Lry the � ,vay beyond the gt1ara-i1tor s c?ntr?l. S� the Code 1·eqt11�-e� a written co11tract t? prevent the gi.1aranto.r form euter 11. 1g 111to 1t carelessly. Bt1t it 1s dot1btf11I whetl1er this protec tion ,vot1ld be s1rfficie11t. Son1eo11e w]10 gt1ara11tees a cor1tract i11volvi11g an obliga tioi1 of Etl1. $ 5,000.-,vill nor111ally expect this st1m to be the maximum risk he can · possibly inctir. But tllis need not be so: tl1e original debt ca11 be increased by interest or damages a11d so occasio11ally a guarantor wo11ld have to ·bear a 111uch bigger lia.bility tl1a11 l1e expected, if his obligatio11 wo11ld correspond to that of the debtor ,vitl1ot1t li111itatio11s. Tl1e g11ara11tor therefore would rt1n a risk be can neither forsee nor control. It is exactly· this da11ger tl1e Etl1iopia11 Civil Code vvants to avoid i11 Article 1922(3). By maki11g the specification of tl1e 1naxin1t11n a1uo11nt ,i reqt1irement for a valid contract of suretyslliJJ, tl1e Code ensttres that tl1e gt1arantor only undertakes a calculable risk. B)' doi11g this the Code tl1e1efore is not jt1st introdt1cing a tecl1ni cal reqt1iremet1t for a contract of s11retyshiJ) wh ich \Va5 t1ot asked for by the pre-Code Ia,v. On the co11trary i t st1bstantially revises the co11cept of st1retysbip ,vhich can no lo11ger be e11tered into ,vitho11t limitatio11, and tllis for sot1nd reasons. This being the policy behind Article I922(3), the I-ligl1 Cot1rt violates not just the words b11t also the logic of the Code by trying to li111it the application of thjs Article to guarantees for a s1Jecified debt, excl11di11g the g11ara11tee for a person (''teyajj''). Obviously it js even more jmportant to protect the ''teyaji'' fron1 enter ing into an u11calc11lated risl<. The amount of an ordinary debt (e.g. a credit or a11 obligatio11 from a con tract of sale) will only in exceptio11al cases be exceeded considerably by interest or damages. Therefore tl1is an1ount can be take11 as g11ideline by the g11arantor to j11dge the risk he inc11rs. 011 tl1e other hand, in a contract of employment ther� is very often 110 basis at all for gt1essing what damage the employee might possibly ca.11se to his e1nployer in tl1e f11tt1re: the employee's d11ties may perhaps not have financial aspects at all - and still he 111ight b11rn the firm's prenuses down by smoking i. 11 a f orbid.cle11 place. Without the protection of Article 1922(3) Civil Code a g_1;1ara11tee for the �e . haviour of a _ person wo11ld be a11 extremely dangerou_s ve11tt1re 1 ndeed. The proffiJse to �ct as g11ara ntor for a perso11 is easily given i11 the abstract vvitho11t reaJly ensing tl1e da11ger, and in additio11 tl1ere is a stro11g social presst1re to stand as : _ _ seek111g guarantor for a relative or frie11cl who 1s employme11t.

IS. C v· ! C. 2877 and also Civ. C. Art. 1723. 16' Crv. C. Art. 1725. 17. Cf· Civ. C . Art. � 725(a). ..

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JOURNAL or• · E'fl-{IOPIAN Li-\W - VOL. 'tl)'Ir - l'-Jo. 2

lJle in 1si g se1 (in asl is for de Co an tl1e 11 explr'c•t tio . "' tia sit s tl1i ·· • . i"'· rl stat 1 1. . of n 1 ng t1.1.e gL1arat1tor a11cl e11abl ii 1g cme . n 1· v;,a t s tl1u and d lve ivo 111. 111 to c 1 suin· i t 'he "' · 1 1ty. b'l' a cula e 1· 1a re t1 t1t f · t le ib ss o p is li ly ct a ex the 111e pre ,tt S11 wl1 d 111e I1nperial · Court lco we · e b ' to is it e for ere Tli e l ph s d th U lB s) z l' atio lr11.ic 1 11co1,2 i Tele v. ,ite Anze 1 ria1r a in M· re Geb . rly clea · v so isi on pro That the 11se of st1rety�lli1., as_ a 111ea11s of sect1ring ag,Linst the disl ru1 e111ployee becomes very 1mpract1cal beca.ltse of tl~1c Court's decision maoyalt. y of b protect thinl< they neecl to who tJ1e1nselv e1uployers i by es ao-ai ilst 8 tc{1 e re-. grettec. l osse�. g o t a by fi�elit� talci11 tl1en1sel:es Bt1t tl1 ey Ci.111 protect tt i11.�11rat1ce for �li eir ei� l 1 ) . e o ye T]lis is a 1n11cl1 111ore s�11s1ble ,�ay �o reacl1 tl�1s a1111 1n tl1e i11terest of �l � _ : parti e ::i certa111 to get lus n1ore 1n. 0 11ey 1s e1nployer fro111 concerned: the an instirai,ce c n1 a as well be ur1reliable who n1igl1t ha as ] , e ! f t11e g11ara11tor e1np a ron1 oyee tli e f ny t n p o�ee \¥l1en guara11tors applyi11g for a job (a11 obli is 110 longer fo,rced to look fo1· ation g create an 1111due aclva11tage for those job-a1Jplica well wllich migl1t 11ts \.vith b etter · · · · 1s · b or11e bY a11 1·11st1rance cornpaiiv ( d 1t: cont1ect1011s) , ana· J·rC a dan1age arises tl1erby by the com1nunity o� tl1o�e :xpose? to tl1e san1e r!sk) and 110i by ��e guara11tor ,-,.,,ho u11dertook 111s obl1gat1011 w1tho11t tl1e professional exper tise of an inst1rer to evaluate a risk a11d perhaps even l111der social presst1re.

18. Cf. supra, note 5. 19. The same solution is advocated by I-Iizkias Assefa, cited abo'o/e at note 4), su,pra.

- 548

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0 = °i = ° = ? ? = ..e.1-p:f :!s : .. , 111 t,.v..e,1£ .. '11''1:, : "f : f ��Y-o I\ f'PI,\ I �, C = °1 t : h � H.V : Y..i(l1'1 : ?\ iiti tr"} : f..-- t. il : m•9'1 m 1� :: . : c : 4'� f, :r: f,f�lll\lD·?° : ft'A : fi"}'?..r..": <l1'? : m•il'r9° : lf� : fl/bl\ : fl;f• : ,,A+. .-�t. 1,f ><: r: C"t.m•9" • O.lf'J: J',v-·t, noaoacoac: 9"t;Afl" t',.,.,�1.,;, 'T lt/\lltJ: pof .,: ffl�(J}' 1: 11il6.i\."1.: "1 11-V.f•,f": o ot:rf"' t\: J!,'i''C(l.-)··: f:,IJ'<;A :: ftf a: ' : (11"11... : ,'h.1--': ODLJ.'/.1' °'l } ;:oJ•9" = "l:JJ!..1'i: V"ti•1y_,: Y..--c:e;;l.. : 9">19° 2 f i, : f 1 07. } : : Of�J {tl : �.�'l.f..l."lOJ• � �" ?.· 6[J�: n. ' 7,. •l· ' OJ : 1fl�'i f : 1A , 1 ? : � qf; .. .. 1 ,,. -<' "if" : l1ro{: : OJ•{l'f: Q.,.f'}il : }t"}J?: : :: : .-1 ill\O ., 'Lv1,n_: ... , 11 , r.. "i·O ( OD,, c.: n : f'l --: 1)1 A : f,r},'lt\ :: «1Ji: l\ 'I J·LU1- : Of4')· : fiP/..f..l. : riJ.,f •. t\ 'l•>j,fi tt \ f,IJ11 : 'L �:i-, : 'l'"l'.>fl : (\01/0l--l)hc : i\"}.�_, 001, : 0Lv1.-n : �•flrf·ce:1!,'i" : 0D"if1fl:(:,- : 19 -O"/'}ij:m·9° : 'l;.JJ!,.c;: f'}-�Y..· : f...'C;�:,_.. = (1,,.�Q;l,«'Jt = '/IP/ "'lll4'{/lJ<f': itl\01 ou'1bt�r: 1lC1iC'a : '10..t;° : U1 61!' : f!PJ.fv.11, : 'lvl,..fl : tmf11 : i',t\fi-t• :: f,IJ'} ° .. 1 : : : ' = f �-�- : r-l--c �t; : ft1.. °1 �- : l ( 9 L 1 'l° : O'/ ti·':e. :,_ : A 'l 1� llJ• } '? � :-1 OI/ ii.'tf.." 20 iv-,,{1 : O'/ {11 c;4!:,,. : (l h ft q 1!ro« : fl r1l vit)(n : a.,on:,,. : OD bbl,l_ if : It� : } (De == f1£V:l•fl hff tt.., : nr1.,-,.(l}c = flTI/�n;:.1....,... At; = fl'P?w = ooAn = fO"/ f il.4!9°'P i "' J-' .e.11�t19':J51 t l1C�5 ;l� } : iht\0!7:19° : f1"1 J1." : UD1·11fl� : (l,l1� 1 {l � -" : flOl/",{14,. : f:7 ,;J1,5}J:,}--.._ fi"f"J.. /\1,•} : <.flJWl_,,)� : f<P/�11 : (lW• : aJf,'J° : f }-�X" � ' f:C :e1· : ·nm'} lii 'i: : ao :p � : ;11'? : OD IPl. :,,. :: "11,. ,,,0 : UD 4-'6li), : lDf;'l° : 21 h1f: : me : llOl/.enAT : h.P�:,-- : f,4'llJA ::

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f1 Q: °11lC = i', 'P:fE,; : f..1 p:1� : f'L01 ,..n : f1f .f11 : i'1il&.I\ 1.. : 'l'rfl:l".c 01 "lY:: ,h °1 : w,ll'P: ti 1r:,,. :, °IYu:.r 9l 1-- : n i-r bt1>tvf t : 01 °l�.. : Ftr : i\f;: -.f tt� : 23 22 f'l?11.. : noo.. tr : 011ft : '?-OC : J-,cp·�c; : ,e.r;n:f : 001.Pl;l... : 'l.'>i"O : i1 �tr : °l.� :r : J-1ftfl:fro• :: l, � 1:LtJ : ;,, ·) -:;�. : :,:c:6t 9':f : 'l"I •fl : '11.1��tf◄ : 24 flt:,: t�:PJ;.f\T'PA f111'11l : °'l..til:1--?- : ''?JfO(: : hti..-r·:f : rr1--mo., : G:C'l° : = riVf"n = JJD1f1n'f.. = 1, 1Jtf,t·r = rai1J!..c1� = .e. 1 p:f = ILf OJflJ = y_;:,'--1\IA == �1c = i1 = n1�1p..:i1 = ro;,oc = htf..r·:f· = 1,,,,v,�1-1· = t.DTJY:l"'l'I° = 1-c1111--, tt..! wllJ = 1'7f1'A == 1,11,ar'J° = n<?-nc = +-41'l� = 'lt\FA"11 = 0r ti� = ODLJ.'l:,-.. = roi 25 +l�m• : 10.Tfrar : hjit (ft�,)--r,,�, = ,nc) : 01\f- : I\Alf., � f"l1lC : h4-V" .-f--: ·� llr:: f1(l: <'JirOC: .e..1n:f.. : r 01,oc : Yl•4i·fl\"'1": fll\FA"11: 10..f:fro•:

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18· h.S.' = �- i2 f n¥t-m°1�'1" : f�}OJ�· : a-.°l = l1m•m = ·1•'11'b : OJi.h�·OC = ti' Ilif:1§ 2 '¼. 'l"• f-r };,1ln:,.,: ,f•ODt\h:,.: (l·) :: 'TC'(bflC {l , .e.. : (l• : tioY.(l.f·"} : J!n11 2 fl·'P : tioici'f.ft\ : (Inf=t9. 1 fA;r,f•oo i 11 Cl1f.ff {l ! f,1,°l : ,j,. h•/.\¥1: J Ll•J'."1'1! : ;)f,ll : P'l\i'l.: f.�ftC{l,,f: ) l 1�: :l� :: 19. f1"1�• : ,11°1 : 4:. �% :f 20. }'tJ.• : t':r- • 5'·�7.-" .,. ,__ ,,... ..

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. foncti,f: 'JOJ?..:f-: f'l°#YO: i'1.f .,f1?i: /,,:,,.e�-�� J\1-� ll'',: r,,.. �.,: r�9' A1 --: ;1,�'i: 0 '1(1. : "l-O C : Jtlf''}!:·: ID"«l'l� : fi-•l'fl11�"r.• 'l'-"t "}� OD{l)f;� •n: i,; - � 01 ° "" ' : : .f1f : '1l 1�;t" : h 1�DI/.li¼J.: : /\ '11/ m�t; fl } °1f: P't,.. 9 : i\f, : 9u1: q,e�:� : 0r,a:,,-. = 1,'}�htD• : l\DPl.�1-- : f{Jl>Ail : OD(ttl;e.:n;i : -qfi""f.l1/\:fro• : n?J:Y� : 9'1'} l (l : ° -t� 1 : t•U � (fftS-" : )\,�.tr'}) : fOtJ.h '¼��;,,. : fir>t{l : f.•fi1 C: : (OD1f'1"'0) l\ f... u '} : : 9 flJ t'\. : f;,m.1�{jl'7{\-c : f°lfl-- : 'ffcgfP•1••'}: 'j:ft,,)�'} : 11/»fl{: :. [\OD(D(l"} ,rm�'l>'PA == f:\A�m-: �f<k = f,Ot\'r = i',ilt..1,1.. = ftr� = f,onltl\A:: .euri r ° TI1,..,... : ,,,. ti· : (19':f- : ClJi,(l�...1' : t\ODOJ(i)1 : f01J.h,t-l\ ID• HY-a : );� n:,. : � flf 9 : � ?>T-1 = hoif;J'l 'flD<'P:fro• = --r,�,,Oll,'l°i" = u�fl-.. : '¼n,, .,e : •r<r : ilhi'111:1.: �ID<� h ou,f• : 'I 'f°vt il 9"' 1:,. : ..,.. ,nf 4! !P:1: : (D•ii. 'j� il '1°1,1, : lffl;; : n. +'i•: f4>'r:i, , IJ, tr'}'1 : " /\., H..l1 : 'r.r4: 9>1: : OD i!"\. il : (l'r yr cpA :: i1 9° BJJ.f : fly_,il,J: : 9°19'1 : q,e, -,:,- 1 f'l.°#11: ..e..--n .. t-c: 'h1f.0'7f,)i""c; : f"'l.h(i:t\d"l' : ,,,nc : f(Jf/.ro(l�m ..: 0"19°1,: �(D,.: --Ot\'PA :-: h9°ll'i:: a,'}: 9"19°: q_e.�'1-: f'l. 0'111: f,.1}rl-•C: i'..1f;1f9°ifr> 111.�/l(l)c9° : °l"'flC: : ft.9° : --flfttf'A :: 'h1f ,tl�IJ : flf1,0:i•"} : ?°h1.r:1,: fi°IAt·: fl..c.,·1"r = t-. A;r it-9'° :: fq,?,;t- : 2/9°.,.I : i', 1,,�� : t\1'.e.\J : °;f,', :,_... : f'/.'1"fl : i•ft1'C: 1''}�1-f/\1 : {tlf19'3: '?"fie;.. = f0"l..tDO�lD.. � (fl) l\_-,. : (loo•n· , fl°l9°1': �(l)•: ,fl� · · 0 ,, t, 'PA :i 111·1•01•1 : �u = rorl 1·1·,)·· : y_ fl,f'C:-�f : f 1/il,.?··m 71 : y_.,,orf·c.? f : mt'? 1 c 'fOD(\ Uf/ oup; : f....fl 1-eii• : '' t;':f (D• :: 0� l·f.IJ 9° : Cir' ft '1' : funi'1 l'"l� : f,4. 0 1 °: 6 , °11f'i "n..f(lit::;« : fl.If� : f6J,9>1·• }9° : 'tlC1IC : f.!'��c : f,f,tf ft• :t fi,lf't9 :i--hht\;;: : rtttAlf)..,; : h'l°I\ : 1°f"A : lll\yl,.!ll.. : -l·t1h/\�lD·•1 : l·c4. ::f(JJ4'}�: h•.,., t..:fw<1 = I\ {ID 1··/\ 9° f'PLfil1· ft-- = 'ti,,e,.e.. ft-- 9 ° h1 �1"":f-: °11 : 04!: fll'}.: f'lu-1,fl : J?�,,fl,t-c_�:1: : 1,liOJ• : f,'l;:. 1r :, �1C: ) 1 : J..t,,,1,f>Ol)·,0,)--9° :: t,'}�-: �;Jfu: n,o� : � h11,�:y. : I\D}it{lC : °1 f'lutifl -h.r 111 = :i--ruc:i-• = rf•?°� = il" � nc = i'1.il &.I\ 1-. : flf'f.•�"1 = f'L•>1•r1 : 1 -1-11+c.1:Y = noo•tr = Y,ti = �oc :, 't1c = �,. = :rh fl·'> = f.,.L19°"-��l-- : ,,9 1� = ��1L 1 U'}: f'll>f11: �,fi,t-c>:Y... : h00 ooc:ooc : �-1:J-- : :J··h fl·'} : fntroil'f.·)·· : tlo�:i:. ; 11:,; . : nOD OD f,\h.)--'j" : n q on· T : (Deil�,, : f,,..f..l.1...,).."} : 7if (Jib1· (l 001"° 1

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it1f: : qou-} ; lf'f• � = �1 c °11 = t11n. .. 00r&.f· =. 11:., i. itA+nl\.:rf!r?°. = 1l!lA == "l•flc;..9'1 : A 1 T : �,-t4'�llt\' : �'l�"t h!f: ' 1.1 . ' ll<t:/CI,:,_- ' h_:,,C(l : 'Inc:: J,"t�: f."1.,.; , � I'ii&. A"l·-l·"t : 00?."dt. •t-'i' ' f 'l"I11 ' w"tm l'tr •1· : h h"'I c:;:'i' , h"t "I I\. 11:;: : "'I. .. th� : ° c : ftm 9 h1 : �t\(D 1?.H, (1:\'\ C ODK � 'iii✓: !(Dc 611> ,n 'h") : : : � '? �J : f'} f: tJ?°: lf'f: 7'',t�IJ: ODft,),t;:::,_•'i: f'l°l,,fl : . f,,,(1,t-('?•8.. : flf1,f!•!D": il/\Ol/�t..,f--7i.: i,' t\:: ,,,,.,� : h'1Y: = _(l91,1� : i',1�...: q��;t· : = ° = (l� 'i'1f,fl1�'(JD•9 11J-OC oom : l\ : : : 0.f1il: ti-h,t:c?14..7c; : �lot;>:f1:_ 'h1�•·1 Wf,'/° �:f1' f..°l'l° � fl'r : f'L"i-0 . C 1\1 r 1,fl : mti?f:P?° = _eant\t1,1::J. A : '11C : �") : flt- 1i:r(Dc : ''1/9°;� : fh� :: A fl " 'f , : :J't\ 1r.r cg 91 : 1:1: ti. OD t\ O• :,..: ,,91:.f = 00 Y ht\ : i,.1 y_�: iiJ.':fl.,.,,,;:OJ·: •fl:E: °1 "tl C : 0 .. e If lD ,.,_7r:µ = o '? 9° :, = ti . �1 = 1"fl�.:} = n 'lv1 ll :r-1 = oo w1. :,.. roi ro it)· n :,.. = f 11. Pf,{ l: OD?a..dh,f�fc; = 1P1m"1·,:f1-:. 'h"}t,DJt\1 = t,h·:: Y'il:,.. : f..�'/D = fnrJ.fll&1A ,,..:r-1: f-L."l•fl: ,.l?..."(11-C'1": flT'J.J?;r-fc : ODlf'i'TOJ•") I '11C : "]"):ho•"): o:,lcfi': 1"1"': flOD� = ill\lf'I = l,ilt-iu-1 = Y:lil = roih'i:�1· = "J.-nc = fA,f,m(l� = ontr�1: 1Ai'PA:: (1J' ::

A� : A� : l'Jf,',:,- : /J:J>?J:.f.. 1 : flT'/.nm•1" : ',;JJ!o?J�". : '1°19° : O,f,',1-- : f1l"111: OD1·f"lfll--: h�tf-- 9° ! fi•.,ftf•: f'lVf"O : �..fl,t-�1:: O.. 'i?o'l°: ft:<1J•OC: onm(lf • "hf11\"lft.1 9° :: ,etJ?°: Jr1ll+,r:1.. ·= hOD..f, : Hm'i : 1,� : fOIJ..lf�T'J : bfl"': o:J>?J�-c; = ff1T: 6.cJ�9-1':fc: :rc;J!t?J1-c"} i hou,f: fltP/'1..Y: i',?°il:i•: l\�: 28 ' foY.V'�:,-01 :' f1,�: P tr-": it'Pt?J-:f-r,: f°IA: ")�Y:: n.�l:Ll?OD(D•: t,1A1?l\�:,..: f°1.nlfrt: (l9l-:Y..1 I 09°�..fl : �T : w•il'P: ,t-114--f. : hir�:1-: ha0,£-: nDlt f(J)c I hon,f:-: (l(}: '19°ilT: f°2.lf�-: o◄'i :' {L!'f•':-f I lf,f;ft. �'i: 'l°t<JJ-0 : (1,f;f, : ht;: honT: ilf:01 : OllT: ll� : fOIJ..lf�:1--1: f A11il'i': lili1C:J> : '1;1C:,J : :rc:F t?JM: f;OD/\h:J--A:: (\<1]>1flC : ODOJ(l�:· fOIJ..lJ;,,r: lD�'l°: h"l9°"1' = ,:.JC: :J"h fl(Dc: fOIJ..LPt..(};fw- : 'l °I n:f : OJ"): b ODrf.•: (lfl : it'l°il:i·•: J,� : 001/..tr�: Oh '1� = IJ:f''i : f�ti4?ll: /J:J'?lr1: >tiltWat..9'-:f-'i : fl:'l°I\ : 'l;Jf.o�1�-: hao,f-: (lq: 1'�: 0111/.lf�.:,, : f A,fi(l'i • f�C:J> : lJJ,C�: i'tilooat.?J:l:c; :· O)!:i�I\ : q(;&b:f : ,,,., fl--::

f10JJ.7 = .e:c�..Y..1--1 = h!l:9° = fl")Oll·ftfi..-,.. = °11\.'l!, +� = 1 °11: = hOIJ�'ltJJ-t;..:,.. = {l)cil'r: h001': nll : h9°ilT'i: f�th-�: il?°?°'I:,-- = flf\,i\.Tl D' = n7icn'i = h°t �°IJ;..t: 11 001': (l"'ltf: 1,� : t\iJJ•OC : au,oo:fl: ·roiz.tr-1- : 'l."111: h&\ftt«9°:: hon!: llf:"I: Jt9°it;J..: h]':: ftP/..tr�--l..: :}i\.&,',:J--:f(Dc:.f,t-ro(l',: f'IA:: h·•'l� f?J1c: },c; : hou,f: nll: "nl.._·: f"2.lf�,1-- : fX-,11-�: il9°9°·'1T : f. t):flD': f7iC -' 1 0 : / ht; 111 10{!'1: : £ 111 : o n flf· T(Dc : ,1--1.;3·-,iot,A ::. ililtLtJ : '/°'}9°: 1',"}l). t : i,,.,,n: Wf:,'J°: Y.")Of:· flf� : f'/.."111: hf!11 : l'lf.o: f"1":rw-: Oh.,<11'�1'-��: 'ln,n.,,.. = foitti�:,. = :,,c;'}7i = r1:c,:e =· (l,Lr,:1: = rof.,9° = fA:rro4? = r7ich'i = Qlf �'l° = :i.." A:,, = rtr� = hf"' = ttil00at.9'1�c; = n �9°" = f°t'1'1 "7in�:r�..•), • °'c•o. Q..,,.. •

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au :.• � O· h>... 1i,�7 : 0D1f1"fi : fl\•'0J "f ": npDD1

h}tlU : (Dc(lrp = h1l•l�!P:i: : ''f�;1.e.,},.,.. : htJ:9° : .ill\fl,l\rlD• :'' "111 : ou1-J11l : 'h1,�'i�TlD• : h�'lf.l',-'J° :s - 555 -

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h. 1tr �: f,111·" : 00 i',h'i: : f:1;J1.9li· :: fl,l,1:-(:: ODtPl;l.: ,,,_r._.. : �-'-�:,,<'Air�� t : (lar '?�: -91::i:"} : /t{IDt.?,9° : f1"}Hirfl : h:,,9u : '1:�(ilD' :;: >tOPit9':P c ('l/\1"}H{l:,:) : f�c,.r..,, : (l..rh"} : lD•"t� : n(IDn_..-f'A : ftlr(l·'i : hfb'f t ol : on+J11'tf 29 = hlf).,)... : '11�'":1"· : . Oili"4't: : f'lt'-6�a1•1' = 1-01.'1· : lD ° : • flf;ft ,::;�/\tr :: ��Y-.9 = �nnro" : fouft.h,J:,)" : 0?1:1: : f,f•'}7(1}•'}; t\. il,�. : f;1'--l\tr I {llf"}9° 1 l)f.,. : h�:f�·') : f��-- ;j, : (lp,:f,. :: po,{11" : 11: '1.e,',ti?� 1 9°19° : �ft : O..IY"} : {){loo11-)--',;J•·:1�m.."} : l\,.4',�>1·.. : .e·,1�·till·:: Ofl;�: 1 : : : �'I;J'lC '''I ;J Fu fAIY't'' : 'lt\6� : (lP''i : ?'(:!}:,• : ;,,--•J : OiPlPI.:,_" tJP,f;: ' "1�-_eh�A = J!;�c� = il.Y.. t.°ll\ :, .. = t,1, :1"•fA'JD == ''11P' ,:.A'' = ,,.,..,flit" = ?I.?

tl,.

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I\ODn&.A : tit:\:Ffl : ,t(lm(l)' : /1.f.,TA'J° :: 'l/ll»-�fDc : : 61iJ, ° : hA& i\.OD&. '1 r :1: :,11t,tf1f: ?.'I° ,..�19 : >f•1](\-o : 1L�--1J.1C: = hY.,,�/,\'J° :: 31 nt\l\. : f ° .. 9 � A , f."l'l" , h.'} Y: ' ., ;1 f.; '. mJ.'; ' f'} "If: = �c}!":i• , 'IC(I• , mJ.';'J" , 111'1.1'} II_ _ . . ,: : 1-��1 : O<;:C� · .f1.rf.. • ticl7�� • h FtJ f,\ • T"fl/\� : IL�;,1� : f;l--1\.A. :: : 1111

n l 1 : : : • ro• f;9 : Y:c:e_:,}- : flU1/1�lD'?° : 1.lt : {It\ tL '>'I� : . 1,J;f, °1 '1° ( 0J 00 t1&.A = ..rA:Fta = ow• = ro f,.9°: r1oi1: : y_--c�•l· 'J = t,J;ro• = ll lt h1 lf� � = . : 't f f,tJ1��.. : f'}"J,�"} : f'l°#1 l : f;.t-t;J, f f·l1C4◄1'i: t).'>//�: ' l"'l,,n I r1�x_ ,: "fl�''r ,>'i: 0�: fnrJ.1A'h = "'lil.:t •w,:l!f = ill\11."'lt• = 1--P.J!, f\lT'l(ltT?w• = �c�· = n,:,.. : 32 (l : tl,,IJ OD1J.1 l:i• : 'lfl t,.V, : t}>:w-; : 11&./,\ : h "}};I."} : h�fl� : "7:t,l-O : h" . = 11�1 f°t�'rA(J·1· = ro�'r = 1�1.,;.. = 1,,Jt(Y,9" = >tJ!.C1 = «J•t = rrr�ro• u-0:1-f}(}t\111HP:f· : {ID1/hA : f°1..h'f,i&.An:,.. : r,..1,rol!on : FC'¼•l' : f;1,.'/°�A :: f(}l\. � w•: i'1 1X:': hP-' O�lD'•: U·fl1•: hi'1.:)... Ii 7LtJ 2 vflC: 01\f,: tiAlf� : (D�'J°: ro•: 1-;Jcq,:1, : <11c.-f-- = ,,'i ,"11'i : 1tmc = •en = .. l'51· tiAlf� n+t,. = 1..t1, = f 0i�t..1 33 1 <t:C�,. = 11,1.. = «1,c..n = r h..°it. = F � r1cq:_,, : hOD P'� : P' C'l 1' ,ero n?,A :: f.l1': �A�' : o?,ar"} : /\. 00 h&.A : �"��:A : ,;(lflu: f 0'l.1'1'1 ;f-- : llt\oPi : h<ll\" 11 tJ1. (Il : : f <! : tt l t:: ;JC fll?...., ll / / h1f..' : f 00 mn-=I!..<' : il9°9°�;l" : 1,'JJt&.. mcll:l· : 011-f: 34 ".. t:f'J;.. : {l{l1f°,:P: f;"'.-} t,A :: '11C: OJ"} : f.U"}"} � l\Ul/f.'l.°l : f &./\1 : },"}�If� : "7"} : h. "I�1 : ,f\ tIT/{l :3, (D � : f <P/. &.t\ 1-- :,..,: 0011. "l (l :-[.. : /1:,,C{l : '}"} J; ,."} : hJ!ODl : 35 11 hu "')·· : '}OD:,-«: (D,�..tJ : n�'JO·: oowl:i-: ODOD'J-11{1•"} : OI/lt;J--w:P: tl lln:,, ::

n:i• ::

ro..

nODCD·f:

1,1 ..eo :,.. : i,'}� a7_ 6.a7'. l/°:: {l 1·1. IJ : ?t..d1-. �: ID-{l1': tL 0ib• : (l AUI/ f'f-9° : 1llt� : f+1)'roc : Tc;:,_, : 0°11,\�· : i,1f...OIJ.flll.,"ilD-4 : ll�tlO : ill\ 4 lt'-'f{!-,'J : ,t-ou,)l}f;: fif�-),"} : �'},;J"l,?11·: oocti,f. : Or{\T : 'll\ ;.t- : "}'?_ p.:} �f,: oomf9° : f.V,cYJ;J--A I !/°h"}f,�9°: -Otf.. ro•"} : 1.1·1, : f<P/.ODf·f'1fi" : ilhtIT/� lf�c;: f1l 11'f,{l: DD1-J1flr"} : il/l""lf;J·f·• : ',(I)• :: flhct:+� : <;:/(LT : «f>Cfl : ,,r1·r 1 0 �w- h1,: nc = 11'1 , f·"} ho. 11;; 1 t.. : = .,l7 = i (De � = = F� "'1 if-' = oaz. oo h :,.. = � m, N�

= rh.

r, r

nil

ico-?11 r;,..,

�

Q"it-- : floncJ-i,f.. : ,',;J,,e.i9'1" : (lf·IA."71." : ;J..ro•tf, : f°1..IP6'fi;.t' : 'ilD• :: 0.lf19°: htLU·: fl&,,}: i\1.e..,,.l•mq:1(ta,,: f7i9'111A'1'i: f1,C� : lD'at•Y..�1-: ll.ft h.."It. = h01/...e. l1 lD' = .��a; •l-- : ;Jc = >-1•oo tt ta.� = flf )· = (Dem,y.-:f = '1 !l.:f-a,. == i1�tilb = ..rvA. = �u·}, = ·a;11c fOILooft.h:.t· h1� = Jt{lOBQ;l_ = f lf'i = l}l•fl = lJi 1-': ''Ohol'' : 'i;J Y-o : l\f;:, : f i'1.,:1-. jj a.tJ : ·flC : f.-f'(l'i, : : (l r,� : �1• : 'Inc == rhwlm-: '1l•O : ·ft1...;l• f-A·f : 7'·7f..tJ : = f<PL.flD{l"l•: 6":Y?J1':." � .h+nti = i\P-'C = ,,r(\ {D• : '?1 : f�:i-.. ' I a.tJ : 11 C : "fl:F : 'i C:, h "'I.If�- : () 9l1-. : +cf7,n 1t� 'i 1-h �iit?J:(: : OJ11'1"" : rlllf.,.f'OJ•(l�'Pt · rro-c; : U·t\ · '1° : r+iltJl/00-fl:,, : ilY:t);,-. : 7i"7

n'c ::

»nc

- 557 -

,,. : � : i "lt\,9'-:f = ,..,... QIJl,n.. :: f'hC'h t'l �' :.t i', �L 0-}1.6.� � � dlc � ilnt1.u = rI" . . .· A....'JO - 0..1-.hlflJ (JO«(l!i ""' � {JQhl�"',? ,,)) C 11f•O .,,,. � 0 C} . ,� � = ,�: , t OD·h • ,r,,t:.. , ll. � ., ; ,u. : ii · . 'I. . 11-, , , • '¼'\67 : rD"l'i"1..1 :- U·,1: � ii c n _ .P. tttJ = : J! = &l<!1D � A C n flJ l lfi n�. 6 1 oo ,,e;n = 1 · l . y , : 1. · · = Ofllr,.-i: , ht..:t. ° : roo � ·:n-: 01 : q • (,tl,l : flDD �� W·9 fllG l i'tf:\ . )-l' 4!1\ � flOD {(l: { �:r:, 11{1,f. : 1 tl ,hl '1 · : U ,, <P : O"'/; � :: 0:\1\ c t\ t t1 } l : �:n. · t.s�rr :t :l"h J h �UlJ .. ll : :J�:1 it{lC -. 1--'i : t ',,ti 00 • ?Jl · : 1 l\, : 11 °? °1 " . ",r, � ,, f • . . � o .. , .. ,1)/ .. ., 1 lt1 f o· q .l ; ,,.., �" · n .,J,, �ll'°t-'C-"""' : ...,.. �.,,1� :: '! 91:,:c; : 'll\"l·)tlfl--1, : �•11'1' = '' /,h) · " llh Le. SI " ifi If p:(: : f,fi(l',.. : (l�p.:,:1 : 4"•�f.. lD" : f l}.�W"1 ' Clfnry/ lli ?: t1.1'uc;.,<t,n�: filllJn:,...'1�1, 6 "'1 r� , .., , (l 1c hA �nc = f .tt. , , 1 � : m/'J� :: w•lt);to• = nmt:.,.,l· l\J'. /'J�F-:f. , n'ii"'l"l "'�:i: = t.:i• , .,..,..v, e..ro• = ht\�nc , 11 HJJ , n:'\It , �1,;. , t 1r, u l\ = 9 ir'i : fL �l} : fCPJ.:.l�A : hf,Uoilt\ :: CD" 1W"1r ,, l,-.�9 : nro• : ++11/\o� � � .,..111!<f!ID·9" ' naoA(I• ' l\.J', : tD·ft);OJ<'} ' '11\hO� : fiOJ- : l\J!, ' 9"'} ' �C9"jf (tf:: 1'1��f1C : h.l\OJ•q,9° : -O�A :: 0

I'-",

.,,

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'i;

>.1� - : 7i"'l'?ib : o.mf4? : 7,1 >tl11 n.tr· :: �:JY-o¥':f : n.hll?-: ..e..11.P,n,: -= 1t1tllD' = tt°1J'lD-�'PrlD4 osi1.1 = l\'1°1 = 1\1 f.110�-- = UO"Jfl�'i : fllflfe&, = o� : ttoobt.A : hC'l''11 : Uon1f� : f+l\00.e.. = �1C = �l&' :: 7iUIJ��W<: tU'}'}: 'l'fck: fi..ODA(t• : n�cn· : OD.,e.1}?, : h+.,4>mll : (IOJ•·: f+t\hl\:f!roc : n.11:: f..11 �-'1 : oh,VJ;f:(J)c = {D«(l'l' 1 1,1-101· = -�nc h.-Oli�ro· = o£D< = 111Y: = l},e;�,}, = hC'P .,, r ll f q·} : }\1�ff..C'? : "11lG'T'0f : flP/. lS:'f..lD· : r-,oo{lf\ 'PA :: 1,1\,e : h1f..+1tt : 'i : : : : 11'1>;. h!'i? lf 'Pll:i•,; f;cf,m�A �� KOJ•: i'l1�1f: : 1..lt'l° : 01-'C : '"n1 . -- : } : : : oY.. "r /J�w-1- : f,h<i!Aft;l .. A :! /Jf:Ci'� : Ofi OJ•�T 'h'} f-. l f" hP'� · :

OA9°f: : f"'lL. Pt-'lTCD" : fh."ft-- : P'C'¼..Y..i.. : 'lll/JP.9'1:"}c; : fl/\'11tf(l�'}: 7'1�°l'i! = ,ti-Ofto = fro"lco-1 = fh.."f�.. = ,'h1l· = OtJDct\- = 1"fi1·1•9° �-;-c = '?1 = 1'� tLU1 fh. VJ� = reODtr Fca,�- = fntfti't�:r = 7i 01/°l /\,?11.. = f ouhc{.J = +'iTlir : f�l(lllr"} : /JP.?1:Y· : f,<IDG'J°lrll-- 1 'l/l/J�lD•1 : 'l''r : ttJ.':c�ar : {l{\Of/. fID-4! : ili\U1t� = Jtmt;+{D« : f(Dc:J>t\- : "7/l.T : �01' :f },1J;..U·9°: f..rlJ'l°: ff 36 -�l1-:i• : ll.9°9°�..Y l- : Otn°l = ''f� A °lA'' 1 lD'll1T : lll\l\:t�lD" : '1/\'11ttP:i: : 0?.I\ : �/�:,- : 'lf.w• = ni\:flD'1 : 'tl..}f..�'i : {LODIPC� : i'1�l--tt--9° ::

Om:Pl\l\w« = f h.Pf� = f:1;J"lsP:f- : .OflJ9° : f�•rol}(l Cr<; : h1ltr : f1<1Jf: 1 r T'?'l�:f = :JC = '11 )".',T : f fbl\rl&' : lll\If).. : 01 '?� : ,1\'? : lD'll'I' : flft�- : f'l�f: = h�flo:f = ro•rt'l' = 1'',Cf\c : f,OAm·� : ''hf;rPt�ll;f!lD ·?°'' :: �1c = 11 1 h.°1�1 : f°t.0011.hi: : f..111:1� : 1,1 Jt'.1· : 0"7ilt.. Om°l : :J�lD"-4'lD·: ft.1Y �'lTw« : f°t:Ftt- : ,Ott« : fA'J°Y-• : P', : P'C(},f:f· : A.t.,n�, = 1··ll.'PA :t

"1' :

- 558 -

(TlJ f.'J°f.°tf

011cti,f:- = m-il� = n,11"l'i = nA9°1: = 00Yl1A = o{l.e, = ftr)- = Aia;-..y.1-.. = 0 : lD•m.,f-1·· : /L1A� : 1--(\�':\ :: 1-iijJ-LU : Ai�,r-1': : 9°C9°C flLIJ ;f(J)''} : ao'i� 0l"fl : hff1'1'i : 9°111 fl : a; ;J fo?J;;-- : (lcf! : ftra; : T . ilt,.'l : 4r ;/!lr:, UC 9° f : &.m ,t :,:c;: t,(J)'+T : il/\/bil.:f:(Dc'i = fll\1:�"1'i:f.9° = hll�' : ftr�ir),1 : fih°I : Y:"};,1, -- ft = 0"7/l;J ... :fro• : �w- :: : : '?'PA :ti1lc 1 .. h P't• 1,a;tLtJ ftf, : : : : °f ?' t . '''lo� il/\tr� • r10J1: = � P.. :f:'P1 ilf\OtJ 17.G� = n14'0 l\:f = J . � = � tt ftn .. ° CD''f' : flfl/..&\. : ilOIJ.,r : hft1i1'J° : 11,;1·19 : flllJ'J° : 1·1-·li : �m- :: ! : ih'l1•,; "r�""'l:, a,.: 1,f-ifl:f�ro-: (t.'tf.' : l,�JL �,:,YusP:t:: - U1 : ih11-- : �It-• fl� "1' : ,tm4'tJDc fl:f w-,; : flP'� = I\� = l\.. flJJc!>..:,; w• : f ui"f tr = fzoo fl� A

=''

- 559 -

-•:-----

· COI\'IPLIANCE WITI-I LEG-AL OBLIGi�,.fIONS rfH D D IS ABAB/t MERCATO E A N I S E S S TE l\ l S U ' BY B

bJ1 Jo/111. Ross a11cl Ze1rtaria11-i Berhe-;,� ,

The Law j 111poses certain obligatio11s on all perso11s wJ10, being traders as dege enga e, in Cod cial 1n1er co1nn1erc e. Am011g th Co11 e th. of 5 cle _A.rti · by fined important of tlie�e are the duties to :egi:t.e1· vvitl1 tl1� �1linistry of' <;oinmer�e� �i� dustry arld Tot1r1sm and to keep accou1.1.ts of alJ bt1s111ess transact1011s. Als the eve11t of. fail11re ?[ a b11si1.1e�s there may .be a �11t� to file a statenle�t �� bankruptcjr w1tl1 �he High �011r_t 1.f all co1111nerc1a.l o?l1gat1011.s cannot be met. In 1 g_11est1011s were asked to deter rn· Mercato tl1e 1n practices business our survey of ine to wl1at extent tl1ese duties a.re beir1g ft11fillecl by traders in tl1e lv1ercato .

a. Bus.iness Registration Requirenients. The Commercial Register. Prior to tl1e enact1ne11t of the Co1.nmercia l Code registratio11 of busi11esses \\1as reqtiired t111d.er tl1e Bt1sir1ess E11terprises Registration Decree . 2 The Code i11cl11des 1Jrovisio11r. t'o1· a Corr1n1ercia] Register3 b11t allovvs the . p.rior law to remain in effect u11til an order is }JUblis11ed i11 tl1e Negarit Gazeta revokj11g it.4 Tllis order has 11ot ·bee11 published yet, but tl1e Decree has been re placed by tl1e Busi.11ess E11terprises Registratio11 Proclan1ation of 1961.5 u·n der the Commercial Code only tl1ose b11si11essu1en classed as ''traclers'' a11d organizations cla�sed as ''co111111ercial'' \VOllld be req11ired to register, b11t every co111pany and every person e11gaged. i;1 bt1si11ess for profit is req1.1ired to register u11der tl1e Pro• clamation. Vi/bile f2�il11re to register 11nder the Con1mercial Code vvill only prevent *

J.D., 1971, I-.J'orthwe ster11 University and LL.B., 1972, I-Iailes Sellassie I University, respectively; members of the North,vester11 University-l-Iai1e Sel'lassie I University Researcl1 Project, 1971. 1. Tbis St1rvey was undertaken prin1arily t o uncover i11forn1atio11 concerning the extent to whi�h the relative1y sophisticated bt1si11es s law concepts imported into Etl1iopia by t11e Con1n�ercial Code an? \'_arious otl1er codes, procl�1�1atioos, a11d �cgulat!ons l1ave bee11 abs orbed by t he a,e� rage Ethiopian 1nerchant ancl at1tl1or1t1es cl1argeti w1tl1 e11iorcement. T11e St1rvey \V?.s condu ct. by anal)rzing a selection of case flles from varioL1s coL1rts vvl1icl1 it \.Vas tl1ought \.vould c?nt� lll represer1tat i,,e samples of all li:incls of con1111ercial cases r1ow bei 1 1g litigated and by intervte\VI� a _selection of. mercha11ts an.d tra_ders i� the M0rcato, Addis Ab,tba's pr�n cipa! ,. mar�e\�re!� . u \'Vitl1 the time and resources available it \Va s C<:llculated tl1 at about 150 1nterVJt:\VS . {;o 01,· � ,o out conducted. Therefore, for most types of b l1 sincs"' intervie,vs \Vere s0L1gl1t in one ret· son1 e establis bn1cnts and while larger pcrcc11 ,. tagcs \Vere soug"'l;t o-f J. ,nporters ' export ers . . r • · · 1 u Id be re.p 1:: blISLn�s�es Vi/,.h,ICt11• , , tl1ougl1 sm.al] 1n 11t1:1,1ber,. appeared so sigr1ifict1nt tl1 t tl1e sl � � '"'•ere disre· � sented In the Sllr\ey. Altogetl1cr, l 66 1nterv1e\vs were co11cl t1cted bt1t e1g bt of th ese ·1rt ers_ garded because_ of their i�co1npleteness. All of tl1e int�rvie o\vn "''ere ,vith tl1e \.VS ��sf;ial ovvners of bu_s1ness establ1sbn1e11ts exceJ)t i □. tl1e for braocl1 ot1tlets i� r sulls few case of a e th sbare_ comp�ru�s wher: tlJe.n1anagers were i11tervie of rt rep o t co1 npl e� wed. A 111ore . ess in ,i.\ddis of tl11s survey ts conta1ne. d Io the a. t1thors ' of DoLng Btism pubh.SI1ed in JJap er ,, As Leg pec a l ts Ababa: A .;rofile of Merc�to Businessmen 11d Ne\.V La\VS" of Ilc . a cep the tio ir n Jan�ary 197- as Occasio al P per No. 1 of tl1 e Jo1,rr1al of Ethiopia,, La�v. _ � � 0· 4. 0 Bu siness Enterprises Registration Decree, 195 r 17, 7, Decree N·o. 27, Neg. Gaz., yea 3. Comm. C., Arts. 86-123. 4. Id., Art. 1174. . 3 no, 21, . r Business Enterprises Registration Proclainatiou, yea , Ga z. 196l, Proc. No. 184, Neg,

,,-·

560 ...

•

LEGAL OBLIGATIONS . WITH NCE PLIA COM

IN TI-IE MERCATO

011t him to self be a ''t1· i11g ade r'' to third parties in addition to ]1ol d in fro 0ne 6 ��:; p11n is n t crim 11n i11al der �1Ill the . � _ . Pen al to Cod e, the Proclamation ject . 6 11b d or i 111 co111 .. 1,,1c pa11 1 11a 1 y ente rpr ser sl1all be e11titled to maintain ''no that des . p ro,vlaction in Ethiopia. upo11 a11y co11tr,ict .n1ade by it i11 Etl1i opia 11nless before the . an) ' e t th co1npa · 11y or 111 contrac 1v1 d" "d l 11a . enterpriser sh,tJl I1ave registered s11cl1 of u · akin !° t he Mi i1 istry of Com111erce a11cl Incl11stry as provided in t]1is Proclamatioii."7 In i 111ay li e.1 1 se ality . 11011-reg a n11111icip st�recl. bt1siness a11d any company or ? 110 on, :diti _1 _ indi\�dtial who car�·1ed 0111 b1;1s111es� \\ 1t�1011t . reg1st�r1ng or engages in a business 111s b) reg1strat1011 1s p11u1sl1able i11 accordance \Yith the a11thor1zecl 1ot 1 is that 8 T 11 Code of 195 ." Penal the of � �, althougl1 tl1e. provisions _of the . 7, provisions_ Proclam at10.o are n1ore s1111ple beca11se tl1ey el1111111ate the necessity for mak111g the subtle legal disti11ctions bet\vee11 ''traclers'' and ''11011-traders'' a11d req11ire every busine ss e11terprise to be registered, tl1e practical effects of failure to register may be rot1cl1 more harsl1 than those of the Commercial Code. Under tl1e Code the only civil legc.l effects of non-regist1·ation of an i11dividual trader seem to be that the t rade nan1e and distinguislung marks of his bttsiness are not protected,9 he is volltntarily . e11ter a sche1ue of arra11gement instead of being declared not able to 10 and his accot1nt books are 11ot adn1issible as evidence in l1is favor ,11 bankrupt, None of tl1ese sanctions are likely to ever be felt by tl1e average small business man. If the provisions of the Proclau1ation were literally applied by tbe courts, ho\vever, they wot1ld prol1ibit the enforcement of any contract made by any 11nregis ter ed b11sinessmau. 0

Registration of Businesses Interviewed in the Mercato. The major purpose of Commercial Registers is publicity of the legal status a11d financial condition of persons and organizatio11s registered. 12 Questio11s were asked, therefore, to find out if the people intervie\ved bad registered and if they ever t1sed the Commercial Register to obtain infor1nation abol1t other busi11esses.

Forty-seven per cent of the people intervie\ved said that they were not registered with the Ministry of Commerce and Inclustry, but two of those not registered said that they looked at files of other b11sinesses. to get in.formation. Forty per cent were registered but 011ly fo11r of these said tl1ey looked at other files to get infor mation. Thirteen per cent did not a11s,ver the questions pertaining to registration. Among the retail businesses about 40 per cent of the clothing and textiles shops, �O per ce11t of the hardware a11d utensil dealers, twenty per cent of those dealing In _ food products, and onJy one of the thirteen miscellaneous goods shops were registered. Abot1t 65 per ce11t of the bars, restaurants, and hotels were registered and 4o per cent of tl1e ha11dicrafts1nen a11d people providing perso11al services. 13 Among 6· 7· 8· 9· IO.

Pen. C., Art. 428. Business Enterprises Registration Proclamation, 1961, cited above at note 5, Art. 5. Pen. C., Art. 746. See Comm. C., Arts. 118, 127-1 41. Id., Art. 1120. 11. iird·, Art. 71. Ii. !d• Art. de et t droi de eral Gen 88; � A. Jauffret, A1a1111el de droit con1mercial (Paris, Librairie JUnsprudence, 1957), p. 60. 13 · These 11 ot are they . . because · d ay not be re.quired to register under t.l1e Co1nn1erciaI c O e. � Business the nder "tract · d ommercial bt1siness organizations'' but they are so require LI· ''c or er� E nterp rises Regis tration Proclamation, 1961, citecl above at note 5·

561

L. W '"vO LA II - No. 2 N VI IA OP I-Il ET OF L NA UR JO ·

c per s 11t e 0 s 7 s 1e of e i1 s u tl1e b · le sa le o texti ll w · le and lo d n a . icr t· o 11 er imp t he . ng th c re ancl a d w i ap1Jl1a11ce r 1 1a h e . t f o ale e d. t 11 ce rs er p said tliey merel1a1.1ts and 65 e Wer red.

registe

t i fotln� a a l tion only _ 37· per ceii orgc\1uza �tisiiiess � � of � . � � . By type t of . _ . 1 e ar w o e t1 \V1 tl1e 1ps 1 l: :s pe rn p � tho nt a11d t 22_ t rs r1se � _ � _ ritte � individt1al en.leff . n a , . gi e 4 Of tl1e par tne1sh11;,s \Vlt.h vvr1tte11 agreen1e11 ts 1 . d stere , �eoi 63 \::; 1 o me11ts wr.-re r . p ce e . .· • . , . nt h e L f . 1 o L e1g1. 11ve �. _,, ., 11 pr as we 1vate as 1 I n ver, e hovi1 11ted com were reoistered . pai u�s, 11y. re con11Ja "I' ,vo of the six wl1 t1ie 00; Jiinited partnersl1ip, ai1d 011e sha tllat they tisec.1 _1.11e Comn1erci _al �egis�er to i:1v e�t�,gate otl1e1� b_L1sinesses \Vere ;ri�� f were 1.nd LVld 11a 1 enterprises. lin1ited co111paPJes and the other 0111 Tl1ere are several reaso11s wl1icl1 n1ay accou11t for �he lac.1( of e11t11usia sm fo Altl1ot1gl1 tl1e Procla1n.a.t1011 says tl1at the O\vner rf . ·use of the Co.mmercial Register . o . a busi_11ess vv.h.i.c]1 . is 11ot �eg1stered ca1�11_�t l_)ring an _ ac:_1011 ?n. an.>' co11tract in any court 1n the �n1p1re_ and _that no . r,1u111c1pal1ty can gra�L any 11ce11se to do busin ess 1s registered, 111 practice t �ese sa1 �ct1011s appear to be c 0111 Jetely u.nless t11e bus111ess p _ . tl1e permanent bus111�sses I? the �1�rcato are lice11sed by f al� 1caUy act ig11ore�. P � � _ _ . the Mun1c11Jal1ty ar1d 1t 1n fact owns 111a11y of t11e ITI.aJor b111ld111gs. The Commercial Register \"¥as me11tio11ed 0111y 011ce i11 all of tl1.e cases exami11ed in the Survey and that was in con11ection witl1 ,vhetl1er or n ot a party could legitimately claim to be president o,.f a s11.are co1npat1y beca11se his 11a1ne \Vas not entered as such in the Register. If the registratio11 la\v had been enforced 111any of the cases examined would probably have been dis1nissed beca11se the plai11tiffs v1ere 11ot registered. :t\1any of tl1.ose v.1ho we.re registered said tl1at tl1ey received practically no benefit from having done so, but s01ne said. that it is easier to e11gage i11 of reigt1 trade and to get loans and guara11tees from t11e banks. A fe\v ba11l<:ers i11ter,1ievved sa.id tl1at they check to see if a borrower is registered, b11t most lJankers accept a valid license as sufficie11.t evidence that he l1as a legiti111ate bt1si11ess. i\mong from the J\1 unicipality · those merc·ba11ts wl10 \Vere aware tl1at the Con1n1ercial Register exists and that they might have some obligatio11 to register but had not, there see1ned to be a feeling that registration would inst1re a11 increase i11 their taxes si11ce they wot1ld have to state the amount of capital i11vested jn tb.eir bt1si11esses and to pay fees for registra tion itself. Tl1e fear regarding taxes may not be entirely 11nfo1111ded. As vt1ill be discussed in !he following section, taxes, although s11pposedly based on i11con� e or turnover are 1.n n1any cases acti1ally based 011 the an1011nt of capita] in the business. In effect, t·herefore, there are t\vo registration systerns, that of the Mir1ist r) : of Commerce, �r1dt1stry, and Touris111 and the otl1 er of the Mt111icipality, a11�. su_ice a�ttial penalties s�em to be appliecl by the latter for non-reg istratio11 an� registeri�g witl1 tl1e forrner 1� often feared to ca11se a11 i 11crease in taxes, 111a�1y . bt_ 1 s11�ess111e11 �� the M ercato consider the proct1re1nent of a license ti·on1 the lVIt1r11c1paILty all t 1 _ fo�maJrty required for legiti111ately doing bt1s iness. 1

b. Obligations to Keep Accounts and 1:'heir ·use for Assessn1e11t of Taxes. · the R equrrements of the Commercial Code lg rdi n1ade rega � • ns . Pr ov ar e isi on s kinds of accounts to b e Icept b Y all wzat10 · a org ss traders and co111111ercial b11sine 14.

J For a discussion of the legal t t us of ' . writ� bout . . t . , vvJ non-registered partnerslups and tl1ose _ agreement see P. McCarthy ' ,,sn!"' 1.aw,' , · ·an thiopi E Facto• and CLtstomary Partenrsl1ips in , L., vol. 5 (1968); P i 105. Et,1. - 562 -

------COMP LIANCE WlTI-I LEGAL OBLIGATIONS IN THE MERCATO 15 Ge11erally a1 y p rson� 6 or business Code. org 11izatio� carryii1g 011 � ercial � � omm C 1·n the as are 11red books 1eq1 accordance with bus111ess practice s11ch 1n u keep st m d ... tra e . porta11.ce of the trade carried o d th t e naLt1re an regar d . 1m av111g · h s, ation regiil d an 1 Petty traders' n1ay be exempted fron1 keeping accout1ts u11der special reguJa 1 n � - s 1s btit such reg1tlatio11s 11ave not yet bee11 issued a11d no definition of petty :;��e; is foun� in �he Co1un1ercia� Cocle or �lsew?-ere. Presumably th.en even the ts n n1e. tl1e to reqrure be111g disct1Fsed. sttbJect 1s trader t a]les sm As a minimu1n the Code reqt1ires tl1,1 t eve1·y trader and every bt1siness organie11trics daily \VJ1ere 11111st be made of l1is or its dealings re urnal j a keep ? n zatio gardless of their natt1re. The b�ok-keepe1· 111ay, hovvever, at least 011ce a month bt1t 1nt1st preserve all doc111nents necessary for balanc e the proceecls of st1ch deall11gs 9 1 checking tl1ese daily tra11sactions. Every tracler a11d business organization must a]so prepare an i11ventory and bala11ce sheet, both when tl1ey begi11 to carry on trade and at tl1 e end of each fina11cial year whe11 they n1t1st also prepare a pro.fit and .20 A11)1one wl10 fails or 11eglects to keep books and accou11ts regularly account loss and in good order and to keep his corresponde11ce, in�1oices, a11d other bt1siness papers for the prescribed ti111e as req11ired by law, regulat.io11, or articles of associa tion is pt 1nisbable u11der the Pe11al Code witl1 fine or arrest not exceeding 011e n1onth.21 Accounting Requirements of the Incon1e Tax Proclan1ation and Regulations. In addition to the requiren1e11ts of the Co1nmercial Code, people in bt1si11ess have ., obligations to keep accounts u11der the I11co111e 1 ax Proclaination22 a11cl Reg11latio11s. 2 3 These lav'lS exempt small businesses fro1i1 keepi11g accot1nts. Tl1e J\Ai11ister of Finance may make regulatio11s requiri11g taxpayers to keep ce1·tain books of accoi1nt in certain forms24 but l1e may prescribe 1·eg11lations for certain taxpayers v;,ho are not required to keep .records and books of acco1111ts if tl1eir taxable i11co1ne as estimated by the Tax Autl1ority does 11ot 11ormally exceecl E. $6,000. 25 The Income Tax Regl11ations do provicle fo1· a category of taxpayers wl10 do not l1ave to keep accounts if the tax at1tl101·ity esti111ates tl1eir income to be belo\v E. $ 6,000.26 Fifteen classes are provided vvithi11 the category basecl on tl1e amo11nt of inco1ne which is estin1ated, and tl1e an1ot111t of tax to be paid is prescribecl for each category. If no recorcls and books of account are mai11tai11ed by a taxpayer, if for any reason the records a11d books of account are tinacceptable to tp..e Income Tax �uthority, or if a ta;(paye1· fails to declare his or its incon1e within tl1e prescribed trme, the Income Tax At1thority 1nay assess tl1e tax, by estimation.27

15· 16· 17· 18· 19. 20· 21. 22 ·

�!:

25. 26. 27.

Comm. C., Arts. 63-85. French version reads, "toltte personne p]1ysique ayant Ia qualite de comn1er9ant.'' Co min. C., Art. 63. Id., Art. 64; see also tl1e clisct1ssion of the Commercial Law Codification Sl1b-Con1rnission on Oct.. 20, 1954, Proces-verbaitx clu soi1s-commissio11 des lois co111111erciales (1954, t1npt1blis]1ed, Archiv es, Faculty of Law, l-faile Sellassie I University), p. 58. Comm. C., Art. 66. Id., Art. 67. Pen. C.' Art . 0o1-1 • incom e Tax Proclamation, J 961, Proc. No. 173, Neg. Gaz., year 20, no. 13. . e a o. e 22, gulations, year Gaz., Neg. R x n l t. Leg. 258, 1962, No. No :: 1 : �a x Proc]an1atiot1, 1961 ' cited above a t note 22, f.rt. 42 . e · Id· , A.r.t. 43 . IL1Comf' · . -: Tax · Regu Jat100s, · eg. 30 · 1962, citecl above at note 23, R 1nco1n e Tax . . �, proe Ia111at1on, 1961, cited above at note 22, A r t• 40 ·

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JOURNAL OF ETHIOPI1\N LAW -- 'IOL. VIII - No.

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1iewcd i r, esse In!e Busi tl1e g Amo the Mercato. I ig Practices � untir � Acco � � · en 111r 11g req nt1 oL1 1ts acc 1e1 the orde n . of w l1o of the r a ide . nie m o Co s. n . ai t b, o m• . to erc C 1,l , l 0 d 11 c 1 o 1g 1 e1_ e b a11 . a�e d . t de wha n atio clam Pro ct effe Tax rn ine Inco they �:', and . . a _ d V/c;te have v1eVi� asl<ed inter e a peopl series the ices, pract of ess busin ties q tion� a � on what kitld of accot111t book s they keep, 1f ar1y, a11d to what exteii t tlley a bout e � pay. us tl1ey l1e ta ;e of i 11t r 1 la�te amo T x the i 1 of ti ques o seern for deterniii1atio11 Partt. le of peop n1ber 1 111 \¥ho tl1e cited of se beca11 t11e 1 a 1t r bitrary cularly iri1porta r aced e by pro st . eate trad g f � 1 _ rs e �I in tlie Mer!�� of tax assessment as t_l1e_ : 1nterv1ews al] b11t e1gl1t people respo11ded to tlies e q· ues ' t Presei1t. Out of tl1e 158 · '· t 100s 1 b �s oo 110 eep · a 1. k 1e� tl d a11 II h t at their taxe s Fifty-six of . the111 sa1�. tl 1�t· a, ar� . ald s _ t11 ver, l1ov,,e t F1ye, they . l{ept n� books at assesse� e11t1 rely by . est1mat1011 � all , explain to failed clearly Tl1ey ,vhy either. ,not. Fifty-o ne otl· but paid 110 tax sai� tl1at they J.ceeJ? s�1ne _ki11� of accotint ·books ,bt1t tl1at ta xes are still asses::� � c�ses 111ost thes� In t1011. bool(s are 011ly note-books es�.1111a 01 basis. entirely 011 the or ''exercise books'' 111 \"vh1ch they record credit sales ancl purcl1ases and keep some ki11d of basic in,,e11tory bttt are 11ot complete e11011gl1 to be 11secl for an ac:curate evaluatio11 of their profits a11d losses.

S01ne appeared to keep adequate acco1111t ·bool(s buL for vario11s reaso11s they are uot t1sed for taxes. 011e mercl1ant l1ad had a co11rse i11 acco1111ting and Jcept all the appro1)riate books, but saicl tl1at tl1e tax assessors \Vill 11ot look at tl1em but 011ly esti1nate on the basis of in,1oices and. their g1iess at the n11n1ber of sales per )-'ear. A11otl1er also said l1e hacl been keepi11g acco1111ts for a year b11t that the revent1e service v.ri]J 11ot accept then1. He l1ad 011ce go11e to co11rt to have the an1ount of h_is tax red11ced. Still another said tl1at lie keeps all tl1e journals and ledgers required a11cl he l1ad copies of th.e Con1n1ercial Code in both Engljsh and Anlharic ,vhic11 lie showed t11e interviewer, but l1e said his books are not tlsed for tax assess111ent because they are not ci.11dited. Eleve11 said they keep son1e lci11d of accounts or at least receipts and invoices \vl1icl1 are co11sidered by t11e tax assessors b11t that tl1e assessors supple1ue11t them with tl1eir O\v11 estimatio11. OnJy one-sixth of tb.ose a11swering the qt1estions said that tl1ey keep journals and ledgers v1l1ich are ltSed. for assessme11t of their taxes \Vitl1011t esti111ation on the part of the assessors. Three others said tl1ey keep jour11als arid ledgers also bu� that their taxes l1ad 11ot been assessed yet beca11se tl1ey l1�td 011ly recently begt111 business. .x assessment ,bY Accounts vvere ta c JJ not for ke1)t ot 1sed or those t e 11 e we t l r · · . c tl1e rc;,rai l any of the n11scellaneo11s goods dealers .111terv 01 1e\vecl, by 90 1Jer cent and ses busine s hardware s at1d 11tensil ser\iicc dealers, 85 percent of tl1e ,JJerso11al . . handic r aftsmer1,-?8 80 per cent of the food prod1tce clealers, 75 perce11t of the bars, hotels, and resta11rants, and 67 per ce11t o f tl1e retail clotl1ing and tex.til! : . n . l mercliants ere o i Accoun ts wl1icl1 were tl1e basis ot· tax assess1ne11t or ,vere co11s d d a lt, · · I olesa e l � Wt'th est1m l at i \\ 1o11 were kept however by 75 per cent of tl1e ir11p anc ers . ort . . , ' . deaIers 111 hardware, 11�achin.ery a11d 11te11sils, and by 70 per ce11t ot� tb e. JDlporters and \Vholesale dealers 10 clotlting a11d textiles. · · the ,.. · of . t ro F m · th·e v1_ewpo1nt of bus111ess organ1zational str11ct�1re, 7) � r ce . ... �reen1ents �en at, individual ent_erprisers a11d 80 per cent o,f the pa \V1tl1out writt 1· t ne rsb ips of t e c n did not keep accounts \vhich were used per 65 wh ile for tax assessn1e11t, 28.

of use ca be e, Most of tl1ese are not required to keep accounts Cod the Co1111nercial under their ''non-trader'' status.

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COMPLIANCE WITH LEGAL OBLIGATIONS

IN THE MERCATO

the private limited companies, and 70 per ce11t of the partnerships with written agreements did. The�efore, al�l1ougl1 n1ost o·f the busine�ses wl1ich do not use any or adequate accounting �ract1ces are the . small�r .retail s.hops which are run by individual o,vners . or an 11�for111al pa�tnersl11p, a s1g111.ficant nti1nber of larger import aiid wholesale bt1s1nesses w.1tl1 n1ore aclva11ced forms of bt1siness organizatio11 seem to be lacking i11 this respect · .,1.Iso. · The problem of i11acleqt1aty accot111ti11g n1etl1ocls is not one wluch can be solved easily or quickly becat1se a st1·ict e11forcen1ent of tl1e Con11nercjal Code provisions would simply drive out of b11si11ess 1na11y people ,vl10 lack the eclucation and ability to keep accot111ts a11d ,,vhose bt1s.i11esses are 11ot large enougl1 to jt1stify hiring en1p loyees to do it for tl1em. There is some effort bei11g made by the tax authority to encourage traders to keep proper accot111ts since 011e person interviev1ed said that he had 11ot kept acco1u1ts in the past, bt1t wot1ld i11 the ftrt11re because last year he had to pay a t,,,enty per ce11t pe11alty .for not ha,1ing tl1em. J-Io,vever, .a11other trader 11oted that altho11gh 11e had to pay E. $ 150 a year as a penalty for not keeping accou11ts, he wot1ld I1ave to pay an employee more than E. $ 150 a 1nontl1 to keep accou11ts for hi1n. Therefore he 11aturally preferrecl the former. The lack of proper· accou11ts i s a serious tl1reat to the stability of 1na11)' bt1sinesses 11ot only because it is needed to establish profitable prices a1.1cl make wise i11vest1nent decisions but because of tl;ie arbitrari_ness and ineqt1ity \\1ith ,vluch taxes may be assessed. There is an ob,;ious ten1ptation for tax assessors to dema11d and accept bribes when the tax assessed is basecl entirely 011 their estimatio11 of how 1n11ch the bu s.iness appears to be ear1u1.1g and the taxpayer l1as no doc11mentary evidence witl1 whic ·h to challenge tl1e estimation. Practica.lly ,Lll of the bt1si11essme11 ,vho complained about tax problems said that most people i11 tl1e Mercato who did not vva11t to pay exorbitant taxes br.ibed tl1e tax assessros a11d several even admitted tl1at they bribed them themselves. ft..11 effort needs to be made, therefore, to enco11rage bl1siness owners to learn how to keep the accot111_ts required by la\v, bt1t it seems tl1at an atten1µt sudden1)' to enforce the la,vs ,vot1ld probably have t111desirable rest1lts.

c. Bankruptcy. Code Provisions. U11der tl1e codes, when a non-trader cloes not have enough · pon proper assets to meet all of his fi11a11cial obligations his creditors may se�ze, u execution of a court judgme11t, what property he l1as other tha11 that deen1ed esse11tial to his and his family's stirvival. 29 Those who come first may take what they find bt1t the debts o\ved to those who find nothing are 11ot exti11gl1ished and may be reasserted at a11y time. That js to say, a ''11011-trader'' debtor apparently may not be legally excused from l1is debts u11der any codified procedure - he can not be declared '' ba11kr11pt' '. 30 Tl1e debtor may not be impriso11ed for refusal to obey a court jt1dgment for payn1e11t of money i'f he_ is ltnable to do so: 31 On tl1e other hand, a trader or commercial busi11ess organization may be p11t into ba11k n1ptcy by a st1it initiated by his creditors or !1imself.

29 • Civ. Pro. C ., Arts. 404-45 5. · · tl1e · by 30 · .ld· , Art·. 392(2 ) ed ss cu ss di as ,;v s e1· ad tr nno to ons v1s1 pro ; extension of· ba.nkruptcy sub-commission but rejected at tl1e instance of tI1e Draftsman. Proces Verbaltx, cited aiJove at note 18, p. 78. 31 · Civ. Pro. C., Art. 389; P-.ev. Con-st., ATt. 58.

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JOURNAL 01:;- ETHIOPIAN LAW - V(,f..,. VITI - No. 2

11 tio Y: ac ptc cJr \.Vl1en it is beg-ti :u nk ba � es iat i11t o wh of l�e(Tardless t to ls h et fai e uc r�1c ra wl a ' fl�e y1n !)a 11 t10 iza 11 at1 org ts r � ess sin bu ls mt t or conl�ercial a ce _ noti tcy 1 L1p 1!cr 11rt ba co tl1e i1 l11d of 1nc 1g rar ist reg e th th tb.e wi ct e · firi:' to this efl an 1ts ?f e l1�t con a l l a11c rcia , rne t1nt acc � d s cre los � and �ts fit pro : its � . sheet, an� bts.;2 _ _ 1cl1 1n \Vl1 111 beg 11 cl1c the gs d1n debtor either w cee pro y tptc krl ban lex Coinp or o �s 1t me1 tial of pay par I1is for s itor cred ts deb b.is arld r e n a n s �t an agreer11ent ,11ith vound tlp at1cl ctll of the rerD,ti11i11g assets � in � v is s i11es btis tl1.e or are bus d 18tri b Uted ,.., s ' · io�s · to tlien1. If the debtor's assets clo not exceec1 E,. ,,$ I , 000 or ca1111ot a111ount to more ure is ci.vaila ble j 11 Whicl than or1e te11th o·f tl1e liabilities, a s111n111a ry p roced 33 �· than entering in ti fa°: 1.ated. or Rathe elin1i1 11ed shorte of the norinal steps are . J ruptcy proceedings, a debtor \ /110 1s abo11t to cease_ 111eet1ng obligations may vo�nt�nktarily apply .for a. ''scl1eme· of arrange1nent'' by ,vJ11ch he works 011t a compron11se 1 e tl1e same d octim . l 1e m11s t fil agreeme11t v,11tl1 his ered'1tors. 34 To do so, I1oweve1, nts reqt1i1·ed for a 11otice of ba11kruptcy a11d sl1o�v that l1e I1as bee11 properly regist:red 35 s. i11es b11s 11i11g of ope the e sinc s year two for the past

Customary bankruptcy practice in the Mercatc. ft._s sl1011ld be e,1ident from tlie findings reported above these bankruptcy a11d scl1e111e of arra11ge1ne11t provisions would be difficult to apply to n1ost b11sii1esses iu t}1e t,1Iercato because they often are not registered and rarely keep the accol1nts 11eccssa1·y for tl1e provisions to apply. 011ly 011e ba11kr11ptcy case \vas fo11nd. ir1 the Higl1 Cot1rt ancl it involved the winding-up of a share compa 1 1y. Bat1lcrl1ptcy is an instit1itio11 recogi1ized by c11sto1n a111ong the busj11essmen in the Mercato, ho\vever, and as already 111e11tioned the res11lts of arbitration and conciliatio11 proceedi11gs ofte11 have tl1e eqt1ivale11t effect of adjudication in ba11kruptcy. One such proceeding was related by a11 Arab i1nporter wl10 l1eld E. $1,000 promis sory note from another trader wl10 was ''bankr11pt." Tb.e bankrupt lJad taken E. $20,000 of goods from ten different people and l1a,J 011ly E. $10,000 remaining. Six elders were chosen wl1om all the parties l(11e\v \Vell a11d all agreed on. The cor1ci liation agreement was not ,1vritten a11d tl1e proceedi11gs ,vere 011ly a11 attempt to bring tl1e parties to a volu11tary reco11ciliation. Fo11r 1neetings ,vere held, oi1e every week. At first the debtor was un,villing to give up I1is last possessio11s, but fi11ally he agreed under press11re fron1 the elclers and, after payi11g his taxes, the elders and the creditors disct1ssed bo\V to share l1is goocls. .l.\ decisio11 vvas reac11ed b)' tlie elders that the creditors tear 11p tl1eir promissory 11otes a11cl accept ]1alf tl1e amount owed. The decision was not vvritte11 ·b11t si11ce tl1e notes \.\'ere tor11 11p in front of the elders, it seen1s unlikely that a f11tt1re disp11te ,vo11ld ,1rise fro111 it. Everyone accepted the decision. The i11terviewee said he dicl riot k 1 10\V ,�.:l1at v1ot1ld l1a,,e been done to a11y party who did 11ot con1ply. Anotl1er eicler interviewed said tl1at \Vl1e11 traders beco111e ba11krt1pt it is cu st0· mary for the1n to circulate 11ot es 1nong tl1cir ,J.cq11ainta.11ces ex1Jlai11i11g ,vl1Y tli_ey � �: � _ c_ 1 111 bai1 krupt ai1d � ad .. sl I 1 1ng for co11 elde tr1b11t1011s to pay off tl1eir debts. '"fl1e r . pocl(et 011e of these 11ot_es fro111 someo11e \¥hose s11.op l1ad bt1r11ed recently and he

32. Comm. C., Arts. 972-973. 33. Id., Art. 1166. 34. Id., Arts. 1119-53. 35. Id., Art. 1120.

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COMPLIANCE WITH LEGAL OBLIGATIONS

IN TIIB MERCATO

said that most people . felt . socially obliged to make these contributio11 s. The idir associations also f11nct1on 1n s01ne cases as a form of bankruptcy insura11ce so that if a member is l1011estly bankr11pt tl1e associatio11 will pay his debts. .

Jt is co11ceivable that tl1e c11sto111ary 1)roced11res 11sed i11 cases of bankr11ptcy do protectio11s for botl1 <. i ebtors the and creditors wluch the ba11I<:ruptcy of all c]11de 11 i not Jaw is desig11ed to provide. It seems lilcely, l1owever, tl1at tl1e elders who cond11ct these proceedi11gs inql1ire into all ou tstancling clebts a11d by k11owing the ba11kr11pt personally are fa111ilar ,vith Iris assets. Also, si11ce tl1e agreements reached usually 11ave tl1e legal effect of a ''co111promise,"36 creclitors sho111cl be unable to reassert their claim later in co11rt. In general therefore tl1e ba11kr11ptcy provisio11s, because of their complexity and

lack of correlatio11 ,'r'itl1 n1a11y business JJractices, are a1no11g tl1e least ''received'' of the foreig11 instit11tio11s of the Co1111nercial Code, but tl1e need of bankruptcy as an instittition has prod11ced c11sto.n1ary practices vvllicb in n1ost cases are legallX recog11izable. Conclusion

Tl1e rest1lts of this survey have shown some major conflicts in the Mercato bet,veen law a11d practice. Tl1ese co11flicts appear to be due to lacl<: of ed11cation or k'11owledge on tl1e part of mercl1ants with respect to accounting practices a11d registration requiren1ents and rel11cta11ce on the part of a11thorities to enforce strictly maL1y harsh legal provisions. I-Iowever \Ve d�tected little, if any, evidence of resistance to these laws on the basis that they are ''foreign'' to the c11stomary way of doi11g tlti11gs. It seems likely therefore tl1.at witl1 a growi11g awareness · on the part of businessmen these laws can be fully implemented and used.

•

36 · Under tl1e Ja\v IJarties are not bound b )' the terms of a con1pron1ise arrived at t� irough conciliation u11l�ss tl1ey }1ave ex1Jressly so agreed in ,vriting. Civ. C., Ar�. 3322(2). If the� have so agreed tl1e conciJiator's decision l1as tl1e force of res jttdicata w1_tI1out apI?eal an · may not be contested by the parties on tl1e grot1nd of a m1stnl<e concerntn g tl1e 1-10°hts on \1/111. c11 a n tipo s tind gro cl wlii 1 th�y l1ave con1promised, icl., Art. 3312, blit tl1ere are certain compromise agree1nent may be invalidated. Id., Arts. 3313-15.

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A PROBLEM ON FAMILY LAV\f By Katheri1ie O'.D011ova1i::� •·

i1it d to t of _th iop i ar fl Lc ivv i 1 al �st their kno wl d E � Readers of the . Jour� . �_ � e e s s o e 1 e a1 of the law and tI1e1r skill 1n fo1mulat� g 7: ,v 1 t l J gal qt1tzzes by stibmittii�: to the Journal written a11swers to tl1e 10 110\\ 1ng prob e1n. T11e best v,ritten a e n. glisl1 v1ill be pr i11ted i rl n sw r S11bniitted to the Joi1r11al i11 either Aml1ari c or E v 1 un1e o • b 1t b ed &' e e_1or �ay 15, 1973. Tlie 9-2 of the Journal. Ans�ers should be Sll ?'1 � participant �hose. a11s�er 1s _ selected for I)t1bl1cat1on vv1Il r�ce1ve a. free co py of tlie Journal 1ss11e 1n which hrs a11swer appears plt1s fi.,,e off-prints of b1s answers.

Problem ln title 1 of the Ethiopi2.11 Civil Code tl1ere i& a cl1apter on absence. If a person djsa1)pears and is not heard of for at least tvvo years a declaration of absence may be given by a court. The effect of st1cl1 a d.eclaration on the marriage of the absentee v.,1ill be its d issolution, accordi11g to Article 163(1). However Article 163 aiso contains tl1e followint;. sub-articles: ''(2) Tl1e marriage co11tracted by tl1e spot1se after the day 011 which the last news of the a·bsentee was received may be impugned only by tl1e absentee. (3) N'otvlit11sta11di11g the provisions of st1b-a.rt. (2) it 111ay olso be imp11gned by the pt1 blic prosect1tot jf he proves i11 a11 indisptrtable m,1nner that the absentee is alive on the day on vvl1jcl1 the 2ction is instih1ted." Dr. Va11derlinden 1 interprets st1b-artic-le (2) to 1nean tl1at the 1narriage dissolved by the judgme11t ot a·bsence is always open to res11scitation by tl1e ret11r11 of the absentee even whe11 the spouse has re-rn.arried. Tbt1s the ,,a}idity of the second marriage is always left in doubt, and tl1e spo11se of tl1e absentee is al\-vays a poten tial bigamist. This view accords with tl1at of French law in \\ihich the retttrn of the absentee causes the second n1a1riage to beco1ne 11t111.2 One diffict1lty v1it�1 �he Ethiopian law is that ArticJe I 63(2) uses tl1e words '' after the day on \VhJch the last n.ews of the absentee \Vas received'' instead of the words ''tl1e jt1dgn1ent de clari11g the absence which are used j11 st1b-a.rticle (1.). But an even grater diffic11lty is ca11sed ·by Articles 669 a11d 670 \Vhich deal with divorce. Un.der Article 669 (b) tl1ere is serio11s ca11se for divorce �11e to on� n,, � nce of the spouses reside ''whe11 011e of the spot1ses l1as deserted tl 1e conjugal _ whe11, srnce at leest tv10 years tl1 e other spo11se does 11ot kno\V ,vbe1.e he_ 1�· The fulancial conseqt1ences of s�cl1 a divorce 1na)' be tl1e award to the r enia�t�� i one spotise of the whole of the con1mo11 pro to spouses and u• p .pertvJ of tl1e · . e caus ious f pe �. :sonal P:Operty of t11e absentee. U11der A 1·tjcle 670 (b) there 1s sei f�r divorce w1thout fat1lt ''when the absence of 011e of tl1e spouses has e •udi� �� J of n sio Cialiy declared''· The conseqt1ences of s11cl1 divorce will be tl1e equal civJ commo11 p1operty.3 *

Fact11ty of La\v, H. S. I. U. 1. J. Vand�rJinden, The Law of �hysical Persons, p. 12 8. . 55• 2. M . PJan1ol and G. R1pert, Tra1te Pratique de Droit C F ·s vol . 1, P· ivil ran9ID , 3. Arts, 692-94 ci,m 689(1).

- 570 -

------- -� A PROBLEM ON FAMILY LAW

QUESTIONS: I) Is a divorce obtained under Article 670 (b) open to attack under Article 163(2) .and (3)? 2) How is the cot1rt to decicle whetl1er it is dealjng witl1 a case of abse11ce or desertio11 when faced \vitl1 a petition 11nder Article 699 (b)? [A11d would not all sensible spo11ses opt for a divorce or desertjon, give11 the advantageous financial provisions?] 3) If Article 163(2) is refer1·i11g to a case in whicl1 no jt1dgme11t declaring absence has been obtained, is this question 11ot adeqt1ately covered by Article 612 (despite tl1e defect in s11b-article (2) in referring to ''tl1e time when the marriage was cele brated'' instead of ''the time when tl1e action is i11stituted''? 4) Note that iil Soviet law the return of the absentee vvill not affect a subsequent marriage of l1is spo11se.4 Would tlus not be the approach the Ethiopian Lavv should take?

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See Revue Internationale de Droit Compare (1950). p. 349.

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opia · Ethi The Journal Of Eth.iopian 10. · ssion Law encourages all n1en1bers of the legal profe · 1 in t b d !�e ��;� �� ns 0J � � e ! . E. L. A patron's st1bscription shows your su�por t an _ � j ��r nal p O f t iopian law, and JJresents yot1 witl1 advance copies of eac1 ization . n ubl'18hed ·and opportuiiitles to attend lectur so red each year by th e J. E · L · orga es spo n . ease send your ,1amc and address lo i the Editors · Journal o f Ethiopian Law' P. 0. Box 1176 Addis Ababa . ers . ) scrib Annual_ subsc�ipti?n is twenty-five Ethi i sub n for foreig i's op $ dollars an (US You will be invoiced by our Business Office with receipt of the first issue.

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