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Commercial Law of Afghanistan

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Commercial Law of Afghanistan 2ND EDITION AN INTRODUCTION TO COMMERCIAL LAW OF AFGHANISTAN An Introduction to the Commercial Law of Afghanistan Second Edition Afghanistan Legal Education Project (ALEP) at Stanford Law School www.afghanistanlegaleducation.com [email protected] Stanford Law School Crown Quadrangle 559 Nathan Abbott Way Stanford, CA 94305-8610 www.law.stanford.edu 1 Table of Contents PREFACE ..................................................................................................................................VII! CHAPTER 1: COMMERCIAL LAW AND ECONOMIC DEVELOPMENT.......................1! I.! INTRODUCTION...............................................................................................................1! II.! AN ECONOMIC OVERVIEW OF AFGHANISTAN........................................................2! A.! Economic Snapshot .........................................................................................................3! B.! Recent Economic Reforms..............................................................................................4! C.! The Markets.....................................................................................................................5! D.! Doing Business in Afghanistan .......................................................................................6! III.! ISLAMIC COMMERCIAL LAW.......................................................................................9! IV.! COMMERCIAL LAW AND ECONOMIC DEVELOPMENT ........................................13! A.! Symptoms of Weak Commercial Law ..........................................................................14! V.! CONCLUSION .................................................................................................................23! GLOSSARY..................................................................................................................................24! SOURCES CONSULTED ................................................................................................................26! CHAPTER 2: HISTORY OF COMMERCIAL LAW IN AFGHANISTAN ........................27! I.! INTRODUCTION.............................................................................................................27! II.! EARLY COMMERCE, TRADE, AND LAW...................................................................28! A.! The Pre-Durrani Period (1600-1747) ............................................................................28! B.! The Durrani Period (1747-1800s) .................................................................................29! III.! THE CONSOLIDATION OF THE AFGHAN STATE.....................................................30! A.! Amir Abd al-Rahman Khan (1880-1919) .....................................................................30! B.! The Early Twentieth Century and Aman-Allah Khan...................................................32! IV.! THE FOUNDATION OF THE CURRENT SYSTEM......................................................35! A.! Nadir Shah.....................................................................................................................35! B.! Bank-i-Melli, Da Afghanistan Bank, and the Birth of Afghanistan’s Financial Sector ............................................................................................................................35! C.! The 1940s and 1950s.....................................................................................................40! D.! The 1964 Constitution and Subsequent Legal Reforms................................................43! E.! The Financial Sector Faces Challenges.........................................................................46! F.! Revolution and Civil Turmoil (1973-2001) ..................................................................54! V.! CONCLUSION .................................................................................................................60! GLOSSARY..................................................................................................................................62! SOURCES CONSULTED ................................................................................................................63! CHAPTER 3: COMMERCIAL LAW IN PRESENT-DAY AFGHANISTAN.....................65! I.! INTRODUCTION.............................................................................................................65! II.! LEGAL PLURALISM AND THE SOURCES OF COMMERCIAL LAW IN AFGHANISTAN...............................................................................................................65! III.! THE FORMAL COMMERCIAL LAW SYSTEM ...........................................................69! A.! The Constitution ............................................................................................................69! B.! Statutory Law ................................................................................................................69! C.! The Executive Branch ...................................................................................................74! D.! The Judicial Branch.......................................................................................................81! ii E.! The Legislative Branch .................................................................................................84! F.! Da Afghanistan Bank ....................................................................................................84! G.! The Afghan Investment Support Agency (AISA).........................................................85! IV.! INFORMAL COMMERCIAL INSTITUTIONS ..............................................................86! A.! Hawala Banking............................................................................................................87! B.! Informal Credit Practices...............................................................................................87! V.! CONCLUSION .................................................................................................................89! SOURCES CONSULTED ................................................................................................................90! CHAPTER 4: CONTRACTS.....................................................................................................91! I.! INTRODUCTION.............................................................................................................91! II.! SOURCES OF CONTRACT LAW IN AFGHANISTAN................................................93! III.! KEY CONCEPTS OF CONTRACT LAW.......................................................................97! A.! What Is a Contract? .......................................................................................................97! B.! How Is a Contract Formed?...........................................................................................98! C.! What Happens When a Contract Is Ambiguous or Incomplete?.................................104! D.! How Can the Rights and Duties That Flow from a Contract be Transferred from the Original Promisors to Another Party?...................................................................107! E.! What Do We Do When a Contract Is Broken? ...........................................................109! IV.! REALITIES OF CONTRACT LAW IN AFGHANISTAN TODAY ............................112! V.! LAWYERING SKILLS APPLICATION: THE EMPLOYMENT CONTRACT..........116! VI.! GOVERNMENT CONTRACTS AND THE LAW OF PROCUREMENT...................121! VII.! CONCLUSION ...............................................................................................................122! GLOSSARY................................................................................................................................124! SOURCES CONSULTED ..............................................................................................................126! CHAPTER 5: CORPORATIONS ...........................................................................................127! I.! INTRODUCTION...........................................................................................................127! II.! SOURCES OF COMPANY LAW..................................................................................128! III.! LAW OF AGENCY ........................................................................................................130! A.! Introduction to Agency Costs and Agency Law .........................................................130! B.! Agency Formation and Agent Duties..........................................................................131! C.! Liability of the Principal to Third Parties....................................................................132! IV.! OVERVIEW OF BUSINESS FORMS ...........................................................................133! V.! PARTNERSHIP LAW....................................................................................................135! A.! Partnership Formation .................................................................................................135! B.! Partnership Rights and Obligations.............................................................................137! C.! Partnership Dissolution and Liquidation.....................................................................140! VI.! CORPORATION AND LLC LAW ................................................................................142! A.! Elements
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