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Choice of Law 2013 Chapter Three : Positive Rules of Conflict of Laws 1 Introduction Though the Egyptian legal system does not contain a specific legislation on conflict of laws, most of the Egyptian rules of the conflict of laws can be found in the Egyptian Civil Code. However, many other rules of conflict of laws can be found in other different statutes such as the Commercial Code Act no 17 /1999 and the Arbitration Act no 27 /1994. These rules of conflict of laws are therefore qualified as positive rules. The Egyptian Positive rules for the conflict of laws cover two main categories of relations. The First category includes matters relating to persons while the second group is concerned with pecuniary transactions. It is to be noted that both topics share similar questions of formality which can be solved by similar rules. Therefore, this chapter will contain the following three sections: Section One : Conflict of laws in Formality. Section Two: Conflict of laws in Personal Status Section Three: Conflict of laws in Assets. 1 This part is an update and an addition to a previous treaties on private international law published by Prof. Dr. Hisham A. Sadek, Prof.Dr Ibrahim N. Saad, Prof. Dr. Hafiza E. Al Haddad, Dr. Nader M. Ibrahim, Private International Law: Selective Basics Under Egyptian Law, 1 st edition, Alexandria 2000/2001. I thank them all for allowing me to perform the update and addition to their valuable work and I would like to express my gratitude for their permission. 1 Section One : Conflict of Laws in Formality. 1-Introduction Formality is a term general refers to "procedure" in contrast to "substance". The Majority of modern legal systems have been settled on the adoption of the " Locus Regit Actum " rule in regard to matters of formality. This rule means that "...when a legal transaction complies with the formalities required by the law of the state where the transaction is done, it is also valid in the state where it is to be given effect although by the law of that state other formalities are required..." 2 The Egyptian law adopted the above mentioned rule in Art (20) of the Civil Code. However, the contracting parties were permitted to apply to of formality irrespectively, the law of the state in which the transactions were concluded, the law applicable to the matters of substance, i.e . Lex Causae , the law of the parties common domicile or the law of the parties common nationality. Art (20) of the Civil Code provides that: "Contracts between living persons are governed as regards their formalities by law of the state in which the contracts are concluded. They may also be governed by the law regulating the substantive issues of a contract, by the law of the common domicile of the parties or their common law of nationality" 2 See BLACKS LAW DICTIONARY (6th ed.1990) 941. 2 2- Historical Background Questions of conflict of laws first appeared in the middle ages within the context of business relations among the cities of north Italy. Therefore, the first solutions for conflict of laws can be traced back to the Glossoe of the old Roman law doctrine ( Glossators ). In the 12th and 13th century those lawyers subjected all transactions to the law of the place where they have been made. However, these early glossators did not differentiate between "substance" and "formality". The distinction did not take place until the times of the roman glossator, Curtius, in the later 15th century. Curtuis is considered to be the first lawyer to differentiate between "substance" and "formality" in transaction. This accidently took place by when he explained the application of the " Locus Regit Actum " rule to the substance of the transaction. He founded the application of that rule upon the implied will of the parties. This interpretation opened the path for the party autonomy rule that was advocated by the French lawyer, Dumoulin, in the 16th Century. Dumoulin, argued for the recognition of the contracting parties authority to subject their contract to law other than the law of the place of contract. I.e. Lex Loci Contractus . His argument was that an express will is better for consideration that an implied will. At the 16 th century it was settled the " Locus Regit Actum " rule was applicable only to the formal aspects of transactions. The substantive aspect of transactions was allowed be governed by another law at that time. It is worthy to mention that the the " Locus Regit Actum " rule 3 disappeared temporarily in the era of the domination of the territorial school which prevailed in the 16 th century. Under such school, conflict of laws was solved by analyzing the laws themselves and not by analyzing the transactions and since that most of the laws were considered territorial the transaction's formality became subject to the law of the where the transaction was created. The the " Locus Regit Actum " rule reemerged in modern time under practical reasons. These reasons aimed at facilitating the creation of transactions. They took into consideration that the concerned parties may face difficulty in knowing the details of formalities in other laws beside that of the place where the transaction was created. In addition, some types of formalities cannot be satisfied in any place. E.g. interference of a public notary. 3- Is the "Locus Regit Actum" rule Facultative? Those who explained the application of the " Locus Regit Actum " rule through the territorial application of law have, logically, reached the conclusion that this rule is a mandatory one. However, such conclusion does not suit the modern philosophy for the "Locus Regit Actum " rule which is the facilitation. This philosophy directs towards considering the "Locus Regit Actum " rule as a facultative rule. The Egyptian legislator opted for the modern philosophy. This can be induced for the facility which has been granted to the Egyptian judge to apply the law which applicable to the substance, or the law applicable 4 to the common domicile of the contracting parties, or their law of common nationality, which ever validates the transaction, i.e . Lex Validatus . Therefore, The Egyptian positive rule applicable to formality is not as the rest of the traditional conflict of law rues, neutral. It is rather of a material objective. 4- What is meant by the concept of formality? Distinction between "substance" and "formality" can be of no importance when the contracting parties satisfy the formality requirements provided for under the law applicable to "substance". However, the applicable law to "substance" can different than that which is applicable to "formality", hence it is useful to highlight the criterion by which distinction is made between these different matters. (a) Matters excluded from formalities i- Matters of procedure. The dominant doctrine differentiates between the concept of "formality" and "matters of procedure". Matters of procedure contain the required procedures for filing a lawsuit before the court which relates to the judicial authority of the state while formality is concerned with the actives of the individuals. Although both formality and procedure may eventually be subject to the same law, i.e. the law which is applicable at the place of the procedure and the law applicable at the place where the transaction is created, only formality can be subject to another applicable law. The " Locus Regit Actum " rule is facultative rule but procedure cannot be subject to other law other than that of the place of procedure., i.e. the Lex 5 Fori, because it is mandatory to follow that law in all matters relating to the filing a lawsuit before the court. ii-Matters of Publicity By the same token, matters of publicity are different than matters of formality. Publicity is required sometimes for the creation of rights such as the case with principal in rem rights (e.g. ownership) and sometimes publicity is required for the enforcement of the right against third parties as in the case with accessory in rim rights (e.g. pledge). Though matters can be subject to the same law i.e. the applicable law at the place of publicity (publicity) and law at the place of the creation of the transaction (formality). Only formality can be subject to another applicable law, because it is subject to a facultative rule. Nevertheless, publicity cannot be subject other law that the applicable law at the place of publicity, because this is a public rule of a territorial application. (b) Matters which fall into the concept for formality. Formality is the means by which the will is expressed to the external world. Such means can be required for the creation of the transaction or its evidence. (i) Formality for Creation Laws may require the satisfaction of certain formalities for the creation of certain transactions as in the case of the contract of donation of an immovable property and the contract of pledge. According to some scholars the decision of determining whether the formability is necessary for the creation of the transaction 6 or as evidence should be left to the Lex Causae . Such interpretation finds support in Egypt in the explanatory memorandum of the Civil Code. The explanatory memorandum of the Civil Code said that "... it should be take into consideration that the scope of the law applicable to formality.... covers only elements of external formality, however, essential mattes of formality, and determining the essential elements for creation of the transaction as in authentication and security-pledge are subject to nothing but the law applicable to the settlement of the transactions in substance.." 3 Therefore, recourse has to be made to the law applicable to matters of "substance" in order to decide whether authentication is required for the creation of the transaction or not.
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