Introduction
The Council of Ministers approved, through the Decree nr. 94/2013 of 31 of December, the Regulation for Exercising the Activities of Building Contractor and of Consultant of Civil Construction (REAECCC).
The REAECCC establishes, in its article 2, that the activity of building contractor and of consultant of civil construction may be exercised by national building contractors or consultants (individual enterprises owned by Mozambican citizens or commercial companies incorporated under the laws of Mozambique, with headquarters in Mozambique, and with more than 50% of Mozambican share capital) or foreign (individual enterprises owned by foreign citizens or commercial companies incorporated under foreign law or under the Mozambican law, but with more than 50% of foreign share capital) legally authorized.
The REAECCC further establishes, in its article 3, that the building contractors and consultant of civil construction are authorized to exercise the activity in public works (are those performed in immovables, undertaken, total or partially, on behalf of the Estate, local councils, public institutes, public enterprises and enterprises participated by the Estate) or in private works (are those performed in immovables, undertaken by private entities).
However, the REAECCC establishes, in its article 48/2, that “the law court to settle any dispute arising from the building contracts or services rendered contract is national and it is up to the parties therein to indicate it pursuant to the law of the Civil Code”. This provision is, in our opinion, problematic because it collides with the provisions in force on the determination of the law court for settlement of disputes.
Therefore, in this opinion essay, we purpose to discuss about the problematic in mention in the following sections:
I. The legal system related to the law court for settlement of disputes
In the Mozambican legal system, the provisions related to the determination of the law court for settlement of disputes are, essentially, composed by procedural laws and by the organic laws of the courts.
The substantive laws as, for example, the Civil Code (CC)[1], establish the legal regime of several legal situations, among which, the legal regime of the contracts, which is the base for entering them (the contracts).
In this particular case, considering that the building contracts and the consulting contracts of civil construction may have public or private nature, the legal system to determine the law court for settlement of disputes related to them is, essentially, composed by the Code of Civil Procedure (CCP)[2], the Law of Judiciary Organization (LJO)[3], the Law of the Administrative Contentious Procedure (LACP)[4], the Organic Law of the Administrative Jurisdiction (OLAJ)[5], the Law of Formation of the Administrative Acts and Defence of Individual interests (LFAII)[6], the Arbitration Law[7].
For better discussion of the matter, we will make a separate approach of the legal system related to the law court for settlement of disputes arising from building contracts and consulting contracts of civil construction and of the legal system related to the law court for settlement of the disputes arising from similar contracts with private nature.
a) Legal system related to the law court for settlement of disputes arising from building contracts and consulting contracts of civil construction with public nature
The building contracts of public works and consulting contracts with immediate public utility have a public nature, because they are administrative contracts, in other words, they are agreements through which the jural administrative relations are created, modified and extinguished (article 176, LFAII).
Pursuant to article 4 of the LJO, the Administrative Court, the provincial administrative courts and the Administrative Court of Maputo City are competent to settle disputes arising from the administrative contracts.
Furthermore, the LJO, the LACP and LFAII establish the faculty for constitution of an arbitral tribunal to settle matters related to administrative contracts. Notwithstanding, none of these laws limit the competence to settle disputes arising from administrative contracts to the national arbitration. On the contrary, the article 214/1 of the LACP establishes that “in the arbitration convention or further document, up to the acceptance of the first arbitrator, the parties may agree on the rules of the process to be observed in the arbitration, as well as on the place where the arbitral tribunal will function”.
In other words, the article 214/1 of the LACP gives the space to the parties to choose the rules of the arbitration process and the place of the arbitration, which means that they may choose the rules of the arbitration process in force in international arbitral institutions and choose a location outside the national territory as the place of the arbitration. Following this, considering that the provisions of the Law of Arbitration are, subsidiarily, applicable to the provisions of the administrative arbitration, we may conclude to be in face of an international arbitration if, among others, the parties in administrative contract choose a location of arbitration that is outside of the national territory (articles 5/1 and 52 of the Law of Arbitration combined with the article 214/1 of LACP).
b) Legal system related to the law court for resolution of disputes arising from building contracts and consulting contracts of civil construction with private nature
The building contracts of private works and the consulting contracts undertaken by private entities have the private nature because they are agreements through which the private jural relations are created, modified or extinguished (article 232 combined with the article 405, both of CC).
Pursuant to the article 74/1 of the CCP, “the action directed to demand the fulfilment of obligations or to demand the indemnity for non-fulfilment of obligations must be proposed in the court of the place where, by law or written agreement, the respective obligation should be fulfilled”.
Therefore, the competent law court to settle the disputes arising from the contracts of private nature are the “judicial” courts of the place where, according to the law or written agreement, the obligation that originated the dispute should be fulfilled.
Furthermore, pursuant to the Arbitration Law, the parties on the building construction contract and consulting contract of private nature may settle the disputes arising from them through the arbitration, under a written and express arbitration agreement (article 4/1 of the Law of Arbitration).
As established in the article 52/1 of the Arbitration Law, the arbitration, beside its national nature, may have international nature, when: the parties have the business domicile in different countries at the time of the execution of the arbitration agreement; or if the place of arbitration, determined or determinable pursuant to the arbitration agreement, or the place where a substantial part of the obligations resulting from the commercial relation must be executed or the place with which the object of the dispute is considered to be strictly more connected to, are located outside the country or in countries where the parties have their domicile; the parties have expressly agreed that the object of the arbitration agreement has connexions with more than one country.
In this context, the regime of the arbitration mentioned above, also, do not limit the competence to settle the disputes arising from the building contracts and the consulting contracts of civil construction with the private nature to the national law court.
II. The effectiveness of the limit of the law court imposed by the Regulation for Exercising the Activities of Building Contractor and of Consultant of Civil Construction
From the analysis of the limit of the law court imposed by the Regulation for Exercising the Activities of Building Contractor and Consultant of Civil Construction (REAECCC), in its article 48/2, emerge at first sight the problem of its effectiveness, because:
a) The disputes arising from the building contracts and of the consulting contracts of civil construction as well as of the similar contracts with private nature may be settled through the international arbitration, as discussed above;
b) The laws that establish the faculty to settle the disputes arising from the building contracts and consulting contracts of civil construction with public nature as well as the similar contracts with private nature are ordinary laws and are hierarchically superior to the decree of the Council of Ministers that approves the REAECCC.
c) The laws that establish the faculty to settle disputes arising from the building contracts and of the consulting contracts of civil construction as well as the similar contracts with private nature are laws of procedures and are special in matter of determination of the law court to settle disputes.
The ordinary laws prevail over the decree of the Council of Ministers and the special laws prevail over the general laws (article 142 of the CRM[8] and article 7 of the CC).
Therefore, we consider that the article 48/2 of the REAECC is ineffective in respect to arbitration, because, as discussed above, the legislation in force on arbitration set the international arbitration as one of the means to settle the disputes arising from building contracts and consulting contracts of civil construction both with public and private natures.
Notwithstanding, for reasons of legal certainty and security, we recommend the express revocation of the article 48/2 of the REAECCC.
Conclusion
In Mozambique, the legal system related to determination of the competent law court to settle disputes of the building contracts and consulting contracts of civil construction both with public and private natures is, essentially, composed by the CCP, LJO, LACP, OLAJ, LFAII and the Arbitration Law.
Among the laws in mention, the Arbitration Law and LACP (combined with the Arbitration Law) establish the faculty to settle the disputes arising from the building contracts through the international arbitration.
The LACP and the Arbitration Law are special and hierarchically superior to the decree that approves the REAECCC.
Therefore, we consider that the article 48/2 of the REAECCC is ineffective in respect to arbitration, because, as discussed above, the legislation in force on arbitration set the international arbitration as one of the means to settle the disputes arising from the building contracts and consulting contracts of civil construction both with public and private natures.
Notwithstanding, to clarify any doubts, for reason of legal certainty and security, we recommend the express revocation of the article 48/2 of the REAECCC.
[1] The Civil Code in force in Mozambique was approved by the Decree-Law nr. 47344, of 25 of November, of the Government of Portugal in power at that time and its applicability was extended to Mozambique through the Administrative Rule nr. 22869 of 4 September 1967.
[2] Approved by Decree-Law nr. 44129, of 28 December of 1961, of the Government of Portugal in power at that time and its applicability was extended to Mozambique through the Administrative Rule nr. 19305 of 30 July of 1962.
[3] Law nr. 24/2007 of 20 of August, amended by the Law nr. 24/2014 of 23 of September and by the Law 11/2018 of 3 of October.
[4] Law nr. 7/2014 of 28 of February.
[5] Law nr. 7/2015 of 6 of October.
[6] Law nr. 14/2011 of 10 of August.
[7] Law nr. 11/99 of 8 of July.
[8] Constitution of the Republic of Mozambique, with the amendments of the Law nr. 1/2018 of 12 of June.
