Sunday, February 28, 2021

Scope of Ethiopian Commercial Code

(Source: LAW OF TRADERS AND BUSINESS ORGANIZATIONS: A Course Material

ALEMAYEHU FENTAW AND KEFENE GURMU)

Central to the scope of the Code is the issue of the territorial scope of application of the Code: is it applicable in administrations that are directly accountable to the Federal Government only, or to the Federation? The problem is hypothetical rather than actual and hence is more of academic interest than a practical one. 

This is so because the Code was promulgated in 1960 at a time when the Ethiopian State was unitary. So, the real problem shall await the promulgation of the Revised Commercial Code. Only then shall it be addressed. A clue to this problem is to be found in Article 55(4) of the Constitution of the Federal Democratic Republic of Ethiopia, which invests with the House of Peoples’ Representatives the power to enact a Commercial Code. Besides, Article 52(1) stipulates that “All powers not given expressly to the Federal Government alone, or concurrently to the Federal Government and the states are reserved to the states.” Thus, if the power to enact a commercial code is given expressly to the Federal Government, then the states are automatically divested of the power to enact such a law. This implies that the commercial code must be a uniform code, like the Federal Criminal Code, that applies to the Federation as a whole.

 

With respect to the relation between the Civil Code and the Commercial Code, Article 1 of the Commercial code provides that “Unless otherwise provided in this code, the Provisions of the Civil Code shall apply to the status and activities of persons and business organization carrying on trade. :”Article 1 provides for the pre-eminent place of the Civil law. It encapsulates the classical principle of the priority of civil law in respect of the theory of obligations and the regulation of contracts. Hence, the only reason for the existence of the commercial law will be to supplement the Civil Code. Furthermore, Article 2 renders applicable in pertinent part provisions of the Maritime Code to persons and business organizations carrying on maritime Code to persons and business organizations carrying on maritime trade. Whereas, Article 4 excludes the application of the Commercial Code to bodies corporate under public law, as they are not going to be presumed to be traders even where they carry on activities under Article 5. sub-article (2) of the same renders the first paragraph in applicable is cases where the bodies corporate under public law only participate in the undertakings as partners or shareholders.  

 

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