Throughout the time, the Egyptians have always believed in the rule and importance of Law in organizing their lives. Along the history Egypt has hosted numerous cultures and civilizations through concurrence and occupation since 332 B.C. This in term has affected the legislative structure. In the modern history, Egypt represents one of the strongest, well-founded and structured judicial and legislative systems in the world

The Egyptian legislative structure inspires its main principals from three different sources, which are the Islamic Shari’a, the Roman Code and the Napoleonic Code. As a Civil Law Regime, Egypt has various Laws for both the Private Laws and Public Laws. In application of the International Law, Egypt has adopted Dualism. The Social Democratic Constitution has maintained the principal of freedom of individuals, the separation and distinction of powers and authorities, and the identification and definition of its roles. But the questions that should be asked: what are the components of the State? What are the main powers of the State? What stages and categories is the Legislative system composed of?

What are the main principals and pillars of contracts? Where do the Oil and Gas agreements “Concessions” fit in this structure?
The response to these queries is the main aim of this study herewith. The study is designed to present the main and basic structure of the Legislative structure in Egypt for non-Lawyers from an overall perspective.

What are the components of the State?
Any State is usually composed of Legal and Political components, which are;
A- Legal components, People, Territory and Sovereignty. The people are the inhabitants of the land and enjoy its citizenship. This means that visitors, foreigners and occupants cannot be considered people of a State. Territory is the land on which the people live and has political borders. Hence, occupied land or illegally possessed lands cannot be considered a legitimate composite of a State. Sovereignty is the ruling power which is usually a Government composed of a clutch that people elect to manage and protect the State.

There are several philosophies in interpreting the relationship between the people and the ruling system. Egypt has chosen the Social Contract of Juan Jacque Rousseau, which mainly believes that people surrender a part of their freedom to an elected ruling system that organizes the relationship in the community and protects the State.
B- The Political components; it is quiet similar to the legal components, which are; People, Territory, Sovereignty and Recognition. Recognition; is the comprehension of the international community members to the State, Government or a territorial situation.

What are the main powers of the State?
In this regard, the main powers of Egypt are; The President, Prime Minister and The parliament. The Egyptian structure of the Government is a Cabinet consisting of 30 Ministers headed by a Prime Minister. The Parliament is Bi-Cameral, People’s Assembly and Shura Council.

The Authorities in Egypt are The Legislative Authority, Administrative Authority and Judicial Authority. The Authorities are totally distinct and perform their functions in cooperation.    

What are the stages and categories of the Legislative system?
The following diagram represents the different Legislative Power of every Authority and Power and the harmony between them.
I- The Legislative Authority (Parliament) issues Legislations in consistence with the Constitution. The features and characteristics of the Legislative rule are:
A- General and subjective; it addresses the public and not someone or a group in specific,
B- A rule for governance; it is made to out of the people’s belief to organize and regulate the relations between them in the society,
C- Coupled with a penalty for breach; in case of intentional breach there is a penalty applied by the concerned Authorities.
As a Civil Law regime, the Egyptian Legislative has recognized two types of Legislations:
1- Subjective legislations; which apply to all the members of the society or any relevant issue that comes within its range of application, I.e. the Commercial Law, the Labor Law…etc.
2- Procedural or private legislations, which are usually issued as an expression of the State well to enter into an agreement for a public interest. This usually requires the representation and expression of people’s will as owners to the public treasures and served by the public domain. The Parliament performs this expression through its members in the form of a Law. I.e. Concession Agreements, exploration and exploitation of minerals or treasures. (Further elaboration will follow in next points)
However, both types of Legislations are issued through the same process and presentation. Both types are published within the same time frames with the official gazette.

II-           The Administrative Authority (Government) implements the Legislations and issues Regulatory Statutes Prime Minister’s Decrees, Ministerial Decisions & Acts of Governors to regulate the execution of the Legislations in consistence with both the Legislation and the Constitution.

III-          The Judicial Authority is the designated Authority to monitor, observe, supervise the application and deal with any dispute that may arise out of the execution, interpretation or issuance of Legislations and Regulatory Statutes.

What are the main principals and pillars of contracts?
In simple terms, Contracts are an agreement between two or more natural or moral persons to conclude a certain legal effect or outcome.
The main principals that a contract should properly include are: Acceptance, Aim of contracting and Subject of contract.

Proper and Valid Offer & Acceptance: is the expression of parties to approve the terms and conditions of a contract based on a free and expressed will and competence. For natural persons, the free will is the expression of approval either explicit or implicit without fraud or pressure. And for moral persons should be expressed in writing and free of any fraud or embezzlement. For States such expression is usually ratified and expressed in Legislation. Competence is the capacity of the contracting parties to enter into agreement, i.e. the legal productive maturity required for natural persons and the valid legal structure for moral persons.

Good Aim of Contracting: the aim of contracting represents the intention of contracting parties to enter into agreement and produce its valid legal effect. This means that if the parties to a contract agree to establish a business to traffic monies through illegitimate channels, such contract will include an illegal aim which switches an agreement from a contract to an organized crime if the jurisdiction considers such.

Legitimate Subject of contract: the subject of contract is the service or the object for which the agreement was mainly created.  The subject of the agreement should legally relate to the contracting parties, i.e. in a sale agreement, the seller should have ownership to the subject of contract or legally represent the owner. On the other hand, the subject of contract should be allowed for contracting, i.e. a contract will not be valid if a natural person sells a Public Domain asset or a national natural resource without a legal representation from a Government or a Parliament.  

Where do the Oil and Gas agreements “Concessions” fit in this structure?
The Egyptian legislative structure did not develop a Petroleum Regime or Law. It has long adopted the International Public Tender Offering system. The winning bidder will enter into an Agreement (Concession Agreement) for a certain geographic identified area with the Government for a period of, most likely, seven years for exploration and exploitation of Oil or Gas. The investor will establish a JV with the Government, represented for the exclusive purpose by EGPC or EGAS, in case of commercial discovery and production (as detailed in March edition article). Such Concession Agreement is considered a Procedural or private legislations. This type of Legislations is usually issued as an expression of the

State will to enter into an agreement for a public interest. This requires issuance from the Parliament to include such Agreement as one of the Country Laws and puts it into force. The Ministerial Decrees issued from the Ministry of Petroleum or EGAS or EGPC are considered Regulatory Statutes that regulates the execution and performance of the Law.

In the coming article, we will thoroughly represent the legal effect of the revolution on the State components and its Legislations.

By Marwan Al-Ashaal, Attorney at Law

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