Mercantile Law (The Legal System)
14. The Legal System
SOURCES OF LAW
WHAT IS LAW?
Law is a body of principles recognized and applied by the government in the administration of justice. Law is a set of rules imposed and enforced by a society with regard to the attribution and exercise of power over persons and things. The function and purpose of law is justice, stability and peaceful change.
FORMAL SOURCES VS MATERIAL SOURCES
FORMAL SOURCES The formal sources include the will of the State as manifested by statutes or decisions of the court. The Constitution of Pakistan is Formal Source of law. MATERIAL SOURCES The sources from which the law derived its matter are called material sources. These may be historical sources or legal source.
HISTORICALSOURCES
These are un-authoritative rules which have been subsequently converted into legal principles (through doctrine of judicial precedent). These include common law and equity.
COMMON LAW Common Law was developed from local customs which became common to the whole country of England, is a complete system of law. EQUITY Equity was developed in piecemeal to remedy injustices of the common law, is an incomplete system. Equity is based on fairness & justice and so its rights and remedies are given at the discretion of the court. The court exercises its discretion according to well-known principles, e.g. "Delay defeats the Equities" and "He who comes to Equity must come with clean hands". It introduced new discretionary remedies e.g. injunctions and specific performance. It is flexible than common law.
Common law rights & remedies are available as of right.
The only remedy is damages. It is rigid and inflexible.
Both were, and are, developed by the judges according to the doctrine of judicial precedent.
Some of the maxims of equity are: (a) He who comes to equity must come with clean hands. (b) Equity will not suffer a wrong to be without a remedy. (c) Delay defeats equity (doctrine of laches). (d) Equity looks at intent, not the form. (e) Equity does which ought to be done. (f) He who seeks equity, must do equity.
ACCA F4 (Eng)
LEGAL SOURCES
These are instrument of the State by which legal rules are formulated. These include legislation, precedent, customs and agreements. Legislation (enacted law) is law created by parliament or created by institutions to which parliament has delegated its power to create law. Precedent (case law) is a judgment or decision of a court which serves as authority in an identical case. The precedent has following four types: (a) original precedent, one which creates and applies a new rule; (b) declaratory precedent, merely an application of existing rule; (c) binding precedent, must be followed by inferior and equal rank courts; (d) persuasive precedent, need not be followed but is worth consideration. Customary law is law created by customs and usage of trade of a society. In Pakistan, to much extent customary law is based on Islamic laws. Agreements (conventional law) incorporate various stipulations which are binding on the contracting parties and thus have the force of law.
INTERACTION AMONG SOURCES OF LAW
1. 2. 3. 4. Constitution and Shria laws take priority over all other sources. Legislation (Act, Ordinance and delegated legislation) takes priority over Case Law. Act of Parliament takes priority over the delegated legislation. Equity prevails over Common Law.
Sources of law have been explained in diagram 1.
PUBLIC LAW VS PRIVATE LAW
Public law governs the relationship between the individual and the State e.g. constitutional law, administrative law, etc. Private law governs the relationship of individuals between individuals e.g. Partnership Act, Contract Act, Sale of goods Act, etc.
CIVIL LAW vs CRIMINAL LAW
Difference Definition Civil Law Civil law sets out the rights and duties of persons as between themselves. The person whose rights have been infringed can claim a remedy from the wrongdoer. The aim, therefore, of the civil law is to provide a means whereby an injured party can obtain compensation. Criminal Law Criminal law is concerned with conduct that is considered so undesirable that the State punishes persons who transgress. The aim, therefore, of the criminal law is to regulate society by the threat of punishment.
Purpose
Mercantile Law (The Legal System) The claimant sues the defendant for harm caused. If the claimant can prove the wrong on the balance of probabilities (i.e. his litigation is successful and the defendant is held liable) The civil court will order the defendant to pay damages or it might order some other remedy such as specific performance or injunction. The State prosecutes the accused / defendant whether or not harm results. If the State can prove the offence beyond reasonable doubt (i.e. the prosecution is successful and the defendant is found guilty and convicted) The criminal court will sentence the defendant to a fine or it might impose some other punishment such as imprisonment.
Harm caused
Burden of proof
Remedy
DOCTRINE OF JUDICIAL PRECEDENT
The system, adopted by the judges, of following the decisions in previous cases is called the doctrine of judicial precedent. Some precedents are binding (they must be followed in later cases) whereas others are merely persuasive (judge may choose to follow but not bound to do so). The following three factors are relevant in determining whether or not a precedent is binding: 1. THE HIERARCHY OF THE COURTS General Rule Supreme Court High Courts Other Pakistani Courts Foreign Courts 2. precedents of the higher courts bind the lower ones but not vice versa.
bind all the lower courts. bind all the lower courts. Its decisions are not reported. not binding but they may be persuasive.
RATIO DECIDENDI AND OBITER DICTA
the legal reason for the decision other legal rules stated but which are not the reasons for the decision not capable of forming binding precedent
capable of forming binding precedent
3.
MATERIAL FACTS OF THE CASES Same binding Similar persuasive
ACCA F4 (Eng)
SHARIA SOURCES OF LAW
The following are sources (priority wise): Quran The Holy Book of Muslims (the divine revelation to Prophet PBUH) Sunnah The acts and sayings of the Prophet PBUH Ijtihad Ijma & Qiyas & Istihsan Ijma Consensus of opinion after consultation between jurists. Qiyas Analogical deduction Istihsan Concept of equity.
LEGAL SYSTEM OF PAKISTAN
THE COURT STRUCTURE
The Pakistan legal system applies to all five administration units of Pakistan i.e. four provinces and the capital territory of the federation. Supreme Court is the highest judicial authority, for each province and the capital there is a High Court being the second highest authority. The court structure has been explained in annexed diagram 2.
FEDERAL SHRIAT COURT
The Federal Shriat Court consists of not more than eight Muslim Judges including the Chief Justice which are appointed by the President. Out of the number of Judges not more than three shall be Ulema who should be well-versed in Islamic Law. This Court decides whether a provision of law is in accordance with Injunctions of Islam or not.
TRIBUNAL SYSTEM - AS AN ALTERNATIVE TO COURT
There are two types of tribunals: Domestic So-called because they are set up by a particular body to regulate the conduct of their members. Administrative Set up by Act of Parliament as a means of settling certain specialised civil disputes - an alternative to the court system. Major example - the Employment Tribunals.
THE PROCESS OF LEGISLATION
TERMS
Parliament: Senate & National Assembly Legislator: Parliament and/or President
THE ACT OF PARLIAMENT
MONEY BILL The following is procedure: (a) the money bill is originated in National Assembly; (b) the money bill is passed by National Assembly; (c) the bill is sent for the assent of the President; (d) On the assent of President, the money bill has legislative power.
Mercantile Law (The Legal System)
OTHER BILLS The following is procedure: (a) there are initially two situations: (i) the bill is originated and passed by National Assembly and sent to the Senate, if it is also passed by Senate, the bill is sent for Presidents assent. (ii) the bill is originated and passed by the Senate and sent to the National Assembly for approval, if it is also passed by the National Assembly, the bill is sent for Presidents assent. (b) If one of the House of Parliament does not pass the bill, the bill is considered by the Joint meeting of both Houses and thereafter the bill is sent for Presidents assent. (c) If president assents to the bill, it becomes an Act of the Parliament. However, the president may send it back to National Assembly for reconsideration, after reconsideration, the president must assent to such bill, and it becomes an Act of the parliament.
THE ORDINANCE
NATIONAL ASSEMBLY NOT IN SESSION The president may promulgate an Ordinance, in case of urgency in respect of any activity, when National Assembly is not in session. Such Ordinance has same power as an Act of Parliament. NATIONAL ASSEMBLY IN SESSION The president may promulgate an Ordinance, even if National Assembly is in session. Such Ordinance has same power as an Act of Parliament, however, if such Ordinance is not presented or passed by the National Assembly within 04 months, it shall stand repealed. The process of legislation has been explained in diagram 3 and 4.
PRESUMPTIONS IN LEGAL SYSTEM
1. 2. 3. 4. 5. A presumption against legislation extending beyond the territorial jurisdiction of the Pakistan. A presumption that legislation does not have retrospective effect. A presumption that legislation does not put the Pakistan in breach of its international obligations. A presumption that legislation does not result in the exclusion of the jurisdiction of the court. A presumption that a statute does not repeal.
