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Monday, 23 April 2018 08:55

Revision of the Commercial Code to 2.0: Tech introductions in the Proposed Draft

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Modern technology has impacted law making in at least three ways. Technology drives the law by  i) adding layers to existing legal principles such as contact law and intellectual property law, ii) creating the need for new legal regimes such as crypto-currencies and artificial intelligence, and iii) changing the way legal and administrative services are delivered.

The Ethiopian Commercial Code, proclaimed in 1960, is now undergoing its first comprehensive revision, a draft of which is under public discussion (the “Draft”). In the Draft, modest additions have been made, informed by technological advancements of the past decades.

The Draft has introduced a number of changes pertaining to corporate governance in business organizations. It provides that company notices, call or meetings, call for subscription or purchase of shares may be made through electronic means. The Draft allows shareholders to take part in meetings through electronic means such as video conference. Shareholders and board meetings may now be made and votes cast electronically.

The Draft especially compels public companies to have websites, which, among others, must contain bylaws and amendments, notices of calls, relevant information and reports, and incorporate a platform for electronic meetings and voting.

The section of the Draft Code that deals with banking recognizes that contracts with banks for deposit of funds may be made electronically. Furthermore, it allows customers to request and banks to provide statement of accounts electronically.

Furthermore, the Draft lays the groundwork for electronic payment orders, bank guarantees, promissory notes, and cheques. It also recognizes that electronic signatures may be used on carriage contracts.

Even though the Draft has incorporated the abovementioned advancements in technology, it does not cover matters such as digital access to the Commercial Register and regulation of e-contracts and e-commerce. It is expected that the upcoming revision of the Civil Code will fill some of these gaps.

Read 158 times Last modified on Monday, 23 April 2018 09:07
Michael Tekie

Michael Tekie is a graduate of Addis Ababa University's School of Law (Class of 2015), with Distinction. During his stay at University, he was actively engaged in moot court competitions, representing his School in several national and international moots. He joined MLA first as an intern and then as a Junior Associate in July 2015. Michael works on corporate issues and is passionate about competition law and finance.

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Mehrteab Leul & Associates is a member of DLA Piper Africa Group, an alliance of leading independent law firms working together in association with DLA Piper, both internationally and across Africa.

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