The harmful act is committed by the contracting authority

The act must be committed by the contracting authority and not by' any juristic entity' other than the entity that concluded the contract; otherwise the condition of the Prince Theory' is not fulfilled, and we may apply the theory' of unforeseen circumstances where appropriate.

The injury sustained by the contracting party is a personal unexpected injury

The General Assembly of the Legal Opinion and Legislation at the Egyptian Conseil D’Etat confirmed that it was necessary' to have this condition, that the injury sustained by the contracting party was a personal injury' where no third party' was affected by' the general decision. The claim of the contracting companies for price increases to the contracts concluded with the Ministry' of Housing before applying Law No. 63 of 1964 of Social Security' had no legal grounds. The said law obligated all companies and not only the contracting companies to increase their social security' contributions for seasonal laborers; hence, the

Prince Theory could not be applied as the promulgation of such law was an expected procedure. The lawmaker declared in Law No. 92 of 1959 that the plan was to extend the social insurance benefits to cover all laborers, which rebuts that such increases were not expected.[1]

The procedure is issued by the contracting administrative authority

The Supreme Administrative Court at the Egyptian Conseil D’Etat confirmed that the intervention of the Administrative Courts to realize the administrative contract’s financial equilibrium, in application of the Prince Theory, would be possible when its conditions were fulfilled, including the condition that the harmful act was committed by the contracting administrative authority. In the case that such an act was taken by a juristic entity that did not conclude the contract, one of the Prince Theory’s conditions was not then fulfilled and thus the theory' could not be applied. However, this did not stop the application of the theory' of unforeseen circumstances where appropriate.

The General Assembly' of the Legal Opinion and Legislation concluded that the contract between the Ministry' of Irrigation and a number of contractors for the execution of certain works in the Ministry’s departments and Inspection Offices during the financial year 1969/1970 did not grant those contractors any rights to address the Ministry with a claim for price differences, as a result of an increase of the price tariffs of steel and cement or due to receiving quantities of imported steel in lieu of local steel, whether such price increases took place subsequent to concluding the contract or during the contract performance. These procedures were taken by' an authority' other than the contracting authority' (Ministry' of Irrigation), which meant that a fundamental condition for the application of the Prince Theory' was not fulfilled.

The effect of fixing the tender prices upon the application of the prince theory

The administrative judiciary’ decided to fix the tender prices of the agreement concluded between the supplier and the administration as from the date of submitting the tender until the handover of the work, subject to the contract. These prices were not subject to any changes that might occur during the contract term, whether the reasons for such changes were related to foreign currency fluctuation, price increases or change in import, production or any other duties. The contracting party' might not refer to the Prince Theory' or the

Substantive mechanisms of PPP contracts 191 theory of unforeseen circumstances to rest the claim for damages for injuries sustained due to any of the aforementioned changes.[2]

  • [1] Legal Opinion No. 297 on 11/3/1965, session 24/2/1965, 19/88/309 - Forty Years Collection of Court Judgments, 426. 2 CaseNo. 562 of Year 10Q-session 11/5/1968. 3 File No. 78/1/46 - session 11/7/1971, Modern Administrative Encyclopedia, 1st Edn, Vol. 18,873.
  • [2] The General Assembly of Legal Opinion and Legislation, File 78/1/29, session 28/10/ 1964, Modern Administrative Encyclopedia, 1st edn, Vol. 18, 882. 2 El Tamawy, The General Principle of Administrative Contracts, 5th Edn, 1991, 653. See the effect of the Prince Theory and the theory of unforeseen physical circumstances in restoring the administrative contract’s financial equilibrium under unforeseen circumstances: Amin, General Principles for the Performance of Administrative Contracts, 302 et seq.; Jean-Quentin De Cayper, Le fait du prince libere t’il une enterprise public, revue de droit des affaires internationals, No. 8, 1993,959. 3 The Supreme Administrative Court, case No. 1562 of year 10Q, 67 of year 11Q - session 11/5/1968. 4 See those who represent this approach, De Soto, a comment published in the Laws Journal in 1950,455. See also an explanation of this notion in the Egyptian judiciary, a judgment issued by the administrative court on 30 June 1957. 5 Mohamed A.M. Ismail, International Public Works Agreements Arbitration, Al Halabi, 2003; S. Badawi, Le fait du prince dans les contrats administratifs, LGDJ, 1954, 24.
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