LAW NO. 10/2011 of 14 September APPROVES THE CIVIL CODE A Civil Code is of fundamental importance to the legal system of any civil law country; more than a compilation of statutes, it is an ordered set of provisions that follows a systematized selection of matters regulating to legal relations among private legal entities, be they individuals or corporate bodies. The Civil Code hereby approved is a modern statute, and the solutions brought by it are considered to be in line with the Timorese reality and in conformity with the general principles of law and the international norms enshrined in the Constitution and which constitute founding principles of a Democratic State based on the rule of law. The present Code is now one of the main instruments of the legal system in Timor-Leste which, as mentioned earlier, will enable the regulation of the legal relations among private legal entities. The approval of the Civil Code therefore constitutes a benchmark of extraordinary importance to the entire society insofar as the future of private legal relations and the construction of the national legal system are concerned. Thus, pursuant to article 95.1 of the Constitution of the Republic, the National Parliament enacts the following to have the force of law: CHAPTER I GENERAL PRINCIPLES Article 1 Approval of the Civil Code The Civil Code published in annex, which forms an integral part of this statute, is hereby approved. CHAPTER II TRANSITIONAL PROVISIONS SECTION I COMMON PROVISIONS Article 2 Temporal scope of application 1. Application of the provisions of the new Civil Code to situations or facts occurred prior to its entry into force shall be subject to the rules laid down in its articles 11 and 12, with the amendments provided for in this chapter. 2. The new Civil Code shall not apply to actions pending before the courts as at the date of its entry into force, save as otherwise provided in the present Law. Article 3 Real Estate The rights over real estate shall be governed by the provisions of the new Civil Code after recognition or issuance of the first legal deeds by the Democratic Republic of Timor-Leste over such property. Article 4 Communal property Communal property shall refer to property that is shared by the people of a community in accordance with the uses and customs. SECTION II GENERAL PART Article 5 Corporate bodies 1. The regime provided for in articles 149 to 185 of the new Civil Code on corporate bodies shall also apply to corporate bodies established prior to the entry into force of the present statute insofar as their functioning is concerned. 2. The conditions of validity of the constitutive act and respective registration of corporate bodies referred to in the preceding article shall remain as established in the law in force at the time of the establishment of the corporation. Article 6 Suspension of prescription Periods of prescription the running of which is suspended as at the date of the entry into force of the new Civil Code and which, by force of a provision thereof, are subject to a mere suspension of their term, shall resume their running, with the rules for suspension established in the new Civil Code being applied to them. SECTION III CONTRACTS LAW Article 7 Penal clause The provisions of articles 744 to 746 of the new Civil Code shall apply to penal clauses set forth prior to its entry into force, but the right to indemnification for the additional damage provided for in article 745.2 shall only exist where it is stipulated by the parties while the new law is in force. Article 8 Leasing 1. Leasing agreements entered into prior to the entry into force of the new Civil Code shall be governed by the leasing regime now established therein, with the amendments provided for in the following paragraph. 2. The provisions of the preceding paragraph shall not prejudice the validity of the agreements, nor that of its clauses, provided they are contained in a title deed considered to be sufficient as at the date they were entered into or have been validated by a subsequent legal provision. Article 9 Interests Interests established by agreement or contract entered into prior to the entry into force of the new Civil Code shall be governed by the law that was in force at the time they were stipulated. SECTION IV FAMILY LAW Article 10 Catholic marriage 1. The law shall recognise validity and efficacy to catholic marriages celebrated prior to the entry into force of the Civil Code. 2. The marriages referred to in the preceding paragraph shall, from the date of entry into force of the Civil Code, be governed by the regime provided for therein. Article 11 Effects of marriage 1. The legal effects of marriages entered into prior to the entry into force of the new Civil Code both insofar as people and property are concerned, shall be those established therein and not in the previous law in force, save where it involves the production of retroactive effects. 2. Previous marriages subjected by a previous law to a certain legal type of property regime, either on an imperative of supplementary basis, shall continue to be subject to such type of property regime, but the content shall be the one laid down in the new Civil Code, pursuant to the preceding paragraph. Article 12 Establishment of parenthood 1. The provisions of the Civil Code referring to the establishment of parenthood shall apply, to the extent possible, to offspring born or conceived prior to the entry into force of the new Code, but shall not prejudice the previous cases the decisions of which have become final. 2. The provisions of the preceding paragraph shall apply to the relevant procedures underway to the extent that such a measure does not prejudice the respective normal proceduring or the guarantees of the parties. Article 13 Exercise of paternal authority and guardianship The amendments made by force of the new Civil Code to the rules of parental authority and to the regime of guardianship shall apply even to actions underway as at the date of entry into force of the present statute to the extent that such a measure does not prejudice the respective normal proceduring or the guarantees of the parties. Article 14 Restrict adoption The links of restrict adoption existing as at the date of the entry into force of the new Civil Code shall continue to be governed by the regime specifically provided for such type of adoption in the Indonesian Civil Code as complemented and modified by the provisions of the new Code that are not incompatible with their nature. Article 15 Full adoption Full adoptions established prior to the entry into force of the new Civil Code shall be regulated by the norms of the present statute relating to adoption. SECTION V SUCCESSION LAW Article 16 Legal succession The provisions of the new Civil Code relating to intestate and compulsory succession, as well as to the right succession representation, shall only apply to open successions after its entry into force. CHAPTER III FINAL PROVISIONS Article 17 Revocatory norm 1. The Indonesian Civil Code, in force in the Timorese legal system pursuant to article 1 of Law no. 10/2003 of 7 August, is hereby revoked. 2. Law no. 12/2005 of 12 September on the Juridical Regime of Real Estate and Leasing between Individuals is hereby revoked. 3. All legal provisions contained in legal statutes prior to the entry into force of the present Law providing for solutions contrary to those adopted by the present Civil Code are hereby revoked. Article 18 Reference to revoked norms All references made in legal statutes prior to the entry into force of the new Civil Code to the revoked legislation identified in the preceding paragraph shall be considered as having been made to the corresponding provisions of the new Code. Article 19 Entry into force The present statute and the Civil Code shall enter into force on the hundredth eightieth day following its publication. Approved on 23 August 2011. The Speaker of the National Parliament, in substitution Vicente da Silva Guterres Enacted on 13 / 09 / 2011. For publication. The President of the Republic, José Ramos-Horta CIVIL CODE OF TIMOR-LESTE CIVIL CODE BOOK I GENERAL PART TITLE I ON LAWS, THEIR INTERPRETATION AND APPLICATION CHAPTER I Sources of the law ARTICLE 1 (Immediate sources) 1. Specific laws are immediate sources of the general law. 2. All generic provisions deriving from the competent state bodies are considered to be laws. ARTICLE 2 (Judicial value of customs) Norms and customary uses that are not contrary to the Constitution and the laws shall be juridically applicable. ARTICLE 3 (Value of equity) Courts may only decide based on equity when: a) There is a legal provision that allows it; b) There is agreement of the parties and the legal relationship is not unenforceable; c) The parties have previously agreed in writing to resort to equity, and the legal relationship is not unenforceable. CHAPTER II Laws in force, their interpretation and application ARTICLE 4 (Coming into force of a law) 1. A law becomes binding only when it is published in the official gazette. 2. Between the publication of a law and its coming into force a period of time determined by the law itself will elapse or, in case of omission, such a period will be determined by special legislation. ARTICLE 5 (Ignorance or misinterpretation of the law) Ignorance or misinterpretation of the law does not justify failing to comply with it nor does it exempt people from the sanctions it imposes. ARTICLE 6 (Cessation of the law in force) 1. When it is not specifically destined to be temporarily in force, the law will only stop being in force if revoked by another law. 2. Revocation may result from an explicit declaration, from incompatibility between the new and the previous rules or from the fact that the new law regulates all the contents of the previous law. 3. The general law does not revoke the special law, unless this is the unequivocal intention of the legislator. 4. Revocation of the revocatory law does not imply the reapplication of the law that had been revoked. ARTICLE 7 (Obligation to judge and duty to obey the law) 1. The court may not abstain from judging by invoking lack or obscurity of the law or alleging irretrievable doubt about the facts under litigation. 2. The duty to obey the law cannot be withdrawn under the pretext that the contents of the legislative rule are unfair or immoral. 3. In the judgments he gives, the judge must take into consideration all the cases deserving analogous treatment, in order to achieve uniform interpretation and application of the law. ARTICLE 8 (Interpretation of the law) 1. Interpretation should not be confined to the letter of the law, but should instead reconstitute the legislative line of thought based on the texts, keeping in mind above all the unity of the judicial system, the circumstances in which the law was created and the specific conditions of the time when it is applied. 2. The legislative thought that does not have any verbal correspondence, even if imperfectly expressed, in the letter of the law, cannot be considered by its interpreter. 3. In determining the meaning and scope of the law, its interpreter shall presume that the legislator consecrated the most accurate solutions and was able to express his or her thinking in adequate terms. ARTICLE 9 (Filling loopholes in the law) 1. Those cases not foreseen by the law are regulated according to the norm applied in analogous cases. 2. Analogy is present whenever in the unforeseen cases the same reasons are valid that justify the regulation of the case foreseen in the law. 3. Where there is no analogous case, the situation is solved according to the rule the interpreter himself or herself would create if he or she had to legislate in the spirit of the system. ARTICLE 10 (Exceptional rules) Exceptional rules do not allow analogical application, but admit extensive interpretation. ARTICLE 11 (Application of the laws in time. General principle) 1. The law provides only for the future; even if it is given retroactive efficacy, it is assumed that the effects already produced by the facts that the law is meant to regulate are presumably excepted. 2. When the law regulates the conditions of substantial or formal validity of any facts or of their effects, it is understood that, in case of doubt, it only targets the new facts; but when it directly regulates the contents of certain legal relationships, ignoring the facts that were at its origin, the law will be assumed to cover the very relations that have already been constituted and which are still valid at the time of its coming into force. ARTICLE 12 (Application of the law in time. Interpretative laws) 1. Interpretative law is part of the interpreted law, with exception of the effects already produced by enforcement of the obligation, through a final sentence, through settlement out of court, even if it has not been homologated, or by acts of analogous nature. 2. Discontinuance and confession that have not been homologated by the court may be revoked by the discontinuer or confessor for whom the interpretative law may be favourable. CHAPTER III Foreigners’ rights and conflict of laws SECTION I General provisions ARTICLE 13 (Foreigners’ legal status) 1. Foreigners are treated as nationals as regards enjoyment of their civil rights, unless otherwise provided by law. 2. However, foreigners are not granted those rights that their respective State grants to its nationals, but does not grant to the Timorese in equal circumstances. ARTICLE 14 (Qualifications) The competency granted to a law only comprises the rules that, by virtue of their contents and function in that law, fall under the legal regime under consideration in the rule of conflicts. ARTICLE 15 (Reference to foreign law. General principle) Reference of the rules of conflicts to any foreign law determines only the application of the internal provisions of that law, in the absence of a rule to the contrary. ARTICLE 16 (Reference to the law of a third State) 1. If, however, the private international provisions of the law referred to by the Timorese rule of conflicts refer to another legislation which is considered competent to regulate the case, the internal provisions of the latter shall apply. 2. The above does not apply if the law referred to by the Timorese rule of conflicts is the personal law and the interested party usually resides in Timorese territory or in a country whose rules of conflicts consider the internal provisions of the State of his or her nationality to be competent. 3. However, the rule in paragraph 1 only applies to cases of guardianship and trusteeship, patrimonial relations between spouses, parental authority, relations between adopter and adoptee and succession by death, if the national law indicated by the rule of conflicts refers back to the law of the location of the real estate and the latter is considered competent. ARTICLE 17 (Reference to the Timorese law) 1. If the private international provisions of the law designated by the rule of conflicts refers back to the internal Timorese law, this is the law to be applied. 2. However, when the matter falls under the personal status law, the Timorese law shall only apply if the interested party has his or her habitual residence in Timorese territory or if the law of the country of such residence also considers competent the Timorese domestic law. ARTICLE 18 (Cases in which reference is not admissible) 1. The latter two articles no longer apply when their application results in the invalidity or inefficacy of a legal transaction that would be valid or efficient according to the rule established in article 15, or the illegitimacy of a state that would otherwise be legitimate. 2. The matter established in the same articles no longer applies if a foreign law has been designated by the interested parties, in cases where such designation is authorized. ARTICLE 19 (Plurilegislative judicial ordinances) 1. When, due to the nationality of a given person, the competent law is that of a State in which different local legislative systems co-exist, it is the internal law of that State that determines the applicable system in each case. 2. In the absence of interlocal law norms, one resorts to the private international law of the same State; should this not be enough, then the personal status law of the interested party is considered to be that of his or her habitual residence. 3. If the competent legislation constitutes a territorially unitary legal order, but several systems of norms for different categories of people are in force, the provisions set forth in that legislation regarding the conflict of systems is what must always be applied. ARTICLE 20 (Law and fraud) In applying rules of conflicts, de facto or de jure situations, created with the fraudulent aim of avoiding the applicability of the law that would otherwise be competent, are irrelevant. ARTICLE 21 (Public order) 1. The precepts of foreign law indicated by the rule of conflicts do not apply when this application involves violation of the fundamental principles of international public order of the Timorese State. 2. In this case, the most appropriate rules of the competent foreign legislation apply, or, subsidiarily, the rules of internal Timorese law.