MOLDOVA STATE UNIVERSITY

LAW FACULTY

PRIVATE LAW DEPARTMENT

Individual Work

on CIVIL LAW

Topic: Concession Contract

Teacher: Cara-Rusnac Aliona, doctor în drept, lector universitar

Author: Șeremet Marinela, student gr.1609

Chişinău – 2018
 Concession Contract
1. Notion and legal features;
2. Elements of the concession contract;
3. The content of the concession contract;
4. Termination of the concession contract;

1. Notion and legal features;

The legal notion of the concession contract is not settled in the Civil Code1, as the notions of the
other contract, but it is provided in a special law2, “Legea cu privire la concesiuni nr.534 din
1995”, which will be in force until 17.02.2019, when a new law3 will regulate the legal
relationships regarding concessions, “Legea nr.121 din 05.07.2018 cu privire la concesiunile de
lucrări și concesiunile de servicii”. Monitorul Oficial al Republicii Moldova nr.309-320 din
17.08.2018, will enter in force in 2019.

The present law, gives in the first paragraph the notion of the concession contract, so it is a
contract by which the state or administrative-territorial units (the concedent) assigns (transmit) to
an investor (the natural or legal person, including foreign), in exchange for a royalty, the right to
conduct an activity, exploration, exploitation or restoration of natural resources on the territory
of the Republic Moldova, to provide public services, to exploit the goods(movable or
immovable), that are in the public property of the state or of the administrative-territorial units
which, according to the legislation, are removed all or a part from the civil circuit, as well as the
right to some types of activity, including those that constitutes the monopoly of the state, taking
over the management of the object concession, risks and patrimonial liability.

The Law that will enter in force from 2019, provides in the paragraph 3 different notions,
moreover determines 3 types of concession contract:

Concession contract of works- onerous and written contract, by which one or more authorities
entrust the execution of one or more works to many economic operators, as well as the
exploitation of accessory goods for the workers, in which the counterperfomance for works is
represented by either the right to exploit the works which are the object of the concession, either
that right accompanied by a payment.

Concession contract of services-onerous and written contract, by which one or more

contracting authorities entrusts the provision and management of services other than the
execution of the works provided under the concept of " concession contract of works", to one or
more economic operators as well the exploitation of the services, in which the

1
COD Nr. 1107 din 06.06.2002
2
Legea cu privire la concesiuni nr.534 din 1995
3
“Legea nr.121 din 05.07.2018 cu privire la concesiunile de lucrări și concesiunile de servicii”.
Monitorul Oficial al Republicii Moldova nr.309-320 din 17.08.2018
counterperfomance for services is represented either by the right to exploit the services that are
the object of the concession, or the right respectively accompanied by a payment;

Mixed concession contract- contract that has as object: the concession of works and the
concession of services

Types of concession contract:

a) Concession of goods- The concedent obtains the right to exploits public goods , which
are wholly or partially withdrawn from the civil circuit.
b) Concession of economic activities- The concedent obtains the right to conduct some
activities, exploration, exploitation or restoration of natural resources, as well as the
development of certain types of activity is the monopoly of the state.
c) Concession of public services-The concedent obtains the right to perform some public
services which implies managing the public service according to the requirements general
interest.

2. Elements of the concession contract;

Parities of the concession contract are:

a. The concedent (concedentul): Government, in the case of concession of land and

other natural resources; the central specialized bodies and the local public
administration authorities, in the case of the concession of state property, municipal
enterprises.
Law nr.121/2018, that will enter in force in 2019, settles the notion „Autoriate
Contracanta”- public authority; legal person from public law; an association of those
authorities / persons whose members designate from among them, by legal act of civil
law, a legal person to represent them as a single contracting authority in relation to
any economic operator;
b. Investor (“concesionar”): natural and legal persons from Republic of Moldova or
other countries.
Law 1214 settles the notion of economic operator, that represents person to whom
was transmitted the object of the contract and the operating risk.

The object of the contract:

a. Legal object-private administration of a public service of a good or execution of a

public service by a private person.
b. Material object:
-land and other natural resources;
- the movable and immovable assets of the public or private domain of the state or
of the administrative-territorial units;
-works and services of national or local public interest

4
Legea nr.121 din 05.07.2018 cu privire la concesiunile de lucrări și concesiunile de servicii. Monitorul Oficial al
Republicii Moldova nr.309-320 din 17.08.2018
The term of the contract: It can be established by the both parties or by the concedent.
According to the law regarding concession the term could not exceed 50 years, the new law in
the article 10 establishes a new term of 35 years.

The form of the contract: Law settles the written form, Government establishes the list of the
concession object, and that list should be approved by the Parliament.

The price of the contract: it is established in nature, money or both, in the form of one-time
payments (rent), payments for the extraction of natural resources or for production (royalties) for
the right to exploration of natural resources, which is paid from the moment when the natural
resources are extracted or the production is started until the expiry of the concession contract.

3. The content of the concession contract;

The rights of the concedent:

1. to modify unilaterally the terms of the contract if there are circumstances that are specific
to those provided for in the grant of the concession, namely in the case of a change in a
general interest;
2. to receive or acquire, as a matter of priority, part of the output produced by the
concessionaire, unless the concession contract provides otherwise;
3. to control how the investor fulfills his contractual obligations;
4. to acquire the goods of the concessionaire after the termination of the concession
contract;
5. to require, in the event of expiry of the concession contract or termination of the contract,
that the improvements which can not be separated from the object of the concession
without causing damage caused by the concessionaire to that object, as well as the
constructions executed on the concession sector without the consent of the conceder;
6. to control the investor’s economic and financial activity by engaging an independent
audit service.

The obligations of the concedent:

1. to give to the investor, on time and in full volume, the rights over the objects of the
concession, provided for in the concession contract;
2. to hand over to the investor the objects of the concession in the condition and terms
provided by the concession contract;
3. to keep the business secret of the investor ;
4. to not interrupt the economic and operational activity of the investor;

The rights of the investor:

1. to exploit the good, the public service or to execute the public works by establishing the
main directions and the prospects for the development of the concession;
2. to collect the fruits of the goods which are the object of the concession;
3. to establish the structure of the governing bodies, the state of functions, to hire workers,
including foreign citizens and stateless persons;
4. to appoint the head of the concession enterprise, his deputies, the heads of the structural
subdivisions, unless the concession contract provides otherwise;
 5. to perform extraconcessional activities in accordance with the law and the concession
contract or with the consent of the concedent;
6. to recover the cost of improvements to the object of the concession, with the consent of
the concedent, if the contract expires or if it is terminated, unless the contract provides
otherwise;
7. to request, in case of unilateral change of the contract, the cover of the loss and the
unrealized income.

The obligation of the investors:

1. to ensure the functioning of the public service, the exploitation of the goods or the public
activity, in compliance with the provisions of the concession contract;
2. to ensure the continuity of service, being exonerated only by force majeure;
3. to respect the equality of beneficiaries in the public service;
4. to pay the fee at the amount specified in the tender, in the manner and within the terms
stipulated in the contract;
5. to execute his / her personal tasks under the contract without being able to subcontract, in
whole or in part, the object of the concession;
6. to present, upon termination of the concession contract, the documents proving that the
objects of the concession are free from any tasks;
7. to return to the concedent, on expiry of the concession contract or in case of termination
of the concession, the goods in the state in which they have been taken over, taking into
account their natural wear and tear;
8. to liquidate the concession company in accordance with the law and the concession
contract within 6 months of the expiry of the contract or in case of termination of the
contract.

4.Termination of the concession contract

 Expire of the established terms
 Termination before the expire terms;
-occurrence of events or the detection of facts that give the right to terminate the
contract;
- breach of the contract terms by the investor;
-the liquidation of the investor - legal person or the death of the investor - the natural
person who has concluded the contract;
- bankruptcy of the concession company;
- by the decision of the court on the nullity of the documents establishing the
concession company.
 the liquidation of the concession enterprise;
 prejudice to the object of the concession;
 in case it becomes unusable until the expiration of the contract.

In conclusion, the modifications established by the legislator come to facilitate and to reduce the
problems that are in practice, because the new law determines better the types of objects of the
concession contract, the limits of rights and obligations of every party. Moreover, by reducing
the term of the contract, legislator has prevented the cases when even though the contract was
still in force, it did not produce some effects, and the good that was supposed to be administrated
and exploit by the party had a passive status.
Every modification speaks about the progress of the society, in this case Law from 1995 is
outdated and the new relationships that appeared in the civil field require new settlements.