Concession contract signed on 01.09.2000
Ministério do Equipamento Social, CTT - Correios de Portugal, S.A., ex-ministério do Planeamento e da Administração do Território (Ministry of Social Equipment, CTT - Correios de Portugal, S.A., forme
(This is not an official translation of the law)
On September 1, 2000, in the Ministry of Social Equipment, located in the Palácio de Penafiel, Rua de São Mamede (ao Caldas), 21, Lisbon, I, Fernando José Ramos Amodovar, Secretary-General of this Ministry, was present and confirmed the presence, as first grantor, His Excellency, the Minister of Social Equipment, Dr. Jorge Paulo Sacadura Almeida Coelho, in representation of the Government and authorised for this purpose under the terms of article 2 of Decree-Law no. 448/99, of November 4, and as second grantor, Emílio José Pereira Rosa, Chairman of the Board of CTT - Correios de Portugal, S.A., public limited company, with registered office in Rua de São José, no. 20, Lisbon, with corporate body number 500 077 568, registered in the Lisbon Companies Registry, under the number 1697, as certified by the appropriate document, presented here and archived in this Ministry's Secretariat-General.
And, in my presence, as Secretary-General of this Ministry, the two grantors stated their agreement to sign the Concession Contract of the Universal Postal Service, under the terms and cover of Decree-Law no. 448/99, of November 4, constituted by the following clauses:
1 - For the purposes of the provisions of the present contract, the following definitions apply:
a) Licensor - the Portuguese State;
b) Licensee - CTT - Correios de Portugal, S. A. (Portuguese Post Office);
c) ICP the Instituto das Comunicações de Portugal;
d) Basic Law - Basic Law governing the setting-up, management and operation of postal services on national soil, including international services originating in or destined to national territory (Law no. 102 enacted on July 26th 1999);
e) Terminal costs remuneration owed to the licensee for the carriage, processing and distribution of international mail originating overseas;
f) User any individual or corporate body able to access the services provided by the licensee under the licensing contract;
g) Case of force majeure any unforeseeable or unavoidable event whose effects are beyond the control or personal circumstances of the parties, to wit natural disasters, acts of war, whether declared or otherwise, subversion, public unrest, economic blockade or fire.
2 - The definitions and classifications set out in article 4 of the Basic Law apply to the present contract.
Object and scope of licensing
Object of licensing
1 - The object of the present licensing contract is:
a) The setting-up, management and operation of the public postal network;
b) To provide the following reserved services and activities:
1. The postal service for sending correspondence, including mailings, whether or not they are express services, whose price is less than five times the public charge for sending correspondence belonging to the first weight scale of the fastest standardised category, provided that its weight is under 350 g;
2. The postal service for sending registered correspondence and correspondence insured for a specific amount, including services to notify and service legal summons by post, within the same price and weight limits referred to in the previous paragraph above;
3. The issue and sale of stamps and other postal products;
4. The issue of postal orders;
5. The placement of post-boxes of whatsoever nature on the sidewalk intended for the collection of post;
c) Providing the following unreserved postal services which make up the general service:
1. The postal service for sending correspondence not covered by the price and weight restrictions stipulated in subparagraph 1) of paragraph b), books, catalogues, newspapers and other periodicals weighing up to 2 kg;
2. The postal parcel service up to 20 kg;
3. The postal service for recorded deliveries not covered by the price and weight restrictions set out in subparagraph 1) of paragraph b);
4. The postal service for sending items insured for a specific amount not covered by the price and weight restrictions set out in subparagraph 1) of paragraph b).
2 - The provisions of subparagraphs 1) and 2) of paragraph b) and of paragraph c) of the previous number above encompass the national and international postal service.
3 - In addition to the stipulations of no. 1, the licensor may, should duly recognised public interest so justify, invest the licensee with the duty of operating other postal services under such conditions as are agreed upon between both parties, these being included in an amendment to the licensing contract, preceded by the corresponding alteration to the present contract for licensing.
Remit of license
For the purposes of the object of license, the licensee is invested with all such rights and obligations as are included under the setting-up, management and operation of the public postal network and the provision of those services and activities set out in no. 1 of clause 2ª on national soil.
1 - The setting-up, management and operation of the public postal network and the provision of those reserved services and activities set out in paragraph b), no. 1 of clause 2ª are bestowed on an exclusive basis.
2 - Economic operation on exclusive basis set out under the terms of no. 1 shall remain in force until the licensor has liberalised the activity or part activity which is the object of the present licensing, to wit in accordance with EC law.
3 - In the event of the constraint, restriction or loss of the exclusive rights set out under the terms of no. 1, the licensee is still obliged to provide the corresponding services and activities in terms of a general service, safeguarding all such obligations as are incumbent upon it under the terms of the licensing.
4 - The situation referred to in the previous number above in no way jeopardizes the maintenance of the right to provide those postal services which are the object of licensing and recognized as having been bestowed upon the licensee.
Public postal network
1 - The licensee is obliged to set up, maintain and develop on such as basis as is appropriate to effectively provide a general service the public postal network, encompassing the set of human and material resources allocated to the provision of the postal service general, to wit those to be found at the following operating units:
a) Postal sorting centres;
b) Postal distribution centres;
c) Post offices.
2 - The following also form part of the public postal network:
a) Real estate whereupon the licensing operating units referred to in the previous number above are to be found;
b) Other real estate, or parts thereof, where licensee services for carrying on those activities licensed out are to be found;
c) The property used for the running those activities licensed out;
d) The rights and duties which are the object of the legal relationships to be found connected with licensing at any time, including labour, loans, contracts, leasing and the rendering of services.
1 - The licensing contract comes into force on the date whereupon it is signed. It is valid for a period of 30 years.
2 - The contract may be renewed for successive minimum periods of 15 years subject to agreement between the parties, either of whom shall - if they are interested in an extension give the other party at least 5 years notice prior to the end of the initial contract or any renewals thereof.
3 - Should no agreement have been reached vis-à-vis the renewal of the contract within two years of the date of notification referred to in the previous number above, the licensor reserves the right to monitor the licensee s management by way of representatives appointed by him to this effect, in order to ensure that the licensing is fully operational. The licensor is further invested with the right to approve the exercise or omission of the following acts by the licensee:
a) Investment and respective financing, repayments and revaluations;
b) Acquisition, disposal or any other form of encumbrance on real estate and marketable securities;
c) Technological and qualitative development of the public postal network in order to ensure the service quality indices stipulated in the present contract.
4 - Should the situation foreseen in the previous number above occur, the licensor may also, via his representatives, determine that extraordinary investments be made in order to ensure the greater technological and qualitative development of the public postal network, thereby ensuring compliance with those objectives not included under the terms of the present contract.
5 - Any extraordinary investments made under the terms of the previous number above shall be subject to compensation corresponding to the differential between the amount of the extraordinary investments made deducted from the repayments, plus such compensation as is agreed upon between the licensor and the licensee.
6 - In the event of any argument between the licensor and the licensee as regards the amount of compensation referred to in the previous number above, it is incumbent upon the court of arbitration referred to by clause 38ª to set this figure.
7 - Should the licensor's representatives fail to approve those acts foreseen in no. 3, the State shall not assume its obligations there under.
Other licensee services and activities
1 - Besides the services licensed out, the licensee may provide other postal services in Portugal and overseas, as well as exercise any other activities which allow the public postal network to become more profitable, either directly or by forming, or taking up a stake in, companies.
2 - The rendering of services and exercise of activities referred to in the previous number above shall not affect the licensee s compliance with his obligations under the licensing contract.
Obligations of the licensee
General obligations of the licensee
1 - Under the licensing contract the general obligations set out below are incumbent upon the licensee:
a) To ensure the provision of those services licensed out throughout national territory, not showing any undue or unwarranted preference or discrimination towards any individual or corporate body requesting such services;
b) To provide those services licensed out ensuring their interoperability, continuity, availability and quality;
c) To ensure and enforce confidentiality and the inviolability of correspondence, including data protection, subject to such restrictions and exceptions as have been laid down by law;
d) To ensure the protection of privacy as regards all postal services provided;
e) To ensure equality and transparency for everybody, under equal conditions, as regards access to the use of the services licensed out, provided they comply with requirements and pay the corresponding prices;
f) To put out suitable advertising and regularly supply users with information about the general conditions of access and use of the services rendered, as well as the respective prices and quality levels;
g) To provide and send to the ICP such information and statistical data as are deemed necessary by the latter to monitor those activities which have been licensed;
h) To allow and facilitate the monitoring of performance of the licensing contract by the licensor, under the terms of clause 17ª;
i) Not to assign, dispose of or encumber, in any way, those rights invested under the licensing, except for those cases foreseen by law or duly authorized;
j) To comply with relevant parts of prevailing national laws and such orders, injunctions, commands and directives and instructions as have been directed to them by the relevant authorities under the terms of the law as well as those stipulations which, under the terms of the present contract, have been addressed to them by the licensor;
k) To comply with such standards as may come into force in the future, even if the said standards lead to the lapsing of those provisions which derive from the needs or requirements of public use of any of the services it provides and not foreseen at the time of licensing;
l) To ensure in an apt, appropriate way, the operation of those services which have been licensed out in crisis, emergency or wartime situations;
m) To ensure the existence of user support services, to wit by providing a suitable information and assistance system and creating a transparent, easy-to-access process which allows the speedy processing of complaints;
n) To adopt measures which ensure the easy use of the service by users with special needs, adopting the structures where this service is provided so as to ensure easy access thereto.
2 - For the purposes of the provisions of paragraph c) of the previous number above, the licensee undertakes to take all such measures as are required, appropriate and within its reach to ensure and enforce the inviolability and confidentiality of correspondence, as well as data protection, under the terms of prevailing legislation, though not entailing any responsibility for the licensee for actions or omissions which are not attributable to it.
3 - The licensee s employees and other workers are obliged not to disclose the content of correspondence or other information whereof they become aware during the course of their duties, except in such cases as are permitted by law.
Specific obligations in the context of the public postal network
The licensee has the following obligations as regards the public postal network:
1- To provide those entities qualified to carry out the postal activity with access to the public postal network, under the terms of the law, under equal conditions and without discrimination;
2- To set up the public postal network and keep it in good working order and secure, seeing to its operationality and proper operation;
3- To develop the public postal network qualitatively and quantitatively, to wit accomplishing those objectives set out in the arrangement referred to in clause 15ª, thereby ensuring the appropriate level of quality of those services provided on the said network;
4- To comply with applicable legislation in terms of the organization of national territory, and the protection of the environment and of heritage.
Specific obligations in the context of reserved services
1 - The following specific obligations are incumbent upon the licensee when providing reserved services pertaining to the sending of correspondence as referred to in subparagraphs 1) and 2), paragraph b), no. 1 of clause 2ª:
a) Its collection at least once a day and on every working day from the post-boxes of whatsoever nature installed to this end on the sidewalk or in such licensee locations as are suitable for the receipt of the said post, except under exceptional geographic circumstances or conditions acknowledged as such by the ICP;
b) Its distribution at least once daily and on every working day in the domicile of each destinee or, under the terms of the regulations, at appropriate locations, except under exceptional geographic circumstances or conditions acknowledged as such by the ICP.
2 - The licensee s employees who provide the services referred to in subparagraph 2), paragraph b), no. 1 of clause 2ª:
a) Are deemed to be employees for the purposes of paragraph c), article 386 of the Penal Code;
b) Shall observe procedural rules as regards notification and serving of legal summons by post, to wit the provisions of article 236 of the Code of Civil Procedure and article 113 of the Code of Penal Procedure.
3 - As regards the issue and sale of stamps, referred to in subparagraph 3), paragraph b), no. 1 of clause 2ª, the licensee has such specific obligations as have been set out in given regulations.
4 - The licensee s specific obligations as regards the issue of postal orders referred to in subparagraph 4), paragraph b), no. 1 of clause 2ª, are those which have been set out in the given national and international regulations in this regard.
Specific obligations as regards unreserved services
The specific obligations set out in no.1 of the previous Clause above are incumbent upon the licensee as regards the provision of those unreserved services forming part of the general service and referred to in paragraph c), no. 1 of clause 2ª and those set out in no. 1 of the previous clause.
The licensee undertakes to provide those postal services referred to in subparagraphs 1) and 2), paragraph b) and paragraph c) of clause 2ª in accordance with the quality standards and indicators to be set by arrangement under the terms of no. 5, article 8 of the Basic Law.
1 - The licensee undertakes to set up an annual cost accounting system that will allow the revenue earned and direct and indirect costs defrayed on each of the reserved services and on each of the unreserved services making up the general service.
2 - The cost accounting system shall also allow the itemization of the costs defrayed on the various basic operations making up the postal service as foreseen in no. 7, article 4 of the Basic Law.
3 - It is incumbent upon the ICP to approve the methodology to be used in setting up and using the system referred to by the previous numbers above.
1 - The licensee undertakes to draft and keep up-to-date an inventory of assets allocated to licensing. This shall distinguish between the property referred to in paragraphs a), b) and c), no. 1 of clause 5ª and the other property allocated to licensing, in accordance with rules to be defined by the ICP, having first heard the licensee's opinion.
2 - The inventory referred to in the previous number above shall be approved by the ICP on an annual basis.
3 - In the event of non-approval, the inventory process shall be submitted to the court of arbitration who shall take a decision in this regard.
4 - Without prejudice to such other penalties as are applicable in the event of a failure to comply with the stipulations of no. 1, the licensor reserves the right to carry out the inventorying of the property assigned to licensing, with the licensee bearing the corresponding costs.
Development objectives of the public postal network and minimum services provided
1 -The following shall be defined by way of an arrangement to be made between the ICP and the licensee:
a) Development objectives of the public postal network;
b) Objectives as regards the minimum services provided, technical characteristics and advanced resources.
2 - The objectives referred to in the previous number above are set for each year of validity of the arrangement.
3 - The arrangement referred to by the present Clause has been signed for a minimum period of three years which may be automatically extended for equal periods, coming into force as from its date of ratification by the licensor and forming an integral part of the licensing contract.
4 - In the event of the cessation of the validity of the arrangement and until a new arrangement has been signed, the licensee is obliged to ensure no less than those objectives set out above, without prejudice to the fact that it is incumbent upon the court of arbitration foreseen in clause 38ª to set new objectives as referred to by no.1.
1 - In order to allow the supervisor to verify smooth adaptation between the developments of the public postal network and of the services and levels of technological development and quality set out under the terms of the previous clause above, as well as any subsequent alterations made, the licensee undertakes to draw up a development plan for the following three years by the 3rd quarter of each calendar year. This plan shall set out the objectives to be aimed at in terms of network expansion as well as those services, which are the object of licensing.
2 - The development plan referred to by the previous number above shall consider the following objectives for each year:
a) As regards the public postal network, the introduction of new technologies into its operation, management and maintenance, quantifying the associated consequences;
b) As regards those services which are the object of licensing:
i) Introduction of new service facilities and the enhancement of the quality of those services provided;
ii) Progress made in terms of access to the services provided by citizens with special needs.
3 - The objectives mentioned in the previous number above shall be itemised by geographic area, so as to display the appropriate harmonisation of supply on national territory.
4 - The development plan shall contain the quantification and valuation of those investments required to put it into effect, distinguishing between investments aimed at the expansion of the public postal network and investments to replace the said network.
1 - It is incumbent upon the Finance Minister to supervise licensing so far as financial matters are concerned, and upon the Minister of the Social Equipment for all other matters.
2 - For the purposes of the provisions of the previous number above, the licensee shall provide the ICP with all such cooperation as it has been asked to provide, undertaking to afford access to its facilities, equipment of whatsoever nature and all documentation and files, to provide any information and to make available any elements requested of it, to wit the statistics and management records used, affording such clarifications in respect of the latter documents as it is asked to do.
3 - At the request of the ICP and in the presence of the licensee s representatives, inspections may be carried out to allow the operating and safety conditions and state of repair of the public postal network, and other property allocated to licensing, to be verified, as well as the quality levels achieved in the various services which are the object of licensing.
4 - Any ICP stipulations issued in respect of its supervisory powers shall be applied within the time period set to this end. They shall legally bind the licensee, without prejudice to an appeal to the court of arbitration foreseen in clause 38ª.
5 - The ICP and its agents are obliged to keep any information gathered in the strictest confidence, namely personal and commercial information within the remit of the supervisory measures carried out. It may not use this information nor disclose it for purposes other than those of supervision itself or some other purpose deemed relevant under the law.
6 - Should the licensee have failed to comply with the stipulations laid down by the ICP within the remit of its supervisory powers, it is incumbent upon the latter to put the situation right, either directly or via a third party, the attendant costs being borne by the licensee.
1 - For the setting-up, management and operation of the public postal network and the provision of those services licensed out thereby, the licensee is obliged to pay the State, on an annual basis and by way of rental, a sum corresponding to 1 % of the gross revenue from running the services which are the object of licensing and provided on an exclusive basis.
2 - Any negative operating margins deriving from compliance with general service provision obligations shall be deducted from the monthly amount of rent, such margins being determined in accordance with the stipulations of clause 19ª.
3 - Amounts relating to exemptions and reductions vis-à-vis the services licensed out, and resulting from the regulatory provisions applicable and laid down as such in the arrangement referred to by clause 24ª, may also be deducted from the annual rental, as may any other amounts which the State owes the licensee.
4 - Rent shall be paid in the month subsequent to the approval of the accounts pertaining to the previous calendar year.
5 - By joint ruling of the Finance Minister and of the Government member responsible for the communications area, the percentage of the amount of rent to be delivered to the ICP in return for those costs connected with licensing supervision and control shall be determined.
Determination of the compensation for general service costs
1 - Any unreasonable economic and financial costs arising from compliance with obligations to provide the general service foreseen under the terms of paragraphs b) and c) of clause 2ª shall be compensated in the event of approval alternatively or cumulatively in the following ways:
a) By way of the compensation fund foreseen under the terms of clause 26ª;
b) By deducting the respective amount from the rental to be paid by the licensee to the State;
c) By way of the prevailing tariff systems.
2 - For the purposes of the provisions of the previous number above, the licensee shall, in addition to and concurrently with the submission of the development plan referred to by clause 16ª, provide a specific demonstration of the costs defrayed on providing the general service and submit them to the approval of a committee made up of ICP and licensee representatives which shall be required to form an opinion within 30 days.
3 - In the event of approval, the licensee shall adapt his accounts so that costs and income associated with the general service can be properly monitored and a statement thereof provided.
4 - Should approval not be granted, namely owing to a failure to reach agreement between the committee and the licensee, the ICP shall promote a consultation of the postal service providers existing on the market with a view to choosing a provider who can provide conditions which are economically more advantageous for the licensor, without compromising the satisfaction of the same level and degree of obligations to provide a general service.
5 - In those cases referred to in the previous number above, the body taking on the obligation to provide the general service shall be compensated for the costs defrayed on such provision, under the terms of no. 1.
6 - Should there not be any other alternative service providers who, under the terms of no. 4, ensure the provision of the service, or whilst the exclusive agreements set out in clause 4ª are in force, it is incumbent upon the court of arbitration to come to a decision about when unreasonable economic and financial costs have occurred, in the event of non-approval by the committee under the terms of no. 2.
Decisions suject to authorisation
1 - The licensee may not, without the express authorisation of the licensor, take any corporate decision which directly or indirectly has as its purpose, or which may lead to one of the situations set out below:
a) Alteration of corporate purpose;
b) Transformation, merger, split or dissolution of company;
c) Reduction in share capital;
d) Total or partial temporary or permanent suspension or cessation of any of the services licensed out or which it is obliged to provide under the terms of the present contract;
e) Disposal of interests in companies formed to provide the services licensed out.
2 - The following are incumbent upon the licensee, subject to prior approval by the ICP:
a) The creation and closure of postal establishments;
b) The alteration of the working hours of postal establishments, bearing in mind service needs and levels of demand.
3 - It is incumbent upon the licensee to totally or partially suspend or cease on a permanent or temporary basis those services not covered by the licensing, having first heard the opinion of the ICP.
1 - Subject to prior approval by the licensor, the licensee is permitted to sublicense all or part of the operation of any of those services, which are the object of the present licensing.
2 - In those cases where sublicensing has been authorised, the licensee maintains his rights and is still directly and personally subject to the obligations deriving from the licensing contract.
Participation of third parties in the activity
1 - The object of licensing shall always be pursued by the licensee directly and personally. The adoption of any legal instruments empowering third parties to take part in licensing activities require the prior authorization of the licensor.
2 - Contracts foreseeing the provision of the following types of services are exempted from the provisions of the previous number above:
a) Postal object transport and distribution services;
b) Post office services and the sale of postage stamps;
c) Other third party services which are complementary to the operation which is the object of licensing.
3 - In the event of authorisation as referred to by no. 1, the licensee maintains his rights and is still directly and personally subject to the obligations deriving from the present contract.
4 - The provisions of the previous numbers above in no way jeopardise the validity of the contracts and other legal instruments in force upon the date when the licensing contracts comes into force.
Under the licensing contract the licensee is expressly invested with the following rights:
a) To operate licensing under the terms of the present contract;
b) To charge the prices of the services it provides;
c) To carry out such works as are necessary to set up, upkeep and maintain the public postal network, in accordance with the law and under the terms of the provisions of the legal regulations on urban development and building dispensing with the need for municipal licensing;
d) To request of the Government member responsible for the communications area expropriations by dint of public utility, to request the formation of administrative rights of way, to set up protection areas and to access land and public and private buildings, whenever this proves necessary for the operation of the services licensed out and in accordance with prevailing legislation.
1 - When setting the prices of each of the postal services which make up the general service, the following principles shall apply:
a) Accessibility of prices in order to allow the provision of services which are accessible to the majority of users;
b) Focus on the costs of the provision of the services, duly demonstrated by a cost accounting system;
c) The transparency and non-discrimination of its application, ensuring that all users in equal circumstances are treated in the same way;
d) Uniform application of prevailing tariff system for those services which are the object of licensing.
2 - Price-setting rules for each of the services which will make up the general service are set out in an arrangement abiding by the principles listed in the previous number above, intended to remain in force, unless otherwise provided for by the parties thereunto, for 3-year periods. This arrangement shall be signed between the licensor, represented by the ICP, the General Directorate for Trade and Competition and the licensee.
3 - As regards the price-setting referred to in the previous number above, the licensee undertakes to submit a plan which results in the adaptation of its financial structure to the principles referred to in no. 1.
4 - In the event of any restriction, limitation to or loss of exclusive agreements, the prices already in place shall remain in force until the agreement containing price-setting rules between the licensor, represented by the ICP, the General Directorate for Trade and Competition and the licensee has been signed, in accordance with the rules set out in the previous numbers above.
5 - In the absence of the agreement referred to in the previous number above, the parties may submit the said price-setting to the court of arbitration envisaged in clause 38ª.
1 - Terminal charges shall be transparent and non-discriminating. They shall be set in line with the costs defrayed by the licensee by dint of the transport, processing and distribution of incoming international post and related with the quality of the service provided.
2 - The terminal charges referred to in the previous number above are set in accordance with the criteria and rules defined or agreed upon by the licensee at the various stages of negotiation, and duly notifying the ICP thereof.
Compensation fund for providing the general service
1 - Any unreasonable economic and financial costs deriving from the provision of the general service, when approved by the ICP, may be compensated for by way of a compensation fund for the provision of the general service, to which the licensee and other postal service providers offering services in the unreserved area but in the context of the general service - shall contribute, under such terms as have been laid down by special legislation.
2 - For the purposes of the previous number above, the licensee shall, in the context of the cost accounting system he is obliged to provide under the terms of clause 13ª, demonstrate the costs defrayed on providing the general service and the costs to be borne by the compensation fund.
Breach of contract
1 - Without prejudice to the breaches which may give rise to sequestration or rescission of licensing under the terms of clauses 29ª and 34ª, any breach by the licensee of its licensing obligations, of the stipulations of the licensor issued under the terms of the law or of the licensing contract, shall entail the application of contractual fines for a sum varying between a minimum of 0.001 % and a maximum of 0.5 % of the annual volume of revenue deriving from the licensing operation carried out in the previous calendar year, depending on the seriousness of the infringements committed and of the resulting damages, as well as the blameworthiness of the licensee.
2 - The fines referred to in the previous article above are applied by way of a ruling by the Government member responsible for the communications area, upon a proposal by the ICP, being communicated to the licensee in writing and taking effect regardless of any other formality.
3 - 60% of any fines applied under the terms of the present article reverts to the State and 40% to the ICP.
4 - The payment of any fines applied under the terms of the present article in no way exempt the licensee from its civil liability for losses and damages resulting from the infringement.
The licensee shall be liable under the terms of the general law for any losses caused - whether intentional or otherwise or where there is a risk involved - to third parties during the course of those activities which constitute the object of licensing. The licensor shall not assume any type of liability in this regard.
1 - In the event of a serious breach by the licensee of its obligations under the licensing contract, the licensor may, by way of sequestration, take upon itself the carrying on of those activities and the operation of those services which are the object of licensing.
2 - Sequestration may occur should any of the following situations occur:
a) Cessation or total or partial interruption of the carrying on of those activities and the operation of those services which are the object of licensing;
b) Serious shortcomings in the smooth carrying on of those activities and the operation of those services which are the object of licensing, as well as situations involving the lack of security of people and property;
c) Shortcomings in the general state of public postal network facilities and equipment which compromise the continuity and/or quality of the provision of those services which are the object of licensing.
3 - Upon the occurrence of sequestration, the licensee shall bear any costs resulting from the maintenance of services and any extraordinary expenses required to resume normal operation.
4 - As soon as the reasons behind sequestration cease to exist and the licensor sees fit, the licensee shall be notified to resume the normal operation of those activities and services which are the object of licensing, within the time period stipulated to this end.
5 - Should the licensee not wish or not be able to resume licensing or, having done so, should there still be serious shortcomings in the operation of those activities and services which are the object of licensing, the licensor may determine the rescission of the contract forthwith.
1 - Should cases of force majeure occur during the term of validity of the licensing contract which prevent compliance with obligations by either party or which require the suspension of those services which have been licensed out, the corresponding obligations or the contract shall be suspended totally or partially for the period corresponding to that of the duration of the case of force majeure, or the contract shall be revised by mutual agreement should this be justified.
2 - Any party intending to invoke a case of force majeure shall notify the other party as soon as he becomes aware thereof, stating its impact on contract performance.
3 - Without prejudice to the possibility of the agreement foreseen in no. 1, should a case of force majeure occur, the licensee shall always provide for the operation and continuity of the postal services, taking such measures as prove necessary and appropriate to this end, to wit in terms of planning, prevention of operation and human resources.
War of crisis situation
1 - Without prejudice to the provisions of paragraph j), no. 1 of clause 18ª and of the aforementioned clause, in the event of war or a crisis situation the licensor reserves the right, by way of the Government member responsible for communications, to manage and operate those services which are the object of licensing.
2 - During the period referred to in the previous number above, the licensing period stipulated under the contract with regard to the object of licensing shall be suspended.
Modification and termination of contract
Modification and termination of contract
1 - In the event that during the term of validity of the present licensing contract, circumstances occur which, by dint of their importance and effects, are to be regarded as an irregular alteration of circumstances under the terms of article 437 of the Civil Code, the parties undertake to revise the contract in accordance with the principles of good faith and fairness.
2 - Should the parties fail to reach an agreement as regards the alteration of the contract foreseen in the previous number above within a time period not exceeding 90 days as from the notification of either party to another of the alteration of circumstances, there shall be a recourse to the court of arbitration foreseen in clause 38ª.
Cessation of licensing
Licensing shall terminate upon mutual agreement in this regard between the licensor and the licensee owing to rescission, redemption or after the respective term has elapsed.
Rescission of licensing
1 - The licensor may rescind licensing, without prejudice to the provisions of no.2, in the event of a serious, ongoing and irredeemable breach of the licensee s obligations, to wit should any of the following occur:
a) Deviation of object of licensing;
b) Breach of legislation applicable to the activity object of licensing or of any of the clauses of the respective contract;
c) Dissolution of licensee;
d) Unfounded, repeated opposition to supervision and a repeated, unwarranted failure to comply with the legitimate stipulations of the licensor and of the ICP;
e) Refusal to carry out the proper upkeep and repair of the facilities and equipment which make up the public postal network;
f) Refusal or impossibility by the licensee to resume the licensing operation under the terms of no. 5 of clause 29ª, or, should it have done so, should the situation which led to sequestration remain;
g) Intentional failure to comply with legal or arbitration decisions.
2 - Should any of the cases of non-compliance occur, which under the terms of no. 1 constitutes sufficient grounds for the rescission of licensing, the licensor shall notify the licensee to comply with his obligations in full within the term set to this end, or correct and remedy the consequences of his acts, except in the case of an irredeemable breach.
3 - Should the licensee fail to see to the correction or remedy of the consequences of his failure to comply under the terms stipulated by the licensor, the latter may rescind licensing by sending the licensee a notification to this effect.
4 - Rescission is incumbent upon the Government member responsible for communications and shall take effect upon notification of the licensee, regardless of any other formality.
5 - In the event of rescission, the totality of all property and rights assigned permanently and necessarily to licensing reverts to the State, without any compensation and without prejudice to the civil liability incumbent upon the licensee and such sanctions as are foreseen under the law or under the present licensing contract.
Redemption of licensing
1 - The licensor may redeem licensing whenever the public interest so justifies, giving the licensee at least 1 year, notice in this regard, after at least 15 years have elapsed since the commencement of the respective time period.
2 - Once a year has elapsed since the notification of redemption, the licensor shall assume all the rights and obligations taken on by the licensee prior to the date of notification, with a view to ensuring the pursuit of the activities of setting-up, management and operation of the public postal network and the provision of those services licensed out, and also those which have been taken on by the licensee after the said date, provided that they have been previously authorized by the licensor, in which case the provisions of no. 3 of clause 6ª shall apply, making such adaptations as prove necessary.
3 - In the event of redemption, the licensee shall be entitled to compensation equal to the value of the property which is assigned to licensing on the date of redemption, provided that they have been included in the respective development plan for the public postal network supported by the licensee, less the repayments and respective revaluations and less 1/15 for each year which has elapsed since the commencement of the licensing period.
4 - In addition to the compensation foreseen in the previous number above, the licensee is entitled to extraordinary compensation corresponding to the number of years left before the end of the licensing period multiplied by the mean value of the net results calculated in the five years prior to the notification of redemption.
Reversion of property and rights upon cessation of licensing
1 - Upon cessation of licensing, the totality of all property and rights assigned permanently and necessarily to licensing on that date reverts free-of-charge and automatically to the licensor under the terms of clause 5ª, with the licensee undertaking to submit them in smooth, safe working order, without prejudice to the normal wear and tear resulting from their use, and free of any encumbrances or costs. Under no circumstances and on whatsoever grounds may the licensee invoke a lien.
2 - Should the reversion of property and rights to the licensor not proceed under the conditions foreseen in the previous number above, the licensee shall compensate the licensor, the said compensation being calculated under the terms of the law.
3 - Upon cessation of licensing, the licensor shall proceed with an inspection of the property assigned to licensing, in which a representative of the licensee shall take part. This inspection is intended to verify the state of repair and maintenance of the said property, drawing up a report of the inspection carried out.
Settlement of disputes
Conflict settlement process
1 - Any conflicts arising between the parties as regards the application, interpretation or filling of loopholes in the licensing contract shall be settled by voluntary arbitration under the terms of Law no. 31 enacted on August 29th 1986.
2 - The submission of any matter to the conflict settlement process in no way releases the licensee from his obligation to punctually comply with the provisions of the present contract and of the stipulations of the licensor whereof he is notified, including such stipulations as have been issued after the date of the said submission, nor does it permit any interruption in the carrying on of those activities which are the object of licensing which shall continue to be processed under the terms in force upon the date of submission of the conflict, until a final decision has been obtained in the conflict settlement process vis-à-vis the matter concerned.
Court of arbitration
1 - Either party may submit the litigation to a court of arbitration made up of three members, one being appointed by each of the parties and the third being chosen by mutual agreement of the arbitrators designated by the parties.
2 - Any party deciding to submit a certain conflict to the court of arbitration under the terms of the previous number above shall submit his reasons for doing so, designating forthwith the arbitrator to be designated by him in the request for the formation of a court of arbitration which he addresses to the other party by recorded delivery with acknowledgement of receipt. Within twenty working days of receipt of the said request, the other party shall designate the arbitrator to be chosen by him and present his defence.
3 - The arbitrators designated under the terms of the previous number above shall appoint the third court arbitrator within ten working days of the designation of an arbitrator by the party against whom the action has been brought.
4 - Should no agreement be reached as regards the designation of the third arbitrator, the choice shall be made by the president of the Lisbon Magistrates Court at the request of either party.
5 - The court of arbitration shall be deemed to have been formed on the date whereupon the third arbitrator accepts his appointment and notifies both parties of his acceptance.
6 - The court of arbitration may be aided by such technical experts as it is thought appropriate to designate, though it shall always seek advice from people or bodies with suitable legal training in Portuguese law.
7 - The court of arbitration shall pass sentence in accordance with the law. No appeal may be made against its decision, without prejudice to the provisions of the law in respect of the annulment of arbitration decisions.
8 - The decisions of the court of arbitration shall be given within no more than six months after the date of formation of the court stipulated under the terms of no. 5, shall outline the final decision of the conflict settlement procedure and shall determine the legal costs and the proportion to be paid by each party.
9 - Any omission shall meet the provisions set out in the law applicable to voluntary arbitration.
Inventory of property
Within two years of the date whereupon the contract is signed the licensee shall be obliged to submit an inventory to the ICP listing the property assigned to licensing under the terms of clause 14ª.
Relations with third parties
The signing of the present licensing contract in no way compromises the validity of all rights and obligations deriving from contracts, which have already been signed or which are to be signed between the licensee and other overseas postal administrations or bodies.
The Minister of Social Equipment (Dr. Jorge Paulo Sacadura Almeida Coelho) Chairman of the Board of CTT - Correios de Portugal, S.A. (Engenheiro Emílio José Pereira Rosa) Secretary-General of the former Ministry of Planning and Territorial Administration (Fernando José Ramos Amodovar).
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