3.2.2.1 Applicable Law -

The Contracting Authority and its legal advisers will need to carefully consider the definition of "Applicable Law" and how it ties in with other definitions in which it is incorporated (in particular the definition of "Change in Law"). The definition will depend on the relevant country as the way laws are implemented varies across jurisdictions. The key principle is that it should be limited to obligations with which the Private Partner must legally comply, including:

• legislation (which must itself be clearly defined);

• case law to the extent that it constitutes binding precedent (for example in some common law jurisdictions);

• binding judicial or administrative orders or decrees;

• international human rights or environmental treaties that are directly applicable in the respective jurisdiction or have been incorporated into its national law;32

• mandatory industry guidelines with which the Private Partner is bound to comply under the PPP Contract; and

• international conventions (for example, in sectors heavily regulated by international treaties, such as airports). The Contracting Authority will need to consider whether it is appropriate for these to qualify, as well as the likely impact of change on the Private Partner. See Section 3.3, Sample Drafting 3, Required Definitions, "Applicable Law" definition.

The definition of Applicable Law typically encompasses tax law although this is sometimes included as a separate limb in its own right. The definition should not include governmental approvals or permits which should be treated separately in the PPP Contract. See Section 2.2.1.2.

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32 If the Parties agree the Private Partner should comply with institutional or industry standards or principles which are not legally binding, the PPP Contract would typically specify the relevant version to be complied with, e.g. the version in effect at the bid submission (or contract signature) date. Any changes would not usually fall under Change in Law or be required to be complied with.