SIMPLIFIED RECOVERY OF DEBTS & ENFORCEMENT OF MONEY JUDGMENTS UNDER OHADA LAW
By Ferdinand Doh Galabe, Esq., B.L., LLM
Co-founder & Managing Partner
The Organisation for the Harmonisation of Business Law in Africa (OHADA) is an international uniform business law system in Sub-Saharan Africa (SSA) comprising Seventeen (17) member states including Benin, Burkina Faso, Cameroon, Central African Republic, Comoros Islands, Congo-Brazzaville, Cote d’Ivoire, Gabon, Guinea-Conakry, Guinea-Bissau, Equatorial Guinea, Mali, Niger, Democratic Republic of Congo (DRC), Senegal, Tchad, and Togo. The organisation was created by a Treaty in 1993 (Port Louis, Mauritius) later revised in Quebec in 2008.
Apart of the English-speaking part of Cameroon which forms approximately 30% of its population, all 17 member states of the OHADA are French-speaking continental civil law countries which applied the Code civil and Code de commerce prior to the entry into force of the OHADA legal framework. The principal objective of the organisation is to achieve through uniform transnational substantive laws legal and judicial security for businesses and private investors. At the summit of the OHADA judicial system is the Common Court of Justice & Arbitration (CCJA) which serves both as an arbitral body and as the supreme judicial body in matters of business law, thus ensuring a consistent and uniform application and interpretation of harmonised rules.
The OHADA uniform acts regulate general commercial law, commercial companies and economic interest groups, simplified debt recovery, enforcement of judgments, arbitration, mediation, cooperative societies, security interests law, carriage of goods by road, accounting law, and collective proceedings for clearing of debts. There are also various complementary rules, especially those regulating the CCJA. There are several other areas of law in which the OHADA has not yet enacted uniform law.
The specific instrument regulating simplified debt recovery, as aforementioned is the OHADA Uniform Act organising Simplified Recovery Procedures and Measures of Enforcement adopted on April 10, 1998 at Libreville, Gabon. This instrument does not work in isolation and recourse to other uniform acts and pertinent domestic instruments is necessary, as the circumstances warrant, for a proper prosecution of debt recovery. It is the case, for example, of the Uniform Act on Security Interests, the Uniform Act on Commercial Companies and Economic Interest Groups, the Uniform Act on Organising Collective Proceedings for Clearing of Debts and the Uniform Act on General Commercial Law.
That said, the abovementioned act regulating simplified debt recovery procedures and enforcement measures contains two books, the first of which deals strictly with the simplified debt recovery procedure (injunction to pay, injunction to deliver, and injunction to restitute), while the second book deals with sequestration (seizure or “asset freezing order” known as Mareva injunctions in some Common law countries) which is essentially a means to ensure security in respect of the enforcement of a judgment (although they cannot be obtained against real property), on the one hand, and measures of enforcement, on the other hand, including: attachment & sale of tangible movable property, garnishee proceedings, attachment & assignment of earnings, attachment & apprehension of tangible movable property, attachment under a prior claim of tangible movable property, attachment of transferable securities or other partnership rights or shareholdings and attachment of real property (land). Asset freezing orders can be obtained against tangible movable property, for debts owed to the debtor by third parties and for shareholdings and other transferable securities.
This, in sum, is the judicial and legal arsenal for simplified debt recovery and for the enforcement of judgments under OHADA law. Attachment of ships or ship arrest and airplanes are regulated by special instruments on maritime and aviation law.
The procedure for simplified debt recovery is designed for creditors who do not have a writ of execution or enforceable judgment or judicial decision. The nomenclature is somewhat deceptive because the procedure is not limited, strictly speaking, to debt recovery, but englobes simplified procedures either for the delivery of specific tangible personal property or for its restitution or return. The words recovery, delivery and restitution have different meanings. An injunction to deliver may be addressed to a seller who has been paid for goods which he has not delivered, while an injunction to restitute or return may be addressed to a car lessee who has not returned a leased car since the end of the contract.
The first procedure concerns the simplified recovery of a debt which arises either from a contract or an obligation which arises from the issuance or acceptance of any negotiable instrument, or of a cheque without cover or insufficient cover, involving a liquidated (specific sum of money) claim which is certain (actual, predetermined) and due for immediate payment. The burden of proving the existence of a debt or an obligation lies on the party who initiates the action.
The success of other two procedures for delivery or for restitution/return of specific tangible personal property hinge on the ability of party initiating the action proving the actual existence of such property, which must be described with exactitude, as well as on that party’s capacity to establish his rightful claim to such property.
The action is initiated by petition in a one-party proceeding, then the judge issues a mandatory injunction to pay, to deliver or to restitute order, which must be served personally on the respondent by extrajudicial act within three (03) months from the date of its issuance. Thence, the respondent must either challenge the order within fifteen (15) days from personal service, or do nothing, in which case the creditor/petitioner may proceed to request from the court the insertion on the unchallenged mandatory injunction order of the executory formula which renders the order final and unappealable. The creditor must request the insertion of the executory formula within a period of two (02) months following the expiry of the time limit to lodge an opposition, failure which the mandatory injunction order becomes null and void.
As aforementioned, if the respondent/debtor decides to challenge the mandatory injunction to pay order, he must file an opposition within fifteen (15) days from the date of personal service of the injunction to pay order. Where the order is served through substituted service, the respondent/debtor still has up to fifteen (15) days from the date he becomes personally aware of the injunction order to challenge it by way of an opposition which is also notified to the court and the parties by way of an extrajudicial act.
Where the injunction order is challenged, the court proceeds to enlist the matter on the cause list for hearing within a period which cannot exceed thirty (30) days from the date the opposition is lodged by the respondent/debtor. Immediately the parties appear before the court, the judge is bound to attempt a conciliation and if it prospers the judge draws up a conciliation report which is signed by the parties and affixed with the executory formula whence it becomes final, unappealable and ripe for enforcement. (The executory formula is affixed or appended on a writ of execution/judgment, after all judicial formalities have been complied with, to indicate that it can be enforced, even with the help of the forces of law and order).
Where conciliation fails, pleadings are ordered by the court and the matter is entertained in the manner of urgent proceedings. This does not, however, stop the debtor/respondent from withdrawing his opposition action at any time before the court enters judgment.
Where the opposition action is not withdrawn and the parties file their submissions and the court adjudicates the matter by delivering judgment, the parties may appeal the court’s decision within thirty (30) days from delivery of the judgment. The Court of Appeal enlists the matter for hearing and prosecutes same in the manner of urgent proceedings and enters judgment as a court of last resort. The decision of the Court of Appeal is enforceable from that point, although it is so at the enforcing party’s risks and perils, as the other party may seize, within two (02) months from service of the decision of the appeal court, the Common Court of Justice and Arbitration (CCJA) which acts as the supreme court of OHADA member states with exclusive competence in all business law matters. Besides, although stay of provisional execution is a matter distinct from stay of execution, a judgment of the CCJA of October 11, 2001 (Judgment no 002/2001, époux Karnib v Société Générale), has interpreted Section 32 of the Uniform Act on simplified recovery of debts to exclude stay of provisional enforcement of judgments.
Essentially, the ordinary remedy against enforcement of a decision rendered on appeal is an application for a stay of execution, however, the CCJA which is a “court of cassation” does not afford this remedy, as such litigants generally recourse to the supreme courts of member states for the grant of this remedy, although the latter are, truth be told, incompetent, as we explained previously. This practice has led to sporadic grants of stays of execution by some supreme courts in a number of cases, with the risk that the CCJA could later annul such stays of execution on grounds of incompetence of the supreme courts of member states. It must be mentioned that Section 32 of the Act provides that enforcement on the heels of a provisional writ of execution is carried out at the risk and peril of the judgment creditor, who shall, where the superior court reverses the lower court’s decision, be bound to fully repair any damage caused by such “premature” enforcement. The liability of the judgment creditor in such circumstances is strict (no-fault).
Once the CCJA hands down its decision, it is final and ripe for execution/enforcement which is a distinct phase in its own right. The question which generally arises at this phase is how to enforce a judgment against a recalcitrant judgment debtor? The answer to this question touches both on the measures of enforcement of judgments provided by the uniform act and disputes on enforcement of judgements. Once a money judgment has become final and executory, it still remains for the judgment creditor to enforce the said judgment and to enforce it in accordance with the law. Failure to do so may open an avenue for a dispute on enforcement of judgment which may drag the execution of the decision for a long period. Proper execution does not, however, preclude a bad faith debtor from filing a frivolous challenge against execution and thus delaying execution.
Disputes on execution are litigations which arise during or on the occasion of forceful or compulsory enforcement of judgments or writs of execution. Any one or more factors may occasion a litigation on the enforcement of a court decision, including: difficulties or resistance faced during execution, improper procedures or irregularities during execution, attachment of property not belonging to the debtor, distraint of inalienable or exempt property, extinction or reduction of debt, ambushing, non-respect or abuse of the rights of the debtor, non-compliance with procedural formalities, etc. When these happen, the judgment debtor may petition the competent court to annul execution/enforcement.
In Cameroon, as in some other member states of OHADA, the legislator has reinforced the rights of judgment debtors by including in its criminal law the offense of refusal to enforce a final court judgment (Section 181-1, Cameroon Penal Code) which is an offence which punishes with imprisonment of one (01) to five (05) years persons who refuse to enforce final court judgments or persons who obstruct the enforcement of judgments. A fine of two (02) to ten (10) million francs CFA is provided where the offender is a corporate body.
That said, Section 28 of the OHADA Uniform Act Organising Simplified Procedures for the Recovery of Debts & Measures of Enforcement provides that, “in default of voluntary execution, any creditor may, regardless of the nature of his claim and under the conditions provided for in this Uniform Act, compel the defaulting debtor to honour his obligations towards him or take protective measures to secure his rights.” Section 50 of the same Act further provides that, “all property belonging to the debtor may be the subject of attachment, even where the said property is held by a third party, save where it has been declared inalienable by the national law of each State party. Attachments may also be carried out on conditional claims, immature debt or debts paid in instalments. The terms applicable to each of these obligations shall be binding on the distrainor.”
As already mentioned above, besides asset freezing orders which are only provisional and do not constitute enforcement per se, there are several modes (measures) of enforcement of money judgments provided by law by which a judgment creditor may compel a defaulting debtor to honour his obligations towards him, including: attachment & sale of tangible movable property, garnishee proceedings, attachment & assignment of earnings (including simplified procedure for claim of maintenance allowance), attachment & apprehension of tangible movable property, attachment under a prior claim of tangible movable property, attachment of transferable securities or other partnership rights or shareholdings and attachment of real property (land). Attachment of real property is a last resort mode of execution where movable property is either inexistent or insufficient to clear the debtor’s obligations or is generally resorted to where provided by a contract (mortgages, for example). Also, although real property attachment is not open to actions for asset freezing orders, the OHADA UA provides that a judgment creditor may institute an action for attachment and sale of real property to recover an amount provisionally awarded before final judgment or for a debt claim which is due and owing, provided that the sale itself of the real property may not take place before a final judgment has been delivered.
Dayspring Law Firm has competent lawyers who have gained enormous experience over the years in debt recovery proceedings, prosecuting attachments (including real property) and assisting and representing clients during enforcement litigations. Our lawyers have worked with commercial companies, multinationals, banks, public corporations and individuals to enforce judgments diligently and in a cost-effective manner.