THE PRACTICABILITY OF SIMPLIFIED RECOVERY PROCEDURES & ENFORCEMENT MEASURES UNDER OHADA
In view of protecting the interest of both local and foreign business entities in Cameroon, the OHADA Uniform Act (hereinafter UA) Organizing Simplified Recovery Procedures and Enforcement Measures was instituted as a harmonized law to govern failed transactions and restitute creditors as the case may be.
Simplified Recovery Procedures & Enforcement Measures
There are several simplified procedures and enforcement measures proposed by the UA to cater for the dynamics of the business climate in the Member States of the signatories to the OHADA Treaty. There are two Simplified Recovery Procedures:
• Injunctions to pay; and
• The Simplified Procedure to Secure the Delivery or Restitution of Specific Personal Property.
The most widely used enforcement measures are:
Seizure Operations (saisie conservatoire);
Seizure-Awards of Debts Garnishee proceedings (saisie attributions de créances); and
Attachment to Real Property (saisie immobilière)
IMPLEMENTATION
Injunction to pay
Injunctions to pay are the most widely used simplified recovery procedure proposed by the UA. To use this remedy, the debt must be certain (arising from a contractual relationship between the parties), liquid (can be determined in monetary terms) and enforceable (the time for payment has elapsed considerably).
For economic operators, this procedure seems to have been very useful when it comes to debt recovery given that all that is required is that the debt be certain, liquid and enforceable. Injunction orders are obtained by filing a court applicationbefore the competent jurisdiction enclosing the pertinent evidence. If the injunction order is issued, the enforcement measures provided can be used.
This procedure must commence with a Pre-Action Notice (Sommation De Payer) and A final pre-action Notice (Iterative Sommation de Payer) before filing of the injunction application.
Seizure Operations (Saisie Conservatoire)
These have temporary effects and can be precautionary measures. They are typically granted if the lender is able to establish that the debt recovery is threatened, and this measure is needed to secure payment. Should the debtor fail to repay after the application of a seizure operation, the lender can convert to Seizure Awards of Debts to recover the debt.
SEIZURE-AWARDS OF DEBTS (GARNISHEE PROCEEDINGS (SAISIE ATTRIBUTIONS DE CRÉANCES)
This is the most commonly used enforcement measure. As indicated above, seizure operations can be converted to seizure awards of debts. Like in seizure operations, the lender can carry out a seizure-award of debts over the accounts of his debtor held by a third party. The third party here is under an obligation to declare whether he has any assets in favour of the Debtor. This enforcement measure can be applied to all banks utilized by the Debtor, to determine where exactly the debtor has funds available. This measure is useful where the lender does not have an idea of which bank holds money to the benefit of the debtor. In other jurisdictions, it is likened to a garnishee proceeding.
Attachment of Real Property (Saisie Immobilière)
This enforcement measure is commonly used by banks. These banks are credit institutions whose day-to-day activity is to lend out money to businesses and individuals, usually against a collateral security. This collateral security most often is a real property (built or unbuilt). Once the debtor defaults on the loan, the banks who are usually already in possession of an enforceable deed, proceed with an attachment of real property, with the aim to sell the property and retrieve his debt.
It is worth noting that there are legal time limits within which to execute any of these measures once an order is granted.
For more information, please kindly contact the firm for proper legal advice.
