ABSTRACT
The purpose of an attachment and sale procedure is for a creditor to have its receivables paid by seizing and selling its debtor's assets. Both OHADA and Moroccan legislations provides specific rules for such procedure. These legislations have in common certain points but differs on others. This article aims to treat main divergence and convergence of these two important African legislations.
Key Words: Ohada Law, Moroccan Law, Debt, Attachment, Sale, Debtor, Creditor, Tangible Movable Property, Amicable Sale, Public Auction.
INTRODUCTION
The attachment-sale is an enforcement process that consists of the attachment and sale of property belonging to the defaulting party, individual or company, to pay-off the creditor who has obtained a legally enforceable act (a court decision, notarial act, etc.).
In OHADA law1, this procedure is governed by the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures (the "Uniform Act") in its articles 91 to 152.
The attachment and sale as governed by the Uniform Act is inspired by the attachment and sale procedure in French law which replaced the old attachment and execution procedure in France with the adoption of the law of July 9, 19912.
In Morocco, the attachment and sale procedure is currently known, under the code of civil procedure (the "Code of Civil Procedure") in its articles 459 and following, under the name of attachment and execution and is distinguished, on certain points, from the attachment and sale procedure as governed by the OHADA Uniform Act.
This article proposes to deal with the main points of convergence and divergence between Moroccan law and OHADA law on the attachment and the sale of tangible movable property.
If for their implementation the Moroccan and OHADA legislations have in common the need for the creditor to obtain a writ of execution, the basis of any attachment-sale or attachment-execution procedure, we will see that the Uniform Act compared to the Code of Procedure Moroccan Civil enacts a more increased formalism at the expense the bailiff or the enforcement agent, as much regarding the operations of attachment as those of the sale.
The Uniform Act also differs from the Moroccan Code of Civil Procedure by the possibility that it offers the debtor to organize an amicable sale of the attached tangible and movable property.
ATTACHMENT PROCEDURES IN OHADA AND MOROCCAN LAW
The Uniform Act and the Moroccan Code of Civil Procedure have both as basis to the attachment- sale or attachment-execution procedures, the obtention of a writ of execution by the creditor followed by the regular notification of a such writ of execution to the debtor (A) before the execution of the formalisms related to the attachment procedures (B).
A) Convergence on the need to obtain an enforceable writ:
Obtaining a writ of execution is necessary for the initiation of any attachment-sale or attachment- execution procedure.
Indeed, article 91 of the Uniform Act provides that "Any creditor in possession of a writ of execution in proof of a debt, certain and due for immediate payment, shall after the service of a summons to pay, proceed with the attachment and sale of any tangible and movable property belonging to his debtor in order to recover the debt from the proceeds of the sale whether or not the said property is in the hands of the debtor. Any creditor who fulfills the above conditions may join the attachment process by way of an opposition".
The Moroccan Civil Procedure Code provides in its article 438 that "No attachment of movable or immovable property is carried out except by virtue of a writ of execution and for certain and due for immediate payment; if the debt due is not a sum in money, it is suspended, after the attachment, of all subsequent proceedings, until the assessment has been made".
A writ of execution is a legal act that allows the forced execution of a claim on a defaulting debtor.
The Uniform Act enumerates in its article 33 the list of writs of execution under which an attachment and sale procedure can be initiated against a defaulting debtor, namely:
- court decisions bearing the executory formula and decisions which are immediately enforceable;
- foreign acts and court decisions as well as arbitral awards which have been granted exequatur in a ruling which is final in the state in which the writs are invoked;
- conciliation reports signed by the judge and the parties;
- notarial deeds bearing the executory formula;
- decisions recognized as court decisions by the national law of each state Party.
In Morocco, the initiation of a attachment and execution procedure also requires the obtaining of an enforceable title bearing the enforceable formula referred to in article 433 of the Code of Civil Procedure, unlike the conservatory attachment procedure3 which can be executed on the basis of a simple authorization of the judge.
Once the writ of execution has been obtained, the creditor can attach the debtor's property in purpose to sale them.
This attachment and sale procedure follows a strict formalism, especially when dealing with OHADA law.
B) Formalisms relating to the attachment procedures
In OHADA law, when a creditor has a writ of execution stating a certain and due for immediate payment debt, he may, after service of a prior summons to pay, proceed with the attachment of his debtor's property in order to proceed with their sale. However, the attachment can only be carried out eight (8) days after the service of the above-mentioned summons to pay.
The purpose of the prior summons to pay is on the one hand to remind the debtor of the debt that exists against him and on the other hand to give him a last chance to pay before the creditor's attach his property.
This attachment can be made in the hands of the debtor himself or in those of a third party who has property belonging to the debtor.
Also, the Uniform Act offers the possibility to any other creditor fulfilling the conditions referred to in its article 91 to join the attachment operations by way of opposition. In this case, the new creditor can extend the attachment to other properties of the debtor.
The prior summons to pay, which contains the choice of domicile, must be served in the form of a bailiff's writ, and must contain, on pain of nullity, certain mandatory information, namely:
- a reference of the writ of execution by virtue of which the attachment exercise was carried out, with a separate detailed account of all the sums payable by way of the principal, costs and accrued interest, as well as an indication of the interest rate.
- a summons to pay the debt within eight (8) days, failing which it shall be recovered by the forced sale of his movable property. The command must be served on anyone or at home, it cannot be served at the elected domicile4.
The summons to pay may be endorsed in the instrument bearing notification of the writ of execution5.
The attachment procedure thus places on the bailiff or the enforcement agent a duty of extreme vigilance when drawing up the act of attachment.
In Morocco, prior to the attachment of the debtor's property, the enforcement agent notifies the debtor of the decision he is responsible for executing. He gives him formal notice to pay immediately or to make his intentions known within a period not exceeding ten (10) days from the date of the presentation of the request for execution6.
If the debtor refuses to pay or declares himself unable to do so, the enforcement agent proceeds with the attachment of the debtor's property.
For this purpose, the enforcement agent proceeds, by means of holding the minutes of the attachment, to the verification and enumeration of the property attached.
If there are jewelry or precious objects, the minutes contain, as far as possible, their description and an estimate of their value. If the property attached is a business, the minutes contain the description and estimate of the tangible elements of such business and the enforcement agent must have the minutes transcribed in the commercial register, to be valid in respect of the intangible elements of the said attached business.
In OHADA law as well as in Moroccan law, the attached property is immediately made unavailable to the debtor who cannot alienate them, even if he may be debtor and custodian of the attached property.
SALE PROCEDURES IN OHADA AND MOROCCO LAW
Unlike the Moroccan law, the OHADA law provides for an amicable sale (A) prior a to public auction which exists in both the legislations (B).
A) Amicable sale: a feature of OHADA law
In OHADA law, the auction is preceded by the possibility offered to the debtor to proceed himself to the amicable sale of the attached property within a period of one (1) month.
This period starts from the establishment by the bailiff or the enforcement agent of an act of attachment which must, on pain of nullity, contain numerous mandatory information, which varies according to whether the attached property is in the hands of the debtor himself7 or those of a third party8, or whether the attachment was made in the presence or not of the debtor or the third party.
The amicable sale is interesting for the debtor because it gives him discretion that an auction does not offer and allows him to sell his property at the best price agreed with a buyer.
From the creditor's point of view, this additional period of one month will have the main effect of delaying the recovery of his debt.
The Moroccan Code of Civil Procedure does not provide for an amicable sale by the debtor of his attached property.
The debtor's assets may be auctioned directly after the expiration of the period provided for in Article 440.
B) Auction of the attached tangible movable property
Under OHADA law, at the end of the one-month period given to the debtor to proceed with the amicable sale of his property, a forced sale of said property may be carried out within 15 days from the publication of the auction.
This publicity is made by the bailiff or by the enforcement agent in the form of posters indicating the place, the day, the time, and the nature of the attached property. The posters are posted at the town hall of the domicile or the place where the debtor lives, at the neighboring market and all other appropriate places as well as at the place of the sale if it takes place in another place. The sale can also be published through the written or spoken press.
The bailiff or the enforcement agent must inform the debtor by registered letter with acknowledgment of receipt or by any means in written, of the sale, at least ten days before the date set.
The sale is carried out at public auction, by a judicial officer authorized by the national law of each state party (auctioneer, bailiff, etc.), either at the place where the attached property is located, or in a room, a public market whose geographical location is the most appropriate to solicit competition at a lower cost9.
The adjudication of attached property is made to the highest bidder after three auctions.
The price is payable in cash, failing which, the object is resold at the auction of the adjudicator10.
The auction ends when the price of the property sold is sufficient for the payment of the amount of the causes of the attachment and oppositions, in principle, interest and costs11.
After the sale, the minutes of the sale will be drawn up containing the description of the property sold, the amount and the names and surnames of the adjudicators12.
In Morocco, at the expiration of the 10-day period provided for in Article 440, the debtor's property is attached in accordance with Articles 455 and 456 of the Code of Civil Procedure.
After the attached property has been verified by the enforcement agent, they are sold at the public auction, in the best interests of the debtor.
The auction takes place at the expiration of a period of eight days from the day of the attachment, unless the creditor and the debtor agree to set another deadline or if the change of the deadline is necessary to avoid the risks of a significant depreciation or to avoid custody costs out of proportion to the value of the property13.
The auction takes place at the nearest public market or wherever they are deemed to produce the best result. The date and place of the auction are made known to the public by all means of publicity in relation to the size of the attachment14.
Except the cash which is handed over to the enforcement agent, the animals and objects attached may be left in the custody of the debtor if the creditor consents thereto or if another way of proceeding is likely to result in, high fees; they can also be entrusted to a guard after verification if necessary. The custodian, who may be the debtor himself, on pain of replacement and damages, is forbidden to use or benefit from the animals or objects attached, unless he is authorized by the parties.
The property is awarded to the highest bidder and are only delivered against cash payment.
CONCLUSION
In OHADA law as well as in Moroccan law, the aim pursued by the attachment and sale and attachment and execution procedures is the recovery by the creditor of his claims on the proceeds from the sale of the property belonging to the debtor. However, these procedures respond to a formalism which can be very strict, and which tries to strike a balance between the discretion sought by the debtor and the prompt payment pursued by the creditor.
The absence of the amicable sale procedure in Moroccan law allows to the rapid forced payment of the creditor. Under OHADA law, the creditor must wait during a month (for the amicable sale), before being able to proceed with the forced sale of the attached property.
Footnotes
1. OHADA means in French "Organization for the Harmonization of Business Law in Africa". It is an organization that brings together 17 African countries, namely: Benin, Burkina Faso, Cameroon, Comoros, Republic of Congo, Democratic Republic of Congo, Côte D'Ivoire, Gabon, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Niger, The Central African Republic, Senegal, Chad, and- Togo. All these countries entered into an international treaty called the treaty of Port-Louis, which has been establish on October 17th, 1993, to create a harmonized business legislation called OHADA.
2. Loi n° 91-650 du 9 juillet 1991 portant réforme des procédures civiles d'exécution en France.
3. It consists in making the property of a debtor unavailable for himself in order to keep them for the benefit of the creditor.
4. Article 92 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
5. Article 94 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
6. Article 440 of the Moroccan Code of Civil Procedure
7. Article 100 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
8. Article 105 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
9. Article 120 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
10. Article 125 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
11. Article 126 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
12. Article 127 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
13. Article 462 of the Moroccan Code of Civil Procedure.
14. Article 463 of the Uniform Act relating to the Organization of simplified recovery procedures and enforcement procedures of OHADA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
