Business Mortgage Proclamation (No. 98/1998)

&of-ob-/,\ ', ;J t :,W ' ;J ft "1 FEDERALNEGARIT GAZETA OF THE FEDERAL DEMOCRATIC .REPUBLIC OF;ETHIOPIA ht-+~ '¼OD-l- <l!'l'C n, h-'til >tll'l-fti,t.:t· rn 4>1 Hf f.j nh.-l-r·k.f 4'..1..t-1\«P. -'t'l°ht,(1.f'I! tTilc\.h f ,'h1f{I •t-mtif-:.Y• 9"hc o.:,- m'l<l!~.:t· fID"I 41hYearNo. 17 ADDIS ABABA - 19th Feb., 1998 OT/ (D«6li/, h'f':(: 4?1'c 1i/:rnn ~-r· ill\1"11: 1-!t?" f'f'il:,-,; or>.f'W f(DllJ h'f':(: ........................................................... 1.K" if<:'l n'P~ <t.'l'c '.l#rnn ill\1"lY: ·t-!1:9" f'Pil.:t·'. oo.f"f fW"I h'P~ f')"lJ.!" +<J:qo'f n'Pil·l·'i ou t•-.n.:t· il/\"'l.ou111n·n.:t· ,po111fl°.f n.f.f1I'. hLKK9" : 'PilTc;'a>-') hoo11111 ill\DD{ll1l'i' hl\P'C'¼-1: ll,'h"l "h')f."'J.f.~1°1 ll1"l.r.· ,'h?- 1t1<1'1i !if.iri f•t-oo /\h•t- nootr't- : (l')"lJ.!" ,°h1• h')cf>Yi ?!Y.~i! 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Page 681 PROCLAMATION NO.98/1998 A PROCLAMATION TO PROVIDE FOR BUSINESS MORTGAGE WHEREAS, it is stated under Article 186 of the Commer­ cial Code that the manner of keeping register of mortgage of business and canceling entries shall be specified by law; WHER..EAS, it is ,also stated-under Article 1175( l) of the Commercial Code that the provisions of Article 179 of the Code relating to registration of Commercial Mortgage shall come into force on such day and on such conditions as shall be notified by order published in the Negarit Gazeta; '. , WHEREAS, in order to create conducive environment to the economic development by enabling banks to efficiently collect debts from debtors whose business has been mortgaged with the banks and thereby establishing a good business culture; NOW.THEREFORE, in accordance with Article 55(1) of 4 llh.·H•·~·.f 4'..Yot.•l\'P. -'¾.'f"ttt.-f'l..f«P. t.T-Oc\.tl rh10D')"lP'-l· the Constitution of the Federal Democratic Republic of Ethiopia, lt')cl>Yi j~(l!) 00,,.,1.:r• f"'l.hi•/\m• :1-m•~A :: it is hereby proclaimed as follows: .f'>~,. cp ~ ;2.80 ',;>~·l- ;>JL"l ;r . .., .•h· iritli UmtPnce - -- Negarit G.P.O.Box 80,001 Ii· h~C Ci,h ~u h'P:(: "hf\'1"11.: •t·!l:r f'Pll-l-'i" "".f-.r fa>"I ~1':E­ .,. .. 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Definition In this Proclamation: l) " Business" means a business specified under the 1960 Commercial Code of Ethiopia; 2) " Bureau" means Regional or City Bureau of Com­ merce and Industry or a Regional or City authority entrusted with the power to register mortgages; 3) "City" means Addis Ababa; Dire Dawa or any City which is accountable to the Federal Government; 4) · 'Region'' means a region specified under Art.4 7 of the f.' Constitution of the Federal Dernocratic Republic of Ethiopia; 5) " Person" means a natural or juridical Person. PARTTWO Registration of Business Mortgage 3. Keeping of Register 4. 5. 1) Register of mortgage of business shall be kept in each Region or City. 2) The manner of organizing and keeping of register of mortgage shall be determined by the Execwtive Organ of the Region or City. Requirement of Business License In order to mortgage a business, the business shall be one which has been registered and given business license by the appropgate Federal or Regional authority. Application for Registration 1) Any request for registration of mortgage of business may be submitted by the concerned person. 2) The request for registration of mortgage shall be submitted by filling in two copies the application forms for registration prepared by the Bureau. 3) The Applicant $hall attach the contract or other evidence which is the basis for the request of registr~tion. 4) When the forms are presented to the Bureau, the Bureau shall, after verifying the fonns, give consecutive num­ bers in the order of their submission. 6. Content of Application form for Registration 1) The Bureau shall prepare application form for regis­ tration. 2) The application form for registration shall include the following: (a) the name and address of the app1icant or agent requesting for registration; (b) if the business has been mortgaged previously the registry number and date of registry; ,h) f'P,H·'i" UDJ''lf(J)• h::ti0 1 mvr htu•l\ fOO',i,U, OOff'p.: OD) f9"11'Jl}(D• 'l',f<I: n-4Jl 9"11111 l\°1Y.."l.°l tDf.,9" cf>~'I° N·Y.1.1 9°111'1'} t1111/7i7iA f+ t.n ourr'I-: 11•) ,}>7,. f•f•'fllf\fl...,• <I>'} : ffl(: ~'i f¼OD-f• 9°0(....,• :: '!, · f'}-flt.:,- '"'".f 9°Ah·l- i\l\ODilm:,· /i · 111°1.~· "11· MM•?.· ?it(;'f,({i) ((l) ~'-,· n1cf>?t Af.G':E(~) (, .. ) l'/PfJ.•l·l· n'Pii'·l-'i" OD (1'lf'trl- fl·f·(lm-~· f'}"l.f.· ·Ml:9" 1-flt.·Y.:l"· l\f, f'Pil·l·<; oo,f1 f f-f•(lma>· 111Ml m.<'•l: ,wft.<' 9"Ah;f. lt.J'.l'.C°ltFt=w· r,'fl\A:: f fHLU n'}cf>?t 1D·il )',1</>?i' (~) oou•t.:,• f-f'(lm,..,· OD/\,f 9°Ah·Y.'·T· fl0P111•n ro.•c\'1' ~~.1t1n· f.f.t.;J~== t· fl001J'J-fl ilfl°.7.M· (IP 0 lfl.'"iJ.9':l-. fi. noo1n-c1 w·il'I' fOSJ.1n· nll,v,·t 0D°lft""'l.9'°f: ll•f•flf,9°: o) f'PO..-,·'i OD,r1rw· l10D1f1-fl f1•1'1-l· cf>'}: rocc,· '¼IID•f- 9"Ul•1- : fl) U1/'i:fW·9" f111MI Uoffi'} Wf.,9" ft.I\ ~re 11n;'.,1f'i IM,.V.f.\ : 11"'/i'iJ'Cf'/ v->.:J· 11"1A,t OD~'tj: .f;'iC:IFf'PA 11 !{· flOD111-fl l\f., fo</.'l.'l· 11D°lfl"7iJ.9'':;. 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C:'JW• {l9°'J°~r)• -f•J.i"'1.H• f,'fl.'PA:: Federal Negarit Gazeta - No. 17 19th February, 1998...,....Page 679 (c) whether the mortgage emanates from the law or contract; (d) whether the application for registration is for making new registration or amending the existing registration; (e) ·the day, ntonth and year of the filling of the fonn. 7. Identification Marks I ) The secured creditor may put identification mark on the property mortgaged based on Article 175( I )(g) and Article 179( I )(e) of the Commercia.l Code. 2) The identification marks made ,in accordam:e with sub­ Article( I ) of this Article shall be entered in the Register. 8. Information entered in the Register I ) Important informat,ion entered in the register, in par­ ticular: (a) the day, month and year of the entry of the mortgage in the Register; ·-(b) any amount of money or other sums both in numbers and words; shall be .-written clearly. 2) any information entered in the register shall he written in ink whlch does not fade-out. 9. Registration and Registration Fee If an application form for registration of mortgage with the necessary documents has been presented and verified by the Bureau, the applicant shall pay registration fee. I 0. Correction oflnlormation Entered in the Register I) Any information entered in the register, may be corrected if it is found to be incomplete or fncorrect. 2) The Bureau shall issue directives regarding correction of information enter~~ in the register, I I ., J11spection The Bureau may, in order to investigate or in~pect the statu~ of the business registered as a mortgage, inspect the said business on site or request 1 information. The owner has an obligation lo cooperate thereto. 12. Cancellation Procedure ~. · · . l ) A person who requests- for the cancellation of a • mortgage from the register shall submit the agreement . ' allowing the release of the mortgage or the final judgement of the couro 2) The registrar shall, after verifying the document submitted to it, cancel the mortgage from the register. PART THREE Selling of Business Mortgage by Auction 13. Agreement of Mortgage ' Nocwithstanding the provisions of Article 189 of the Commercial Code, an agreement "".hich authorizes a se~ufed creditor bank whose claim is not paid to sell the mortgaged business, by auction upon giving a prior notice of at least 30 days to the debtor, and to transfer the ownership of the business to the buyer or to take over the business, in consideration of its estimated value as specified , in the contract of loan, and have the ownership thereof registered in i.ts own name; in cases where bidders fail to appear ~p,on a second public auction having been held shall be valid. !§· o,-,.(- -Htr l\,t. 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A f • .(•'l ;J1.9"'f t,· lll\1°11: ih°l 1'l,,.K9" fi· "'°'''11 .v1&:i:m- f:,:unt ci-r f')-,.(• ih.., .(-.,.,,.,,'f fl')-,.(• •t-t9° f'Ph-l·'i ou,f-.rS"'f l\t, •h'-""t ~:,. 1,', 1,. :f'PA.11 I· . i'ULU h'l';E- "''·""9° n,..,.(- ih1- f'l°l.(- +!l.'r1 1 n'Pli-l·'i "7ll.f111 n"7.""llh1:+ .(-'J .n.S"'f co-ll-r, I b)111~ti'i.\A') foY.oP/lh-l· hlf~ "'"~"" °ltf-l-" f"7.{\tD­ ,J"t¥iG.A" ~1Jto•9" ~'f1-i1: oY.thi:C" foY.lla> • I t-t t "O.r."": Wf,'I° Federal Negarit Gazeta - No. 17 19.'h February, 1998--::.~~e 680 14. Claim on Mortgaged Business A secured creditor bank which, prior to the effective date of this Proclama:tton, has a claim on business mortgage, registered 'in the P.,.wraja Court in accordance with Article 1175(2) of the Commercial Code as 'a resu'lt ·0f 'a legal imposition to'fegister mortgage on a busine.--;s, may sell the business by auction ·upon by giving a prior notice of at least 30 days to the 'debtor and transfer the ownership to ltle buyer or take over the business, 'in consideration of its estimated value as specified :in the· contract of loan, and have 'the ownersfiWthereof re-gistered in its own name; ir. cases where bidders fail to appear upon a second puh'tic auction havin'g been held. 15. Relationship between, die Bank and the Debtor Toe sale made in accordance with Articles 13 and I 4 of this Proclamation shall be deemed to have been ext';c.:Uted on behalf of the debtor. 16. Application of the Civil Procedure Code to Auction The provisions of Article 394-449 of the Civi'I Procedure Code shall, mutatis mutandis, be applicable while the Bank is exercising its power of selling the business mortgage by auction. 17. Liability of the Bank The Bank shall be liable for any damage it causes to the debtor in the process of selling in violation of the relevant provisions of the Civil Procedure Code specified under Article 16 of this Proclamation. 18. Powers and Duties of the Bureau I) The Bureau which has registered the business mortgage shall have the powers and duties to take the hecessary measures for carrying out the sale by auction. 2. If the Bureau, while taking action in accordance with sub-Article( 1) of this Article, finds it necessary to use police force, it may order police. 19. Cases Pending before the Court Any suit or decree on execution, pending before a court prior to the coming into force of this Proclamation. may be tenninated upon application by the creditor bank with which the bui,iness has been mortgaged and the bank may sell the business by auction and transfer the property to the buyer in accordance with this Proclamation. PARTFDUR Miscellaneous Provisions 20. Appli~ability of the Commercial Code I) The relevant provisions of the 1960 Commercial Code shall be applicable in mortgage of business. 2. For the purpose of this Proclamation, the provisions in the Commercial Code conc'erning mortgage of business shall be'read as follows: (a) if it concerqs a Region the word • 'Teklay-gizat'' shall be read as •'Region'' and the ' 'Ministry of Commerce and Industry" shall be read as "Bureau" t\) h...-,'} f "7. OD I\ h-l- h tr~ "m-l-1\ .e. "I lf-l-" f "7.1\ a,. "h ...-," ~ 'J.\V-9° "'J"l .f: "7.tl\-t:C" f "7.t\fD- "fl.<!'" ,.,o A- .e. ~ n 'l A 11 f;lt · l\t\ hct:.f (l'}"l.f: ih'1-'i' Olt.U h'P~ ODIPl..,. A'Pil-l-'i' OD.f'tr r,J1'l'i' ,\,f-tfOD~ h1A'"Jtt-+"f f"7.hLA hct:.f OhAA m.e.r fl h ...-, ih '"I ,em ll 'i' A 11 SI· h'P)f. f"7.~'i'fl-l- 'I.IL n,..,~- •Ntr l\.e. ht\"7.(lm- oo.r .. r""f r111'l f'J"l.f: ;,., h'J.,.~· U~Y ~'i' fllll h'P~ l:'J;,1."°f f"7.~°1'--l- hfti-t-l­ II .,., IP.Y.1 '¼·9° tr'r.' .e.1rc;A11 p./c: ~;,(I ,.~~ fh.·l•f-kJ' .V.t-1\'P. .\'l"ht•ll.J'«t ~T-OA.h T t..ll~'J-1 Federal Negarit Gazeta - No. 17 191b February, 1998-Page 681 (b) if it concerns City the word "Teklay-gizat" shall be read as "City" and the " Ministry of Commerce and Industry" shall be read as "Bureau". 21. Fees Fees for registration of mortgage and related services based on the Commercial Code and this Porclamation shall be determined by City or Regional Jaw. 22. Effective Date The provisions of Article 179 of the Commercial Code on registration of mortgage and the provisions of this Proclamation shall enter into force as of the l 9'h day of February, 1998. Done at Addis Ababa, this 19th day of February, 1998. NEGASO GIDADA(DR.) PRESIDENT OF TIIE FEDERAL DEMOCRATIC REPUBLIC OF EHTIOPIA Corrigendum No. 1/1998 Property Mortaged or Pledged with Banks Proclamation No. 97/ '1998 is hereby corrected by: I . omission of the '','' after the word •'buyer'', in Article 3, and insertion thereinafter of the phrase "or to take over the property, in consideration of its estimatd value as specified in the contract of loan, and have the ownership thereof registered in its own name; in cases where bidders fail to appear upon a second public auction having been held.''; and 2. omission of the '•.'' at the end, of Article 4, and addition thereinafter of the phrase "or take over the property, in consideration of its estimated value as specified in the contract of l9an, and have the ownership thereof registerd in its own name; in cases where bidders fail to l\ppear upon a second public auction having been held.''.