Legal Update
April 2011
Enhancing structured lending into francophone African countries:
OHADA adopts a major reform of its uniform act organizing security law
At a meeting held in Lomé from 13 to 15 December
2010, the OHADA council of Ministers adopted the
new OHADA Uniform Act Organizing Securities (the
“Uniform Act”) which brings major changes to the
existing legislation dated April 17, 1997. The Uniform
Act was published in the OHADA’s official journal on15
February 2011 and will take effect on 16 May 2011.
The Uniform Act creates a favorable and innovative
legal framework for security interests in the OHADA
member states (Benin, Burkina Faso, Cameroon,
Central African Republic, Chad, Comoros, Congo, Ivory
Coast, Gabon, Guinea, Guinea Bissau, Equatorial
Guinea, Mali, Niger, Senegal and Togo – DRC will soon
become a member) and makes secured lending in
Francophone Africa more “creditor friendly”.
The reform was encouraged by the World Bank and is
heavily influenced by French law governing security
interests as it was reshaped in 2006 (albeit with
significant improvements). It aims at facilitating the
creation and enforcement of security in the OHADA
member states, in particular by improving the existing
security and creating new securities with a view to
enhance the availability of international project financing
and promote direct investments in such countries.
named nantissements). Prior to the reform the
difference between gages and nantissements related
mainly to the type of the asset being charged.
Under the existing system, only possessory pledges
were available (i.e the possession of the pledged assets
by the creditor or a third party was required as a matter
of validity of the pledge) which proved impractical and
restricted a borrowers’ ability to raise credit. The
reform creates non-possessory pledges (gages sans
dépossession) which do not require dispossession of the
pledged assets from the pledgor in order to be valid.
These non-possessory pledges are now fully perfected
upon registration at the RCCM (see below).
The regime of the pledge over receivables is
substantially amended and simplified: it no longer
requires formal notification of the assignment to the
debtor by bailiff and is enforceable against the debtor
upon a mere notification (e.g. by letter) of the pledge.
By contrast to the French legal framework, all non
possessory pledges (including pledges over receivables)
must now be registered with the commercial registry in
order to be enforceable against third parties, which
evidences the World Bank’s influence over the reform.
The main features of the reform include:
Introduction of new security interests
• a major overhaul of the legal framework applicable
to security ;
The reform introduces a simplified form of pledge over
a securities account (i.e pledge over shares taking the
form of securities (titres)) by a mere statement of pledge
by the pledgor.
• a reform of the commercial registry (RCCM) and
new security registration rules ; and
• the creation of a security agent.
1. Major overhaul of the legal framework applicable to
security
New regime for pledges
Following the pattern of the new French law on
security, the reform establishes a clear and simple
distinction between pledges over tangible movable
assets (which are named gages) and pledges over
intangible assets – such as receivables (which are
It also creates an assignment of receivables by way of
security which is similar to what is known under French
law as a “Dailly assignment”. Such assignment is only
available to secure a loan made by a national or foreign
credit institution to the assignor. This is a major
innovation as this will allow a borrower to raise financing
on the basis of its account receivables by assigning to the
lender full title to such receivables, thereby protecting
them from the borrower’s insolvency. The Uniform Act
further introduces the concept of acceptance of the
assignment of receivables, which is also found in the
French rules governing “Dailly” assignments of
receivables: if the assigned debtor formally accepts the
assignment, then it cannot raise against the assignee
(lender) the counterclaims and set offs (e.g. late delivery or
defective product) which it would have been able to raise
against the assignor to resist payment.
The reform creates a public, centralized and
computerized record for all security interests at various
levels (local, national, regional).
The concept of cash collateral is introduced in the form
of a fiduciary transfer of cash (transfert fuduciaire de
sommes d’argent) where cash is handed over to a
creditor by way of security for an obligation.
A major consequence of registration with the RCCM is
that it allows different priority rankings on the same
asset (which dispossession did not permit). The security
can be filed by any of the creditor, the security agent
(see below) or the debtor. The filing of a security with
the RCCM no longer requires that the documents
evidencing the secured claim be translated into French
and that such translation be filed.
Personal guarantees
Minor changes have been brought to the rules governing
suretyships (cautionnement) and independent
guarantees (garantie autonome). The regime applicable
to independent guarantees has been developed and is
inspired by the ICC Uniform Rules for Demand
Guarantees (URDG 758) published in July 2010.
Increased efficiency of enforcement procedures
Following the example of the French reform of 2006,
the amended OHADA Uniform Act now allows selfappropriation of the secured asset (a concept known as
pacte commissoire which allows the secured lender to
take possession of the asset and sell it even without a
court order). This will be regarded as a major
improvement of the efficiency of security under
OHADA law and brings the legal framework closer to
anglo-saxon rules governing security interests.
It is to be noted that restrictions (to the self
appropriation right) apply if the debtor granting the
security is a non professional.
2. Reform of the Commercial Registry (RCCM) and new
security registration rules
Prior to the reform, only few security interests were
registered with the local commercial registries
(Registre du Commerce et du Crédit Mobilier - RCCM)
and no national centralized registry existed.
All non-possessory pledges (gage sans dépossession) or
other types of security (retention of title, assignment by
way of security) must now be registered with the RCCM
in order to be enforceable against third parties
It should be noted that registration of the security with the
local tax authorities is no longer required (this should
significantly reduce the amount of stamp duties which are
generally calculated on the basis of the secured amount).
3. Creation of a security agent
Another major improvement brought by the reform is the
creation of a security agent (agent des sûretés). OHADA
law does not recognize the concept of trust ( fiducie) so
the equivalent of the English or US law security trustee
could not be used. Accordingly, a specific regime was
designed, vesting the security agent with extensive
powers, including the creation, registration and
enforcement of any type of security and undertaking
judicial actions on behalf of secured creditors.
The security agent must be a local or foreign credit
institution or a bank (accordingly, it cannot be a fund or
a special purpose vehicle).
The authors of the Uniform Act obviously tried to bring
the security agent as close as possible to the anglo saxon
security trustee since the act creates a security estate
(comprising the security interests granted to the security
agent) which is separate from the agent’s estate and is not
affected by the bankruptcy of the security agent or the
debtor.
Mayer Brown is a leading global law firm serving many of the world’s largest companies, including a significant portion of the Fortune 100, FTSE
100, DAX and Hang Seng Index companies and more than half of the world’s largest investment banks. We provide legal services in areas such as
Supreme Court and appellate; litigation; corporate and securities; finance; real estate; tax; intellectual property; government and global trade;
restructuring, bankruptcy and insolvency; and environmental.
OFFICE LOCATIONS
AMERICAS: Charlotte, Chicago, Houston, Los Angeles, New York, Palo Alto, São Paulo, Washington DC
ASIA: Bangkok, Beijing, Guangzhou, Hanoi, Ho Chi Minh City, Hong Kong, Shanghai
EUROPE: Berlin, Brussels, Cologne, Frankfurt, London, Paris
TAUIL & CHEQUER ADVOGADOS in association with Mayer Brown LLP: São Paulo, Rio de Janeiro
ALLIANCE LAW FIRMS: Spain (Ramón & Cajal); Italy and Eastern Europe (Tonucci & Partners)
Please visit our web site for comprehensive contact information for all Mayer Brown offices. www.mayerbrown.com
Mayer Brown is a global legal services organisation comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability
partnership established in the United States; Mayer Brown International LLP, a limited liability partnership (regulated by the Solicitors Regulation Authority and registered in England and Wales number OC
303359); Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. “Mayer Brown” and
the Mayer Brown logo are the trademarks of the individual Mayer Brown Practices in their respective jurisdictions.
© 2011. The Mayer Brown Practices. All rights reserved.
0490fin
April 2011
XXXX