The entry into force of the Organization for the Harmonisation of Business Law in Africa (OHADA Law) since 12 September 2012 in the Democratic Republic of Congo (DRC) i.e. the Treaty, Regulations, Decisions and Uniform Acts, thus making the country the OHADA 17th member State does not cause any coexistence problem, as OHADA norms are supranational in nature, mandatorily apply and repeal any previous or subsequent regulatory and legal provisions.
However, such enforceability of OHADA Law seems to have worried in a certain measure the DRC Government, which has therefore been keen to be reassured regarding the protection of State-owned commercial companies not only against the impacts of the General Uniform Acts, but also, in particular, against the Uniform Act on Collective Proceedings for the Clearing of Debts. Actuality, seeing that the process of transforming state-owned companies is not yet finalized, the winding up of such companies will adversely affect the dynamism of the national economy, shake macro-economic stability and ultimately lead to social unrest.
Many are of the opinion that the entry into force of OHADA Law in the DRC would probably undermine the objectives set by the DRC Government to enhance and reorganize the state-owned companies. Furthermore, it was feared that OHADA Law might not be consistent with measures governing state-owned companies and which inter alia provide such companies with a three-year waiver from bankruptcy.
The Law No. 08/007 of 7 July 2008 on the transformation of State-Owned Companies, by granting to these companies a transitional waiver from bankruptcy, needed to be accommodated with the provisions of the OHADA Uniform Act on Collective Proceedings for the Clearing of Debts, otherwise it would be incompatible and could be repealed in according with article 10 of the OHADA Treaty. In this perspective, the Law No. 12/2009 of 31 December 2012 amending the Law No. 08/007 of 07 July 2008 includes special provisions essential to the continuation and finalisation of the transformation process of State-Owned Companies. As a result, the process must be substantiated by legal, economic, and financial measures that have to be passed through regulations.
The Parliamentary debates that have surrounded the passage of the Law of 31 December 2012 mentioned above requires for an in-depth analysis of OHADA Law, more specifically the doctrine and case-law related to commercial companies subjected to a special regime (I), to collective procedures and their limitations (II), to the immunity from enforcement and exemption from attachment of assets held by companies with state capital (III), as well as residual or suppletive powers granted to the Congolese legislator (IV), likely to protect state-owned companies being transformed into commercial companies now referred to as “Portfolio Companies”.
- Rules applicable to companies subjected to a special regime
State-owned companies are governed by the Law No. 08/007 and No. 08/010 of 7 July 2008 on transformation of such companies and on the Organisation and Management of the State portfolio («the Reform conducted in 2008») as amended by the Law No. 12/009 of 31 December 2012. Such companies are, under OHADA Companies Law, commercial corporations subjected to a special regime defined in article 916 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groups.
Being commercial corporations under a mixed legal regime, they are subjected not only to relevant provisions of OHADA Uniform Act on Commercial Companies and Economic Interest Groups (AUSCGIE), but also to the provisions of the Law 08/007 and Law 08/010 of 7 July 2008. That said, provisions that are contrary to AUSCGIE shall not apply.
Actually, OHADA legislator organizes companies subjected to a special regime (clause 916 of AUSCGIE ) and grants exemption to assets of State-owned companies from the general pledge of their creditors, thereby granting to such companies an immunity from enforcement (article 30 of the Uniform Act organizing Simplified Recovery Procedures and Measures of Execution (AUPSRVE).
It stands out from the comparative review of the provisions of articles 908, 916 and 919 of AUSCGIE that the specific legal and regulatory provisions, to which companies with a special regime are subjected, will not be repealed. However, these provisions shall survive if they are not contrary to the provisions of said Uniform Act. Therefore, as per CCJA Notice No. 001/2001/EP of 30 April 2001, a legislative or statutory instrument under domestic law, which is neither contrary, nor identical with any of the OHADA Law provisions, should form part of the special legal regime whose validity seems to be indisputable.
By examining statutory and regulatory instruments in force, it is clearly seen that in the organization and operation of commercial companies resulting from the transformation of former state-owned companies, such residual features of public law as the appointment of directors by the President of Republic, supervision of the withdrawal of state capital, strong links with the powers that be which permeates special agreements entered into or to be entered into by the State and Portfolio Companies. These companies are subjected to public service requirements with a view to defining inter alia their special obligations as to their missions as state services, ensuring compliance by these companies with State technical and financial control, as well as with a view to administration and management powers performed by the Government through the Minister of State Portfolio.
Further, the Reform conducted in 2008 was characterized by the survival of the regime applicable to former state-owned companies as described in transitional provisions of Chapter V and, especially, in article 17 of the Law No. 08/007. Legislators in 2008 have hence transformed companies into new “state-owned companies” as set forth in article 3 of the Law No. 07/010. It follows that, while placing state-owned companies transformed into commercial companies under common law, the reform conducted in 2008 did not intend to confine derogatory provisions solely to aspects pertaining to incorporation rules for limited liability companies (SARL) but also to regime of bankruptcy.
The special legal nature of single-shareholder and state-held commercial companies (the single shareholder being the State) also derives from the actual nature of the asset (patrimony) the state contributes with, transfers or allocates to such companies. If the State’s contribution consists in the transfer of a piece of asset from state domain (whether public or private), in this case commercial law becomes applicable to such companies so long as there is consistency with relevant, public law, imperative rules. Such imperative rules survive notwithstanding the application of OHADA Law, which supersedes DRC commercial law.
- Law applicable to Collective Proceedings for the Clearing of Debts and limitations of such proceedings
Concerning the issue of bankruptcy (which may pose for State-owned enterprises and companies due to the expiration of the interim special exemption regime provided for in article 14 of the Law No. 08/007 of 7 July 2008 on the transformation of State-owned Companies) it is worth highlighting that the Decree of 27 July 1934 on Bankruptcies forms part of instruments which shall ex officio be repealed upon the entry into force of OHADA law. Consequently, only such measures as provided for in the Uniform Act on Collective Proceedings for the Clearing of Debts of 10 April 1998 (“AUPCAP”) shall apply to State Portfolio companies in consideration of the special nature of such companies.
The Law of Collective Proceedings, which supersedes the bankruptcy regime, comprises three measures which are namely: the preventive settlement, administration, and liquidation of assets. Therefore, in order to avoid cessation of payment or of activity of the company, the procedure for preventive settlement may be undertaken by the Company. In the event of cessation of payment i.e. in the event that possible preventive measures are unsuccessful prior to the cessation of payment, the difficulties of the company will be resolved through the respective procedures for administration which is reserved for companies making a credible settlement proposal and through the liquidation of assets.
It is worth highlighting the fact that the liquidation of assets, as it affects the assets of the debtor, can be contemplated only if it is impossible to save the company. Yet, at the end of the day, it is quite difficult to imagine that a company be subject of collective proceedings while the assets of the company are non-attachable.
Indeed, article of 53 of AUPCAP does stipulate that the judgment that orders liquidation of a company automatically entails the winding up of the debtor’s business and the removal of the debtor from involvement in any administration or disposal of its assets. The removal automatically includes the cessation of duties and powers of the persons appointed by the Government and their replacement by the judicial bodies as the official receiver, controllers and the Public Prosecutor.
As it can be noted, administration and liquidation of assets, as they can result in the realisation of the corporate assets of the company in order to pay off the debtors, may circumvent the immunity from seizure of assets owned by legal entities of public law operating as a commercial company. As a result, this allows the sale of assets through means other than judicial sale or attachment of real property.
It stands out from the systematic analysis of the new uniform law that OHADA legislator shields the assets of state-owned companies from general pledge by their creditors through expressly establishing the immunity from execution for such companies.
- Immunity from execution of state-owned companies
According to paragraph 1 of article 30 of the Uniform Act Organizing Simplified Recovery Procedures and Enforcement Measures (AUPSRVE) which “Compulsory execution and preventive measures are not applicable to persons enjoying immunity from execution”. This provision does not provide with legal details on the concept of legal or natural persons enjoying immunity from execution. This induces a residual competency left to the member states to determine the beneficiaries of such immunity from execution.
Such is the case with Senegal which passed the Law No. 2002-12 of 15 April 2002 on Code of Civil Obligations. Article 194 of the Code stipulates that “there shall not be any forced execution against the State, local communities and public institutions”.
On the other hand, OHADA Common Court of Justice and Arbitration (CCJA) has a moderate interpretation of article 30 of AUPSRVE. For the CCJA, by stating in paragraph 1 the rule whereby the forced execution or protective measures may not be applied against persons enjoying immunity from execution, and by contemplating in paragraph 2, the possibility to oppose the compensation to legal persons incorporated under public law and public companies, article 30 lays down the principle of the immunity from execution for such persons. The compensation that may be opposed to them can be interpreted only as a moderation of the principle of immunity benefiting them.
To further emphasize the personal immunity from general execution, articles 50 and 51 of the same Uniform Act expressly task States with defining inalienable assets and rights, which confers to each of OHADA member states entire freedom or absolute power in this regard. It therefore falls within the jurisdiction domestic law to draw up the list of persons enjoying immunity from execution and to specify assets and rights not liable for seizure.
In view of the above, one may consider that collective procedures stricto sensu (administration and liquidation of assets) will not adversely affect the DRC state-owned companies transformed into commercial companies.
In this regard, it is worth underlining that across OHADA space, case law enshrines absolute immunity from execution. It was therefore decided that “the immunity, which a state-owned company enjoys per article 30 of AUPSRVE is public in nature and the judge may invoke it ex officio on appeal even for the first time. Therefore, the judge in chambers has wrongly ordered the garnishment on accounts of such company. The garnishment must be cancelled and its release must be ordered”.
Furthermore, the Cameroon case law explains that term “person” as used in paragraph 1 of article 30 of AUPSRVE must be construed in the general sense, which leads to believe that all public legal entities enjoy said immunity, including: the State and its divisions which Territorial Communities and Public Institutions happen to be, as well as public enterprises irrespective of their form and mission.
Above all, it is worth underlining the Precedent-Setting CCJA Decision of 7 July, 2005, which laid down the principle of the public companies immunity from execution together with compensation mechanism which can only be construed as a moderation of the principle. Furthermore, CCJA has refused to apply a provision from domestic (Togolese) law solely on this ground. As a result, CCJA excluded state-owned companies from the regime of public law and placed them under private law, thus, depriving them of the immunity from execution, which they henceforth enjoy under article 30 of AUPSRVE. CCJA’s stance in this case, based on the repealing effect of article 10 of OHADA Treaty and article 336 of AUPSRVE, is at the same time illustrative of the application of the effects of a softer law upon public companies and those in a similar category. 
It is nonetheless worth stressing that article 29 of AUPSRVE obligates the State the obligation to provide its assistance for the enforcement of court decisions and other attachment or execution under sanction of engaging its responsibility. But, in practice, this provision seems difficult to apply because the Public Prosecutor may oppose or suspend court decisions by giving orders to bailiffs or enforcement officers.
Besides, it can be seen that the principle of immunity from execution may be relaxed in the event of express waiver in cases involving national and international arbitrations. Hence, as part of OHADA arbitration (with binding and enforceable nature of its arbitration awards being affirmed as per article 23 of the Uniform Act on Organizing Arbitration Law and article 27 of CCJA Arbitration Regulation) arbitration awards may be implemented by forced execution, failing spontaneous execution, by virtue of the binding effect of contract and its bona fide performance. However, the acceptance of an arbitration agreement and, therefore, the waiver of immunity does not entail in liability for seizure assets destined to the accomplishment of a public utility mission.
On balance, it appears that the special status of commercial state-owned companies grants special protection under OHADA law from the Collective Proceedings for the Clearing of Debts, due in particular to very important limitations to non-attachable assets, which renders liquidation hard to contemplate.
- Suppletive competences granted to the DRC as statutory and regulatory measures of domestic law additional to OHADA law
By principle, the domestic legislator may tailor domestic laws and regulations not contrary to or identical with the provisions of OHADA law. Consequently, as the process of transforming state-owned companies into commercial companies is not finalised, the extension of interim regime provided under Chapter V of Act No 08/007 of 7 July 2008, particularly the regime laid down in articles 14 and 16, required amending of the Law in order to endow the economic and financial measures with the required legal foundation, more-so as these measures substantiates the continuation and completion of said process.
The two articles mentioned above have been amended by the Law of 31 December 2012. The new article 14 grants a new regime of exemption, which shall remain valid for 36 months as from 31 December 2012, for companies that are unable to settle their debts as per special provisions set forth in a Decree debated by the executive. The Prime Minister has not as yet taken any implementation decree. However, given paragraph 2 of Article 14 which makes the definitive finalisation of the process of state-owned companies conversion contingent upon the satisfaction of all operations restructuring, the DRC legislator seems to have implicitly provided for the extension of the special regime of state-owned companies beyond 36 months.
It is the new article 16 which grants the Prime Minister the competence to determine inter alia the legal, economic, and financial measures necessary for the protection of state-owned companies. Whether the enumeration of protective measures should open to measures or provisions of a different nature remains to be seen.
In conclusion, it appears that the adoption of other legal and/or regulatory instruments, which comes under the residual jurisdiction of the DRC, may strengthen the protection of commercial companies in which the state in the single shareholder or which have state shares. Amongst measures that are worth passing is the Law on the Public Ownership of State Companies Assets. This Law would clearly define inalienable assets and rights in line with the provisions of the Uniform Act on Simplified Recovery Procedures and Measures of Execution, more specifically article 50 which provides: “Attachments may apply to all assets belonging to the debtor even if such assets are held by a third party, except if said assets have been declared inalienable by virtue of the domestic law of each member state” and article 51 which specifies that “Inalienable Assets and rights shall be defined by each member state”.
Attention should be paid that the Law to be adopted, on the one hand, provides a clear-cut definition of state-owned assets and private assets by determining their substances and, on the other hand, organizes measures aimed at protecting state strategic interests in any procedures alienating assets from state private domain and state-owned companies, including during liquidation, while imperatively paying attention to the interests of creditors through just and equitable compensation.