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Friday, Jan 27th 2023

The ACP Legal Association

  • OHADAC and ACP Legal

    The partisans of this project, called OHADAC (Organisation for the Harmonisation of Business Law in the Caribbean), decided to meet within the framework of the association ACP Legal, to help interested Caribbean States to implement the project.

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  • OHADAC in brief

    This brochure has been published by the ACP Legal Association.

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OHADAC Texts

Summary

DRAFT OHADAC MODEL LAW OF COMMERCIAL COMPANIES

Article 41

Authority competent to initiate insolvency proceedings

The authorities of the State or territory in which the center of main interests of the entity is located shall have sole and exclusive competence to initiate insolvency proceedings, and therefore to determine the opening, organization and closing of the said proceedings.

Article 42

Recognition of a single set of insolvency proceedings for the entity declared insolvent

1. Any insolvency proceedings initiated in a foreign country in accordance with the provisions of the previous article shall be recognized, independently of any appeal lodged in another State or territory, and shall be binding, producing the same effects as insolvency proceedings carried out under domestic law, in respect of all matters not expressly governed by the present law.

2. Should the entity have one or more places of business in various States or territories which are separate from the center of main interests of the entity, the provisions of article 41 hereof shall be applied, and any act contrary thereto shall be deemed null and void.

3. None of the previous provisions shall affect or impair the mandatory coordination and collaboration between competent authorities in the various States or territories or the work of the court-appointed administrator, the objective being to protect the interests of the creditors and preserve the assets of the entity declared insolvent in other States or territories. The competent authorities shall take action and provide any necessary assistance to the court-appointed administrator, as if the insolvency proceedings had been initiated in their jurisdiction, without prejudice to the provisions of Title IV of the OHADAC Model Law pertaining to private international law.

Article 43

Exceptional recognition of secondary proceedings for an entity declared insolvent

1. As an exceptional measure, based on a significant volume of assets or the amount of debt contracted by an entity declared insolvent through a fixed place of business located in a foreign State or territory, secondary proceedings may be initiated before the competent authorities of the State or territory in which the fixed place of business is located. The secondary proceedings may only be initiated where expressly and reasonably requested before the competent authorities in the country in which the center of main interests is located, and where authorized by those authorities, albeit not necessarily in a firm and final manner. The said proceedings may be initiated:

  1. by the court-appointed administrator of the entity declared insolvent before the competent authority of the State or territory in which the fixed place of business is located; or
  2. by one or more creditors having entered into a contract with the entity declared insolvent through the fixed place of business, in which case the views of the court-appointed administrator, who is entitled to accept or reject the request of the creditors, shall be heard.

2. The competent authorities which initiated the secondary proceedings and their court-appointed administrator shall work in coordination and collaboration with the competent authorities of the State or territory in which the main proceedings were initiated, and with the court-appointed administrator of the entity declared insolvent, with the aim of conducting the secondary proceedings in coordination with the main proceedings and, in any event, for the benefit thereof. In particular, the closing of the secondary proceedings by means of a recovery plan, an arrangement with creditors, liquidation or any similar measure, shall constitute the most appropriate result in relation to the main proceedings. Consequently the views of the court-appointed administrator in the main proceedings shall, in any event, be heard and the said administrator shall be entitled, in accordance with the procedures provided for by the law applicable to secondary proceedings, to oppose or appeal any decision to close the proceedings that the administrator may regard as not being consonant with the interests of the main proceedings.

Article 44

Cooperation and communication between authorities

1. The opening of insolvency proceedings in a foreign country, in accordance with the provisions of article 41 hereof, shall produce the effects provided for by the applicable law, no additional formality being required, with effect from the date of the opening of the said proceedings, and without prejudice to the provisions of Title IV of the OHADAC Model Law pertaining to private international law.

2. The insolvency proceedings register shall be duly updated. The competent authorities at the various stages of the proceedings shall, in any event, indicate any information relating to the liquidation, recovery plan, arrangement with creditors or any similar measure they may intend to adopt. They shall also mention any relevant information concerning the rights of creditors in respect of such decisions, whether or not a liquidation, recovery plan, arrangement with creditors or any similar measure was adopted, and whether or not any remedies have been exercised in respect of the decision in question. The basic information to be provided shall be: registered name of the debtor entity, competent authority, type of proceedings initiated, date of opening of the proceedings, contact details for the debtor company, identity of the court-appointed administrator, contact details for the court-appointed administrator, deadline and minimum requirements for the purposes of filing claims.

3. Should the said register not be created or where the updating thereof is suspended for a period of more than one month, the competent authorities which initiated the insolvency proceedings in accordance with the provisions of article 41 hereof, with the aim of protecting the creditors and the assets located in other States or territories, shall without delay notify the competent authorities of any other State or territory in which the debtor has a fixed place of business, or in which the creditors of the entity declared insolvent have their center of main interests, of the opening of the proceedings, so that such authorities may, where applicable, enter the relevant proceedings in their respective register.

Article 45

Rights and obligations of court-appointed administrators

1. The rights, duties and obligations of the court-appointed administrator who is appointed in the insolvency proceedings initiated in accordance with the provisions of article 41 hereof shall be those conferred on him by the applicable law, without any limitations other than those set out by mandatory or public policy rules.

2. Where the local law confers greater rights upon the court-appointed administrator, those rights shall be recognized, and the court-appointed administrator shall enjoy, for matters circumscribed to the insolvency proceedings, the same rights as a court-appointed administrator appointed in accordance with the local law.

Article 46

Foreign creditors’ access to proceedings pursuant to the insolvency rules of another state or territory

Foreign creditors shall enjoy the same rights as national creditors with respect to the opening of insolvency proceedings and to their participation therein, without prejudice to the order of payment to creditors in pending proceedings, in accordance with the applicable rules on insolvency.

Downloads

EXPLANATORY NOTE.pdf

Draft OHADAC model law of commercial companies.pdf