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FEDERAL NEGARIT GAZETA OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

ht.+;;: ~OO..,.-hTC !:'k

4th Year No. 16'
hJtit hOfl-fS,i;"" Hl. 4>') EI1.1. flh.""r-A-f "--Y..t.I\'e Jt'JPht'()..fJ'e &T1ll\.h
ADDIS ABABA - J9tJt Feb., 1998
f;"'1'11 +mS,r-T 9"hC 11.""mll<t~"" fmfIJ

lP!l&6IiJ,
CONTENTS
h'P~ «hTC 1%/IU!1 '}.9".
Proclamation No. 97/1998
flfl1h flUDJ'"lr (}/\1-fll 111lT flDflJ
Property Mortgaged or Pledged with
h 'P)!:- 1 ~ ~!G'!!
Banks Proclamation Page 674

h 'Pj!- <h,,'c :i1;/Ei 1.1.

PROCLAMATION NO. 97/1998
fllnh floo.(''tr ittH'.('''. fD?~,)4>It4>""C; A PROCLAMATION TO PROVIDE FOR PROPERTY
fD? ') 4>It 4>(). ').fl l-f:-'~ f m fIJ h 'P j!- MORTGAGED OR PLEDGED WITH BY BANKS
fl 'n 1'11' fl'Pit:',c; f.t- .('". fUIJ~ ,)4>It4>().C; fD? ') 4>It4>....
,)lIl'Y.:'}'" ~ ')J;Jf m. t\r,:c,~' fl.')' hit h:"C(1 t\D?itm()')c;
WHEREAS, it takes rather too long a time to obtain
judgement, from courts of law, for sale of property mortgaged
m.lt~m'')9u t\u"lit~.1.9" fD?mfaf.m'
'lIt flfIJ9" lj!-9" floorr~! or pledged with banks and to subsequently have it executed;
fl<hml] ,£,.,11 ooAh
h;"'1'11 f()fl()n-..,.')c; h"'t\f~ WHEREAS, consequently, banking business thriving
9"')'-1' .("n'.:"') 'nll1] flUIJflf.c W''l:'-fm- fmt\.(- 111. on interest payments on loans it provides from public money
fD?"'~~~ fI,)1'11' Ft. I\~ hr,:".~ received by way of saving deposits or acquired from other
"';t~'i flD?It~~!
t\h.I'1'i"7. ~'):"it""""m. hoo:t; y.~:J' t\oott:mC fI,)I'1T sources, has been adversely affected;
t\+t\.('~ f')",'(-C; fAUIJ"" ~'):"it fD?()f!l.rm- lI.(-C:T') WHEREAS, in order to create a conducive environment
fl+4>I\m~. 00')1y,." t\00()11()11 ~')JtTt\"c; t\m~~1: T~ to economic development by enabling banks to collect their
f,)"Iy,." h()t.C flIM\ ~')Jt~lIC t\UIJ.(-l"l t\fI,)h debts from debtors efficiently and thereby promoting a good
lIY."C floof'tr
f,t-()m. fUIJ~,)4>It4>""c; f"7,,)4>It4>(). business culture, it is necessary to amend the Civil Code
')11l-f1'') 1i.('6JJ>fl"7,oo
t\h')' flFt. I\~ ,('t\"'),') concerning the sale of property mortgaged or pledged with
;""f'}'" UIJ?i7iAc; hJtit FC~""
oollC;J:" flUIJfa~,t\'N banks;
NOW, THEREFORE, in accordance with Article 55(1)
flh.:"f'A',r &",('..t.I\'P. JtlfDht,().,(''e &T11t\.h ;"'100') of the Constitution of the Federal Democratic Republic of
"IF')'l,,)4>1.' ~U;(fi) oolPl:" f"7,h.,.t\m- ;J'm'~:A::
Ethiopia, it is hereby proclaimed as follows:
ji' l,6IN: C /) fa
I. Short Title
~IJ h'P:~" "flfl,)h floo,(''tr itt\+,rll ')11l:" fmfIJ h'Pj!-
This Proclamation may be cited as the' 'property
<h'I'C 1.1;/:011.1." "'111\" t\.m4>it ~1"I\A:: Mortgaged or Pledged with Banks Proclamation No. 97/
1998."
,("M. (P,"J
Unit Price 2.30 ~;J kr ;J 11.11)
;,...". -k. ii' a:!!
Negarit G.P.O.Box 80,001
r
',K' ?;r.(f?; &..yo(..t:\ ~;Jt'1' ;J/Lf', '~'I'C: I?; flt,,;.1' I~ <I''}Iilfj fl.,... Federal Negarit Gazeta - No. 16 1901February, I998-Page 675

.-,. 2. Definition
!I' C =\
fill

(}fUJ htp~ m'i\", "1o~i\:"t..C" IP/l\:" nlP/,e.'}.,.".,.i\ In this Proclamation' 'Registrar" means in the case
,}1I~'-"1\,e. ,fl\ oPlI:'-') n'f-oPl\hof- flP/f. '}.,.".,.i\ ,}1I~'-" of mortgage, a Regional or City organ responsible
foPoP1'1-f1 ~I\.c.":'- ,fl\m. fhAA m,e.9" fhof-IP/ htaA
for registering an immovable property or in the
m,e.9" nlP/.'}.,.".,.i\ ,}-fI~:" I\,e. ,fl\ oPlI'-"'} nof-oPl\hof- case of pledge, an organ with the power to witness
f i\ 9"9"" 1: '} oP L~ 9" flP/.,f ~;1"1 m m-C;i\9"9" .,.,:'} fDtf
the signing of a contract of pledge and deposit
.,m.;:
i\"'9"mm. fhAA m,e.'}o fh'f'lP/ htaA
same.
f.' flP/,e.'}.,.".,.i\ m,e.9" fOlf.'}.,.".,.i\
,}-fI~:" flP.f"r i\9"9°"')- 3. Contract of Mortgage or Pledge
fIi!~=tg fr.::'-thllth.C ~"l h'}"''' !Iif.:!:~2li "C; h'}"''' Notwithstanding the provisions of Articles 2851
!:if.:f Y:'} ;11. n. 'iC'}o: fOlI,e.'}.,.".,.i\ mf.9" fDt '}.,.".,.i\ and 3060 of the Civil Code, an agreement
,}1I~:'- ntpi\'-"c; f f" 11l\1'}"11 '1'}h fOO/..c.A 1m- "~m'
.,.C;.-,. authorizing a creditor bank with which a property
"'}-'th.c.A nof-lD(}"ID'1.IL",e.h.c.l\m- O..,.C hIPI\"
has been mortgaged or pledged and whose claim is
,fl\"(} IP/i\m'}.,.ctf l\'Il\~~ID' noPi\m'-" noP f..r
not paid within the time stipulated in the contract,
f.f"ID''} foo/f.'}.,.".,.i\ 1D,e.9" fDt'}.,.".,.i\ ,}1I~'-"
ntht..~ l\oP7I1'C; f'1l\n.:'-":'- oPlI1:,}9" l\11Cm- to sell the said property by auction upon giving a
l\lP/t,IDC 10,e.9" l\(/ol\'f'~: l.IL nlDlfJ f~t..~ 1P/i\;t-lDctf prior notice of at least 30 days to the debtor and to
oPIP~')- ',:-"r taA.,.~n ,}-fI~":,} nll'('c ID-l\- lD'i\1' transfer the ownership of the property to the buyer,
n(}.c.~m' ftp;1 '19":,. oPlJ'!.')' l\oPlD'(}.(-C; f'1l\n.'-""'-" shall be valid.
oP-fl1: ni\oo. "'}-'tt,IDCl\:" l\1P/i:~"I h'1l\~~ID' ;JC
fOO/.,ff.C11D' i\9"9""'-" 'f'.c.~OO/..,:,- f.'i ~tpA;: 4. Claim on Mortgaged or Pledged Property
9.' nlP/,e.'}.,.".,.i\ 1D,e.9" nOO/.'}.,.".,.i\ ,}1I~'-" I\,e. fl\ A creditor bank which, prior the effective date of
foP ,f"r oPlI'-" this Proclamation, has a claim on property mort-
,e.U "tpJ~' hoP"C;1: n.c.:" flP/,e.'}.,.".,.i\ 1D,e.9"fDt'}'" gaged or pledged with it, may sell the property by
".,.i\ ,}1I~'-" noP,f"r f,f"C; ~~m- "'}-'thLA nof-ID auction UpODgiving a prior notice of at least 30
(}"ID' 'lIL JJAof-h.c.l\CD' 11l\1'},,11 '1'}h l\'1l\~~m- days and transfer the ownership of the property to
hIPI\" .,.C;.-,.J'I\.,() tllJi\m'}.,.ctf noPi\m'-" noPf"r the buyer.
.-,.
f ,f" CD''} ftIIJ,e.'}.,.".,. i\ ID,e.9" f 00/.'}.,.".,. i\ '}11~
(Itht..~ l\oP7I1'C; flll\n.')'''1:,}9'' oPlI:" l\11CID'
5. Relationship between the Bank and the Debtor
l\lP/t,IDC 1D,e.9" l\(/ol\"'~ 1.,L flDlfJ ftht..~OO/i\;t-lDctf
oPIP~')' 11C taA.,.~n '},n~1:,} nll'('c 1D'l\- m-i\", The sale made in accordance with Article 3 and 4 of
n(}L~ID' ftp;1 '19"'-" oPIP~'-" l\oPm-(}f;C; f'1l\n.'-""'-" this Proclamation shall be deemed to have been
oP-01: ni\oo' "'}-'tt,IDCl\:" l\1P/f;~"I ,e.'fI\AII executed on behalf of the debtor.
?;, n'1'}hC; n'1l\~~m- oPtahA i\l\Dt'iC "ITf."'-"
6. Application of the Civil Procedure code to Auction
mLU "tp~ "'}.,.,, f."c; ~ oPIP~'-"n'1'}h fof-1.~11if6J.l'
'1l\~~CD''} noPlDhA "'}f..f'.c.2\oP ,e.cJ.mt..A:: The Provisions of Article 394-449 of the Civil
,;, procedure"!Code shall, mutatis mutandis, be ap-
ntht..~ 'li,f6J.1'I\,e. fr.:,).thllthoC r., rc'i'-" ~"I
.f' .c.~ 0If. ., .).
plicable while the Bank is exercising its power of
selling the mortgaged or pledged property by
'1'}h noP ,f"r f JJ"ID''} ftllJ,e.'}.,.".,.i\ 1D,e.9" fOO/.'}.,.
auction.
".,.i\ ,}-fI~')' ntht..~ foP7I1' rAIfJ'} nrt.. I\f.
nOO/.J'ID'An.-,.
l.lt. n~:,.thllthoC r., rc'i'-" ~"I
7. Liability of the Bank
h+.1'C f.~~m-!!f.~i! f,t-oPl\h-t:'-"Y:'};J1."'f ",}1.""I
'111., ;J':r:ID' of-.c.~Dt .,:,. ,e.'i t..T'P A II The Bank shall be liable for any damage it causes to
~, i\ l\ '1'} h of-m,f ct., .-,. the debtor in the process of selling by auction in
violation of the relevant provisions of the Civil
'1'}h (}fLUh'P~ h'}"''' 1 f,t-m+"''-''') h"l'1-o fl\TID-'}
Procedure Code specified under Article 6 of this
y...'};11."';f- noP-tl\l\r.: 1i.f'U;,} OoP.c.2\tJOon'1l\~~ID'I\f.
Proclamation.
l\00/.,ff-C(}CD'1'~'-" n:'JI\.c..,,-,, .t-mfct ,e.11'C;AII \
 .,~. j~{t.4 t..~o".A ~;Jt..1' ;JJI.f'J <I:'I'Cj:j ft11:-r I!{ 4>1Hjf.j '}.9". Federal Negarit Gazeta - No. 16 19u1 February, 1998-Page 676

~. fOlJ~1"''''4>it m~'}o fOlJ.1.,."'.,.it 111~-} oo.r"r 8. Powers and Duties of the Registrar
oo1';J0. FAflJ111 ;~,,&.~.}. I. The Registrar shall have the powers and duties to take
Ii' ~~:,./..~ /\OIJ~,.,."'.,. it m~1JD /\"7. ,.,. "'.,. it 111~-} the necessary measures for carrying out the sale by
f fl1/.':~ "li,r6J!>ht.~~'}o fOlJ.~.P,.hit&.I\'l ~CIJD~5P1--1 auction.
.
foom''''.~' FAnnc,' :~"&.~:,. ~fj ~tpA:: 2. If the Registrar, while taking action in accordance
~. {lILU t,14>:Z, 10.it t,1"'?t. (ji) ooIP~:" ~:~it-}/..~ with sub-Article(1) of this Article, finds it necessary
/\OIJ.lIJftJ'.m.~,C,}o~ f?'/\.it :'J~A oom"''}o hitt.l\'l to use police force, he may order the police.
Irfj .r1'fm. ~1J'.IY~ ?'/\.it1 OIJII11~1--"A::
9. Cases Pending before Court,
it. W':C.f.: n.')' noo :J-f:" ,,~ it,,/\, '1-~f'1-- Any suit or decree on execution pending before a court
fOlJ~1"''''4>it m~1JD fOlJ.1.,."'.,.it 111~:'- ntpit-}c;' n.rll prior to the coming into force of this Proclamation may
'1/\111111 'nh hooAi11'~:" ~U htp~ hooK'c;'i: n&,-} be terminated upon application by the creditor bank with
n~C.f.: 0,')- noo:f-f-}"~ .r/\ hit (lJ~1JDht.~RIJD "'*C{1\ which the property has been mortgaged or pledged and
nlLU htp~ oolP~:,- 'nh 111~i:1 nm/.'~ /\ooif1'c;' the bank may sell and transfer the property to the buyer
ff}/\f1.'}'H:1,}o 0011:" /\11': /\OIJit.,-,,/\~ ~1'''A:: in accordance with this Proclamation.

'i. f,,'7i~ ~ol 10. Repealed La w

The Civil Code (Amendment) Proclamation No. 65/

fC'::"fl111d1.C ~.., (tII/i'ii'i.r) htp~ <h1'C ~?;/H1£iti1
1997 is hereby repealed.
I1ILtJ htp:~ ''''li~A::
00 if;J11..r .f.:1;J1.
11. Transitional Provision
Hi'
Any action taken in accordance with the Civil Code
~U htp~ hooK'c;''': nt.:" f~-}m11m.C ~.., (OIJifif.r)
(Amendment) Proclamation No. 65/1997 prior to the
htp~ <h1'C ~?;/Iitf.'jrit oolP~-} nht.~~1JD ,,~ ,rlr
effective date of this Proclamation shall be governed by
1'~f'1' {lIlU htp~ ooIP~:'- ~oo/..lr:: this Proclamation.
II' .f- t.~ OIJ.~ -} fOlJ ~fj /..:,:m' ~ -) 1--
12. Inapplicable Laws
~U11 htp~ fOlJ.:J>l1 OIJc;'TCD-1JD
~.., .,.t.~"7.~-} Any law which is inconsistent with this Proclamation
h~fj ~m''}o::
shall not be applicable.
htp~ fOlJ.Rc;'n-} 'UL 13. Effective Date
Ii:'
This Proclamation shall enter into force as of the 191h
~U htp~ hfI'J-t:', :r:~ .,., Ii1£1 ~'IJD. 1.1JDC:fRc;' day of February, 1998.
~rrc;'A:: Done at Addis Ababa, this 19thday of February, 1998.

h.ctit Mlf} fi1-t-} .,., Ii1f1 ~'IJD NEGASO GIDADA (DR.)

I'-
PRESIDENT OF THE FEDERAL DEMOCRATIC
'./e ~;J(\ 1.~~ REPUBLIC OF ETHIOPIA
fJ\.:'-f'kl t..1../..,,'P. .ctlfPh/..f\I'P. I.T11/\.h
T~Il~1:"

{lCV1'i fI/\,.. """"7..' n.'}'

BERHANENA SELAM PRINTING INTERPRISE