Date: July 9, 2001 E.C.

Legal Rule:

• Pledge of Intangible Assets (Shares): The pledge of intangible assets, such as shares, follows different procedures than the pledge of tangible assets. Valid pledge of shares requires proper documentation and registration.

Summary of Facts:

Ato Tesfa Alemu (Respondent) obtained a judgment against W/ro Tigist Wondyifraw (Respondent). The Commercial Bank of Ethiopia (CBE) (Applicant) intervened, claiming a prior pledge on Wondyifraw's shares in Abyssinia Bank as collateral for loans to Mina Trading Private Limited Company. The lower courts ruled against CBE.

Decision of the Supreme Court:

The Supreme Court reversed the lower courts' decisions. Consistent with prior similar cases, the Court emphasized the distinct rules for pledging intangible assets. The Court found that the evidence, including letters from Abyssinia Bank and Mina Trading, established a valid pledge of the shares to CBE. The Court rejected the Respondents' arguments, including the claim of registration without consent, noting Wondyifraw's request for CBE's permission to attend shareholder meetings. CBE was granted priority rights to the shares and dividends to satisfy Mina Trading's debt.