Case Details:

• Cassation Case No.: 65632
• Date: Hamle 13, 2003 E.C. (Ethiopian Calendar) - Likely late June or early July 2011 Gregorian Calendar
• Parties: Hibret Bank S.C. (Applicant) vs. Ato Ali Abde (Respondent)
• Court: Cassation Division of the Federal Supreme Court of Ethiopia
• Subject: Bank's right to sell collateral under Proclamation 97/90.

Key Facts:

• The Respondent owed money to a judgment creditor (not Hibret Bank).
• The judgment creditor initiated execution proceedings against the Respondent, leading to the attachment of a sesame processing plant warehouse owned by the Respondent.
• Hibret Bank intervened in the execution, claiming a prior lien on the warehouse as collateral for a loan.
• The lower court initially ordered the sale of the warehouse through the court's execution process, with the proceeds distributed first to Hibret Bank to satisfy their loan, and any remaining balance to the original judgment creditor.
• However, Hibret Bank later requested and received permission from the court to sell the warehouse directly under the powers granted to them by Proclamation 97/90.
• The Regional High Court reversed this decision, stating that Hibret Bank, by initially participating in the court-ordered execution, had effectively abandoned its right to sell the collateral under Proclamation 97/90.

Cassation Division Decision:

• The Cassation Division reversed the decision of the Regional High Court and reinstated the decision of the lower court.
• The Cassation Division held that Hibret Bank's initial participation in the court-ordered execution did not constitute a waiver of its right to sell the collateral under Proclamation 97/90.
• The Court emphasized that Proclamation 97/90 explicitly grants banks the power to sell collateralized property themselves to recover outstanding loans. This power exists independently of court-ordered execution proceedings.
• The Cassation Division stated that Hibret Bank had the right to sell the warehouse under Proclamation 97/90, and the Regional High Court's decision to the contrary was erroneous.

Key Legal Rule (Interpretation of Law):

Proclamation 97/90 - Bank's Right to Sell Collateral: A bank's participation in a court-ordered execution process does not preclude it from exercising its independent right to sell collateralized property under Proclamation 97/90. The power granted to banks by the proclamation exists independently of judicial proceedings and can be exercised even if the bank has initially pursued a court-ordered sale. The Cassation Division stressed the policy behind Proclamation 97/90, which is to allow banks to quickly recover loans without the delays associated with court processes.