Date: April 26, 2014 E.C.

  Applicant: Abyssinia Bank S.C.

  Respondent: Commercial Bank of Ethiopia

Legal Rule (Interpretation of Law):

1. Enforceability of Unregistered Lease Agreements: A lease agreement that is not registered with the relevant authorities, as required by law (specifically, in this case, referencing articles 2899(1) and 1577 of the Civil Code), is not enforceable against third parties. This means that a third party who acquires ownership of the property (in this case, the bank through foreclosure) is not bound by the terms of the unregistered lease agreement.
2. Liability for Rent After Foreclosure: If a tenant has a lease agreement with the previous owner of a property, and that property is subsequently foreclosed upon and sold to a new owner, the tenant's obligation to pay rent shifts to the new owner (the foreclosing bank). However, if the tenant has already paid rent in advance to the previous owner for the period in question, the new owner cannot demand a second payment of rent for that same period from the tenant. The new owner's recourse is to seek the prepaid rent from the previous owner.
3. No Double Payment: A tenant cannot be compelled to pay rent twice for the same period. If they have already paid rent to the legally entitled party at the time of the payment (the previous owner under a valid lease), they cannot be held liable to pay it again to the new owner (the bank) simply because the lease was not registered. The new owner's claim, if any, is against the previous owner who received the prepayment.
4. Legal Basis for Claims: Any claim for payment or fulfillment of an obligation must be based on a legal right arising from contract or law (as per articles 1675 and 2027 of the Civil Code). In this case, since the tenant had a valid (though unregistered) lease agreement with the previous owner and had prepaid rent, there is no legal basis for the new owner (the bank) to demand a second payment of rent for the same period.