Problematic of liquidation and dissolution of companies under rwandan law: case study of Rwandatel

I.4.1.1.2. Law N°12/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency.

In order to well explore the topic, the researcher analyzed other laws which have the link with the dissolution and liquidation of companies. And that is the reason why she took a look on the LawN°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvency. She will go article by article in order to make the readers of this research to understand where the legal framework of dissolution and liquidation of companies comes from.

I.4.1.1.2.1. The ratio legis of the Law N°12/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency

The ratio legis is the reason for the law. That is the policy reason or underlying purpose for a specific norm, rule, treaty provision, act of legislation^62(*). The researcher will try to know the reason of the existence of the law establishing the dissolution and liquidation.

The reason of enacting the acting laws relating to company dissolution and liquidation vary from country to country. Consider the example of the countries that I discussed in this dissertation; the intention ofthe Canadian legislator while adopting their law is different from that one of Kenya or Rwanda. There are so many things to be considered before a certain country adopts a given law; that is, the government policies, the economy of the country, the population and others.

In Rwanda as my topic is concerned, the law N°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvency has been adopted because the company law was silent and that law came to clarify how a matter resulting from the insolvency or bankruptcy as it is stated in its article 1^63(*). The main purposes were:

1° promote as it maintains timely collective mechanisms and procedures for dealing with problems that arise from low levels of paying the debt and insolvencies;

2° carry out activities related to liquidation of the debtor's assets and distribution of the proceeds there from;

3° design contracts and plan of action relating to modalities of revival of the debtor's commercial activities;

4° maximize value of the debtor's assets;

5° ensure equitable treatment to creditors of the same category;

6° preserve and maintain the insolvent estates;

7° facilitate honest debtors in procedures of being discharged from residual debt

This article protects the interest of the creditors and it is a good thing because it avoids the matters which may arise from the insolvency of the company whether related to a trader or a company.

I.4.1.1.2.2.Provisions on dissolution and liquidation of companies

The article 4 Law N°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvencyprovides the competent court and it states that the commercial court with jurisdiction in which the debtor is domiciled shall have exclusive jurisdiction^64(*).It also states in which cases the immediate appeal may be granted and that it commence on the date the court took its decision or on the date the case was notified to both parties in case it was not pronounced.

The article 6 of the same law provides the designation of the administrator. He/she is designed by the court and he/she has to be approved by the first creditors' meeting^65(*). For the researcher's analysis, this is so important because the liquidator has to be someone who has integrity and in order to be independent, it is the best thing to choose someone who has no relationship with the parties so that he/she does his/her work freely without any external pressure.

Article 7 and 8 provides the duties and obligations of the liquidator^66(*). It is obvious that he/she also has duties to fulfill like convening creditors' meeting and etc.. In addition, he/she is entitled to information related to insolvency to the creditors as well as to the court which is in appointed him/her.

Article 11 states about the report of administrator's activities. He/she shall submit a report of his/her activities to the creditor's meeting after completion of his/her duties^67(*). From the researcher's point of view, while making this law, the legislator provided this article in order to render the administrator accountable of his activities. In reading the report they assess whether he/she performs well his/her duties or not. That is the reason why in article 12, they provided that the administrator may be suspended or dismissed

Chapter two provides the commencement of insolvency proceedings. Taking example of article 21 which states the content of the court order commencing insolvency proceedings like the period in which the creditors shall register their debts^68(*). Article 22 provides the schedule of the meeting of creditors by which their general assembly decides the insolvency proceedings basing on the administrator's report.

Chapter three provides the effects of the commencement of insolvency proceedings. The article 38 states that the rights to manage the assets are transferred to the administrator of insolvency^69(*).

Chapter four provides the management and use of assets during insolvency proceedings. That is,how the assets of the company in dissolution are managed during the insolvency period. Article 60 states about the sale of assets involved in insolvency proceeding. If the creditor's general assembly decides to sell the property forming the assets involved in insolvency proceedings, the administrator shall immediately institute the procedures for liquidation of the property and shall inform the court thereof^70(*). The article 65 states the priority of claims^71(*). That is, the classification of claims basing on by which order the debts will be paid.

All in all, this law is complete and the legislator provided everything and every situation concerning the liquidation and dissolution of company. It completes the Rwandan code relating to companies. As in the Company law there are no enough provisions regarding the insolvency of the companies. The researcher could not mention all articles but she tried to choose some of them and make comments.

* ⁶² H. Campbell, op. cit. p.251.

* ⁶³ Law N°12/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency, art.1, OG N. special of 26/05/2009.

* ⁶⁴ Law N°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvency. art. 4, OG N. special of 26/05/2009.

* ⁶⁵ Art. 5 of the same law.

* ⁶⁶Art. 7-8 of the same law.

* ⁶⁷ Art. 11 of the same law.

* ⁶⁸ law N°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvency, art.21, OG N. special of 26/05/2009.

* ⁶⁹Ibid, art.38

* ⁷⁰Op cit., art.60

* ⁷¹Ibid, art.61