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Mauritian Law on Enforcement of Security and Insolvency Proceedings

In the event that a borrower fails to pay the amount claimed, a seizure will be carried out on the mortgaged property.

Seizure Process

  • The process commences with the service of a commandement through a public or private registered usher.
  • However, the seizure of the mortgaged asset cannot take place until at least 10 days have elapsed since the date of service.
  • Once the commandement has been served, the usher will draw up a memorandum of seizure that must be registered and transcribed with the Conservator of Mortgages/Registrar General of Mauritius.
  • The creditor must also register and transcribe a memorandum of charges containing the desired conditions of sale before proceeding to seize and sell the property.

Pledges

  • Enforcement procedure varies depending on the type of pledge involved:
    • For general civil or commercial pledges, the creditor must apply to the Supreme Court of Mauritius for authorisation to realise the pledged assets or transfer ownership.
    • For special civil or commercial pledges over shares, the creditor can serve notice on the debtor and then cause the pledged shares to be transferred after seven days.

Fixed Charges

  • Can be enforced by appointing a public or private registered usher to seize the assets without serving a commandement on the debtor.
  • If the debt remains unpaid for three weeks following the date of seizure, the creditor can sell the seized assets by public auction.

Floating Charges

  • Creditor must serve notice on the Conservator of Mortgages/Registrar General of Mauritius and inform the debtor of the commencement of seizure proceedings.
  • Once the inventory is completed, a public or private registered usher must be appointed to carry out the seizure and sale of the charged assets.

Governmental Consents

Except for authorisations required by the Supreme Court of Mauritius for regular civil pledges, no governmental authorisations are required for the enforcement of security under Mauritian law.

Restrictions on Enforcing Security

There are no restrictions on who can enforce a security interest over assets located in or governed by the laws of Mauritius.

Insolvency Proceedings

The insolvency regime for companies is set out in the Insolvency Act 2009, which covers voluntary and involuntary winding-up procedures. Certain statutory bodies may be excluded from the general insolvency legislation or subject to a separate regime.

Winding-Up/Insolvency Registers

Winding-up or insolvency registers can be searched at the Bankruptcy Division of the Supreme Court of Mauritius or at the Registrar of Companies/Director of Insolvency. These searches cannot be conducted online or over the phone.

Company Rescue Procedures

Mauritian law allows for a company to be placed into voluntary administration, which provides an opportunity for the company or a substantial part of its business to continue existing or result in a better return for creditors and shareholders than immediate insolvency proceedings.

Voluntary Administration

In voluntary administration, a person is appointed as administrator of the company. The company can appoint the administrator or liquidator to hold a charge over all or substantially all of its assets.

Effect on Secured Parties

A secured creditor must obtain leave of court before enforcing any security interest granted by a company subject to insolvency proceedings.

Preference Periods and Clawback Rights

The court can set aside transactions made by or charges constituted over assets within two years of the commencement of insolvency proceedings. Certain preferential creditors, including tax authorities and workers, have super-priority over secured creditors regarding receivables from an insolvency.

Contractual Subordination

Yes, contractual subordination provisions agreed among creditors are legally recognised on a company’s insolvency or bankruptcy.

Priority Among Secured Parties

Priority between creditors will be as follows:

  • Super-preference preferential creditors
  • Secured creditors holding a fixed/floating charge
  • Other preferential creditors
  • Unsecured creditors