Ethiopia's 2021 Commercial Code introduced a modern, rescue-oriented insolvency framework — most notably, a general automatic stay that freezes "individual enforcement actions" once reorganization proceedings enter the observation period. At the same time, Ethiopia's bank-collateral foreclosure regime — Property Mortgaged or Pledged with Banks Proclamation No. 97/1998 (as amended) — continues to empower banks (where contractually authorized) to sell mortgaged or pledged property by auction after at least 30 days' prior notice, without first obtaining a court judgment.
When a distressed borrower files (or plans to file) for reorganization, these two regimes collide in practice:
Debtors invoke the Commercial Code's stay as a shield to stop foreclosure. Banks invoke Proclamation No. 97/1998 as a special, speed-oriented enforcement track designed to protect depositors' money and financial stability.
