Mortgage and its validity requirements: a case based analysis of the requirements of authentication and witnesses

Abstract

The Civil Code of the Empire of Ethiopia 1960 (here after Civil Code) does not provide definition of mortgage. I assume that this is probably because the lawmaker acknowledged that the definition for mortgage might differ based on the contextual usage of the term. When we say “Mortgage”, we may be referring to the juridical act, or the property that is furnished as a security or the right of the creditor on the security. Mortgage as a juridical act has distinct validity requirements though varying based on its sources. Out of these validity requirements, this work emphasizes on the requirement of authentication and witnesses which are both relevant for conventional mortgage. Authentication as a validity requirement regarding some contracts concerning immovable properties including mortgage was first affirmed by the Federal Supreme Court Cassation Bench decision on file number 21448. The Cassation bench while rendering this decision built its reasoning on the Amharic version of Article 1723 of the Civil Code. Subsequent rulings of the bench at least by majority vote of the judges were also in line with similar precedent although in some of the rulings dissenting opinion against interpretation of the majority was expressed. Latest decisions on the other hand are against these precedents and from the reading of several related cases, it is very difficult to either consider authentication as a validity requirement or not. Likewise, regarding the requirement of witnesses concerning contracts which have to be made in writing including conventional mortgage, the law being clear on the effect of nonfulfillment of witnesses’ requirement and decisions of the bench affirming the same, latest precedents are against the laws and the benches’ own prior interpretations. Therefore, this work is aimed at unravelling these inconsistencies in the existing precedents and provides valuable observation for subsequent decisions based on a meticulous legal analysis.