Bank account in arrears: Alarm sounded in commercial jurisdictions

It was predictable. The Covid-19 crisis, the stagnation of economic activity, as well as the international situation have led to an explosion of bad debts. According to the latest report from the central bank (Bank Al-Maghrib), the arrears would represent nearly 90 billion Dirhams (9 billion USD). At the judicial level, magistrates are sounding the alarm. “This new court season was marked by the explosion of procedures involving unpaid debts, in particular banking debts, and the realization of collaterals”, indicates a judge of the commercial chamber at the Casablanca Court of Appeals. According to him, cases have increased by 45% compared to the annual average in the Casablanca courts alone. “It is really mindboggling”, admits our source.
There is a case law, concomitant with the economic crisis, which has allowed this explosion. It is the processing of the two-year statute of limitations period. This was compartmentalized within several triggering events. Before the judgment of the Court of Cassation of September 12, 2013, when a credit institution noted that a borrower had not paid his debt on the due date, the credit institution had two years, from this date of observation, to claim in court the reimbursement of all the amount demanded. If the credit institution did not do so within this period, its action was time-barred, and the debtor had nothing more to repay, neither capital, nor interest, nor any compensation. However, the practice was such that banks exceeded this deadline, and for good reason, namely the various mediation and amicable settlement procedures, always preferable for the financial operators.
This trend was based on the fact that the two-year limitation period began on the date of the first unremedied event of default, and not when the bank pronounced the debt as being uncollectible. However, since September 2013, things have changed. On the one hand, the two-year period applies to each maturity, individually. Thus, if a borrower does not repay the monthly payment due on January 1, 2020, the bank will have until January 1, 2022 to compel him to do so. If he does not repay the installment of February 1, 2020, the bank will have until February 1, 2022 to do so, and so on. Indeed, the statute of limitations is split like the debt itself and runs, with respect to each of its fractions, from its due date, and the action for payment of unpaid monthly installments becomes time-barred from their successive due dates. On the other hand, the fact that a banker exceeds this limitation period no longer affects the rest of the debt.
Nevertheless, this shift, certainly explicable from the legal standpoint, is clearly criticized by the magistrates of first instance. They see it not only as a main cause for a surplus of workload to be processed, but also require the Court of Cassation to issue a judgment in principle to oblige banking operators to warn their customers of such a shift. In addition to the procedures for the realization of collateral and repayment requirements, our source indicates that nearly 3,000 grace periods have been requested by consumers and professionals during this new court season. This is an exceptional measure that the president of the court grants by order, and which consists of suspending the performance of the debtor’s obligations, particularly in the event of layoff or of an unforeseeable social situation.
Abdessamad NAIMI