Offsetting of debts regarding legal entities under public law in OHADA law: an incomplete easing of immunity from execution

I. Offsetting: an instrument for mitigating immunity from execution Article 30 of the AUPSRVE occupies a singular place within OHADA law regarding measures of execution. While its first paragraph enshrines the principle of immunity from execution for legal entities under public law, its second paragraph simultaneously organizes one of its main mitigations by admitting the offsetting of reciprocal debts. This coexistence, within the same text, of a principle protecting public authority and a mechanism intended to preserve the rights of creditors does not proceed by chance. It reflects the search for a balance between two requirements, neither of which can be sacrificed: on the one hand, the preservation of the continuity of public service and the integrity of public finances; on the other hand, the imperative of legal certainty essential to the development of economic exchanges. The study of this mechanism therefore assumes, in a first phase, recalling its economic and legal justification before examining the real scope of the easing thus consecrated. ### A. A necessary derogation from the principle of immunity from execution The principle of immunity from execution rests on an ancient idea that the assets of public entities cannot be seized as long as they are allocated to the satisfaction of the general interest. The prohibition of conservatory measures and forced execution measures thus aims to prevent an individual decision from compromising the normal functioning of public services or the execution of missions entrusted to the State. This principle, perfectly legitimate in its foundation, however quickly reveals its limits when the public entity acts no longer as an administrative authority, but as an actor in economic life. In the OHADA space, States conclude public contracts, concessions, partnership contracts, investment agreements, supply contracts, or service provision contracts daily. They then become contracting parties subject, like any economic operator, to the requirements of contractual good faith. However, if immunity from execution were applied absolutely, it would lead to a particularly paradoxical situation: the State could be judicially ordered to pay a debt without its creditor having the slightest effective means to obtain its execution. Such a situation would be difficult to reconcile with the very objective pursued by the OHADA Treaty. The harmonization of business law does not solely have the purpose of unifying the rules applicable to economic operators. It also pursues an objective of trust. The legal certainty sought by the Treaty assumes that contractual commitments can be effectively executed and that court decisions produce real effects. Failing that, the legal risk attached to contracts concluded with public entities becomes a factor in increasing the cost of investments, or even discouraging economic operators. It is precisely from this perspective that the community legislator introduced, from the origin of the AUPSRVE, a mechanism for offsetting reciprocal claims. Rather than directly challenging the principle of immunity from execution, it chose a more measured path consisting of allowing the extinction of obligations when the parties are simultaneously creditors and debtors of each other. The choice is particularly remarkable. Offsetting is not, strictly speaking, a measure of forced execution. It constitutes above all a mode of extinction of obligations. By authorizing this mechanism against legal entities under public law, the legislator does not directly infringe on the unseizability of their assets; it simply admits that two reciprocal debts can be extinguished up to their respective amounts. Public authority does not undergo any enforcement measure on its assets: it only sees a debt disappear due to the existence of a correlative claim. This distinction is essential. It explains why offsetting probably constitutes the mitigation most respectful of the very principle of immunity from execution. Far from organizing a disguised seizure of public assets, it proceeds from an accounting logic of clearing mandatory relationships. From this point of view, the community legislator adopted a balanced solution, reconciling the protection of public funds with the requirement of effectiveness in economic relations. Doctrine has also widely emphasized that this faculty of offsetting historically constitutes the first real easing of the principle of immunity from execution consecrated by the AUPSRVE, even before the innovations introduced by the 2023 reform. ### B. An easing whose effectiveness is compromised by the very conditions of its exercise If the introduction of offsetting undeniably constitutes a major innovation in the general economy of the AUPSRVE, it must be noted that the community legislator simultaneously surrounded its exercise with particularly restrictive conditions. In other words, the text creates a mechanism intended to correct the effects of immunity from execution while itself limiting the hypotheses in which this corrective will be able to effectively play. This apparent contradiction deserves to be examined. Article 30 indeed subordinates the offsetting to the meeting of several cumulative conditions. The claims must be certain, liquid, and due. They must, moreover, have a reciprocal character. Finally, when it concerns the debt of a legal entity under public law, it can only be considered certain on the condition of resulting either from an enforceable title or from a recognition emanating from the public debtor. These requirements are obviously not devoid of justification. The legislator intended to avoid offsetting being invoked on the basis of hypothetical or contested claims likely to disrupt the management of public finances. Legal certainty effectively commands that only definitely established obligations can lead to the extinction of a public debt. However, the combination of these different conditions leads to a paradoxical consequence. Firstly, the requirement of reciprocity considerably reduces the practical field of application of the mechanism. Offsetting only benefits operators who are simultaneously creditors and debtors of the public entity concerned. Now, in economic practice, this situation remains relatively exceptional. The holder of a public contract, a supplier of an administration, a concessionaire, or a service provider most often hold a claim on the public entity without being themselves debtors of a financial obligation towards it. Offsetting thus remains inaccessible to the majority of public creditors. The mechanism therefore only protects a relatively restricted category of economic operators, even though the objective pursued consisted precisely in mitigating the effects of immunity from execution in economic relations maintained with public entities. In the second place, the condition regarding the certainty of the public debt appears even more debatable. Article 30 provides that the debt of the public entity can only be viewed as certain on the condition of resulting either from a debt recognition or from a title having enforceable force. This precision is surprising. Certainty already constitutes one of the general conditions of any legal offsetting. By adding a specific requirement applicable only to public entities, the legislator seems to establish an additional protection whose justification does not appear immediately. More still, this wording indirectly gives the public debtor a determining power over the very application of the mechanism. Indeed, when no enforceable title has yet been obtained, it suffices for the public entity to refuse to recognize its debt to block any offsetting. The person whose debt must precisely be extinguished thus finds themselves invested with the power to prevent the extinction of this same debt. The paradox is manifest. The mechanism conceived as an instrument intended to protect the creditor against the effects of immunity from execution becomes, in this hypothesis, largely dependent on the will of the debtor benefiting precisely from this immunity. The balance sought by the legislator is deeply affected. This criticism is, moreover, not isolated. Part of the doctrine has been pointing out for several years that the modalities retained by Article 30 make offsetting of limited use and do not allow, by themselves, to remedy the practical difficulties of recovering debts from public entities. There finally exists a last difficulty, more fundamental still. Article 30 remains silent on the very legal nature of the offsetting it institutes. Is it a true legal mode of extinction of obligations, producing its effects automatically as soon as its conditions are met, or a simple procedural mechanism requiring the prior intervention of the judge? The answer to this question directly conditions the effectiveness of the device. For if offsetting constitutes, as in civil law, an autonomous mode of extinction of obligations, its efficiency should depend neither on the will of the public debtor nor, in principle, on a prior judicial decision. It is precisely on this point that the silence of the community legislator maintains one of the main uncertainties of the legal regime of Article 30. ## II. The procedural uncertainties of offsetting: between automatism and the intervention of the judge If the substantive conditions of offsetting already limit its field of application, the uncertainties that surround its implementation contribute even more to reducing its effectiveness. Article 30 of the AUPSRVE indeed remains silent on a question which is nevertheless essential: does the offsetting operate by operation of law or does it require the prior intervention of the judge? This interrogation goes beyond mere procedural technique. It determines, in reality, the very nature of the offsetting instituted by the community legislator. ### A. The arguments in favor of an offsetting by operation of law The general economy of the law of obligations naturally leads to considering offsetting as a legal mode of extinction of obligations. In legal systems of civil law inspiration, it does not constitute a measure of forced execution but a mechanism by which two reciprocal obligations are automatically extinguished when the conditions set by the law are met. This conception seems, moreover, comforted by the very wording of Article 30 of the AUPSRVE. By providing that the debts of legal entities under public law "give rise to offsetting", the text seems to use an imperative and not a potestative formula. The legislator does not write that these debts "may" be the object of an offsetting; it affirms that they give rise to it. This editorial nuance is far from trivial. It suggests that the offsetting results directly from the law and not from a discretionary appreciation of the judge or the will of the parties. Such an interpretation also presents a certain consistency with the objective pursued by Article 30. If offsetting constitutes a mitigation intended to correct the effects of immunity from execution, its efficiency assumes precisely that it can play without depending on the consent of the public debtor. Subordinating its application to a new judicial procedure would amount, in many hypotheses, to reintroducing the obstacles that the mechanism was supposed to overcome. This analysis thus leads to considering that the judge should only intervene in case of contestation regarding the existence or the conditions of the offsetting, and not to authorize it. Their role would then be declaratory and not constitutive: they would note an extinction of obligations already produced by the effect of the law. ### B. A judicial practice that maintains uncertainty This reading is, however, not the one that seems to prevail in practice. National courts are frequently seized with requests tending to see the offsetting "ordered" or "pronounced", as if it constituted an autonomous judicial measure. This practice reflects a certain hesitation regarding the legal nature of the mechanism instituted by Article 30. The origin of this hesitation undoubtedly lies in the silence of the text. The AUPSRVE does not specify either the authority competent to note the offsetting or the procedural modalities of its invocation. This lacuna opens the way to divergent interpretations. A first approach consists of attaching the litigation to Article 49 of the AUPSRVE, relating to difficulties arising from forced execution, and to recognize the competence of the execution judge. A second consists on the contrary of considering that the trial judge remains competent to settle disputes relating to the conditions of application of the offsetting, without it losing its automatic character for as much. In reality, these two approaches are not necessarily incompatible. They simply distinguish two different questions: that of the birth of the offsetting and that of its contestation. This distinction deserves to be clearly affirmed. When the legal conditions are met, the offsetting should produce its effects by operation of law, in accordance with its nature as a mode of extinction of obligations. On the other hand, if one of the parties contests the existence of these conditions, it naturally falls to the judge to settle the dispute. Their intervention does not create the offsetting; it notes or refuses its effects. This reading presents a double advantage. It respects the logic of the law of obligations while ensuring better effectiveness of the mechanism wanted by the community legislator. ## III. The 2023 reform: a welcome modernization, but a balance still perfectible The reform of the AUPSRVE that took place in 2023 undoubtedly marks an important evolution of OHADA law regarding measures of execution. By clarifying the scope of the beneficiaries of immunity from execution, by consecrating the possibility of an express waiver of this immunity, and by instituting a mechanism for the ex officio registration of certain debts in the budgets of public entities, the legislator intended to strengthen the effectiveness of creditors' rights while preserving the requirements of continuity of public service. These innovations testify to a desire to adapt OHADA law to the contemporary requirements of legal certainty and economic attractiveness. However, they do not fundamentally challenge the regime of offsetting provided for in Article 30. The difficulties regarding the reciprocity of claims, the proof of public debt, or the procedural modalities of offsetting remain intact. The main instrument for mitigating immunity from execution thus retains the ambiguities that already limited its efficiency before the reform. A future evolution of the text could usefully specify that offsetting constitutes a legal mode of extinction of obligations producing its effects as soon as its objective conditions are met. Such a clarification would strengthen the legal security of economic operators without infringing on the protection of public assets, provided that it would not lead to any measure of forced execution on the assets of public entities. ## Conclusion The introduction of the offsetting of reciprocal debts in Article 30 of the AUPSRVE constitutes one of the most significant manifestations of the desire of the OHADA legislator to mitigate the effects of immunity from execution of legal entities under public law. By admitting that a public debt can be extinguished by the play of offsetting, the legislator recognized that the protection of the general interest cannot lead to depriving economic operators of any effective guarantee of payment. This advancement remains, however, incomplete. The restrictive conditions to which offsetting is subordinated, the specific requirement surrounding the recognition of public debt, as well as the procedural uncertainties related to its implementation significantly reduce the practical scope of the mechanism. The instrument intended to correct the effects of immunity from execution thus remains, in many hypotheses, dependent on the very will of the public entity it intended precisely to counterbalance. The 2023 reform reflects a certain desire to strengthen the effectiveness of the law of execution in the OHADA space. It does not, however, put an end to the questions raised by Article 30. In this regard, a clarification of the legal nature of offsetting appears desirable today. By apprehending it as a legal mode of extinction of obligations, and not as a particular modality of forced execution, the legislator or the Common Court of Justice and Arbitration could contribute to restoring the balance sought between the protection of public entities and the legal security of economic operators.