Douala Court Registers CFA3.81 Billion Retention-of-Title Claim on Sodinaf Equipment

In Cameroon, a retention-of-title clause for industrial equipment supplied by Chinese firm CNBM General Technology Co. Ltd to Société de distribution nouvelle d’Afrique (Sodinaf) was formally registered with the Trade and Personal Property Credit Register (RCCM) at the Douala-Bonanjo Court of First Instance on September 24, 2024, securing an obligation valued at CFA3.81 billion (approximately $6.47 million).

This registration holds significant legal implications for both the supplier and the buyer, as it perfects CNBM's security interest in the palm oil processing and refining equipment. For Sodinaf, it means their ownership of these critical assets remains conditional upon full payment, potentially affecting their ability to secure further financing using this equipment as collateral or to freely dispose of it. For CNBM, the perfected retention-of-title clause provides a robust legal mechanism to assert ownership and potentially reclaim the equipment in the event of Sodinaf's default, offering a strong protective measure against insolvency proceedings or claims from other creditors. The substantial value of the obligation underscores the commercial importance of this security arrangement.

The legal context for this development is primarily the OHADA Uniform Act on Security Interests (Acte Uniforme portant organisation des Sûretés - AUS), which governs security interests across 17 West and Central African nations, including Cameroon. Under the AUS, retention of title (clause de réserve de propriété) is a recognized form of security, but its effectiveness against third parties often hinges on proper registration. The registration with the RCCM at the Douala-Bonanjo Court of First Instance provides public notice of CNBM's claim, making it enforceable against third parties who might otherwise assume Sodinaf holds unencumbered title. The excerpt notes a significant seven-year gap between the sales contract signing in September 2017 and the registration in September 2024, a delay that could have exposed CNBM to risks if Sodinaf had faced financial distress or attempted to encumber the equipment during that period.

Key parties involved are Sodinaf, the Cameroonian buyer and debtor; CNBM General Technology Co. Ltd, the Chinese supplier and creditor; and the Douala-Bonanjo Court of First Instance, which serves as the registry for the RCCM. The practitioner takeaway for attorneys and businesses operating in the OHADA zone is paramount: timely and accurate registration of security interests, particularly retention-of-title clauses, is crucial for their enforceability and protection against third-party claims. Failure to perfect such interests promptly can severely undermine a creditor's position. Businesses acquiring high-value assets under retention-of-title clauses must be acutely aware of their conditional ownership and ensure strict adherence to payment terms to avoid potential repossession or legal disputes. This case serves as a reminder of the importance of diligence in perfecting security interests, regardless of the duration of the underlying commercial relationship.