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4. Rational Dispute Resolution
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment Information

4. Rational Dispute Resolution

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default

 

 

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4.1 Rule of Law

 

Core Question:  Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Weak, judiciary is government-influenced and suffers from inefficiency, a lack of resources and corruption.

Impartiality

4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Weak – Percentile Ranking – 46.9 Trend  ­

Source: Governance Matters 2011, World Bank, www.govindicators.org

Judiciary

4.1.2   Can members of the judiciary be held accountable for their actions?  No, Very Weak, Score 56 out of 100

Source: Global Integrity Report 2009 – http://report.globalintegrity.org/Rwanda/2009/scorecard

Costs of Crime

4.1.3   What are the business costs of crime and violence?  – Very Strong – Score 5.6 out of 7; Ranking 30th out of 144

 

Source: The Global Competitiveness Report 2012-2013, World Economic Forumhttp://www.weforum.org/issues/global-competitiveness

 

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4.2 Enforcement of Contracts

 

Core Question:  Are systems in place for timely and efficient enforcement of contracts?
Commercial – Yes – Very Strong
Residential – Unknown 

4.2.1 – Judicial Enforcement

Commercial – Very Strong – Ranking 39th out of 183

4.2.1.1  What is the number of procedures involved in resolving a commercial dispute? 23

4.2.1.2  What is the time between the filing of a lawsuit and resolution in judicial enforcements? 230 days

4.2.1.3   What is the cost of judicial enforcements as a percentage of debt value? 78.7%

Source: Doing Business 2013–  http://www.doingbusiness.org/data/exploreeconomies/rwanda#enforcing-contracts

Residential – Unknown

Survey Questions

SQ 12  What is the time between notice of intent to foreclose and loan collection in judicial enforcements? Unknown

SQ 13  What is the cost of judicial enforcements as a percentage of property value? Unknown

4.2.2 – Summary Proceedings

SQ 14  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders?  Unknown

SQ 15  What is the cost of summary proceeding if available to lenders as a percentage of property value? Unknown

4.2.3 – Power-of-Sale

SQ 16  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? Unknown

SQ 17  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? Unknown

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation  http://www.cipe.org/sites/default/files/publication-docs/Financing%20Homes%202008.pdf

 

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4.3 Commercial Dispute Resoluiton

 

Core Question: Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? No – Weak, commercial courts not yet an effective means for enforcing contracts.

Survey Questions

Commercial Courts

SQ 18  Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Weak, became operational May 15, 2008

Source: Enforcing Contracts – Case Study: Rwanda, World Bank www.doingbusiness.org/documents/CaseStudies/Rwanda_CS2008.pdf

Alternative Dispute Resolution

SQ 19  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes, Strong.   

Commercial Treaties

SQ 20  What bilateral, regional and international commercial treaties exist concerning business between countries? Weak  Rwanda has not yet ratified WIPO internet treaties, but the Government has taken steps to implement and enforce the WTO TRIPS agreements. 

Source: Rwanda Development Board, www.rwandainvest.com/

Source: U.S. State Department Investment Climate:  http://www.state.gov/e/eb/rls/othr/ics/2011/157349.htm

 

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In-Country Assessment Information (as of 2007)

FQ 7. To what extent do practitioners report contracts as enforceable?  

There is a notary public and legitimate brokers indicated a reasonable confidence in the court systems. When quizzed, brokers indicated that they believed that the courts would enforce their listing and sales agreement. There seemed to be no hesitancy to look to the courts for resolution.

Source: IRPF Assessment May 2007

 

 

 

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