Law on Secured Transactions: Elimination of the Prohibition of the Commissory Pact.

The growing number of small and medium-sized enterprises nationwide, which due to their economic conditions face a barrier or limitation in accessing credit services, and based on that premise and thinking particularly about access to capital for the promotion of productive activities, the National Government considered that one of the ways to promote access to credit was the implementation of a system of guarantees that would ensure compliance with obligations acquired by natural and legal persons[1]. Law 1676 of 2013 aims to facilitate and increase access to credit by constituting guarantees or rights over movable property, and simplifying the process regarding the constitution, opposability, priority, and enforcement of the respective guarantee that is constituted.

Consequently, we must refer to Article 3 of the Secured Transactions Law, which determines the concept and scope of application of the system of guarantees over movable property. In this regard, it is worth highlighting: "Inc. 2. Regardless of its form or nomenclature, the concept of a security interest refers to any transaction that has the effect of securing an obligation with the movable property of the grantor and includes, among others, those contracts, pacts, or clauses used to secure obligations with respect to movable property, including, among others, the sale with retention of title, the pledge of a business establishment, guarantees and transfers over accounts receivable, including purchases, assignments as security, consignments for security purposes, and any other form contemplated in legislation prior to this law."[2]

According to the provisions of this rule, it is not, then, a restriction on the application of the concept of a security interest; on the contrary, it establishes that a security interest may arise when a contract or legal transaction has the purpose of serving as a guarantee and operates with respect to movable property as established in Articles 5 and 6, and taking into account the limitations set forth in Article 4 thereof.

Now, this same law in Article 91 provides for the repeal of various rules, including Articles 2422, paragraph 2 of the Civil Code and 1203 of the Commercial Code, which prohibited and rendered ineffective the stipulations that the parties made and that allowed the creditor to dispose of the collateral, which in effect was understood as a prohibition of the commissory pact. The commissory pact, in matters of pledge or security interests, is understood as the possibility granted to the creditor that, in the event of default, it may become the owner of the pledged or secured asset[3].

In that order of ideas, Law 1676 of 2013 established a direct payment mechanism found in Article 60. Said mechanism may be agreed upon by mutual agreement of the parties or when the secured creditor has been given possession of the asset by the grantor. If the secured creditor exercises or wishes to exercise direct payment, it must take into account the following stipulations provided by the rule:

1. If the value of the asset exceeds the amount of the secured obligation, the creditor must deduct expenses and deliver the remaining balance to other registered creditors or to the debtor, grantor, or owner of the asset.
2. If the debtor, grantor, or guarantor does not voluntarily deliver the asset subject to the guarantee, the secured creditor may, by means of a request, ask the competent judicial authority to issue an order of seizure and delivery of the asset.
3. The value for which the appropriation of the asset is made shall be determined by an expert selected by lottery from a list provided by the Superintendence of Industry and Commerce. The value determined by the expert shall be binding on both the grantor and the secured creditor.

It is important to highlight that every security interest and what happens during the development of that contract is subject to the registration of security interests with Confecámaras, regulated by Decree 400 of 2014, for all purposes of publicity and opposability.