MONACO Law and Practice Contributed by: Donald Manasse, Donald Manasse Law Offices
5. Enforcement 5.1 Methods of Enforcement
3.3 Shareholders’ Claims Against Fraudulent Directors The shareholders of a company cannot act on behalf of that company to sue fraudulent directors, unless they are mandated to do so. They have standing as shareholders to sue the fraudulent directors both civ - illy as injured parties and by filing criminal complaints as victims. They could sue to have a judicial admin - istrator named for the company, who could then sue the directors on behalf of the company. 4. Overseas Parties in Fraud Claims 4.1 Joining Overseas Parties to Fraud Claims While Monaco does not generally purport to exercise extraterritorial jurisdiction, overseas parties can be joined under the provisions of Article 5 of the Code of Private International Law (CDIP), which provides that Monaco has jurisdiction if one party is a Monaco resident, even where the other defendants are not. However, there is a caveat: there will be no jurisdiction if the application is made only to bring a party who has their habitual residence or domicile outside Monaco before the Monaco courts. Since the CDIP is relatively recent (2017), no case law applying this exception has yet been published. Where there is a seizure action, it must be validated before the Monaco courts by an action to request payment of the sum in question. In that case, the overseas party will be a party to the action and the Monaco court will have jurisdiction (Article 6, No 7, of the CDIP). To enforce against seized assets, it will often be nec - essary to seek recognition of a foreign judgment. In that event, “any interested party” may bring the action for recognition (Article 15 of the CDIP) and the defend - ant may be the overseas or foreign party. 4.2 Service of Proceedings out of the Jurisdiction Parties outside of the jurisdiction can be served by instructing a bailiff to file the summons or decision with the prosecutor general’s office, under the provi - sions of the Hague Service Convention. No leave of the court is required for service abroad.
Monaco judgments are enforced by bailiffs ( huissiers ). There are three bailiffs in Monaco. It is an office held by appointment of the Prince. Only bailiffs may serve process in Monaco, and only bailiffs may execute judgments against the assets of a defendant pursuant to a money judgment issued by the Monaco courts. Enforcement can be effected through the seisure of the bank accounts belonging to the debtor. The procedural requirements for a judgment to be enforceable in Monaco are set out at Articles 470 et seq of the Monaco Code of Civil Procedure. The judgment must first be formally notified (by a bailiff or through the prosecutor’s office if the party is not in Monaco). Unless the judgment states that it can be provisionally executed, an appeal suspends the execution. For real and personal property, including furniture and automobiles, a sale at public auction is required. For real property, conventional mortgages will grant the lender the right, in the event of default, to initiate judicial sale proceedings, without having to obtain a judgment on the debt. The judicial sale begins with a “commandment to pay” served on the debtor and published in the registry of deeds. Once published, the “commandment” makes it impossible for the debt - or to otherwise dispose of the property. Judicial sales of real property take place in court, in the presence of a bailiff, and following public notice of the sale to attract as many bidders as possible. The timelines and procedures are very strictly followed. There is a right to overbid the first auction within eight working days, after which a second auction may be held. Contractual clauses that allow creditors to take own - ership of real or personal property in loan documents in the event of default are null and have no effect in Monaco.
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