Debt Collection in Sierra Leone

Debt collection in Sierra Leone begins with a legal, documentary and asset-based review of the debtor, the debt and the assets against which recovery may be directed. For a Sierra Leone debtor, the initial assessment should identify whether the debtor is a company, partnership, sole trader or individual, whether the debtor has a registered or actual place of business in Sierra Leone, who had authority to sign or approve the transaction, and whether the claim is supported by contracts, invoices, delivery records, account statements, correspondence, acknowledgements of debt or previous settlement proposals.

The assessment should also cover pending court cases, existing judgments, enforcement history, signs of financial distress and possible objections to the claim. This is especially important for a foreign creditor because the practical strategy may differ depending on whether the creditor needs to file a new claim in Sierra Leone, rely on an existing foreign judgment or enforce an arbitral award against assets located in Sierra Leone.

If the debtor continues to trade, has reachable decision makers, maintains business relations in Sierra Leone and there is no indication that court, enforcement or insolvency proceedings already control the situation, the out-of-court stage may be the first practical route. At this stage, the creditor may seek full payment, instalments, return of goods, set-off, transfer of the debt to a third party or another documented settlement that preserves the creditor’s evidence if formal recovery becomes necessary.

Communication with the debtor should start after sending a clear written demand by mail, email or another traceable business channel. Further communication by phone or messaging channels should be documented and focused on confirming the debtor’s position, identifying the person who can approve payment, preserving evidence of notice, obtaining written acknowledgement where possible and negotiating a settlement that can be relied on if the debtor defaults again.

The duration of out-of-court collection depends on the debtor’s response, the quality of the evidence, the amount and nature of the claim, the availability of a realistic payment proposal, the debtor’s assets and whether the debtor admits or disputes the obligation. If the debtor ignores the demand, gives unsupported objections, delays payment, transfers assets or has no workable settlement position, the creditor should move to judicial debt collection or another formal recovery route.

The limitation period for debt collection in Sierra Leone is generally 6 years for ordinary contract-based civil claims. The creditor should calculate the limitation period from the date when the cause of action accrued and should also take into account any written acknowledgement of the debt, part payment or other legally relevant conduct that may affect the running of time. Limitation is important at the strategy stage because a claim filed after the applicable period may face a procedural defence from the debtor.

Sierra Leone law allows judicial debt collection through ordinary proceedings, default judgment and summary judgment, depending on the facts of the claim, the documents available and the debtor’s procedural response.

Ordinary proceedings normally start by issuing a writ of summons or another appropriate originating process. Service may be carried out by a bailiff or through the procedural method permitted by the court. After service, the defendant enters appearance in the Master’s Office or, where the writ is issued in a District Registry, in that District Registry.

On the day appearance is entered, the defendant must notify the plaintiff’s solicitor or the plaintiff acting in person. If the writ is served in Sierra Leone, the time for entering appearance is 14 days after service unless extended by the court. If service is outside Sierra Leone, the time for appearance is fixed by the court order authorizing service outside the jurisdiction. At the time of appearance, the defendant or solicitor must state an address for service not more than 5 miles from the Master’s Office or 7 miles from a District Registry.

If the claim is for a liquidated debt and the defendant does not enter appearance within the permitted time, the plaintiff may seek default judgment after the procedural requirements for service and search have been met. For a liquidated demand, final judgment may be entered for an amount not exceeding the sum claimed, together with interest at the stated rate or, if no rate is stated, interest at 5 percent until the date of judgment and costs. If the claim is unliquidated, the plaintiff may seek an interim judgment with damages to be assessed.

If the defendant has been served with the statement of claim and has entered appearance, the plaintiff may apply for summary judgment where the defendant has no defence to the claim or to a specified part of it. The application is made by summons supported by an affidavit verifying the facts relied on, and the summons, affidavit and exhibits must be served on the defendant not less than 4 clear days before the return day.

At the hearing, the court may give judgment for the plaintiff if the defendant does not show an issue or question in dispute that should be tried and there is no other sufficient reason for a trial of that claim or part of the claim. If a real dispute is shown, the case continues through ordinary proceedings.

After entering appearance, the defendant who wishes to contest the claim serves a defence within the period set by the High Court Rules. In the ordinary sequence, the defence is served before the expiration of 10 days after the time limited for appearance or after the statement of claim is served, whichever is later. If a summary judgment application is served before the defence, the defence timing depends on the order granting leave to defend. After the defence is served, the court identifies the issues of fact and law, may deal with pleadings, discovery and evidence, and then hears the case on the merits. After examining the evidence and hearing the parties, the court makes a final decision on the claim.

The appeal route depends on the court that issued the decision. A Magistrate’s Court decision may be appealed to the High Court; a High Court decision may be appealed to the Court of Appeal; and a Court of Appeal decision may be appealed to the Supreme Court of Sierra Leone, whose decision is final. In civil appeals to the Court of Appeal, an appeal against an interlocutory decision is generally brought within 14 days, while an appeal against a final decision is generally brought within 3 months, unless the Court enlarges the time. Where a further appeal to the Supreme Court requires leave, the application for leave is made by motion within 1 month from the date of the judgment, decision or order to be appealed from.

For an international creditor, the route also depends on whether the creditor is starting a new claim in Sierra Leone or already holds a foreign decision. Where the creditor already has a foreign court judgment, recovery may proceed through recognition and enforcement of foreign judgments under reciprocal enforcement rules if the judgment falls within the statutory conditions. The judgment must be final and conclusive between the parties and must order payment of a sum of money, excluding taxes, similar public charges, fines and penalties. The application for registration may be made within 6 years after the judgment or, where there has been an appeal, after the last judgment in the appeal proceedings.

The debtor may challenge registration on specific grounds, including lack of jurisdiction of the original court, insufficient notice of the original proceedings, fraud, public policy or absence of the creditor’s rights under the judgment. Once registered and available for execution, the foreign judgment may be enforced in Sierra Leone in the same practical way as a domestic judgment.

If the debt is confirmed by a foreign arbitral award, the recovery route is different from the registration of a foreign court judgment. Sierra Leone is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force for Sierra Leone on 26 January 2021. For this route, the creditor’s file should include the arbitral award, the arbitration agreement, evidence of the debtor and assets in Sierra Leone, and any translations or supporting documents required for recognition and enforcement.

Once the judgment has entered into legal force or an enforceable foreign judgment or arbitral award has been recognized for enforcement in Sierra Leone, the creditor may initiate enforcement proceedings against the debtor’s assets. The enforcement stage should be planned around the type of asset that can realistically satisfy the judgment debt.

A money judgment may be enforced through a writ of execution for payment of money, including a writ of fieri facias, which allows seizure and sale of the debtor’s property sufficient to satisfy the judgment debt, post-judgment interest and execution costs. In addition, the creditor may use examination of the judgment debtor to obtain information about debts owed to the debtor, property and other means of satisfying the judgment, including books and documents in the debtor’s possession.

Where a third party in Sierra Leone owes money to the judgment debtor, the creditor may seek a court order attaching that debt for satisfaction of the judgment. Enforcement may also include seizure and sale of movable or immovable property, seizure of money or negotiable instruments, and measures against shares or other attachable assets, depending on the asset structure and the court order.

An alternative route may be bankruptcy proceedings against an individual debtor or a firm carrying on business in Sierra Leone. This route is separate from ordinary enforcement and is used where the statutory conditions for bankruptcy are met. A receiving order under the Bankruptcy Act, 2009 is not made against a corporation, association or company registered under the Companies Act, 2009, so a corporate debtor requires analysis under the company winding-up framework rather than the ordinary personal bankruptcy route.

A creditor may present a bankruptcy petition if the debt owed to the petitioning creditor, or the aggregate debt owed to several petitioning creditors, is not less than Le5,000,000; the debt is a liquidated sum payable immediately or at a certain future time; the act of bankruptcy relied on occurred within 3 months before presentation of the petition; and the debtor has the required connection with Sierra Leone through residence, dwelling house, place of business, business carried on personally or through an agent or manager, or membership in a firm or partnership carrying on business in Sierra Leone.

Acts of bankruptcy include, among other things, fraudulent conveyance, gift, delivery or transfer of property; transfer or charge that would be void as a fraudulent preference if the debtor were adjudged bankrupt; leaving Sierra Leone or remaining outside Sierra Leone with intent to defeat or delay creditors; execution by seizure where the goods have been sold or held by the bailiff for 21 days; failure to comply within 14 days with a bankruptcy notice based on a final judgment or order; and notice by the debtor that payment of debts has been suspended or is about to be suspended.

In bankruptcy proceedings, the creditor’s position may be affected by rules on execution, attachment and transactions made before bankruptcy. A creditor who has issued execution or attached a debt generally retains the benefit against the trustee only if the execution or attachment was completed before the receiving order and before notice of the bankruptcy petition or available act of bankruptcy.

The Bankruptcy Act also allows certain transactions to be treated as void against the trustee. Dispositions of property not made in favour of a purchaser or encumbrancer in good faith and for valuable consideration may be void if bankruptcy follows within the statutory period, including a two-year period and, in certain solvency-related situations, a six-year period. Assignments of existing or future book debts may be void unless registered in the required register, and transactions giving one creditor preference over others may be treated as fraudulent and void if bankruptcy follows on a petition presented within 3 months after the transaction.

If such transactions are set aside, property or value transferred away from the debtor may be brought back into the bankruptcy estate. This can increase the assets available for distribution to creditors and for the costs of the bankruptcy procedure, although the practical result depends on the debtor’s assets, evidence of the transaction, secured creditors and prior enforcement steps.

If you need assistance with debt collection in Sierra Leone, Grandliga can support the main stages of the case: debtor and document assessment, lawful written demand, out-of-court negotiations, court strategy, default or summary judgment route, recognition and enforcement of a foreign judgment, work with a foreign arbitral award, enforcement planning and bankruptcy-related recovery where the debtor’s status allows it. The strategy is built around the evidence, limitation period, debtor profile, asset location and the most suitable legal route for recovery.

# DEBT COLLECTION AGENCY SIERRA LEONE

05.12.2024

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