Debt Collection in Benin

The debt collection procedure in Benin begins with an assessment of the debtor’s solvency, its area of activity, its business history, the existence of documentary evidence of the debt, current court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy to be used on behalf of the client in the collection process.

If the debtor has no current court cases or outstanding judgments for debt collection and is actively engaged in commercial activities, then it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor in order to reach an agreement on the payment of the creditor’s claims or other possible settlement options (e.g. return of goods, transfer of the debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending a notice by mail, email, phone or instant messengers. This process involves intensive communication with the debtor in order to exert constant pressure. The main objective is to establish contact with key decision makers to achieve early recovery of the debt.

The average time for informal out-of-court collection is up to 60 days (except in cases where a debt repayment plan has been agreed upon). If this stage does not produce the expected results or after an initial analysis it becomes clear that it is not applicable, it is necessary to proceed to collection through the courts.

The Republic of Benin is a member of OHADA (Organization for the Harmonization of Business Law in Africa), which includes nine approved Uniform Legal Acts applicable to all member countries of the above-mentioned organization. Therefore, the procedures for judicial debt collection, enforcement and bankruptcy are mainly regulated by the provisions of the relevant Uniform Acts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period under the national legislation of Benin is 30 years. According to the provisions of the general commercial law of OHADA, obligations arising from commercial transactions between merchants or between merchants and non-merchants expire after five years. The effects of the expiration of the limitation period are applied in the court of first instance and on appeal only at the request of the debtor. The limitation period is interrupted by the recognition of the creditor’s claims by the debtor. After the interruption, the limitation period begins to run anew. The limitation period may be shortened or extended by agreement of the parties. However, it may not be shortened to less than one year or extended to more than ten years. The parties may also, by mutual agreement, supplement the list of reasons for the suspension and interruption of the limitation period.

Judicial debt collection in the Republic of Benin is carried out in the ordinary judicial procedure and by issuing an order for payment.

The ordinary judicial procedure begins with the filing of a claim with the court, after which the president of the court, if the claim complies with the procedural requirements, orders the summons of the parties and the service on the defendant of copies of the statement of claim and the documents attached thereto.

The period between the service of the summons and the day specified for appearance is fixed as follows: eight days if the party summoned resides within the jurisdiction of the court to which the case has been assigned; fifteen days if the party resides in an adjacent jurisdiction; one month if the party resides in other regions of the country; two months if the party resides outside the territory of Benin.

On the appointed day, the parties must appear in person or through representatives. If the defendant fails to appear, he may be summoned again to appear at the initiative of the plaintiff or by decision of the judge if the summons was not served in person. If the defendant fails to appear when re-summoned, the case is still heard on the merits on the basis of the materials available. The court makes a decision against the debtor only if the creditor’s claim is recognized as legal, admissible and justified.

If the defendant and the plaintiff appear, the court hears them and may consider the case if it considers it ready for a decision. If the case is not ready for a decision, the chairman of the court refers the case to the judge for preparatory activities. Preparatory activities are carried out with the aim of resolving contentious factual and legal issues in order to establish the truth in the case. During this procedure, the parties exchange their opinions and documents, the judge questions witnesses, verifies the authenticity of documents, orders an expert examination or involves technical specialists, and resolves other procedural issues. After completing the preparatory activities, the judge returns the case to the chairman for consideration on the merits.

At the hearing to consider the case on the merits, the court evaluates the results of the preliminary activities and holds final arguments between the parties, after which it makes a final decision. If the decision cannot be announced immediately, its adoption is postponed for more careful consideration for a reasonable period, but not more than two months.

The order for payment procedure is governed by the OHADA Debt Settlement Act and is used to collect debts arising from contracts, negotiable bills or checks. To initiate this procedure, the creditor must file an application for an order for payment with the court, attaching documents proving the debt. If the materials submitted prove the validity of the claim, the court issues an order for payment of the specified amount. In the event of a full or partial denial of the application, the court’s decision cannot be appealed. The only option for the creditor is to apply to the court within the framework of standard claim proceedings. 

Copies of the application and the order for payment must be given to the debtor within three months, otherwise the order will lose legal force. Upon receipt of the documents, the debtor must either pay the debt within 15 days or file an objection within the same period. If there is no objection, the order for payment acquires the status of an enforcement document. If the debtor files an objection, the judge initiates an attempt to reconcile the parties. In case of successful reconciliation, a deed is drawn up, signed by both parties, one copy of which contains the writ of execution. If reconciliation cannot be reached, the court immediately considers the case on the merits and issues a decision, even in the absence of the debtor. Such a decision has the same force as one issued in the context of adversarial proceedings and replaces the original order for payment.

The decision of the court of first instance may be appealed to the court of appeal within one month from the date of the contested decision. In uncontested cases, this period is fifteen days. The decision of the court of appeal may be appealed to the Supreme Court of Benin within three months from the date of the contested decision. During the appeal period, the contested decision may be suspended at the request of the interested party if the execution of the decision would cause irreparable harm. The decision of the Supreme Court is final and cannot be appealed further.

After the court decision has entered into legal force, the creditor must initiate enforcement proceedings. The period for presenting a court decision for enforcement is 30 years. As part of the enforcement of a court decision, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the debtor’s movable and immovable property with their subsequent sale; seizing and confiscating securities, seizing and confiscating the debtor’s property held by third parties.

An alternative method of debt collection is to initiate bankruptcy proceedings against the debtor. In the Republic of Benin, this process is regulated by the provisions of the Uniform Insolvency Act OHADA. A creditor may initiate proceedings if his claims are undisputed, payable and have a monetary value. If the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to challenge transactions concluded with the aim of causing damage to creditors. Such transactions, concluded between the cessation of payments and the commencement of bankruptcy proceedings, include: gratuitous transfer of property; agreements in which the debtor’s obligations significantly exceed those of the other party; early repayment of debts with an unfulfilled payment date; provision of security for previously incurred debts; as well as any transaction in which the other party was aware of the financial insolvency of the debtor. The annulment of such transactions makes it possible to restore the property or assets lost by the debtor, which increases the volume of the liquidation estate to satisfy the claims of creditors and cover the costs of the bankruptcy proceedings. 

If you have any questions or need support on international debt collection in Benin, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to get additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY BENIN

13.12.2024

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