Debt Collection in Equatorial Guinea

The debt collection process in Equatorial Guinea begins with an assessment of the debtor’s solvency, their line of business, the history of the business, the availability of documentary evidence of the debt, current court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy that will be used on behalf of the client in the collection process.

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

This stage includes 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 in order to achieve the fastest possible recovery of the debt.

The average time for informal extra-judicial collection is up to 60 days (except in cases where a payment plan has been agreed upon). If this stage does not bring 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 Equatorial Guinea 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 collection of debt, 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 limitation period for private obligations is 15 years. According to the provisions of the general commercial law 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 running of 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 cannot 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 Equatorial Guinea is carried out in the ordinary judicial procedure and by order of issuance of an order for payment.

The ordinary judicial process begins with the filing of a petition to summon the debtor to court. If the procedural requirements are met, the court issues an order to summon the defendant at the appointed time. The order, together with a copy of the petition, is transferred to the bailiff for delivery to the defendant.

The parties are required to notify each other in advance of the factual circumstances of their claims, provide evidence and state the legal grounds so that each of them can prepare their position before the court hearing.

On the appointed day, the parties may be present in person or through their representatives. If the debtor does not appear, the court considers the case based on the available materials. If the parties appear, the court hears their explanations and, if the circumstances of the case are clear, may make a decision on the spot.

If disputes arise over the facts, the court appoints investigative actions to establish them. This may include questioning the parties and witnesses, requesting evidence, verifying the authenticity of documents, appointing expert examinations or engaging specialists. After establishing all the circumstances, the court hears the arguments of the parties and makes a final decision.

The order for payment procedure is governed by the OHADA and is used to collect debts related to contracts, bills of exchange or checks. To initiate the procedure, the creditor files an application for an order for payment, attaching documents proving the debt. If the court finds the application justified, it issues an order for collection of the amount. If the court refuses, the decision cannot be appealed, and the creditor can file a lawsuit in the usual manner. 

A copy of the order and the application must be served on the debtor within three months, otherwise the order becomes invalid. After receiving the documents, the debtor must either pay the debt or file an objection within 15 days. If no objection is received, the order becomes an enforcement document. If an objection is filed, the court attempts to resolve the dispute. If an agreement is reached, a conciliation act is drawn up, which has enforcement force. If agreement is not reached, the court promptly considers the case and issues a decision on debt collection, even in the absence of the debtor. This decision is equivalent to a decision made in an adversarial proceeding and replaces the original order for payment.

The decision of the court of first instance may be appealed to the court of appeal within two months from the date of its issuance. For decisions on uncontested cases, the appeal period is one month. The decision of the court of appeal may be appealed to the Supreme Court of Equatorial Guinea within two months from the date of its issuance. The decision of the Supreme Court is final and cannot be appealed.

Once the judgment has entered into legal force, the creditor must initiate enforcement proceedings. As part of the enforcement of the judgment, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the movable and immovable property of the debtor and then selling them; seizing and confiscating securities, seizing and confiscating the debtor’s property held by third parties.

An alternative way to collect a debt is to initiate bankruptcy proceedings against the debtor. In Equatorial Guinea, this procedure is regulated by the Uniform Insolvency Law (OHADA). A creditor may initiate proceedings if its claims are undisputed, certain in amount and subject to payment. In the event that the debtor’s assets are insufficient to satisfy all creditors’ claims, it is possible to cancel transactions concluded with the purpose of causing damage to creditors. Such transactions, concluded between the suspension of payments and the commencement of bankruptcy proceedings, include: gratuitous transfer of property; agreements in which the debtor’s obligations significantly exceed the counter-obligations; early repayment of debts whose maturity date has not yet arrived; provision of security for previously incurred debts; as well as any transactions concluded with the participation of parties who were aware of the debtor’s financial insolvency. Cancellation of such transactions allows the return of lost assets or property, which increases the liquidation estate to satisfy creditors’ claims and cover bankruptcy-related expenses. 

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

# DEBT COLLECTION AGENCY EQUATORIAL GUINEA

19.12.2024

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