Debt Collection in Eswatini

The debt collection process in Eswatini 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, ongoing 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 ongoing 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 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 the fastest possible debt collection.

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.

There is no statute of limitation for debt collection under the law. Therefore, the creditor has the possibility to initiate judicial recovery at any time. 

Judicial debt collection in Eswatini is carried out in the usual and simplified judicial procedures.

The usual judicial procedure begins with the filing of a summons to court. If the summons meets the procedural requirements, the registrar of the court registers it and issues a preliminary order for the collection of the debt. The summons, together with the preliminary order and documents confirming the existence of the debt, are then handed over to the defendant.

Once these documents are received, the defendant has 10 days to appear in court and either admit liability or contest it. If the defendant fails to appear within the specified period, or notifies of the intention to appear but loses the right to defend itself due to failure to file objections, the plaintiff may apply to the court for a decision to be made in writing without notice to the defendant. Based on such an application, the judge may issue a decision consistent with the plaintiff’s demands set out in the summons or declaration.

If the defendant has registered his appearance, he must submit his objections to the plaintiff’s claims within 10 days. The plaintiff must then provide a response to the defendant’s objections within 12 days of receiving them. The defendant then has the right to file his response to the plaintiff’s application within a further 12 days.

If the defendant appears in court to defend the claim, the claimant may, before the pre-trial conference, make a motion for summary judgment on the claims set out in the summons. Such motion must be accompanied by an affidavit setting forth the facts in support of the claim and a statement that the defendant does not have a bona fide defence and that his statement of intent to defend is made solely for the purpose of delaying the case. In determining the motion, the defendant may do the following: (a) provide the claimant with security satisfactory to the registrar against judgment, including costs; (b) convince the judge by affidavit or oral testimony that he has a bona fide defence to the claim. If the defendant fails to provide the required security or fails to satisfy the judge of the merits of his defence, the judge may enter summary judgment in favour of the claimant. If the defendant complies with these requirements, the case will proceed as usual.

After the exchange of procedural papers is complete, the court will schedule a case management conference. At this conference, the parties and their attorneys meet to discuss the nature and basis of the claims and objections raised and to consider options for a prompt resolution of the dispute.

After the case management conference is over, the judge sets the case for trial on the merits. During this process, the court examines the evidence, hears witnesses and decides disputed questions of law and fact. If the defendant is absent from the trial, the plaintiff has the right to present evidence to prove his claim, subject to the stated burden of proof. The court’s decision is based on the quantity and quality of the evidence presented by the plaintiff. Once all the circumstances of the case have been established, the court will give the parties an opportunity to argue and then issue a final judgement.

The judgement of the Magistrates’ Court may be appealed to the High Court within 21 days from the date of the judgement. The decision of the High Court may be appealed to the Supreme Court of Eswatini within 15 days of the judgement. The judgement of the Supreme Court is final and not subject to further appeal. 

Once the judgment has become final, the creditor must initiate enforcement proceedings. In the context 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 movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities; seizing shares and stakes in companies; seizing and imprisoning the debtor.

An alternative option for debt collection is the bankruptcy procedure of the debtor. The creditor has the right to initiate this procedure if the following conditions are met: 1) the amount of the debt is not less than 100 emalangeni, payable either immediately or at a certain time in the future; 2) the debtor has committed an act of bankruptcy.

According to the provisions of the Bankruptcy Law, the following actions are considered acts of bankruptcy: 1) the debtor transfers his property or any part thereof with the purpose of causing damage to creditors or giving an advantage to one creditor over others; 2) enters into or proposes to enter into any agreement with any of its creditors for the full or partial release of the debtor from its debts; 3) the debtor leaves the territory of Eswatini or hides from creditors; 4) if the debtor has no property or the debtor has not indicated the existing property during the execution of the judgment; 5) if the debtor notifies any of its creditors in writing that it is unable to pay any of its debts.

As part of the bankruptcy procedure, if the debtor’s assets are insufficient to fully satisfy the claims of creditors, it is possible to challenge and cancel transactions made with the aim of causing damage to creditors. Such transactions include: 1) disposal of property without providing counter valuable consideration; 2) transactions in which the debtor’s counterparty knew about the debtor’s state of insolvency; 3) actions aimed at giving preference to one creditor to the detriment of others. Cancellation of such transactions allows the return of property lost by the debtor and an increase in the liquidation estate, which contributes to a more complete satisfaction of creditors’ claims.

If you have any questions or need support for international debt collection in Eswatini, 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 ESWATINI

15.01.2025

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