Debt collection in Lesotho

Debt collection in Lesotho begins with a legal, financial and evidentiary assessment of the claim. At this stage, it is important to verify the legal basis of the debt, the contract, invoices, delivery or service records, correspondence, payment history, any acknowledgment of debt, the debtor’s exact legal identity, registered or business address, assets located in Lesotho, existing court cases, enforcement exposure and possible objections to the claim.

For a foreign creditor, the initial analysis should also cover whether the debtor carries on business in Lesotho, whether the relevant documents can be used in court, whether the claim is connected with a commercial relationship, whether witnesses or documentary evidence are available, and whether documents prepared outside Lesotho require proper authentication or English translation. This helps determine whether the matter should start with a written demand, settlement negotiations, court proceedings, recognition of a foreign judgment, enforcement measures or insolvency-related recovery.

If the debtor is active, has identifiable assets or business operations in Lesotho, and the documents support the claim, the creditor may use the out-of-court debt collection stage first.

This stage involves lawful communication with the debtor, a written demand for payment and structured settlement negotiations. The creditor may seek full payment, an installment plan, return of goods, transfer of the debt to another party, set-off, additional security or another documented settlement arrangement.

Communication with the debtor should be organized through verifiable channels so that the creditor can preserve evidence of the demand, the debtor’s response, any admission of liability, payment proposals and refusal to perform. The main objective is to establish contact with the persons authorized to make payment decisions and to determine whether the debt can be resolved without court proceedings.

If the out-of-court stage does not produce payment or the initial assessment shows that negotiations are unsuitable, the creditor may proceed to judicial debt collection in Lesotho.

Before filing a claim, the creditor should assess the limitation period. Under Lesotho prescription rules, many liquid debt and contractual claims are subject to an eight-year prescription period. A written acknowledgment of debt, a promise to pay, partial payment of the debt or payment of interest may affect the calculation of the prescription period, and the period may begin to run again from the relevant acknowledgment or payment.

Judicial debt collection in Lesotho is generally conducted through High Court civil and commercial proceedings. Commercial debt disputes may fall within the commercial matters framework where the claim arises from business contracts, banking, negotiable instruments, international credit, suretyship, security, import or export of goods, company matters, insolvency, liquidation or other commercial relationships.

Court proceedings are initiated by an originating application. The claim should set out the cause of action, the material facts relied on by the creditor, the nature of the debt and the relief sought. If the claim is based on a written contract, the relevant contract or the part relied on should be attached. The originating application must also be supported by the documents, witness information, exhibits and other evidence on which the creditor intends to rely. Documents filed in a language other than English must be translated into English.

Service of process is an important practical stage. A company debtor may be served at its registered address, principal place of business or another address allowed by the procedural rules. Where the debtor, documents or service route are outside Lesotho, the creditor should prepare the case with the foreign-service rules and proof of service in mind.

After service of the originating application, the respondent is generally allowed seven days to deliver a notice to answer. In proceedings against the Crown, a Minister, Deputy Minister or a public officer in an official capacity, the period for the notice to answer is generally not less than twenty days unless the court authorizes a shorter period. After the notice to answer, the respondent must deliver an answer within twenty-one days. The applicant may deliver a replication within fourteen days after service of the answer. If no replication is delivered, the applicant is treated as having denied the factual allegations contained in the answer.

After pleadings are closed, the matter may be referred to court-annexed mediation. Mediation is part of the court process and may help the parties record a settlement, narrow the dispute or clarify whether the debtor has a real defence. If mediation is completed, a mediation report is filed, and the case continues according to the procedural timetable if no settlement is reached.

For claims based on a liquid document, a liquidated amount of money, delivery of specified movable property or ejectment with interest and costs, the creditor may apply for summary judgment after the respondent has delivered an answer. The application must be supported by an affidavit verifying the cause of action, the amount claimed, the legal point relied on and the reasons why the answer does not raise an issue for trial. The application is delivered within fourteen days after the answer. The respondent may provide security or satisfy the court by affidavit or oral evidence that the answer discloses a real defence. If the respondent fails to do so, the court may enter summary judgment for the creditor.

Where there is a risk that the debtor may remove, conceal, dissipate or reduce the value of assets before judgment, the creditor may consider an application for a freezing order. The applicant must show a good arguable case or an existing judgment, a risk that a future or existing judgment may remain unsatisfied because assets may be removed or reduced, and that the value of the restrained assets does not exceed the claim, including interest and costs. The applicant may also be required to undertake to compensate the respondent for damage caused by the order.

If the matter proceeds in the ordinary way, the court manages the case through case planning and case management. Once the case is allocated, the case planning conference must take place within thirty days of docket allocation. The court may set the timetable, directions for evidence, discovery, expert evidence, interlocutory applications, settlement issues and the later course of the proceedings.

After the case management conference, the court holds a pre-trial conference before the trial or hearing. The parties must jointly submit a proposed pre-trial order at least four days before the pre-trial conference. The proposed order should identify the issues of law and fact, admitted facts, witnesses, exhibits, documents, procedural proposals and the expected length of the trial. The court then conducts the trial, considers the evidence and submissions, and delivers judgment.

A decision of a Subordinate Court or tribunal may be appealed to the High Court. Under the current High Court civil rules, such an appeal must be prosecuted within sixty days after noting the appeal, and the appellant must request a hearing date from the Registrar within thirty days after noting the appeal. If the appellant fails to prosecute the appeal within the required period, the appeal may lapse.

A judgment or order of the High Court may be taken to the Lesotho Court of Appeal according to the Court of Appeal Rules. Where leave to appeal is required and was not requested at the time of judgment or order, the application for leave to appeal must be made with the grounds for leave within fifteen days after the judgment or order. In matters where there is a direct right of appeal to the Court of Appeal, the Court of Appeal Rules set a six-week period from delivery of judgment for the relevant appeal step. Filing an appeal to the Court of Appeal does not by itself stay execution of the judgment.

Where the creditor already has a foreign court judgment, recognition and enforcement of foreign court judgments in Lesotho usually requires a local procedure before the judgment can be executed against assets in Lesotho. Enforcement is governed by common law and, for certain judgments, by the Reciprocal Enforcement of Judgments Proclamation 2 of 1922. The foreign judgment should generally be final, issued by a court with jurisdiction, consistent with natural justice and public policy, free from fraud, and supported by proper notice to the debtor.

A judgment from England, Ireland or Scotland may be registered in the High Court of Lesotho under the Proclamation within twelve months after the date of the foreign judgment or within an extended period allowed by the court. Other foreign judgments may be enforced through a local application or ordinary summons, depending on the circumstances. Foreign judgments in a language other than English require translation into English by a sworn translator. The Lesotho court may also require security for costs from a foreign plaintiff where the defendant is resident in Lesotho.

Foreign arbitral awards are treated separately. Lesotho has acceded to the New York Convention without reservation, and enforcement of a foreign arbitral award is sought by application to the High Court of Lesotho. The applicant should provide the authenticated original award or a certified copy, the original arbitration agreement or a certified copy, and an English translation where required.

Once a judgment has become enforceable, the creditor may initiate enforcement proceedings. The limitation period for filing the original debt claim should be distinguished from enforcement of a judgment: the eight-year prescription period applies to many liquid debt and contractual claims, while execution of a judgment is conducted through the enforcement mechanisms provided by the court rules and the relevant enforcement legislation.

A judgment creditor may request one or more writs of execution from the Registrar. Enforcement may involve attachment of movable property, attachment of incorporeal property and rights, garnishment of debts owed to the judgment debtor, and execution against immovable property. Salary, earnings or similar payments are handled through an attachment order rather than an ordinary writ.

Execution is carried out by the deputy sheriff. When executing against movable property, the deputy sheriff may demand satisfaction of the writ, request the debtor to point out sufficient movable property, make an inventory and take property into custody where required. Attached movable property may be sold by public auction after the required advertising and sale procedures. Execution against immovable property requires a detailed description of the property, service of attachment notices and additional safeguards for property subject to preferential claims or used as a home.

An additional option for collecting a debt from a company is insolvency or liquidation-related recovery. Lesotho’s insolvency framework changed after the commencement of the Insolvency Act 2022 from 1 April 2025. The new framework replaced the former fragmented approach based on the Insolvency Proclamation 1957 and corporate insolvency provisions of the Companies Act 2011, and introduced a unified insolvency regime covering corporate and personal insolvency, corporate rescue and cross-border insolvency.

For a creditor, liquidation may be relevant where the debtor is unable to pay its debts, where execution of a judgment has returned unsatisfied in whole or in part, or where the debtor’s financial position shows that ordinary enforcement is unlikely to produce payment. Under the updated framework, the threshold for inability to pay debts was increased to LSL 15,000, replacing the former low threshold under the old regime.

The updated insolvency framework also expands the grounds relevant to liquidation of a company or other debtor. These grounds may include inability to pay debts, financial or commercial insolvency, management or shareholder deadlock that harms the company, circumstances where the business cannot be conducted to the advantage of members or shareholders, conduct that is fraudulent or illegal, misapplication or waste of company assets, and situations where winding up is just and equitable. A corporate rescue practitioner may also apply for liquidation if there is no reasonable prospect of rescuing the company.

The Insolvency Act 2022 introduced corporate rescue as a replacement for the older judicial management model. Corporate rescue is designed to preserve a financially distressed company or its business where there is a realistic prospect of revival or a better outcome for creditors than immediate liquidation. It may include temporary supervision of the company’s affairs, a moratorium on legal proceedings, appointment of a rescue practitioner and preparation of a rescue plan.

Where the debtor’s assets are insufficient to satisfy creditors, the insolvency route may also allow review of pre-insolvency transactions that reduced the debtor’s estate. Transactions that may require challenge include transfers made to prejudice creditors, transactions for inadequate value, related-party transactions, security granted for existing debts, disposal of assets when the debtor was unable to pay its debts, and obligations incurred when the debtor knew or ought to have known that performance would be impossible. If such a transaction is set aside, the property or value may be restored to the estate and made available for distribution to creditors.

Insolvency-related recovery may also involve claims connected with the conduct of directors, officers or controlling persons. Where company assets were misapplied, wasted or transferred through fraudulent or illegal conduct, civil consequences may include restoration of value to the estate or personal liability for losses caused to the company, shareholders, creditors or other affected persons. Serious fraudulent conduct may also create criminal-law exposure under the relevant corporate and insolvency rules.

If you need support with debt collection in Lesotho, Grandliga can assist with the key stages of the recovery process: assessment of the debtor and documents, preparation of a written demand, settlement negotiations, choice of court strategy, High Court proceedings, summary judgment applications, recognition and enforcement of foreign court judgments, foreign arbitral awards, execution against debtor assets, freezing orders, liquidation-related recovery and corporate rescue analysis. Contact us to review the documents and determine the most practical recovery route for your claim.

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