Debt Collection in Senegal

Debt collection in Senegal begins with a legal and financial assessment of the debtor, their commercial status, actual business activity, assets available in Senegal, ongoing court or enforcement proceedings, and the documents proving the debt. For a foreign creditor, this first stage is especially important because the strategy depends on the nature of the debt, the debtor’s location, the availability of attachable assets in Senegal, whether the debt is certain, liquid and due, and whether negotiation, ordinary court proceedings, a payment order, protective measures or a procedure connected with the debtor’s financial distress is more appropriate.

If the debtor continues business activity, can be located and payment is not clearly impossible, an amicable collection stage may be started before going to court. The purpose of this stage is to clarify the debtor’s position, obtain acknowledgment of the debt, agree on a payment schedule or prepare a stronger evidentiary basis for later court proceedings.

Communication with the debtor should be based on structured reminders, a formal payment demand, written correspondence and, where useful, direct negotiations with the persons authorized to decide on payment. The purpose is not to apply informal pressure, but to obtain a documented response from the debtor, determine whether the debt is acknowledged or disputed, and decide whether the claim can be recovered by agreement or must be pursued through court.

If the debtor refuses to pay, does not respond to reminders, disputes the debt without sufficient grounds or attempts to reduce available assets, the creditor should consider judicial debt collection. The choice of procedure depends on the contract, invoices, delivery or service documents, correspondence, acknowledgment of debt, the debtor’s commercial status and the existence of assets that may be subject to enforcement in Senegal.

The Republic of Senegal is a member of OHADA. Therefore, judicial debt collection in Senegal combines Senegalese national law with the uniform OHADA rules on commercial obligations, payment orders, protective measures, enforcement methods and collective proceedings. The new OHADA uniform act on simplified recovery procedures and enforcement methods applies to new proceedings started from 16 February 2024 and is especially important for payment orders, protective measures and compulsory enforcement.

Before filing a court claim, the creditor must check the applicable limitation periods. Under Senegalese law, the general limitation period is ten years unless a special rule provides otherwise. For obligations arising from commercial transactions between merchants or between merchants and non-merchants, OHADA commercial law provides a five-year period if the claim is not subject to a shorter special limitation period.

The consequences of limitation are not applied by the court on its own initiative; they must be invoked by the interested party. The period starts running on the day after the obligation becomes due. Limitation may be interrupted, among other cases, by the debtor’s express or implied acknowledgment of the debt, a payment demand, an enforcement measure or the filing of court proceedings. After interruption, a new period starts to run. Court proceedings and a payment period granted by the judge suspend the running of limitation; once the reason for suspension ends, the period continues.

The main types of judicial debt collection in Senegal are ordinary court proceedings and a payment order. If the dispute is commercial, the case may fall within the jurisdiction of commercial courts or, in regions where such courts have not been established, the competent ordinary courts. Commercial courts hear, among other matters, disputes concerning obligations between merchants, commercial transactions and collective proceedings. They decide at first instance disputes exceeding twenty-five million CFA francs or disputes of undetermined value, and they decide at first and final instance disputes not exceeding that amount.

Ordinary court proceedings begin with filing the case before the competent court and serving a summons on the defendant. The ordinary summons period depends on the defendant’s place of residence: five days if the defendant resides in the place where the competent court is located, ten days if the defendant resides within the district of that court, fifteen days if the defendant resides in a neighboring judicial district, and thirty days if the defendant resides in another part of Senegal. In urgent cases, the president of the court may authorize a shorter summons period.

If the defendant resides outside the territory of the Republic of Senegal, the periods are determined by the region of residence: two months for Europe, Africa, Madagascar and Réunion; three months for America; and four months for all other countries. If a summons for a party domiciled abroad is served personally in Senegal, the ordinary periods apply unless the court grants an extension.

On the appointed date, the parties appear in person or through authorized representatives. The judge may attempt reconciliation at the beginning of the case or at any later stage. Before the commercial court, the reconciliation attempt is mandatory and is held without a public hearing. If the parties reach an agreement, its terms are recorded in minutes that may serve as an enforceable basis.

If no agreement is reached, the court continues to examine the case. The parties submit evidence, written explanations and legal arguments. The judge may order the measures necessary to clarify the facts, including hearing witnesses, appointing experts or carrying out an on-site inspection. Once the case is sufficiently prepared, the parties are heard and the court decides on the creditor’s claim.

A payment order is a special procedure for recovering a certain, liquid and due debt. It may be used, in particular, for claims arising from a contract, claims based on commercial instruments and claims based on a cheque without sufficient funds. The creditor must state in the application the amount claimed, the components of the debt, the legal basis of the claim and the supporting documents. If the creditor is not domiciled in the state of the competent court, the application must indicate an address for service within the district of that court.

The president of the competent court or the appointed judge decides within three days from the filing of the application. If the application appears fully or partly justified, a payment order is issued for the amount determined. If the application is refused in whole or in part, the decision must be reasoned; the creditor cannot bring a separate appeal against that refusal, but may pursue the claim through ordinary proceedings.

A certified copy of the application and the payment order must be served on the debtor by an out-of-court service act. The payment order becomes ineffective if it is not served within three months from its date. The service must require the debtor, within ten days, either to pay the amount fixed in the order, together with interest and costs, or to file an objection.

If the debtor does not file an objection within ten days or withdraws the objection filed, the creditor may request that the payment order become enforceable. This request must be made within two months after the expiry of the objection period or after the debtor’s withdrawal. If the creditor misses this period, the payment order may lose practical value for recovery.

If the debtor files an objection, the case goes before the competent court that issued the payment order. The objection must be served on the interested parties and a hearing date must be fixed within thirty days from the objection. The court appoints a judge to attempt reconciliation within fifteen days from appointment. If no agreement is reached, the case is examined in a public hearing and the court decides on the claim. The decision given on the objection replaces the earlier payment order.

Available appeals depend on the procedure used. In ordinary proceedings, an appeal against a first-instance decision follows Senegalese procedural rules; as a general rule, a two-month period applies, taking into account special time limits where one of the parties is domiciled outside Senegal. In the payment order procedure, the decision given on objection may be appealed within fifteen days unless the applicable national law provides a different period. In this procedure, both the appeal period and an appeal filed within that period suspend the effect of the decision, unless provisional enforcement has been ordered.

If the creditor already has a judgment from a foreign court, the creditor usually needs to obtain recognition and a declaration of enforceability in Senegal before taking action against the debtor’s assets located in Senegal. Foreign civil, commercial or administrative judgments may have effect in Senegal if the foreign court had jurisdiction, the judgment was issued under the law recognized as applicable by Senegalese conflict-of-law rules, the judgment is final and enforceable in the country of origin, the parties’ rights to be summoned and represented were respected, and the judgment does not conflict with Senegalese public order or with a final Senegalese judgment.

For this application, the creditor usually needs an authenticated copy of the judgment, the service document or its equivalent, proof that no ordinary appeal is available or that such appeal was not used where required, and a copy of the summons or notice served on the party that did not appear. This step is especially important for foreign creditors because a foreign judgment cannot be used directly as a basis for seizure in Senegal until it has been recognized and declared enforceable there.

After obtaining an enforceable title, the creditor may proceed to compulsory enforcement under OHADA rules. The choice of measure depends on the available information about the debtor’s assets, the amount of the claim, the existence of bank accounts, business assets, the debtor’s claims against third parties, other assets located in Senegal, and whether protective measures are needed before enforcement.

In compulsory enforcement, the creditor may act against movable or immovable property, bank accounts, electronic money, the debtor’s claims against third parties, company rights, securities or other attachable assets. If there is a risk that the debtor may conceal or transfer assets, protective measures may be used to protect future recovery. The measure chosen must not exceed what is necessary to obtain payment or preserve the creditor’s rights.

Special rules apply when the debtor is a public-law legal entity, such as the state, a territorial authority or a public institution. Unless there is an express waiver, compulsory enforcement and protective measures cannot be used against such entities in the same way as against a private debtor. A debt recognized by a public-law legal entity or confirmed by an enforceable title may, after a formal payment demand remains unsuccessful for three months, be entered as a mandatory expense in the accounts and budget of that legal entity.

Another recovery route may consist of using collective proceedings under OHADA rules when the debtor is in financial difficulty. In Senegal, these proceedings may include conciliation, preventive settlement, judicial recovery and liquidation of assets. Their purpose depends on the debtor’s situation: preventing inability to pay, allowing restructuring, preserving business activity or realizing available assets to satisfy creditors.

If the debtor can no longer pay debts when they fall due or collective proceedings have been opened, certain earlier transactions may be reviewed. These may include free transfers of property, contracts with clearly unbalanced obligations, early payment of debts not yet due, late security granted for previous debts or transactions concluded when the other party knew about the debtor’s inability to pay.

The cancellation or ineffectiveness of such transactions may help recover assets and distribute available assets more fairly among creditors. This route may be important where individual enforcement measures are insufficient or where several creditors face the same financial difficulty of the debtor.

International debt collection in Senegal requires a precise analysis of the contract, available documents, the debtor’s commercial status, limitation periods, the jurisdiction of Senegalese courts, OHADA rules and assets that may be subject to enforcement. The appropriate strategy may combine amicable collection, a payment order, ordinary proceedings, recognition of a foreign judgment, protective measures, compulsory enforcement or collective proceedings depending on the circumstances of the case. Grandliga can assess the matter based on the documents, the debtor’s status, available assets and the initial legal position.

# DEBT COLLECTION AGENCY SENEGAL

29.11.2024

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