Debt Collection in South Sudan

The debt collection process in South Sudan 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 early recovery of the debt.

The average time for informal out-of-court collection is up to 60 days (except in cases where a payment 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, then the next step is to proceed to collection through the courts.

There is no statute of limitations in South Sudan, so debt collection can be initiated at any time, regardless of the age of the debt.

South Sudanese law provides for judicial recovery of a debt in the ordinary course of judicial proceedings.

The courts of first instance are the Payam Court (which has the power to hear a case with a claim value of up to 500 South Sudanese pounds), and the District and High Court, which have the power to hear any case, regardless of the value of the claim.

The normal judicial procedure begins with the filing of a claim with the court, after which the court checks the claim for compliance with the requirements of procedural law. If there are no objections to the claim, the court decides to accept the claim and orders the creditor to pay the court fee within 7 days. After the court fee is paid, the court issues a summons containing a precise statement of the cause of action and the amount of the debt claimed, and orders the defendant to appear and give an answer at the specified date, time and place.

On the day appointed for the hearing of the case, the parties must appear in court in person or through their lawyers. In the event of the defendant’s failure to appear, the court must either continue the consideration of the case in the defendant’s absence, provided that sufficient evidence is presented confirming that the summons was properly served, or if it is proven that the summons was not properly served, the court adjourns the consideration of the case and orders the issuance and service of a second summons on the defendant.

At the first hearing of the case or at any subsequent time for which the case is adjourned, the court shall question the parties to ascertain any questions of law or fact on which the parties disagree. The court may, in lieu of questioning the parties, require them to submit written statements.

Based on the questioning of the parties and their statements, the court shall formulate and record: the facts on which the parties have come to an agreement; the questions of law or fact on which the parties disagree; a list of the evidence that the parties intend to present to establish the disputed facts. The court is not required to formulate and record the questions if the defendant has not presented a defense.

If the defendant fails to present a defense to the claim, the court may, having admitted the evidence in support of the plaintiff’s claims, render a judgment against the defendant or make such other decision on the case as it deems appropriate.

On the day appointed for the consideration of the case, the court shall hear the positions of the parties and consider the evidence in support of the disputed questions that the parties must prove. After considering the disputed questions, the court shall immediately or within any subsequent short and reasonable time make a final decision.

In the judgment, the court may order the payment of interest on the principal amount of the debt from the date of commencement of the proceedings until the date of payment or such other date as the court considers appropriate. The rate of interest shall not exceed the base rate fixed by the Bank of South Sudan plus five basis points.

The judgment of the Payam Court may be appealed to the District Court, and the judgment of the District Court may be appealed to the High Court. The judgment of the High Court may be appealed to the Court of Appeal, and the judgment of the Court of Appeal may be appealed to the Supreme Court of South Sudan. The period for appeal is 15 days from the date of notification of the judgment. The judgment of the Supreme Court is final and may not be further appealed.

Once the judgment has entered into force, the creditor must initiate enforcement proceedings. Enforcement of the judgment may satisfy the creditor’s claims by seizing and debiting the debtor’s accounts; seizure of the debtor’s movable and immovable property with subsequent sale; seizure and confiscation of securities.

An alternative option for debt collection is the bankruptcy procedure of the debtor. The creditor has the right to initiate this procedure if the debtor is unable to pay his debts. According to the Insolvency Law of South Sudan, a debtor is considered unable to pay debts if: 1) the debtor has failed to comply with a legal requirement; 2) enforcement proceedings against the debtor under a court decision have not been satisfied in whole or in part; or 3) all or almost all of the debtor’s property is in the possession or under the control of a bailiff or other person holding a pledge on this property. At this stage, if the debtor’s assets are insufficient to fully satisfy the claims of creditors, it is possible to cancel the debtor’s transactions made with the intent to cause damage to creditors. Such transactions or actions include, in particular: transactions at an undervalued price; transactions that provide for or create an encumbrance on any property of the debtor in relation to a previously existing debt; transactions in relation to any asset of the debtor, concluded with related persons with the purpose of placing assets beyond the reach of creditors; transactions giving preference to some creditors in relation to others. The above transactions may be recognized as invalid if they were concluded within a year before the date of opening of the bankruptcy procedure. As a result of the cancellation of the above transactions, it is possible to return back to the debtor what he lost from such transactions and due to this to increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or you need support on international debt collection in South Sudan, 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 SOUTH SUDAN

15.11.2024

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