Debt collection in the Central African Republic

The debt collection process in the Central African Republic begins with a legal, financial and evidentiary assessment of the case. It is necessary to verify the origin of the debt, whether the obligation is civil or commercial, the exact status of the debtor, the debtor’s actual business activity, registered office or place of residence, operating establishment, identifiable assets, existing court or enforcement proceedings, documentary evidence of the debt and possible objections to the creditor’s claim.

In a case connected with the Central African Republic, the initial analysis should not be limited to confirming that the debt exists. It should also establish whether the debtor is located in Bangui or in another region, which court may have jurisdiction, whether documents can be properly served, whether attachable assets exist in the country and whether the debtor is already involved in other procedures affecting its solvency.

If the debtor continues to operate, its representatives can be identified and existing court or enforcement proceedings do not make voluntary payment unrealistic, the creditor may first use out-of-court debt collection.

This stage is based on documented reminders, a formal payment demand and controlled negotiations with the debtor. Negotiations may cover full or partial payment, a payment schedule, return of goods, transfer of the debt to a third party, set-off, exchange of goods or services, or another settlement option consistent with the contractual documents and the debtor’s actual situation.

Communication by mail, electronic message, telephone or communication applications should help identify the persons authorized to decide on payment, preserve evidence of the content of negotiations, record the debtor’s position and, where possible, obtain a written acknowledgment of debt or payment undertaking.

By around the 60-day point, it should normally be clear whether negotiations can lead to payment or a workable instalment arrangement. This is a practical case-management benchmark, not a mandatory waiting period. If the debtor refuses to pay, disputes the debt without sufficient grounds, avoids receiving documents, transfers assets or the case requires an enforceable title, it is appropriate to proceed earlier to judicial debt collection.

The Central African Republic is a member state of the Organization for the Harmonization of Business Law in Africa. Therefore, commercial debt recovery requires consideration of both the national court system and the uniform rules applicable to business law, simplified recovery procedures, enforcement measures and collective settlement of liabilities.

In judicial debt collection in the Central African Republic, national law is relevant for determining the competent court, the judicial structure and certain practical aspects of procedure. The uniform business law rules regulate the conditions of monetary claims, payment orders, attachments, protective measures and the effects of collective proceedings on creditors’ rights.

Before court proceedings are started, the limitation period must be checked. Under the general commercial law rules, obligations arising from trade transactions between merchants, or between merchants and non-merchants, are generally time-barred after five years, unless a shorter special period applies to a particular claim. The effects of limitation are considered by the court when the debtor invokes them.

Acknowledgment of the debt by the debtor interrupts the limitation period, after which a new period begins to run. The parties may modify the limitation period by agreement, but it may not be reduced below one year or extended beyond ten years. The parties may also agree on additional grounds for suspension or interruption. For this reason, contracts, addenda, acknowledgments of debt, payment correspondence, partial payments and documents extending the due date should be preserved in the case file.

Judicial debt collection in the Central African Republic may be carried out through ordinary court proceedings or, where the legal conditions are met, through an order for payment.

Jurisdiction depends on whether the debt is civil or commercial, the status of the debtor, the place of performance of the obligation, the debtor’s registered office or residence and the judicial organization of the Central African Republic. Commercial courts may hear disputes between merchants, disputes involving commercial companies, claims arising from commercial transactions, applications for orders for payment and certain proceedings involving businesses in financial difficulty. In practice, the commercial court operates in Bangui; where no separate commercial court has been established, commercial matters are heard by courts of major jurisdiction.

Ordinary court proceedings begin with an application to summon the debtor before the competent court. If the application meets the procedural requirements, the court fixes a hearing date and the required documents are served on the defendant. The creditor should submit the contract, invoices, delivery documents, acceptance records, business correspondence, acknowledgments of debt, payment records and documents proving that the debt has become due.

The parties must promptly disclose the facts on which they rely, the evidence submitted and the legal arguments invoked, so that each party can prepare its defense. This allows the court to assess the existence of the debt, its amount, its due status and the validity of the debtor’s objections.

On the appointed date, the parties may appear in person or through representatives. If the debtor fails to appear, the court may examine the case on the basis of the available documents. Where the facts are sufficiently proven by written evidence, the court may issue its decision more quickly.

If the facts of the case are disputed, the court may request additional evidence, hear the parties or witnesses, verify the authenticity of documents, appoint experts or involve specialists. After examining the case file and hearing the parties’ positions, the court issues a decision on the claim.

The order for payment is governed by the uniform rules on simplified recovery procedures and enforcement measures. This procedure may be used where the claim is certain, quantified and due. It is particularly relevant for debts arising from contracts, commercial instruments or checks.

The creditor files an application with the competent court and attaches documents proving the existence, amount and due date of the debt. The application must identify the parties and their addresses, state the name and registered office where a party is a legal entity, specify the amount claimed with a breakdown of its components and set out the basis of the claim. If the creditor has no residence or registered office in the state of the competent court, the application must indicate an elected address within the jurisdiction of that court.

If the application appears justified in whole or in part, the court issues an order for payment for the amount accepted. If the application is rejected in whole or in part, the rejection cannot be appealed by the creditor, but the creditor may still bring the claim through ordinary court proceedings.

A certified copy of the application and the order for payment must be served on the debtor within three months from the date of the order. If service is not completed within that period, the order loses effect. The notice must order the debtor to pay the amount set by the court, interest and court costs, or to file an objection. The debtor has ten days to pay or file an objection before the court that issued the order for payment.

If the debtor does not file an objection or withdraws it, the creditor must apply to the court registry for the enforcement clause. This request must be made within two months after the expiry of the objection period or after the debtor withdraws the objection. An order for payment bearing the enforcement clause has the effect of a decision rendered after adversarial proceedings and may be used to start enforcement.

If the debtor files an objection, the court attempts to reconcile the parties. If an agreement is reached, a conciliation record is prepared and one copy receives enforceable effect. If no reconciliation is reached, the court decides the recovery claim, and its decision replaces the initial order for payment. The judicial fees published in the Central African Republic include 6,000 Central African francs for an order for payment before the court of major jurisdiction and the commercial court, and 15,000 Central African francs before the court of appeal where that procedure is applicable.

A first-instance decision may be challenged by appeal before the competent court of appeal within two months from service of the contested decision. For certain non-contentious decisions, incidental decisions or decisions subject to a special regime, the time limit may be one month from service. In matters involving an order for payment, the decision issued on the objection may be appealed within fifteen days: if the decision was rendered after adversarial proceedings, the period runs from pronouncement; if it was rendered in default, the period runs from service. This appeal and the appeal period generally suspend enforcement.

The decision of the court of appeal may be challenged by an appeal on points of law before the Court of Cassation of the Central African Republic within two months from service of the contested decision. The civil and commercial chamber of that court examines challenges against final decisions rendered by ordinary courts in civil and commercial matters.

Where the dispute concerns the interpretation or application of the uniform business law rules, review on points of law may fall within the jurisdiction of the common court of justice and arbitration of the Organization for the Harmonization of Business Law in Africa. If the jurisdiction of that common court was raised before a national court reviewing points of law but was not respected, the interested party may apply to the common court within two months from service of the contested decision.

If the creditor already has a foreign court decision, recognition and enforcement of foreign court decisions must be addressed before attachments or other enforcement measures are pursued. For civil and commercial decisions in relations between France and the Central African Republic, the judicial cooperation agreement provides a framework for recognition and declaration of enforceability.

A declaration of enforceability allows the foreign decision to be enforced in the Central African Republic. The application is filed before the competent court of the place where enforcement is to be carried out. The file usually includes an authentic copy of the decision, documents proving service of the decision, a certificate showing that the decision is no longer subject to objection or appeal where required, and documents proving proper summons of the absent party where the decision was rendered in default. After the declaration of enforceability is obtained, the creditor may act against the debtor’s assets located in the Central African Republic.

After a court decision, an order for payment bearing an enforcement clause, an enforceable conciliation record or a foreign decision declared enforceable has taken effect, the creditor may initiate forced enforcement. Enforcement may include attachment of funds in bank accounts, attachment of claims owed to the debtor by third parties, attachment and sale of movable or immovable property, attachment of securities and attachment of assets belonging to the debtor but held by third parties.

For a foreign creditor, the decisive practical step is to identify attachable assets before or immediately after obtaining the enforceable title. Bank accounts, commercial receivables, vehicles, goods, real estate, contractual rights and amounts owed to the debtor by local business partners may determine whether the court decision turns into actual recovery.

Where the debtor’s financial condition makes individual enforcement difficult or several creditors are involved, the creditor may need to act within collective settlement of liabilities proceedings. The uniform rules provide for conciliation, preventive settlement, judicial recovery and liquidation of assets.

Judicial recovery or liquidation of assets may be opened when the debtor is no longer able to pay due debts with available assets. A creditor may request the opening of such proceedings if its claim is certain, quantified and due, and if the nature, amount and basis of the claim are stated.

If the court finds that the debtor has ceased payments, it may order judicial recovery where a serious payment plan, organized transfer of the business or orderly continuation of activity appears possible. If that possibility does not exist, liquidation of assets is ordered. From the opening decision, the way in which creditors must assert their rights changes and the bodies of the procedure become involved.

If the debtor’s assets are not sufficient to satisfy creditors in full, certain acts carried out during the suspect period may be ineffective against the body of creditors. This period begins on the date of cessation of payments and ends on the date of the opening decision for judicial recovery or liquidation of assets.

The acts concerned may include gratuitous transfers of movable or immovable property, contracts in which the debtor’s obligations clearly exceed those of the other party, early payment of debts not yet due, abnormal payment of due debts, creation of new security interests for previous debts and certain protective registrations. Gratuitous acts made within six months before the suspect period, onerous transactions with a person who knew that the debtor had ceased payments and voluntary payments received by a creditor who knew that situation may also be ineffective where they harm the body of creditors.

The ineffectiveness of such acts helps restore the assets available for the procedure. Depending on the type of transaction, this may lead to return of the transferred asset, reimbursement of its value, repayment of amounts unduly received, loss of effect of an unperformed contract or filing of the beneficiary’s claim in the proceedings. This may improve creditors’ prospects of payment according to the statutory order of priority.

In serious cases, collective proceedings may also have consequences for legal or actual managers. Property-related measures, extension of certain procedures to managers and sanctions may apply where mismanagement, irregular accounting, abusive continuation of loss-making activity, preferential payments, concealment of property, asset transfers or fraudulent acts contributed to the insufficiency of assets or harmed creditors’ rights.

If your case concerns debt collection in the Central African Republic, Grandliga can support the process at every stage: analysis of the debt and the debtor, preparation of a payment demand, out-of-court negotiations, choice between ordinary court proceedings and an order for payment, preparation of the evidence file, recognition of a foreign court decision, planning of forced enforcement and protection of creditors’ rights in collective settlement of liabilities proceedings. Our work is focused on building a strategy consistent with the available documents, the debtor’s status, the applicable rules in the Central African Republic and the uniform business law rules.

18.12.2024

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