Debt Collection in the Democratic Republic of Congo

The debt collection process in the Democratic Republic of Congo begins with an assessment of the debtor’s solvency, their business sector, business history, 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, it is necessary to proceed to collection through the courts.

The Democratic Republic of the Congo is a member of OHADA (Organization for the Harmonization of Business Law in Africa), which includes nine approved Uniform Legal Acts applicable to all member countries of the above-mentioned organization. Therefore, the procedures for judicial collection of debt, enforcement and bankruptcy are mainly regulated by the provisions of the relevant Uniform Acts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period under the national legislation of the Democratic Republic of the Congo is 30 years. According to the provisions of the general commercial law OHADA, obligations arising from trade transactions between merchants or between merchants and non-merchants expire after five years. The effects of the expiration of the limitation period apply in the court of first instance and on appeal only at the request of the debtor. The limitation period is interrupted by the recognition of the creditor’s claims by the debtor. After the interruption, the limitation period begins to run anew. The limitation period may be shortened or extended by agreement of the parties. However, it may not be shortened to less than one year or extended to more than ten years. The parties may also, by mutual agreement, supplement the list of reasons for the suspension and interruption of the limitation period.

Judicial debt collection in the Democratic Republic of the Congo is carried out in the ordinary judicial procedure and in the order for the issuance of an order for payment.

The ordinary judicial procedure begins with the submission to the court of a request to summon the defendant, after which the court, if the request meets the procedural requirements, issues a summons to summon the defendant. The summons must be served at least eight days before the hearing. If the defendant is outside the territory and the Democratic Republic of the Congo, the summons must be served at least three months before the hearing.

On the appointed day, the parties must appear in person or through their representatives. If the defendant fails to appear, the court may conduct a hearing in absentia and satisfy the plaintiff’s claims if they are substantiated and properly verified. If the court does not have evidence of proper service of the summons, the court orders a re-summoning of the debtor.

If the parties appear, the court conducts an adversarial process during which the parties exchange opinions, documents and arguments in support of their positions. If, as a result of the first hearing, all the circumstances of the case are clear to the court, the court may make a decision at the same hearing. If the case is not ready for a decision, the court orders an investigation. During the investigation, the court questions witnesses, engages experts, visits sites, verifies the authenticity of documents, orders the personal participation of the parties in the case and carries out other procedural actions. After the investigation is completed, the court will hold a debate between the parties and make a final decision.

If after the initial appearance the defendant no longer appears or refrains from filing statements or participating in the investigation, the plaintiff may continue the process after notice to the defendant. After fifteen full days from the date of notice, the plaintiff may apply for a decision on his claim. Such a decision is considered to have been made in the adversarial manner.

The order for payment procedure is governed by the OHADA Debt Settlement Act and is used to collect debts arising from contracts, negotiable bills or cheques. To initiate this procedure, the creditor must apply to the court for an order for payment, attaching documents proving the existence of the debt. If the court finds the evidence presented to be fully or partially justified, it will issue an order for payment of the specified amount. If the application is rejected (in whole or in part), the court’s decision cannot be appealed. In such a situation, the creditor has only one option available – to file a lawsuit under the standard procedure.

Certified copies of the application and the order must be served on the debtor within three months. Failure to comply with this deadline makes the order for payment invalid. After receiving the documents, the debtor must either pay the debt within 15 days or file an objection within the same period. If there is no objection, the order becomes an enforcement document. If the debtor files an objection, the judge will try to reconcile the parties. In case of success, a reconciliation act is drawn up, one copy of which contains the writ of execution. If reconciliation is impossible, the case is immediately heard in court, which issues a decision, even in the absence of the debtor. Such a decision has the same legal force as a decision in adversarial proceedings. The court’s decision on the objection replaces the previously issued order for payment.

The decision of the court of first instance may be appealed to the court of appeal within thirty days from the date of the contested decision. The appeal is suspensive, unless the decision declares temporary execution. The decision of the court of appeal may be appealed to the Court of Cassation within three months from the date of the contested decision. An appeal to the Court of Cassation does not suspend the execution of the contested decision, except in cases where it changes the status of the persons. The decision of the Court of Cassation is final and cannot be further appealed.

Once the judgment has entered into legal force, the creditor must initiate enforcement proceedings. Within the framework of enforcement of the judgment, 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 and confiscating the debtor’s property held by third parties. 

An alternative method of debt collection is to initiate bankruptcy proceedings against the debtor. In the Democratic Republic of the Congo, this procedure is regulated by the Uniform Insolvency Law OHADA. A creditor may initiate bankruptcy if its claims are undisputed, liquid and subject to collection. In the event that the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to annul transactions made by the debtor with the aim of causing damage to creditors. Such transactions, concluded from the moment of suspension of payments until the beginning of the bankruptcy procedure, include: gratuitous transfer of property, transactions where the debtor’s obligations significantly exceed the obligations of the other party, early repayment of debts that are not yet due, provision of security for existing debts, as well as any transactions in which the other party was aware of the debtor’s financial insolvency. The cancellation of these transactions allows the return of property or other assets lost by the debtor, which helps to increase the liquidation estate to satisfy creditors’ claims and cover the costs associated with the bankruptcy procedure. 

If you have any questions or need support on international debt collection in the Democratic Republic of the Congo (DRC), our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us for additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY DEMOCRATIC REPUBLICK OF THE CONGO

24.12.2024

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