Debt collection in Tunisia

The process of debt collection in Tunisia begins with a legal, financial and documentary assessment of the debtor. It is necessary to review the debtor’s solvency, field of activity, business history, available evidence of the debt, ongoing court cases and enforcement proceedings, as well as the possibility that the debtor may dispute the claim. It is also important to verify the debtor’s registration status in the National Business Register, its registered address or principal place of business, actual business activity, registered changes, possible cessation of activity and signs of insolvency.

The assessment should also cover the basis of the debt: contract, invoice, delivery document, debt acknowledgment, check, bill of exchange, promissory note, account balance, foreign court judgment or another document confirming the payment obligation. For a foreign creditor, it is also important to determine whether the debtor has assets in Tunisia, whether payment should be made in Tunisian dinars or in foreign currency, and whether the case should be coordinated with proceedings opened in another country.

If the debtor has no active court proceedings, pending enforcement issues or serious signs of insolvency, and continues to conduct real commercial activity, an amicable collection stage may be initiated before court proceedings. At this stage, the debtor’s management, finance department or authorized representatives are contacted, the reasons for non-payment are clarified, and direct payment or a written payment commitment is sought.

This stage may include negotiations on full payment of the debt, an installment schedule, return of goods, set-off, provision of security, payment by a third party or another settlement option compatible with the nature of the claim and the creditor’s interests.

Interaction with the debtor begins after a written notice is sent by mail, email, phone or professional messaging channels. This process is based on regular and documented communication with the debtor, preservation of evidence of sending and receipt, clear indication of the amount claimed and identification of the persons authorized to make a payment decision. If this stage does not result in voluntary payment, or if the initial assessment shows that the debtor disputes the debt, diverts assets or no longer carries out real business activity, it is necessary to proceed to judicial debt collection.

Before initiating court proceedings, the applicable limitation period must be determined. Under Tunisian law, claims arising from obligations are generally subject to a fifteen-year limitation period, unless the law provides a special period or an exception for a specific category of claims. The starting point depends on when the creditor’s right arises and becomes enforceable through court proceedings, especially where the obligation is subject to a term or condition.

Where a commercial debt is documented by a bill of exchange, a special rule applies: a claim arising from the bill of exchange against the acceptor is time-barred three years after maturity. This period should not be confused with the general fifteen-year period applicable to obligations that are not subject to a special rule.

The limitation period may be interrupted by an act through which the debtor acknowledges the creditor’s right. This may include an approved account reconciliation, a partial payment with a determined date, a request for payment deferral, a suretyship or another form of security. After interruption, a new limitation period begins to run. The legal consequences of limitation are assessed in the proceedings when the debtor invokes limitation.

Tunisian law provides for judicial debt collection mainly through ordinary court proceedings and an order for payment. The choice of procedure depends on the nature of the debt, the level of the debtor’s objections, the quality of the evidence, the debtor’s domicile, the amount claimed and the possibility of obtaining an enforceable title quickly.

Ordinary court proceedings begin with the filing of a written statement of claim by a lawyer with the competent court. Before the court of first instance, representation by a lawyer is generally mandatory unless the law provides an exception. The lawyer’s office is considered the chosen address of the client for the relevant level of proceedings. A copy of the statement of claim is served on the defendant through a bailiff, together with copies of the evidence.

The statement of claim must contain the identity of the parties, their profession, address and procedural status. If the opposing party is a legal entity, its name, registered office, legal form, commercial registration number and place of registration must be indicated. The statement of claim must also set out the facts, evidence, claimant’s requests, legal basis of the claim, the court seized, and the date and time of appearance.

The application must require the defendant to submit a written response to the claim, supported by evidence and filed through a lawyer, by the appointed hearing date. In the absence of such a response, the court will continue to examine the case on the basis of the submitted documents. The hearing date may not be set less than twenty-one days away if the defendant resides in Tunisia, or less than sixty days away if the defendant resides abroad.

The claimant’s lawyer must submit to the court registry, at least seven days before the scheduled hearing date, the original statement of claim, a copy of which was served on the defendant, together with the evidence and a register in two copies containing the list of submitted documents. After verifying payment of court fees, the registry records the claim in the appropriate register, includes it in the hearing schedule and transfers the file to the court president for the appointment of a reporting judge.

If the defendant appoints a lawyer, that lawyer must notify the claimant’s lawyer of the representation through a bailiff and submit a copy of that notice to the court registry for inclusion in the file. The defendant’s lawyer must also provide the claimant’s lawyer with a copy of the response to the claims and copies of supporting documents. If the defendant does not appoint a lawyer or the defendant’s lawyer does not submit a defense, the court will continue to examine the case and render a decision on the basis of the available materials.

The case is heard on the day specified in the hearing schedule. The court verifies the appearance of the parties, their procedural status, the authority of their representatives and compliance with procedural rules. The court may order a second summons to the defendant if the first summons was not personally received. If the case is ready for examination, the court sets a hearing for oral submissions, which may be held on the same day.

The court may immediately proceed to the merits if the claim is based on an acknowledgment of debt, an official deed, a private document with an undisputed signature or legal presumptions. In that case, the lawyers of the parties may exchange arguments and documents within the time limits set by the court.

If the court considers that the case requires further investigation, it may instruct the reporting judge to take measures necessary to establish the facts. These measures may include witness examination, expert assessment, site inspection, questioning of the parties, document review and investigation of alleged document forgery. After the additional investigation is completed, the reporting judge prepares a report and transfers the file to the court president for further examination. During the hearing, the court assesses the evidence, hears the parties’ arguments and renders its decision by a majority vote of three judges.

An order for payment may be used to collect a debt of a determined amount where the obligation has a contractual basis or arises from a check, bill of exchange, promissory note or security connected with one of these documents. This procedure is particularly suitable where the debt is clearly documented and the claimed amount can be calculated precisely.

If the debt amount exceeds 150 Tunisian dinars, the creditor must, before filing the application, notify the debtor through a bailiff that if payment is not made within five full days, the order for payment procedure will be initiated. The notice must be accompanied by the document proving the debt. If the debtor is domiciled abroad, this period is thirty days.

Unless otherwise agreed, the application for an order for payment is filed with the judge of the debtor’s actual or chosen domicile. An order for payment cannot be granted if the debtor has no known domicile. Depending on the amount of the debt, the application is submitted to the cantonal judge or to the president of the court of first instance. It must be prepared in two copies and indicate the parties, their addresses, the exact amount claimed, the cause of the debt, supporting documents and proof of notification.

If the judge considers that the debt is proven, the judge orders payment on one of the copies of the application. Otherwise, the application is rejected, and the same debt cannot be submitted again through the order for payment procedure on the basis of the same documents. The decision must be issued within three days of filing the application. The order is then made enforceable, served on the defendant and may be appealed regardless of the amount.

The decision of the court of first instance may be appealed to the court of appeal within twenty days from regular notification of the decision, unless a special rule provides otherwise. If the losing party is outside Tunisia on the date of notification, the appeal period is extended by thirty days. If the last day of the period falls on a public holiday, the period is extended to the following day.

The appeal returns the case, within the limits of the contested points, to the state in which it was before the challenged decision. In debt cases, this stage may be important where the debtor disputes the existence of the debt, the quality of the evidence, the jurisdiction of the court, the amount claimed or the validity of notification.

The decision of the court of appeal may be challenged before the Tunisian Court of Cassation within twenty days from regular notification of the contested decision. An appeal in cassation is aimed at reviewing the correct application of the law and compliance with procedural rules. It does not automatically suspend enforcement of the decision. In exceptional cases, at the applicant’s request, the court may suspend enforcement for one month if enforcement could lead to irreversible consequences. The decision of the Court of Cassation is final and cannot be appealed further.

If the creditor already has a judgment issued by a foreign court, collection in Tunisia may require recognition and enforcement of a foreign court judgment. Foreign judgments may have effect in Tunisia where the rights of defense have been respected, the judgment does not violate Tunisian international public order and the other conditions required by Tunisian law are met.

In cross-border cases, notification of the debtor is especially important. If the defendant resides abroad and has a known address, the summons may be sent by registered letter with acknowledgment of receipt. If a judicial cooperation agreement exists between Tunisia and the relevant state, transmission and tracking of the summons may follow the procedure provided by that agreement. After recognition and authorization of enforcement, the foreign judgment may serve as a basis for enforcement measures against the debtor’s bank accounts, movable and immovable property, claims or other assets located in Tunisia.

Once the judgment has become final or the creditor has obtained an enforceable title usable in Tunisia, enforcement proceedings must be initiated. Rights arising from a final court judgment are not treated in the same way as an ordinary contractual claim subject to limitation. Obtaining an enforceable title is therefore especially important where the debtor does not make voluntary payment.

Within the enforcement of a judgment, the creditor’s claims may be satisfied by seizure and allocation of funds held in the debtor’s bank accounts, seizure and sale of the debtor’s movable and immovable property, seizure of securities, seizure of company shares, or seizure of the debtor’s property and claims held by third parties. The choice of enforcement measures depends on the type of assets identified in Tunisia, the quality of the enforceable title and the information available about the debtor’s property.

In an international case, enforcement should also be coordinated with the actual method of receiving payment. The Tunisian dinar is convertible for current account transactions, but certain transfers may require authorization from the Central Bank of Tunisia and may create additional time for receipt of funds. If the debt is expressed in foreign currency or the creditor is located outside Tunisia, the collection strategy should take into account banking documents, payment currency, justification of the transaction and transfer timing.

An additional route for collecting debt from a company or entrepreneur is the debtor’s bankruptcy procedure. Under Tunisian commercial law, bankruptcy is declared by a judgment of the court of the place where the debtor’s principal commercial establishment is located. The court may act on the debtor’s written declaration or on a claim filed by a creditor. This route becomes relevant where the debtor has ceased making payments and the claim should be addressed within a collective creditors’ procedure.

A trader who has ceased making payments must declare this to the registry of the competent court within one month of the cessation of payments. Failure to comply with this obligation may lead to the application of rules on fraudulent bankruptcy and sanctions provided for by article 290 of the Tunisian Penal Code. In urgent situations, for example where the trader closes business premises, absconds or causes a significant part of assets to disappear, creditors may apply to the court, and the court may order protective measures to safeguard creditors’ rights.

The judgment declaring bankruptcy determines the date on which the cessation of payments occurred. This date may be moved backward by one or more judgments, either by the court on its own initiative or at the request of an interested party, including creditors. However, it cannot be set earlier than eighteen months before the judgment declaring bankruptcy.

From the judgment declaring bankruptcy, the debtor loses the power to administer and dispose of its property, and rights and actions relating to that property are exercised by the bankruptcy administrator. The judgment suspends individual actions by ordinary creditors and creditors with a general privilege. It also stops, as against the bankruptcy estate, the running of interest on claims not secured by a special privilege or by movable or immovable security.

Within the bankruptcy procedure, certain acts performed by the debtor from the date of cessation of payments fixed by the court, or within the twenty days preceding that date, may be declared ineffective against the bankruptcy estate. These include gratuitous acts and transfers, except minor customary gifts, early payments, payments of due monetary debts made by means other than cash, bills of exchange, promissory notes, checks or payment orders, as well as the creation of a mortgage or pledge over the debtor’s property to secure a pre-existing debt.

Other payments of due debts and transactions for value made after the cessation of payments may also be declared ineffective against the bankruptcy estate where the persons receiving payment or contracting with the debtor knew of the cessation of payments. Claims based on these rules must be brought within two years from the judgment declaring bankruptcy. Declaring such acts ineffective or cancelling them allows assets to be returned to the bankruptcy estate, increases the possibility of satisfying creditors and helps cover the costs of the procedure.

If your case concerns debt collection in Tunisia, Grandliga can assist at every stage: analysis of the debtor and documents, preparation of a payment demand, amicable negotiations, selection between ordinary court proceedings and an order for payment, recognition and enforcement of a foreign court judgment, enforcement proceedings, tracing of the debtor’s assets and actions connected with bankruptcy. Our work is aimed at building a collection strategy adapted to the available evidence, the debtor’s status and the real enforcement possibilities in Tunisia.

# DEBT COLLECTION AGENCY TUNISIA  

25.11.2024

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