Debt collection in Turkmenistan

The debt collection procedure in Turkmenistan begins with an analysis of the financial capacity of the debtor, his field of activity, the history of the enterprise, the availability of documentary evidence of the debt, current court cases and initiated enforcement procedures, as well as the possibility of contesting the debt. This analysis forms the strategy that will be used on behalf of the client to recover the debt.

If there are no open lawsuits against the debtor or unexecuted court decisions on debt collection, and if he is actively engaged in his business, then it is advisable to use amicable debt collection.

This stage is based on active negotiations with the debtor to reach an agreement regarding payment of the creditor’s claims or other settlement options (for example, return of goods, transfer of debt to a third party, exchange of services or goods).

Interaction with the debtor begins with sending a notification via mail, email, telephone or instant messengers. This process involves intensive communication with the debtor to put pressure on him. The main goal is dialogue with key decision makers in order to speed up debt repayment.

The average term for out-of-court collection is up to 60 days. If this stage does not bring the expected results or if after an initial analysis it becomes clear that it is not applicable, then you should proceed to recovery through the court.

The statute of limitations in Turkmenistan is 3 years. The law prohibits changing the specified period by agreement of the parties. If the statute of limitations has been missed, the creditor has the right to file a lawsuit to collect the debt, but if the debtor files an application with the court to apply the consequences of missing the statute of limitations, then the claim will be denied. The statute of limitations is interrupted due to the debtor performing actions that indicate recognition of the debt, including partial payment of the debt or interest, or the provision of security. After the interruption of the term, the three-year period begins to be calculated anew.

Before going to court, you should pay attention to the procedure for resolving the dispute, which the parties provided for in the contract. Therefore, if the parties to the contract set a certain type or method of pre-trial settlement of the dispute, then before filing a claim in court, it is necessary to fulfill the stipulated condition. Otherwise, the statement of claim will be left without progress and in the future, if the comments are not eliminated within the time specified by the court, it will be returned without consideration.

The legislation of Turkmenistan provides for two types of debt collection through the court, by issuing a court order and by way of general claims consideration.

The procedure for issuing a court order is applicable to claims for the collection of monetary obligations in the amount of no more than ten thousand manats, due to non-fulfillment or improper fulfillment of an agreement, which are recognized by the debtor, but are not fulfilled. To carry out this procedure, an appropriate application must be submitted to the court, after which the court will issue a court order within three days without trial or summoning the parties. If the debtor does not file an objection within 10 days from the date of receipt of the court order, the court issues an order to the creditor, certified by the official seal of the court, to present it for execution. If the debtor files an objection, the court issues a ruling to cancel the court order, and in this case the case should be considered in the general procedure for litigation.

The general procedure for litigation is carried out by filing a statement of claim in court. In this case, the plaintiff is obliged, before filing a claim in court, to send the defendant a copy of it with all attachments that the debtor does not have. The period for consideration of the case in the court of first instance is two months from the date of filing the claim in court. In exceptional cases, the court has the right to extend the period for consideration of the case to six months. The case is considered in court sessions with the participation of representatives of the parties. The decision of the court of first instance comes into force within one month from the date of its adoption, unless it is appealed in cassation.

Each of the parties to the case that does not agree with the decision of the arbitration court of first instance has the right to appeal it by filing a cassation appeal. A cassation appeal against a court decision is considered in a court session with the participation of representatives of the parties within two months from the date of receipt of the complaint along with the case by the cassation court. As a result of considering the complaint, the court makes a decision, which comes into force from the moment of its adoption.

A decision of a cassation court that has entered into legal force may be appealed by an interested party in an arbitration court of a supervisory instance within one year from the date of entry into force of the appealed decision. An appeal against the decision of the cassation court does not suspend its execution, but the supervisory court has the right to suspend the execution of the decision until the end of the period for consideration of the supervisory appeal if there is a request from the applicant. The grounds for appealing a court decision in a supervisory court are its groundlessness or significant violations of substantive or procedural law. The supervisory appeal is considered in a court hearing with the participation of representatives of the parties within one month. As a result of consideration of the supervisory appeal, the court adopts a decision, which comes into force from the moment of its adoption.

After the completion of legal proceedings and receipt of a court decision, provided that the debtor refuses to comply with it voluntarily, you should obtain an executive document from the court – an order and present it to the bailiff. The creditor has the right to submit a court order for execution within three years from the date the court decision enters into legal force. Satisfaction of the creditor’s claims in the process of forced execution is carried out through the seizure of funds and their write-off, seizure of property with subsequent sale, seizure of the debtor’s property located in third parties, foreclosure of the debtor’s property (including receivables) located in other individuals and legal entities.

If within two months the debtor is unable to ensure the fulfillment of the creditor’s demands from the moment they arise and the corresponding claim is received from the creditor, then it becomes possible to initiate bankruptcy proceedings for the debtor. This procedure is interesting in that it provides for the possibility, depending on the organizational and legal form of the debtor’s company, to hold the debtor’s owners personally liable for the company’s debts if the company’s property is not enough to satisfy the creditors’ claims. In addition, the Law of Turkmenistan “On Bankruptcy” provides for criminal liability for deliberately bringing a company to bankruptcy.

An alternative way to collect debt is to bring the debtor’s officials to criminal liability in accordance with Art. 229 of the Criminal Code of the Republic of Turkmenistan for non-execution or obstruction of the execution of a court decision.

If you have any questions or need support regarding international debt collection in the Republic of Turkmenistan, our company is ready to provide our expert assistance to effectively resolve your debt issue. Please contact us to receive additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY TURKMENISTAN

06.02.2022

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