Nigeria | How Debt Collection/Recovery Mechanisms Work in Nigeria?(1)
Contributed by CJP Ogugbara, CJP Ogugbara & Co (Sui Generis Avocats), Nigeria.
There various means validly permissible under the law for a creditor to explore in the recovery of debts owned it by a debtor.
Where the contract, trade or transaction in which the debtor received goods and services in trust from the creditor on credit makes provisions for Arbitration in the settlement of any arising dispute, the creditor can resort to Domestic Arbitration to recover the debt. It need be noted that there is no requirement for engaging experts in the settlement of disputes at the arbitration level. The procedure is partially informal and very flexible. In using the Arbitration, the first thing expected of a creditor is to ensure that the payment of the debt had become due after which he would have made a demand for the payment either orally or in writing. Due to the necessity for documentary evidence, it is advised that the demand be made in writing. This would be followed by a notice of arbitration drawn up and issued by the creditor to the debtor. It is important to state that where the contract did not specify the arbitrator to resort to, the notice is expected to contain the details of an Arbitrator the Creditor had appointed. It would further inform the debtor that in the event he (debtor) that the issuer of the notice would approach the High Court for a Court appointed Arbitrator in the event the debtor fails to agree on the Arbitrator. Where the debtor agrees on the Arbitrator, either parties would write to the panel or institution of the Arbitrator to communicate of their dispute alongside the evidence of such contract unless the contract was orally. Upon receipt of the letter, the panel would be constituted and parties would put in their claims and defenses alongside supporting evidences. Unfortunately, there is no precise timeline within which an Arbitration proceedings and Award are expected to have been concluded. After an award has been handed out or published, the creditor would proceed to the High Court to apply for its enforcement. Furthermore, where the creditor in China had obtained an international award, same is also enforceable in the same manner as that of domestic under the Arbitration and Conciliation Act, as stipulated in the Foreign Judgment Act 1961; the Reciprocal Enforcement Judgement Act 1922, and the New York Convention 1958 (Convention on the Recognition and Enforcement of Foreign Award). The creditor would either transmit a duly notarized English translator Original Copy or a Certified True Copy thereof. In any case, an application to set aside an Arbitration Award by a Debtor is very possible, to frustrate the effort. This is a major fallout of the Arbitration as a mechanism for debt recovery.
Contributor: CJP Ogugbara
Agency/Firm: CJP Ogugbara & Co (Sui Generis Avocats)(English)
Position/Title: Founding Partner
For more posts contributed by CJP Ogugbara and CJP Ogugbara & Co (Sui Generis Avocats), please click here.
The Q&A Global is a special column run by CJO Global, and serves as a knowledge-sharing platform to facilitate peer learning and networking, and to provide the international business community with a global landscape of this industry.
This post is a contribution from CJP Ogugbara & Co (Sui Generis Avocats). Established in 2014 as a Partnership Firm in Nigeria, CJP Ogugbara & Co has been working along and engaging in dispute management, litigation and arbitration, commercial practice: real estate and investment advisory, tax practice and energy consultancy. Apart from the core practice areas, they also facilitate and extend practice to the development of clients’ businesses and corporate interests, especially as they apply to the Nigerian economy and investment circle.
Photo by Sheyi Owolabi on Unsplash