How a Canadian company can collect a debt from a Central African Republic company

International business transactions often carry a level of risk, particularly when partners are based in jurisdictions with differing legal systems and economic stability. One of the more challenging regions in this respect is Central Africa. For Canadian businesses facing unpaid invoices or breached contracts, debt collection in the Central African Republic (CAR) can seem daunting. However, with a clear understanding of the legal and practical mechanisms available, recovery is possible.

1. Understanding the Legal Landscape

The Central African Republic operates under a civil law system influenced by French law and is a member of the Organization for the Harmonization of Business Law in Africa (OHADA). OHADA’s Uniform Acts establish standardized commercial rules across its member states, including provisions for contract enforcement and debt recovery. For a Canadian creditor, this framework provides a predictable starting point, even though enforcement on the ground may still pose practical challenges.

The primary legislation governing debt collection in the Central African Republic includes the OHADA Uniform Act on Simplified Recovery Procedures and Enforcement Measures. This act outlines the formal process for obtaining payment orders, executing judgments, and seizing assets of the debtor. However, enforcement often requires patience and familiarity with local procedures.

2. Preliminary Steps: Amicable Collection

Before resorting to litigation, it is advisable to attempt an amicable resolution. Sending a formal demand letter—preferably drafted in French, the official language of the CAR—can serve as a strong first step. The letter should specify the outstanding amount, reference the contractual obligations, and provide a clear deadline for payment.

Engaging a local debt collection agency or legal representative in Bangui (the CAR’s capital) can also be effective. Local professionals understand cultural nuances, communication styles, and can help negotiate settlements more efficiently than distant correspondence.

3. Judicial Debt Recovery Procedures

If amicable efforts fail, legal action may be necessary. Under OHADA law, creditors can file for an injonction de payer (order for payment) with the competent commercial court. This simplified procedure allows creditors to obtain a court order without an extensive trial, provided sufficient documentary evidence of the debt is presented—such as invoices, contracts, or delivery receipts.

Once the court issues the order, it must be served on the debtor. If the debtor does not contest within the legally prescribed period (typically 15 days), the order becomes enforceable. However, if the debtor challenges it, the matter proceeds to a standard civil hearing.

4. Enforcement of Judgments

Securing a judgment is only part of the process. Enforcing it can be more complex, especially in a developing economy like the Central African Republic, where companies may have limited assets or operate informally. Enforcement typically involves seizing assets, freezing bank accounts, or garnishing receivables. Local bailiffs (huissiers) handle such enforcement measures under judicial supervision.

For Canadian companies, cooperation with a local attorney licensed in the CAR is essential. They will assist in registering and executing judgments, as well as liaising with the authorities. The creditor must also account for logistical hurdles such as delays, bureaucratic inefficiencies, and potential political instability.

5. Recognition of Canadian Judgments

Canadian court judgments are not automatically enforceable in the Central African Republic. The creditor must initiate an exequatur procedure to have the foreign judgment recognized and declared enforceable by a local court. The CAR courts will generally verify whether the original judgment respected due process, whether it is final and binding, and whether it does not violate local public policy.

Given this requirement, some Canadian businesses prefer to include arbitration clauses in their contracts, designating neutral venues such as Paris or London. OHADA member states, including the CAR, are parties to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This means arbitration awards are easier to enforce than foreign court judgments.

6. Practical Recommendations for Canadian Businesses

• Due diligence: Before entering contracts, verify the creditworthiness and registration status of the CAR company.
• Clear contracts: Include payment terms, governing law, and dispute resolution clauses—ideally specifying arbitration.
• Local partnerships: Retain local legal counsel familiar with OHADA and CAR procedural law.
• Insurance: Consider trade credit insurance to mitigate potential losses.
• Persistence: Given administrative delays, consistent follow-up is crucial.

Conclusion

While debt collection in the Central African Republic presents undeniable challenges, it is not an impossible task. A well-prepared strategy combining preventive measures, local legal support, and the use of OHADA’s harmonized legal framework can significantly increase the likelihood of recovery. For Canadian companies engaged in African trade, understanding the regional legal environment and acting promptly when payments default is key to protecting their financial interests.

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