If the debtor denies indebtedness to the Client or refuse to pay the debt within a reasonable period, we may subject to the Client’s instruction resort to one of the following legal proceedings to recover the debt;
Upon review of the claim, if we discover that the debtor does not have any defence to the Client’s claim, we would commence summary judgment proceedings under the relevant rules of court against the debtor. This proceeding is referred to as “summary judgment procedure” in the Southern part of Nigeria while in Northern part; it is referred to as the “undefended list proceedings”.
The advantage of this procedure is that it dispenses with the need for a full trial with its manifest delay and costs. If the Court is convinced on the merit of the Client’s case, Judgment would be entered in its favour. Judgment under the summary judgment procedure is on the merits. The Court would only set it aside on grounds of fraud, lack of service or lack of jurisdiction of Court.
If the Court arrives at a finding that the debtor has disclosed that it has a reasonable defence to the Client’s claim, the suit would be transferred to the general cause list in which case oral testimony of the witnesses shall be called.
In the same vein, upon receipt of a claim from the Client, if we discover that the debtor has a defence to the claim, we would, as against summary judgment procedure or undefended list proceedings, commence an action against the debtor to recover the debt.
If the debtor is a corporate person and the debt against it is clear and incontestable and the debt is up to N 2, 000, the debtor may be served a statutory letter of demand pursuant to the provisions of the Companies and Allied Matters Act (CAMA).
If the debtor fails to pay up the debt within the statutory period of 21 (twenty-one) calendar days, we shall upon the Client’s instruction commence winding up proceedings against the debtor for inability to pay its debts. The proceeding is commenced by service of the winding up petition and other accompanying processes on the debtor.
Upon commencing a winding up proceedings, the debtor usually pays its debts or enter into an arrangement with its creditors to avoid being wound up.
In appropriate cases, the arbitration clause of the relevant agreement between the Client and the debtor may be invoked. Arbitration is commenced by serving the debtor with the Notice of Arbitration, the appointment of arbitrators as per the arbitration clause and service of the originating processes pursuant to the relevant arbitration rules agreed between the parties.