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Debt recovery in Zimbabwe

In section 2 of the Prescription Act of Zimbabwe Debt is said to be including “…anything that may be sued for or claimed by reason of an obligation arising from statute, contract, delict or otherwise”. 

Traditionally, debt recovery by Law Firms in Zimbabwe is referred to and is facilitated by the applicable court through defined litigation procedures. Parties are also increasingly deviating from litigation to Alternative Dispute Resolution (ADR) mechanisms such as arbitration. In terms of statute, while it is not necessarily part of the litigation or ADR processes, any person who is owed, typically proceeds by way of issuing a letter of demand.

The letter of demand sets out the names of the parties, the facts in terms of which the claim or debt arises, the timeline within which the debtor must pay the debt and the legal consequences of failing to do so. If a debtor fails to settle the debt after being served with a demand letter, the next step would be to issue summons or an application before an arbitration tribunal, the Magistrates or High Court. If liability for the debt is admitted, the parties can formalise the settlement by entering into a Deed of Settlement or an Acknowledgement of Debt.

Should a court order be obtained in the creditor’s favour, and in the event that the debtor fails to adhere to the terms of such court order, the creditor can file a warrant or writ of execution instructing or authorising the Sheriff of the High Court or the Messenger of Court in the Magistrates Court to attach movable and / or immovable property belonging to the debtor and to sell such property through a public auction, in-order to recover the debt. Should the proceeds of such sale be required to be remitted to an offshore debtor, exchange control approval must be obtained from the Reserve Bank of Zimbabwe.