CASE: COLLECTION OF INSURED EXPORT COMMERCIAL DEBTS
ECA (Export Credit Agency)
Importer in one of CIS countries
B2B case for export insurance recoveries
One of our clients belongs to institutions that serve exporters through the provision of effective financing and insurance facilities. Traditionally they finance exporting and insure credit risks for local companies who plan to sell their products abroad. Once the project is accepted such institutions support export deals. In case of contract breach, the insurer takes full obligation to demand the payment by the debtor.
One of the cases below is about such situations. The debtor was located in one of CIS countries. At the very beginning the deal was typical: exporter from pharmaceutical industry agreed with the importer from CIS country a shipment of goods. The deal was insured by our client. However, the importer was not able to pay in time. Debt occured. CIS DRS was enrolled as a recovery subcontractor to handle the dispute. A team of lawyers was formed to support the project and return money (debt collection).
We have advised the client regarding restructuring concerns, evaluation of distressed assets, as well as further litigation. Lawyers have provided the overall advice on the preliminary check of the ability to recover the debts in legal and alternative ways. Our team has advised the client regarding reimbursement of payment for the problematic transaction. It was agreed to start with the restructuring efforts and further move to legal actions. We put together a team of international debt recovery lawyers and began to work.
Despite the team’s efforts the defendant did not acknowledge any obligation to pay for the goods delivered. Moreover, the debtor denied claims of breach of contract and was not intended to comply with the offered restructuring plan. Dozens of negotiation rounds were conducted and all results were reported to the client. It should be noted that there was a high risk to breach the statutes of limitation. So the Team decided to involve more lawyers from our partner office in one of CIS Countries. We have developed the plan for litigation in the defendant's jurisdiction, despite the fact that the agreement determined the arbitration of the dispute.
The lawyers built a position, thanks to which the court could not refuse to consider the case. The situation is further complicated by the assignment of rights and obligations under the contract from the primary creditor to our client (plaintiff). Hence, the local courts are considering our arguments on the validity of assignment. So our client has received a necessary judgment proving his position and the right to demand the payment. Thanks to the complex strategy of debt recovery combining amicable solutions and legal actions, the client has recovered a substantial amount of indemnification paid to the original creditor.
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