A Belarusian legal entity (creditor) requested us to accompany debt collection process under an ICC arbitration award from a counterparty registered in Ireland (debtor). Debt amount – 1 million euros.
The REVERA team was requested to develop the most effective debt collection strategy under the existing sanctions against Belarus.
REVERA initiated proceedings in the Irish High Court to recognize and enforce the ICC arbitration award. This process was used as ongoing leverage against the debtor, with hearings scheduled periodically to maintain pressure.
At the same time, the debtor was offered to settle with several options of debt restructuring. Eventually, both parties agreed to restructure the debt repayment by transferring funds to a third party. The transaction was conducted through special accounts held by local lawyers in Ireland. This arrangement mitigated sanction-related risks for the debtor.
The collection process was completed successfully. Our client received the entire amount of the debt.
Even if the ICC arbitration award was recognized through full-scale judicial proceedings and enforced accordingly, there remained a risk that funds could be frozen on the European bank accounts.
An alternative option was to issue a 21-day letter and file a petition for compulsory bankruptcy due to outstanding debts; however, this procedure did not guarantee the return of funds and could take several years to resolve. Both options were quite expensive and required to hire a local solicitor’s firm and to instruct barristers to attend the hearings and so on.
Before starting any debt collection process, it is crucial to carefully plan each stage and be prepared to exit the process through negotiations with the debtor if necessary.
Hybrid approaches that combine legal proceedings with negotiation opportunities often prove most effective. Public court processes add pressure on the debtor, while more aggressive methods like bankruptcy can lead to a permanent breakdown in relations and loss of any trust.
It is important to remember that behind every business are people, and preserving business relationships is often more valuable than rushing to “penalize” and immediately bring a lawsuit.
If you need to recover debt – trust REVERA to handle the legal job. The REVERA Arbitration team (Kamal Tserakhau, Aliaksandr Struzhko) – our experts in dispute resolution and debt collection.
