In the context of the rapid growth of the international IT business, there is an increasing need to address issues related to debt recovery from Belarusian partners in favor of foreign companies. For non-residents, such situations can be particularly challenging: it is necessary to take into account the specifics of local business regulations, the procedures for recognizing and enforcing obligations, as well as the peculiarities of interaction with judicial and enforcement authorities.
At the same time, debt recovery in the IT sector has its own particularities. Often includes significant amounts related to software delivery, cloud services, as well as the development and maintenance of digital solutions. To protect the interests of a non-resident company, it is important not only to properly document any breach of obligations, but also to develop a recovery strategy that minimises risks, speeds up the process and ensures the actual execution of the decision.
Practice shows that successful recovery is possible with a comprehensive approach: from pre-litigation negotiations and claim work to filing in economic courts and subsequent enforcement. This is why foreign IT companies prefer to involve specialists who are well-versed in the local legal and business environment and can safeguard the non-resident’s interests at every stage of the process.
Features of Debt Recovery in the IT Sector
The IT market differs from traditional business sectors in that a significant portion of obligations is intangible. The product is often software, digital content, or access to cloud services. Such obligations are more difficult to substantiate and assess than the delivery of physical goods, so debt recovery in the IT sector requires a special approach.
Why IT Contracts Require a Special Approach
IT contracts often contain complex technical terms and descriptions of work that must be correctly interpreted in case of a dispute.
The outcome of the work may be expressed in code, algorithms, online services, or technical documentation — all of which require specific evidence of delivery and usage.
Foreign companies need to adapt their standard contracts to local business practices to avoid regulatory gaps.
Typical Types of Debt
- Software Development Agreements: Non-payment for the delivered product or individual development milestones.
- Technical Support Agreements: Outstanding debts under maintenance and system support contracts.
- Cloud Service Access Agreements: Failure to meet payment obligations for subscriptions or resource usage.
- License Agreements: Breaches of usage terms or refusal to pay for licensing contracts.
Risks for Foreign Companies
Not all foreign companies fully understand the risks they face when dealing with local IT firms. Some of the main risks include:
- Difficulty in proving service delivery.
Digital products cannot be “touched,” so it is important to properly document the transfer of work results. - Differences in business practices.
Contracts standard in Western markets may not fully account for local requirements. - Delays in payment.
Some counterparties may use legal and organizational mechanisms to postpone settlements. - Language and legal barriers.
Incomplete understanding of local procedures can result in wasted time and resources.
Pre-Litigation Dispute Resolution
For foreign IT companies, pre-litigation settlement plays a key role, as it helps save time, maintain business relationships, and reduce costs. In many cases, properly conducted claim work is sufficient to ensure that the debtor voluntarily fulfills their obligations without resorting to court.
Importance of Claim Work
A claim is a written proposal to the debtor for the voluntary resolution of a dispute. Claims are usually prepared by lawyers who review all documents related to the debt. The benefits of sending claims include:
- Establishing the creditor’s official position and notifying the counterparty of the breach.
- Providing the debtor with an opportunity to voluntarily resolve the conflict, which is often faster and more cost-effective than litigation.
- Building an evidentiary base: all claim-related documents can later be used in court to demonstrate attempts to resolve the dispute amicably.
Negotiations and Mediation
Sometimes, instead of the formal claims process, parties resolve disputes through direct negotiations or mediation (if such methods are stipulated in the contract).
Direct negotiations with the debtor allow clarification of their position and identification of possible solutions (restructuring, installment payments, set-offs).
Involving independent mediators can help resolve the conflict while preserving business relationships.
For non-residents, this approach is especially valuable, as it reduces the need for immediate court action and allows resolution in line with local market realities.
Our experienced specialists can represent your interests in negotiations and prepare the necessary debt recovery documents.
Judicial Debt Recovery in Favor of Non-Residents
When pre-litigation measures are ineffective, foreign IT companies must resort to judicial debt recovery. This stage requires a deep understanding of local procedures and rules, as the correctness of actions directly affects the speed and effectiveness of the process. Therefore, for all matters related to judicial debt recovery, we recommend consulting our experienced specialists.
Competence of Economic Courts
Disputes related to non-performance of obligations between legal entities and individual entrepreneurs are handled by economic courts. Their competence includes analyzing contractual relationships, verifying fulfillment of obligations, and issuing decisions on the recovery of monetary amounts, penalties, or interest, or refusing recovery.
For non-residents, it is important to note that courts consider not only the existence of the debt but also the correctness of the evidence submitted.
Filing and Reviewing Claims
A statement of claim must comply with procedural requirements and include evidence of the debtor’s breach of obligations.
Supporting documents may include the contract, acceptance acts, correspondence, and other proof of service delivery or work performance.
Court proceedings are based on written and oral arguments from the parties, with the possibility of appointing an expert in case of technical or specialized matters (e.g., scope of completed IT development).
Foreign claimants must provide the economic court with evidence confirming their status as economic entities, usually an extract from the commercial register, translated into Russian and legalized or apostilled.
Timeframe for Court Resolution
The duration of proceedings depends on the complexity of the dispute and the completeness of submitted materials. When one party is located outside Belarus, the case should be resolved within seven months from the court’s decision to schedule the hearing. This applies only to courts of first instance, but the timeframe can be extended.
For example, the foreign party is not notified directly by the court; instead, a request is sent to a foreign justice authority or other competent body. In such cases, the term is extended according to the relevant international treaty. If no treaty exists between Belarus and the non-resident’s country, the term may be extended by no more than six months.
Importance of Representing a Foreign Company’s Interests
It is difficult for a foreign creditor to participate in legal proceedings on his own due to language barriers and the specifics of local procedures. Professional representation ensures that the documents are properly prepared, the evidence is organised, and the company’s position is effectively represented in court.
Having experienced representatives on the ground increases the chances of a quick and successful debt recovery while minimizing the risk of procedural errors. Our experienced lawyers and attorneys can represent your interests in courts and other government authorities.
Enforcement of Court Decisions
Obtaining a favorable court decision is only one stage of the process. For a foreign IT company, it is crucial that the decision is actually enforced and the debt is effectively recovered. Enforcement of judicial acts includes recognition of foreign decisions and the application of compulsory collection mechanisms.
Enforcement of Foreign Court (Arbitral) Decisions in Belarus
Foreign court and arbitral decisions can be recognized and enforced in Belarus, in accordance with international treaties and the principle of reciprocity, or as provided by local law.
To recognize and enforce a foreign court or arbitral decision, the foreign creditor must submit a written application for recognition and enforcement. The application is filed with the economic court at the location of the debtor or their property in Belarus.
The application must include several documents:
- The certified foreign court or arbitral decision, or its copy.
- The original arbitration agreement or a properly certified copy.
- A certified translation of the decision and the arbitration agreement.
The content of the application is determined by legal norms, but it is best to consult an experienced lawyer who can properly prepare the application and attach the required documents.
A state fee of 10 base units must be paid for the consideration of the application, which is 420 Belarusian rubles (approximately €120).
The court reviews the application within one month. If the application is granted, the court issues a ruling. Once recognized, the foreign act has the same force as a Belarusian court decision and can be enforced in Belarus through the enforcement service.
Work of Court Bailiffs
A foreign court (arbitral) decision recognized in Belarus can be submitted to the enforcement service within three years from the date it comes into legal force.
Bailiffs supervise the collection process and take measures to ensure actual recovery of funds. Their authority includes sending inquiries to banks, registration authorities, and interacting with the debtor’s accounting department. The effectiveness of bailiffs’ work depends directly on the completeness of the information provided by the creditor about the debtor and their assets. Therefore, we recommend that a foreign creditor act in Belarus through a representative, a lawyer or attorney who will interact with the enforcement service.
Compulsory Collection Mechanisms
Bailiffs are authorized to use a range of measures to collect a debt on behalf of a non-resident when the debtor does not voluntarily comply with a foreign court (arbitral) decision:
- Freezing the debtor’s funds in bank accounts.
- Seizing the debtor company’s property.
- With holding future revenues, for example, from client contracts.
In certain cases, restrictive measures aimed at ensuring compliance, such as restricting the debtor company’s executive from leaving the country.
Possible Challenges and Ways to Overcome Them
A foreign creditor should be aware of several potential challenges in debt recovery:
- Concealment of assets by the debtor. This can be addressed through thorough information searches on bank accounts and property.
- Lengthy collection procedures. These can be minimized by timely submission of all documents and active oversight of enforcement actions.
- Differences in legal systems. Foreign companies should prepare in advance and engage specialists familiar with local practices who can promptly resolve arising issues.
Our experienced lawyers and attorneys can advise you on potential challenges and help mitigate them.
Conclusion
Debt recovery in favor of a non-resident in the IT sector requires a comprehensive and well-considered approach. The nature of digital products and services imposes additional requirements for documenting the fulfilment of obligations and preparing an evidence base. For foreign companies, it is essential to take into account local rules and practices to avoid delays and increase the likelihood of successful recovery. To prevent the need to navigate the specifics of debt collection in Belarus independently, we recommend consulting with our experienced specialists.
Key Takeaways on Protecting Non-Resident Interests in Belarus:
- Pre-litigation settlement can be an effective tool for preserving business relationships and securing timely payment.
- Economic courts are competent to handle disputes between foreign and local counterparties, but success depends directly on the completeness and correctness of the submitted documents.
- Enforcement of a court decision is the final and equally important stage, requiring careful attention to detail and coordination with bailiffs.
Importance of a Proper Debt Recovery Strategy
A well-structured strategy allows for risk minimization, faster proceedings, and actual recovery of debts.
For a non-resident, professional legal support is a key factor, ensuring adaptation to the local legal environment and protection of interests at every stage, from claim work to enforcement of the decision.
A comprehensive approach not only enables debt recovery but also helps maintain the company’s business reputation on an international level.
How to contact us
For more information or to schedule a consultation on debt recovery for non-residents in the IT sector in Belarus, do not hesitate to contact us. We are here to help and support you.
Phone and email communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
