Debt Recovery Through the Courts in Azerbaijan: Limitation, Court Fees and Enforcement

Short answer: A creditor whose contract debt goes unpaid should first send a written demand, gather evidence and watch the limitation clock: contractual claims are time-barred after 3 years (Civil Code, Article 373.2). Commercial courts hear disputes connected with business activity; general courts hear the rest. The state duty on a money claim depends on its value — from AZN 30 up to a cap of AZN 50,000. Since 2024, commercial disputes no longer require a mandatory initial mediation session.

Pre-trial steps: written demand and mediation

Before going to court, send the debtor a written demand (pretenziya) stating the amount, its basis (contract, invoice, acceptance act), a payment deadline and that you will sue if it is not paid. This has two legal effects:

• If the debtor fails to pay after the due date despite the creditor's reminder, the debtor is in delay; delivery of a written demand counts as such a reminder (Article 445.3).
• If the contract provides for a pre-trial claim procedure, the judge will return the statement of claim unless you file proof that you complied with it (Civil Procedure Code, Article 152.1.6).

Mediation: Article 4.6 of the Civil Procedure Code used to require attendance at an initial mediation session before filing commercial, family and labour disputes. Laws of 26 December 2023 (No. 1078-VIQD and No. 1079-VIQD) removed "commercial disputes" from both that article and the Law on Mediation. The mandatory initial session now applies only to family and labour disputes; for business debts mediation is voluntary, though it can be a fast route to a settlement if both sides are willing.

Limitation periods: how long you have

A court will still accept a time-barred claim, but if the defendant asks for the limitation period to be applied before judgment, the claim will be dismissed (Article 375).

For an obligation with a fixed due date, the period starts when that date passes (Article 377.2). Filing a claim, or any act by the debtor showing that it acknowledges the debt, interrupts the period and restarts it (Article 380). That is why a reconciliation act signed by the debtor, or a part-payment, is so valuable in practice. Once the main claim is time-barred, ancillary claims such as penalties, pledges and suretyships are barred too (Article 376).

Which court to file in

• Commercial courts hear disputes connected with business activity (Civil Procedure Code, Article 26.1). There are commercial courts in Baku, Ganja, Sumgayit, Shirvan and Sheki, plus the Commercial Court of the Nakhchivan Autonomous Republic.
• General (district/city) courts hear disputes not connected with business activity — for example, a loan between two private individuals (Article 25.1).
• Unless the law provides otherwise, a claim is filed at the defendant's registered place of residence, or for a legal entity at its address (Article 35).

For undisputed money claims based on a written transaction there is a simplified court order procedure (Articles 275–284). The order is issued without a hearing and is itself an enforcement document; if the debtor objects within the statutory period, the order is cancelled and the case moves to ordinary proceedings (Articles 282–283). Where the debtor is likely to object, filing a full claim straight away usually saves time.

State duty and e-court

For money claims the duty is calculated on a sliding scale under Article 8.1 of the Law on State Duty:

A court order application costs AZN 100 (Article 8.2); an application to secure the claim costs 10% of the main duty, at least AZN 10 (Article 8.4); and an appeal or cassation complaint costs 50% of the applicable duty (Article 8.6). A claim filed without proof of payment is returned (Civil Procedure Code, Article 152.1.5).

A claim can be filed on paper or through an electronic cabinet in the e-court (Elektron Məhkəmə) system at e-mehkeme.gov.az, where court notices are also posted.1-2).

Late-payment interest, penalties and securing the claim

On top of the principal you can claim:

• A contractual penalty (fine or daily penalty), if agreed in writing (Articles 462–463). The creditor does not have to prove loss, but the court may reduce a disproportionately high penalty (Article 467).
• Statutory interest — unless the Civil Code or the contract says otherwise, 5% per year on the overdue amount (Article 445.7); interest for unlawful use of another's money is calculated at the Central Bank's discount rate (Article 449.1). If your loss exceeds the interest, you can claim the difference (Article 449.3).
• Under credit agreements, unless the contract provides otherwise, default interest equals the contractual annual rate plus the Central Bank discount rate, and no additional penalty may then be charged (Article 745.5).

If there is a risk the debtor will move assets away, apply to secure the claim together with the claim or at any stage of the proceedings (Civil Procedure Code, Article 157). Measures include attaching the defendant's property and bank accounts and prohibiting certain actions (Article 158). The application is considered without delay and the ruling is enforced immediately (Articles 159–160).

After judgment: enforcement officers

Once the judgment enters into force, the creditor obtains a writ of execution and submits it to the Ministry of Justice's enforcement officers under the Law on Enforcement. The officer can take coercive measures such as freezing the debtor's accounts and property, selling assets and deducting from income. Interim measures stay in place until the judgment is enforced (Civil Procedure Code, Article 162.4), so an early freeze makes enforcement much easier. If the debtor company is being wound up, you need to lodge your claim in the liquidation — see our post on liquidating an LLC in Azerbaijan.

Evidence checklist

1. The signed contract and all annexes (price, payment terms, penalty, dispute resolution clause).
2. Electronic tax invoices (e-qaimə) and commercial invoices.
3. Acceptance acts, waybills and certificates of completed work.
4. Bank statements showing part-payments and advances.
5. A signed reconciliation act (as an acknowledgment of the debt it may interrupt the limitation period).
6. Correspondence: emails, letters, messenger chats, the debtor's promises to pay.
7. The written demand you sent and proof that it was delivered.
8. The debtor's legal address, tax ID (VÖEN) and details of authorised signatories.

A poorly drafted contract makes evidence harder to assemble — we discuss this in AI contracts vs lawyer-drafted contracts.

Frequently asked questions

Is mediation mandatory for a commercial debt?
No. Following the amendments adopted in December 2023, the mandatory initial mediation session applies only to family and labour disputes. In commercial disputes mediation is voluntary.

Is it pointless to sue over a debt older than 3 years?
Not necessarily. The court accepts the claim and applies the limitation period only if the defendant asks it to. Also, acts by which the debtor acknowledged the debt (a reconciliation act, a part-payment) may have interrupted the period.

How much state duty is payable on a AZN 50,000 claim?
AZN 120 plus 0.3% of AZN 40,000, i.e. AZN 240. An application to secure the claim costs a further 10% of that amount.

Which court handles a loan I made to a private individual?
If the dispute is not connected with business activity, the district (city) court at the defendant's registered address. Business disputes go to the commercial courts.

Can I claim interest if the contract has no penalty clause?
Yes. Unless the law or the contract provides otherwise, Articles 445.7 and 449 of the Civil Code allow you to claim interest on the overdue amount.

I won, but the debtor still won't pay. What next?
Obtain the writ of execution and submit it to the enforcement officers. They take coercive steps such as freezing the debtor's accounts and property.

How we can help

Affidacons handles debt recovery end to end: reviewing documents and limitation periods, drafting the written demand, calculating the state duty, filing through e-court, applying to secure the claim, representing you before commercial and general courts and at appeal and cassation, and working with the enforcement officers. See our litigation and legal representation service or get in touch.

This article is general information and does not constitute legal advice. It is based on the Civil Code of the Republic of Azerbaijan (Articles 373–380, 445, 449, 462–467, 745), the Civil Procedure Code (Articles 4.6, 25, 26, 35, 152, 157–162, 275–284), the Law on State Duty (Articles 8 and 9.1-2), the Law on Mediation and the Law on Enforcement (October 2026); legislation may change. Obtain advice on your specific circumstances before acting.