Moratory Interest Vs Compensation

In one of the cases considered by the Court of Cassation, the applicant submitted a challenge to the appeal judgment...

NOVEMBER 25, 2020

In one of the cases considered by the Court of Cassation, the applicant submitted a challenge to the appeal judgment, inter alia, stating that at the same time the court awarded the defendant Moratory interest and compensation, which is considered to be a misapplication of the law. In the opinion of the claimant, the moratorium interest is also considered to be compensation awarded to the respondent.

However, the Court of Cassation held that each of the moratorium interest and the compensation had a different concept, since the creditor was entitled to a moratorium interest in the even tof failure of the debtor to pay the amount of the debt and to a default paymen tof the debt. Moreover, even if the value of the moratorium interest is greater than the debt amount, the court is not subject to any restrictions when awarding the moratorium interest. Plus, the reason for avoiding any stalling attempt from the debtor side is beyond imposing such interest. It is therefore entirely different from the basis and concept of compensation that is awarded for any sustained harm as a means of remedy and rectification.

Brief Concept Established by the Court:

Awarding compensation does not preclude the court from imposing a moratory interest on thej udgment debtor.

(Cassation no. 11 of 2018, real estate)

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