Legal Interest or Super Interest? An Interesting Decision!

The Joint Sections of the Court of Cassation clarify the prerequisites and conditions to enforce the payment of the so-called super-interest provided for in the fourth paragraph of art. 1284 of the Italian civil code.

Art. 1284 of the Italian Civil Code establishes that:

1. The statutory interest rate is set at 5% per annum. The Minister of the Treasury, by decree published in the Official Gazette of the Italian Republic no later than 15 December of the year preceding the year to which the rate refers, may amend the amount annually, on the basis of the average gross annual yield on government bonds with a maturity not exceeding twelve months and taking into account the inflation rate recorded during the year. If no new rate is fixed by 15 December, it shall remain unchanged for the following year.

2. Contractual     interest shall be calculated at the same rate, if the parties have not determined the amount of interest.

3. Interest in excess of the statutory amount shall be determined in writing; otherwise it shall be payable at the statutory rate.

4. If the parties have not determined the amount of the claim, the statutory interest rate shall be equal to that provided for in the special legislation on late payment in commercial transactions from the time the proceedings are brought.

5. The provision of the fourth subparagraph shall also apply to the act by which the arbitration proceedings are initiated.

But, what to do, however, in the event that the operative part of the judgment upholding the application is limited to recognizing the “payment of statutory interest” without further specification in this regard?

In this case, the creditor who acts in enforcement may be faced with the doubt of which is the rate applicable to the principal amount (the statutory rate or the increased one?) and – in the event of incorrect application of the same – he may be subject to an opposition to enforcement by the debtor who contests the debenture of the so-called super-interest provided for in the fourth paragraph of art. 1284 of the Italian Civil Code (i.e. the interest provided for by the special legislation for late payment of commercial transactions, applicable pursuant to the fourth paragraph from the time the claim is filed).

The Court of Cassation – after a brief excursus of the differences between the activity of the judge in the cognizance phase (which leads to the issuance of the judgment or enforceable title) and that of the judge in the enforcement phase (which is merely interpretative, but not supplementary to the title) – clarified that “if the enforceable title is silent, the creditor cannot obtain the payment of increased interest at the time of enforcement,  given the prohibition for the enforcement court to supplement the title, but must rely on the remedy of appeal.”

The right to obtain the so-called super-interest (currently at 12,5%), with respect to ordinary legal interests (currently at 2,5%), is, in fact, a question that cannot be resolved by the judge of the enforcement phase, but requires a proper judicial assessment of the correspondence of the real case to the abstract one provided for by the rule and presupposes an investigation on:

• the source of the obligation (which can be the most varied: contractual liability, non-contractual liability, employment claims, maintenance claims or claims that do not pre-exist the trial);
• whether there is a (valid and effective) contractual determination of the amount of interest, as a circumstance that – pursuant to the fourth paragraph of art. 1284 c.c. – prevents the production of super-interest); and,
• the identification of the judicial application as a relevant moment for the commencement of the interests (which the Court hypothesizes may also be prior to the service of the writ of summons or appeal, as in the case of previous precautionary applications or prior technical assessment or, for example, be excluded during the course of the mediation procedure introduced after the judicial application due to its lack of prior experimentation by the creditor).

Considering, therefore, that the ascertainment of the case producing the increased interest (or super-interest) is evidently autonomous with respect to the dispute to be resolved, and is likely to become “res judicata”, where the operative part or the grounds of the judgment do not provide the enforcement judge with a clear preceptive content of the order ordered by the title, the creditor will have no other remedy than an appeal.

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