A Critique of "the Unified Judicial Precedent No. 850" of the Supreme Court General Assembly (Calculation of Late Payment Damages Based on Annual Index)

Document Type : Scientific Research

Author

Assistant Professor Faculty of Law and Political Science of Shiraz University, Shiraz, Iran.

10.30473/clk.2025.74533.3377

Abstract

The decrease in the value of money due to severe inflation has caused numerous economic and legal problems in monetary transactions and overdue debts. Therefore, the approval of Article 522 of the Civil Procedure Code was an effort to reduce such problems. However, the method of execution offices for calculating late payment damages has not been uniform, and two bases of monthly and annual indices have always been applied in similar cases in favor of creditors and debtors. This disagreement in the execution stage and conflict in calculation led to the intervention of the Supreme Court and the issuance of the Unified Judicial Precedent No. 850 on 16/5/1403 (August 7, 2024), which unfortunately stipulates the annual inflation index announced by the Central Bank for calculating the damage incurred by the creditor.The aforementioned unified judicial precedent not only does not reduce the grounds for dispute and litigation among people but also leads to more abuse and breach of contract by obligors.The debtor's liability to compensate for late payment damages based on the monthly index is more consistent with economic and social realities, as well as the jurisprudential and legal principles justifying the responsibility of the procrastinating debtor, such as the rule of destruction and causation , the rule of no harm, the rule of action, the rule of profit and loss, the rule of usurpation, and also with custom.

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References

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