Spain's Supreme Court gives clarity on reduced award amounts in rulings and paying interest
Published on 23rd Mar 2023
A lack of arithmetic coincidence between an amount requested and awarded doesn't prevent the payment of interest
The Supreme Court's ruling no. 948/2022, dated 20 December, has further clarified the jurisprudential doctrine on the payment of interests and the interpretation of the principle in illiquidis mora non fit.
Payment of interest
Based on a contractual breach, the claim sought to terminate an agency agreement and order the defendant to pay €757,818.78 in compensation for the loss of clients, €176,416.50 in damages, and €337,079.56 for accrued unpaid commissions. In addition to these sums, the plaintiff also sought the payment of legal interests from the date on which they were claimed out of court until the date on which they were finally paid.
The Court of First Instance considered that there were "doubts of fact and law" and dismissed the claim in its entirety without imposing costs on either party. The plaintiff appealed, and the case was heard by Section 16 of the Barcelona Provincial Court, which partially upheld the appeal and ordered the defendant to pay the following amounts: €284,476 in compensation for the loss of clients and €103,459.17 in damages. The court ruled that, in addition to these amounts, the defendant should also pay legal interest from 19 July 2012 until the date of the ruling and, from that date, the interest provided for in article 576 of the Civil Procedure Act.
The defendant appealed in cassation against this decision. They argued, among other things, that the significant difference between the amounts requested in the claim and those awarded in the ruling showed that the initially claimed sums were illiquid and hypothetical.
Supreme Court stance
Prior to this case, the Supreme Court had refused to allow interest to accrue "because the amount of the compensation to be paid by the defendant is much lower than the amount claimed by the plaintiff" (STS no. 163/2016, of 16 March).
However, the ruling departs from this criterion. It upholds the payment of interest for the following reasons: the plaintiff's right to claim both compensation and damages was recognised, and both payments were difficult to quantify without the defendant's cooperation.
Likewise, the ruling states that the main difference is in the settlement for losing clients. It argues that "it is very significant" that the defendant "had denied compensation for this item" and that "it was in a better position to quantify this amount, if necessary since it had information on the clients and their invoices."
Osborne Clarke comment
The lack of arithmetic coincidence between the sums requested in the claim and those awarded in the ruling does not prevent the issue of an order to pay interest.
Once again, the Supreme Court reminds us that the strict criterion of the principle in illiquidis mora non fit has been relaxed; therefore, in order to determine the accrual of interest, various guidelines must be taken into account, such as the reasonableness and basis of the claim, the grounds for opposition, the defendant's conduct in settling and paying the sums owed, and the circumstances of the case.
