New Interpretative Decision of the Supreme Court of Cassation

On 13 November 2014, the General Assembly of the Civil and Commercial Colleges (“the GACCC”) of the SCC ruled on Interpretative Case No. 7 of 2013 whether a penalty for arrears was due in case the contract had been terminated due to non-performance at the fault of the debtor. It held that the penalty for arrears, being an accessory agreement, had to follow the fate of the main contract and to be considered retroactively cancelled upon the termination. There is a different solution when the termination has a prospective effect, i.e. in cases of contracts implemented on a long-term or regular basis. Then the penalty continues to be due with regard to those obligations which remain valid. Regardless of the effect of the termination of the contract, a penalty is due also in the cases, where it has been explicitly agreed as a compensation for the damage caused by the contract termination.