The question of whether it is permissible to accrue interest on interest in contractual relations with the participation of individuals has been considered repeatedly in the case law. The Supreme Court Judges and the case law has consistently held that the stipulation in supplementary agreements to a credit agreement for the addition to the amount of the regular principal of overdue interest liabilities on which interest is accrued constitutes anatocism (taking interest on interest, or receiving compound interest – which is forbidden). It is only possible between traders.
On the other hand, in Decision № 30 of 20.05.2020 on item № 739/2019 of the First Commercial Division of the Supreme Court of Cassation the distinction is made that interest on overdue obligation to charges including by adding the fee to the loan principal on which interest is charged, does not constitute anatocism in the same sense.
A cassation proceeding was allowed on this issue.
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