The Correct Index Used in Calculating Late Payment Damages (Annual or Yearly Avarage)

Shamloo, Bagher; Hemmati, Amirhossein; Hajian, Hani; Dowlatnia, Sara

doi:10.48308/eclr.2026.240305.1183

The Correct Index Used in Calculating Late Payment Damages (Annual or Yearly Avarage)

Document Type : Original Article

Authors

bagher shamloo ¹ ^¶

Amirhossein Hemmati ²

hani hajian ³

sara dowlatnia ⁴

¹ Professor, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

² L.L.M Student, Faculty of Law and Political Science, University of Tehran, Tehran, Iran. Corresponding Author Email: a.h.hemmati@ut.ac.ir

³ PhD Student, Faculty of Humanities, Islamic Azad University, North Tehran Branch, Tehran, Iran

⁴ L.L.M Student, Faculty of Law, Shahid Beheshti University, Tehran, Iran

10.48308/eclr.2026.240305.1183

Abstract

Article 522 of the Civil Procedure Code of Iran, enacted in 2000, establishes the requirements under which delayed payment Damages (khesarat-e takhir-e tadiyeh) can be claimed based on the annual price index changes from the date of demand. Despite the clarity of this article regarding the proper method for calculating such compensation and the provision of necessary indices by the Central Bank of Iran, discrepancies in judicial interpretations have emerged. These discrepancies stem from the varied indices provided by the Central Bank in different columns, leading some courts to adopt the average annual price index of the previous year as the basis for calculation. This inconsistency in judicial practice has resulted in significant variations in the calculated compensation amounts, creating substantial differences in the enforcement of judgments. To address this issue, the Supreme Court issued Unifying Decision No. 850 on August 7, 2024, aiming to standardize the approach. This theoretical study, conducted through descriptive and analytical methods and utilizing library-based research sources including books and articles, seeks to answer the following question: What is the legally appropriate method for calculating delayed payment damages according to legal standards? The findings indicate that the legislator's intent in Article 522 refers to the "annual index" as the monthly indices published by the Central Bank at the end of each month, and the method for calculating late payment damages is the amount of the debt multiplied by the index of the payment time, divided by the index of the maturity month of the debt.

Keywords

Delayed Payment Compensation

Currency Devaluation

Annual Index

Average Annual Price Index

Monthly Index

Inflation

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