19.12.2024

The application of penalties for failure to fulfil an obligation to do or not to do, in civil court practice

The purpose of this article is to highlight some aspects drawn from the practice of civil courts in the matter of the application of penalties to a debtor for non-performance of an obligation to do or not to do.

A. When can penalties for non-performance be claimed?

As a rule, if the debtor refuses to perform an obligation contained in an enforceable title, the creditor may be authorized by the enforcement court, by an enforceable judgment, issued with the summons of the parties, to perform it himself or through other persons, at the debtor's expense (Article 904 of the Code of Civil Procedure). Also, when the enforceable title includes an obligation not to do something which has not been performed by the debtor, the creditor may ask the enforcement court to be authorized, by an enforceable judgment served on the parties, to dismantle himself or through other persons, at the debtor's expense, the work done by the debtor against the obligation not to do something (Article 905 of the Code of Civil Procedure).

There are, however, certain obligations to do or not to do which can only be performed by the debtor, in which case the debtor can only be compelled to fulfill the obligations by the enforcement court by the application of penalties (Art. 906 of the Code of Civil Procedure).

B. What is the amount of the penalties?

The amount of penalties for delay may be between 100 and 1000 lei per day of delay, if the obligation is not assessable in money, or between 0.1% and 1% per day of delay of the value of the subject matter of the obligation, if the obligation is assessable in money.

C. For what period can penalties be claimed?

In order for the creditor to obtain these penalties for late payment, the court must fix a definitive amount by way of penalties for late payment, after the expiry of a period of three months during which the debtor has not performed his obligation under the enforceable title, until the obligation has been fully discharged.

It is also possible to fix the final amount owed to the creditor by way of penalties for a period of more than three months, but composed only of three-month periods, as was held to be binding by Decision No 37/2023 of the I.C.C.J. - Panel for the Settlement of Certain Questions of Law[1].

D. How is the court stamp duty calculated?

According to O.U.G. No. 80/2013[2], the court stamp duty is determined differently, depending on whether or not the subject-matter of the claim is assessable in money.

With regard to the stamping of the request for the court to fix the final amount by way of late payment penalties for failure to perform an obligation to do or not to do, pursuant to Article 906 of the Code of Civil Procedure, divergent opinions have emerged in the practice of the courts.

Thus, some courts have held that for such a request, the court stamp duty should be the fixed amount of 20 lei, pursuant to art. 27 of O.U.G. no. 80/2013. An argument in support of this view is the fact that the initial request to oblige the debtor to pay penalties per day of delay is stamped with the fixed amount of 20 lei, pursuant to art. 27 of O.U.G. no. 80/2013 (in this regard, the summary of the Meeting of the Presidents of the Civil Sections of the High Court of Cassation and Justice and of the Courts of Appeal hosted by the Bacău Court of Appeal on June 23-24, 2016).

Other courts have held that in the case of a request for setting penalties, the court stamp duty is calculated on the amount of the final amount, pursuant to art. 3 of O.U.G. No. 80/2013. An argument in support of the latter opinion is that the law does not specifically regulate the stamp duty in the case of a request for setting final penalties, thus the common law on stamp duty is applicable.

In our opinion, the court stamp duty should be a fixed amount of 20 lei, all the more so since, as we will see below, the creditor's application for the establishment of final penalties will be rejected if the debtor performs his obligation during the proceedings, the purpose of the judicial proceedings being to compel the debtor to perform and not to obtain a sum of money.

E. What happens if the debtor enforces his obligation during the proceedings?

If the debtor has performed the obligation to do or not to do something, which cannot be performed by another person, even during the course of the decision on the application for the final amount, the creditor can no longer obtain the final amount by way of penalty, as was ruled in a binding decision No 30/2023 of the I.C.C.J. - Panel for the determination of certain points of law[3].

As the role of penalties is eminently constraining, the purpose of the procedure governed by Article 906 para. (4) of the Code of Civil Procedure is, and must remain throughout the procedure, that by which the creditor will obtain the exact performance of the obligation under the enforceable title, and not an additional sum of money, together with performance in kind and, possibly, damages. An approach to the contrary would show that the fixing of penalties would have no other purpose than to punish the debtor, which is contrary to the comminution rationale of the procedure (I.C.C.J. Decision No 30/2023).

F. Can the debtor still be ordered to pay the costs?

The rule enshrined in civil procedural law is that the losing party will be obliged, at the request of the successful party, to pay the costs to the successful party (Article 453 of the Code of Civil Procedure).

If the debtor has performed his obligation under the enforceable title until the application for the final amount to be set by way of penalties has been decided, the question arises whether he can still be ordered to pay costs.

First of all, a defendant who has admitted, at the first date on which the parties are lawfully summoned, the plaintiff's claims cannot be required to pay the costs, unless, before the proceedings were instituted, he was put in default by the plaintiff or was in default by operation of law (Article 454 of the Code of Civil Procedure). In principle, this exception does not apply, even if enforcement takes place before the first date of judgment, because in the case of the request for the final amount to be fixed by way of penalties, the debtor has previously been ordered to pay penalties per day of delay by a previous final judgment, and is therefore in default.

Second, the dismissal of the action for a definitive amount by way of penalties on the ground that the debtor has discharged its obligation in the course of performance (in the light of I.C.C.J. Decision No 30/2023) does not necessarily relieve the defendant of its obligation to pay the costs. Thus, it can be interpreted that the performance of the obligation by the debtor during the course of the proceedings, until the application for the final amount to be fixed by way of penalties has been resolved, constitutes an acknowledgment of the creditor's claims.

Thirdly, the award of penalties does not preclude the debtor from being ordered to pay damages, at the creditor's request, under the conditions of Article 892 or the ordinary law (Article 906(7) of the Code of Civil Procedure). The court costs incurred in bringing and supporting the application for the final amount to be fixed by way of penalties constitute in themselves a loss caused by the debtor's late performance of the obligation, which the debtor is liable to make good.

In view of the above, in the practice of the courts, solutions have been handed down to allow the accessory head of the claim for the award of costs to the creditor, even though the main head of the claim for the fixing of the final amount by way of penalties was rejected in the light of I.C.C.J. Decision No 30/2023, since the debtor had performed his obligation until the claim was settled.


[1] Decision no. 37/2023 delivered by the High Court of Cassation and Justice - Panel for the resolution of certain questions of law, on the examination of the application lodged by the Bucharest Tribunal - Fourth Civil Section in case no. 28.297/302/2021, with a view to the delivery of a preliminary ruling, published in M.Of. Part I no. 660 of July 19, 2023.


[2] Government Emergency Ordinance No. 80/2013 on stamp duty, published in M.Of. Part I No. 392 of June 29, 2013, as subsequently amended and supplemented.

[3] Decision no. 30/2023 issued by the High Court of Cassation and Justice - Panel for the resolution of certain points of law, on the examination of the application lodged by the Gorj Court - First Civil Section in cases no. 1627/318/2022 and no. 308/318/2022 for a preliminary ruling, published in M.Of. Part I No 418 of May 16, 2023. 

An article written by Laura Mihalache - Senior Partner - and Marius Chelaru - Managing Associate.

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