The Journal of Critical Analysis of Judicial Decisions

The Journal of Critical Analysis of Judicial Decisions

The Confusion Concerning Initial Point of Calculation of Late Payment Damages in Cheques: A Study of Judicial Precedent Following Binding Precedent No. 812, Rendered by the Supreme Court

Document Type : Original Article

Authors
Meghdad Momenianmasouleh 1
abbas niazi 2
1 LLM student in commercial law, Faculty of Law, Judicial Science and Administrative Services University, Tehran, Iran
2 Assistant Professor, Department of Law, South Tehran Branch, Islamic Azad University, Tehran, Iran
10.22034/analysis.2026.2078976.1151
Abstract
According to the Inquiry for Interpretation of the Law regarding Note to Article 2 of the Cheque Issuance Act, a holder of a cheque may claim compensation for late payment based on the Central Bank's inflation index rate from the date the cheque is issued.However, case law was inconsistent in determining the initial point of calculation of damages for late payment.This dispute led to the issuance of binding precedent No. 812 dated March 24, 2021 rendered by the General Board of the Supreme Court, which declared the due date of a cheque as the initial point of calculation of damages for late payment.However, some courts still consider the scope of the aforementioned decision to be limited, and despite the fact that the binding precedent, the aforementioned Inquiry, and Article 2 of the Cheque Issuance Act generally consider the beginning of the period for claiming damages to be the maturity date of the cheque, a review of the case law revealed that even after the binding precedent was issued, judgments continue to differ in this regard, and the courts follow their own particular approaches to determining the initial point of calculation of damages for late payment of the check.So that, in three cases, the courts consider another starting time for calculating damages: first, if the case in question falls within the limitation period for commercial suits; second, when the holder is late in claiming payment; and third, in the event of the transfer of the check after the issuance of legal notice for cheque dishonor.Analysis of the regulations shows that the limitation period for commercial suits only results in dismissal of a claim against certain signatories of the commercial instrument and does not extinguish the commercial nature of the cheque. Therefore, if the conditions stipulated in Article 319 of the Commercial Code are met, at least with regard to damages for late payment, a cheque subject to the limitation period will still be eligible for damages for late payment based on the privileges of commercial instruments.Furthermore, a holder’s delay in demanding payment does not, per se, preclude the recovery of damages, unless such delay is of a nature that customarily breaks the chain of causation between the obligor’s non-payment and the resulting loss.Furthermore, the transfer of a cheque after the issuance of legal notice for cheque dishonor, considering the unconditionality of the Note to Article 21 of the Cheque Issuance Act, which states that legal benefits apply to the "ultimate holder", still has commercial effect, the transferee is considered the legal holder and the approach of some judgments in limiting the initial point of calculation of damage to the date of the demand or the issuance of legal notice for cheque dishonor appears to be legally unfounded.


Keywords
binding precedent No. 812, Late payment damages, cheque, limitation period for commercial suits, the rule of Iqdām )the rule of acting to one&rsquo
s own detriment(
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Judicial Decisions and Advisory Opinions
Advisory Opinion No. 1296,98,7 dated 2019/09/03
Advisory Opinion No. 7,1403,149 dated 2024/04/12
Advisory Opinion No. 7,93,1928 dated 2014/11/17
Advisory Opinion No. 932,98,7 dated 2019/06/20
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The Journal of Critical Analysis of Judicial Decisions
Volume 5, Issue 9 - Serial Number 9
August 2026
Pages 535-579