Supreme Court Says, “No Capitalization Without Notification”

1. Introduction

The accrual of interest on interest, also known as anatocism, is a subject of eternal debate in court. The law permits it only in exceptional cases (article 770 of the Argentine Civil and Commercial Code (CCCN)) and under strict conditions, as it has the potential to increase values exponentially.

In practice, the exceptions listed in that article's paragraphs are open to various interpretations that parties make hoping to gain an advantage during the enforcement stage of the judgement.

In a recent ruling (November 27, 2025) in the case “Ferreyra, Ramón Edgar c/ Copquin, Alberto y otros s/ Daños y perjuicios - resp. prof. médicos y aux.”  (docket number CIV 85155/2005/1/RH1), the Argentine Supreme Court analyzed the requirements for applying the interest capitalization rule in article 770(c) of the CCCN.

 

2. Case facts

Ramon Edgar Ferreyra filed a medical malpractice lawsuit against a doctor, a private health insurance company, and their insurers. The National Civil Court 15 ruled in his favor and ordered the defendants to pay ARS 652,000 (principal amount at historical nominal value), with interests calculated as follows:

(i) the Argentine Central Bank (BCRA) passive rate from the date of the event until the initial ruling, and

(ii) the Banco Nacion active rate since then (in accordance with the National Court of Appeals in Civil Matters’s en banc ruling “Samudio”).

During the judgment enforcement stage, the plaintiff submitted his interest calculation, in which he capitalized the accrued interest up to the final decision on the merits. However, following the defendant’s opposition, the court rejected the plaintiff’s calculation on the grounds that it did not constitute the exceptional case provided for in article 770(c) of the CCCN.

Consequently, the court approved a calculation that applied interest only to the principal, without capitalization. The resulting amount was ARS 4,366,494.32 (valued on the date of that specific ruling).

 

3. Overturned decision

The plaintiff appealed the ruling, challenging the rejection of interest capitalization. The National Court of Appeals in Civil Matters (Chamber L) overturned the decision, deeming the approved interest calculation outcome absurd, and allowing the plaintiffs’ capitalization to proceed. The outcome of the new computation was almost double the previous amount, totaling ARS 8,098,033.

The specific rationale was :

(i) The original judgment on the merits stems from a malpractice incident that occurred almost twenty years ago, resulting in serious uncompensated damage to the plaintiff.

(ii) The alternation between passive and active interest rates results in a lower amount than that obtained by applying only the BCRA passive rate which—in turn—dilutes the credit and hinders full reparation.

(iii) The principal and the accrued passive interest remain unpaid and unproductive in the face of constant depreciation, even after a full year since the final judgement.

(iv) Notifying the final judgement, without interest calculation, satisfies article 770(c)’s requisite for capitalization of accrued interest.

 

4. Supreme Court ruling

In response to the National Court of Appeals in Civil Matters' ruling, a co-defendant and a third-party defendant filed a Federal Extraordinary Appeal, which the Court of Appeals denied. This gave rise to the appeal route of direct presentation before the Supreme Court.

Upon reviewing the facts of the case, the Supreme Court clarified that, while rulings in enforcement proceedings are typically not considered “final judgements”—as its jurisdiction requires—the ruling under scrutiny was deemed equivalent because of the irreparable harm that it would otherwise cause to the defendants.

The Supreme Court then held that the requirements of article 770(c) of the CCCN are clear: once the interest computation for the final judgement has been approved, the debtor must be summoned to pay. They only incur in default if they fail to comply, and this enables the capitalization of interest accrued up to that point. Consequently, the Supreme Court affirmed that—given the facts of the case—the National Court of Appeals in Civil Matters had deviated from the legal text by allowing capitalization outside of the outlined prerequisites.

Judge Rosenkrantz's vote, in agreement with the majority (Rosatti and Lorenzetti), elaborated on this point, emphasizing that legal interpretation must be based on the written law. This means applying it directly when its meaning is clear, without introducing considerations unrelated to the case at hand. Otherwise, it would be equivalent to disregarding the rule without first declaring it unconstitutional.

Finally, regarding the federal issue required to access the Supreme Court’s jurisdiction, it was deemed satisfied by framing the National Court of Appeals' ruling within the doctrine of arbitrary rulings. This is because it involved the violation of an express rule of mandatory public policy without first verifying the legal grounds for the exception that it wanted to allow. Based on this reasoning, the Supreme Court overturned the decision to authorize capitalization and remanded the case to the lower courts.

In short, there is no capitalization without notification.