The Superior Court of Justice (STJ) established an important precedent under Repetitive Theme 1368 regarding the interest rate applicable to civil debts in Brazil before the enactment of Law No. 14,905/2024.
The established thesis: the STJ ruled that Article 406 of the 2002 Civil Code (in its wording prior to Law No. 14,905/2024) must be interpreted to mean that the SELIC rate (Special System for Settlement and Custody) is the applicable interest rate for late payment on civil debts.
Why SELIC?
The reasoning is based on the fact that the SELIC rate is used for monetary adjustment and late payment interest on taxes owed to the National Treasury (federal taxes), in accordance with various tax laws.
Key points of the ruling:
- National Unified Standard: The SELIC rate is currently the only rate in effect for late payment of federal taxes and holds constitutional status, serving as the basic benchmark for the entire economy.
- Harmony and Predictability: Setting civil default interest rates different from the national benchmark violates Article 406 of the Civil Code and creates macroeconomic distortions. The law aims to ensure that civil late-payment interest follows the same rate applied to federal tax arrears, promoting harmony between public and private obligations.
- Compensatory Function: Late-payment interest serves to compensate the creditor for the loss of the money’s value over time and should not be confused with the punitive function, which is fulfilled by the contractual late-payment penalties.
- Consolidated Jurisprudence: The STJ had already established in previous Repetitive Themes (Themes 99, 112, and 113) that the SELIC rate is the legal interest rate referenced in Article 406 of the Civil Code.
- No Double Counting: By its nature, the SELIC rate already includes both late-payment interest and monetary adjustment. Its application prevents the overlap of different indices, ensuring greater predictability and alignment with the national economic system.
What does this mean for civil debts?
This decision consolidates the guidance that the SELIC rate must be used as the interest index for late-payment interest in judgments and civil debts, aligning private relationships with the official economic indicators and ensuring legal certainty.
CPDMA is available to assist and advise its clients on the impacts of this and other important decisions from the Superior Court of Justice. Contact us.