The court has considered that having a provision allowing the parties to elect to have interest on the loan compounded in conformity with article 1154 of the Civil Code is not only beneficial for the lender but it also allows the debtor to decide to delay the interest payment by compounding the interest due.
Therefore, one party may not unilaterally decide using this provision, both parties need to give their consent, which may be deducted from the approval of the annual accounts by the lender in the context of a shareholder loan (Role No.: 2022-00282, Judgment CAL dated 24 October 2023)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
