Case C-463/26, Järvehi – late-payment interest that rounds down to nothing
If the statutory interest on a late commercial payment works out at a fraction of a cent, and national rounding rules turn that fraction into zero, has the debtor paid late at all — as far as the EU’s Late Payment Directive is concerned?
Facts
A Ltd sued the City of B in Finland over late payment in a commercial transaction. The amounts of default interest at stake were vanishingly small: calculated to the nearest tenth of a cent, they round down to zero euros under ordinary mathematical rounding. That raises the question whether the creditor can still claim the fixed compensation for recovery costs which Article 6(1) of Directive 2011/7 attaches to late payment — and whether Finnish rules against unreasonable debt-recovery costs, or the principle that a bad-faith contracting party forfeits otherwise valid claims, can stand in the way. The Korkein Oikeus (Supreme Court of Finland) has referred both questions to Luxembourg. (Järvehi is a fictitious case name assigned under the Court’s anonymisation practice; it does not correspond to any party.)
Questions Referred
According to the Official Journal notice, the Korkein Oikeus asks:
1. (a) Is Article 6(1) of Directive 2011/7 to be interpreted as meaning that interest for late payment must be paid if the application of the statutory default interest rate results in an amount of less than one cent? (b) Is it relevant to the consideration of that question that a claim for late payment interest, expressed to the nearest tenth of a cent, is rounded down to zero euros in accordance with mathematical rounding rules?
2. Does Article 6(1) of the directive, when determining the amount of compensation payable for recovery costs under that article, preclude the application of a provision of national law that prohibits unreasonable or unnecessary costs from being incurred in debt recovery, or the application of a legal principle, on the basis of which a contracting party that acts in bad faith in a contractual relationship forfeits the right to assert a claim that would otherwise be valid?
Sources
OJ notice C/2026/3644 (EUR‑Lex) · Case file on CURIA · Directive 2011/7/EU
Comment
Directive 2011/7 was built to make paying late expensive, mechanically so. Interest runs automatically once the deadline passes, without a reminder; where the debtor is a public authority — as the City of B is here — Article 4 makes statutory interest all but non-negotiable; and Article 6 adds a fixed minimum of EUR 40 in recovery-cost compensation “in cases where interest for late payment becomes payable”, plus reasonable compensation beyond that. The Court has read the scheme strictly: in Case C‑555/14, IOS Finance (ECLI:EU:C:2017:121) it allowed a creditor to waive interest and compensation only in exchange for genuinely immediate payment, precisely because the entitlements exist to deter late payment in the first place.
Järvehi tests the scheme at its floor. The first question turns on what “interest … becomes payable” means when the arithmetic produces a positive amount smaller than the smallest coin in circulation. Two readings are available. On one, interest is payable as a matter of law the moment the deadline passes — the quantum, and what national rounding conventions do to it, is bookkeeping that cannot switch off the accessory EUR 40. On the other, a claim that rounds to zero is no claim at all, so nothing “becomes payable” and the compensation never triggers. The directive contains no de minimis rule, and that silence is the battleground: if rounding can extinguish the trigger, a debtor who systematically pays small invoices a few days late faces no consequence at all — multiplied across thousands of micro-invoices, a business model. The Court will have to decide whether the trigger is legal or arithmetical.
The second question may matter more in practice. Article 12(3) lets Member States keep rules more favourable to the creditor — a one-way ratchet. Finnish doctrines that cap unreasonable recovery costs, or strip a bad-faith party of otherwise valid claims, operate in the opposite direction: they trim the creditor’s minimum entitlements case by case. The Court has generally tolerated national fairness control at the margins (abuse of rights is, after all, a general principle of EU law) while defending the directive’s deterrent core. Where it draws that line here will determine how much room national courts across the Union have to equity-adjust late-payment claims — a question every collections department will read closely.