LEGAL PRINCIPLE: CIVIL PROCEDURE – Interest on Judgment Debt – Scope of Order 40 Rule 7
PRINCIPLE STATEMENT
While Order 40 Rule 7 is wide and gives the court uninhibited discretion on interest payable, such broad powers and discretion are circumscribed by the Rule itself which stipulates "ten Naira per centum per annum" and the interest rate would have application or commence from the date of the judgment and not an award antedating the judgment.
RATIO DECIDENDI (SOURCE)
"... Order 40 Rule 7 ... provides ... 'may order interest at a rate not exceeding ten naira percent per annum to be paid upon any judgment, commencing from the date thereof or afterwards' ... (a) that while Order 40 Rule 7 is wide and gives the court uninhibited discretion on interest payable yet, such broad powers and discretion are circumscribed by the Rule itself which stipulates 'ten Naira per centum per annum' and (b) that the interest rate would have application or commence from the date of the judgment ... and not an award antedating the judgment ..."
EXPLANATION / SCOPE
Order 40 Rule 7 grants discretionary power to award interest on judgment debts, but with limitations: (1) Rate cap—maximum 10% per annum; (2) Commencement—from judgment date forward, not retroactively; (3) Discretionary—court may award or refuse. This discretionary interest differs from interest as of right (which can predate judgment). The rule balances: compensating successful parties for delayed payment against protecting judgment debtors from excessive burdens. Courts exercise discretion considering: judgment amount, delay in payment, conduct of parties, and circumstances. The 10% cap prevents excessive interest awards. The judgment-date commencement means interest on the underlying debt (pre-judgment interest) must be claimed as substantive relief, not under this rule. This procedural interest compensates for post-judgment delay in satisfaction.