LEGAL PRINCIPLE: CIVIL PROCEDURE – Scope of Court’s Discretion under Order 27 Rule 8 – Discretion to Vary Rate of Interest on Judgment Debt
PRINCIPLE STATEMENT
The expression "unless otherwise ordered by the court" governs the interest and its rate. The court may order that interest of more or less than 10% shall be paid, having regard to the circumstances brought to its notice.The expression "unless otherwise ordered by the court" governs the interest and its rate. The court may order that interest of more or less than 10% shall be paid, having regard to the circumstances brought to its notice.
RATIO DECIDENDI (SOURCE)
Per Onu, JSC (citing Agbaje, JSC, in Ekwunife v. Wayne (West Africa) Ltd), in Berliet Nigeria Ltd. v. Kachalla (1995) NLC-1851989(SC) at pp. 9–10; Paras B–A.
"The expression, 'unless otherwise ordered by the court' which opens the provisions of Order 27 rule 8 in question ... governs the word immediately following it in the enactment, that is to say, 'interest' and its rate. So ... the statutory interest will apply unless the court orders otherwise, that is to say, unless the court orders that the interest of more or less than 10% shall be paid having regard to the circumstances brought to its notice."
EXPLANATION / SCOPE
The court has discretion to vary the interest rate on judgment debt. The court may award more or less than 10% based on circumstances. The discretion must be exercised judicially. The principle applies to all judgments. The court must give reasons for varying the rate. The default rate applies if the court does not exercise discretion. The rule promotes flexibility in interest awards. The court may consider the nature of the debt and the conduct of the parties. The principle balances the interests of judgment creditors and debtors.