Compartmentalization of usury nullity following Judgment of the Supreme Court 317/2023 of 28 February and Judgment of the Supreme Court 231/2024 of 21 February

Abstract

The case law doctrine of compartmentalization of usury nullity, established by Spanish Supreme Court Judgments 317/2023 of February 28 and 231/2024 of February 21, has sparked significant controversy in lower courts regarding revolving credit contracts with unilateral modifications of the interest rate. While the Supreme Court considers each interest rate modification as a new contract, allowing partial nullity declarations by time periods, Provincial Courts have adopted divergent criteria, especially when the modification is downward or when there are intermediate zero balances. Civil law scholars have pointed out problems of consistency with the radical and incurable character of usury nullity enshrined in the Usury Repression Act and with the general regime of contractual novation.