LATE PAYMENTS AND BANK TRANSFERS
07501 Telecom GmbH v Deutsche relekom AG (Case C-306/06) [2008] All ER (D) 36 (Apr), Court of Justice of the European
Communities (First Chamber), (Judges Jann (President o! the Cliamber), Tizzano (fJapporteur), Borg Barthet, llesic anci
Levits) (3 April 2008)
Background
Conclusion
Proceedings were begun before the German courts between two
telecom companies concerning payment of default interest claimed
following alleged late payment of invoices. According to the
majority judicial view in Germany, payment by bank transfer was
regarded as performed in time if:
'Ifie relevant article of the Directive required, in order that a payment
by bank transfer might avoid or put an end to the application of
interest for late p.iyment, chat the sum due actually be credited to the
account of che creditor within che petiod fot payment. The Directive
was explicit that a debtor's payment was regarded as lace, for the
purposes of entitlement to interest tor late payment, where the
creditor did not have the sum owed at his disposal on the due dace.
In che case of payment by bank transfer, only the crediting of
the amount due to the creditor's account would enable him to have
chat sum ai his disposal. It was clear from the preparatory work on
che Directive chat che word 'received' was deliberacelj' inserted and
chat a primary objective pursued by the Directive was the protection
of those holding financial debts. The interpretation was confirmed
by [he various language versions of che Directive which referred,
unequivocally, to the receipt of the amoimt due within che period for
payment.
*
the transfer order was given to the debtor's bank before rhe
time limit for payment expired;
* there were sufficient funds in the debtor's account or it had a. line
of credit in a sufficient amount for it to pay the sum owed; and
* the bank accepted the transfer order within that time limit.
However, the German court scaycd the proceedings and referred
a question to the European C^ourt ofJustice for a preliminary rulingAc what point is a payment by bank transfer regarded as having been
made on time in a commercial transaction? One interpretation of
art 3(])(c}(ii) of Parliament and Council Direccive (HC) 2000/35
(on combating late payment in commercial transactions) {the
'Directive') could lead to a different solution to che one normally
employed by the German courts.
May 2008
Jaiiathiin Lawrence
K&-L GaUs
jom'lhan,!awfence@klgiites.i'omAvivwMgatei.coni
Butterworths Journal of International Banking and Financial Law