The significant real and comparative loss in rental value, a product of the acute inflationary process in recent years, justifies the constitutional grievance and the subsequent disqualification of norms that prevented indexing,” explained the lawyer. "The palliatives created to compensate for the loss of purchasing power of our currency are insufficient without resorting to indexing or monetary update,” he explained in a column published on the specialized law site, El Dial. Not long ago, also in Córdoba, “the Superior Court set an interest rate to contain inflationary expectations” in a property rental case. “The decision, as developed in its reasoning, serves to form a necessary safeguard for the right to property and the principle of equality. Buenos Aires, November 25 (NA) – Although the judges ruled in favor of the Quilmes engineering and construction company, Nissan Davidson SRL, in its claim against the electricity company Edesur, the compensation set at USD 2 million ended up being just USD 100 thousand, by virtue of article 7 of Law 23.928, which prohibits the indexing of debts. This article, which was based on the nation's economic and financial debacle after the fall of convertibility, continues to generate countless claims in commercial justice courts for different reasons, all related to the imposs of updating amounts. Of course, parties seeking economic redress in various cases often request amounts that are sometimes absurd and border on illegality by attempting to take everything possible from the debtor. Finding a balance in the compensation amount is a major challenge that, for example, is already applied in the opposite way in the courts of the province of Buenos Aires, where the definition of this important trial is awaited. According to sources from the Buenos Aires judiciary, a ruling from the Superior Court of Justice on the constitutionality or unconstitutionality of the aforementioned article is imminent and will be the most important decision of the year for the court due to the implications it will have in other judicial debates. The controversial article states: The original text of article 7 of Law 23929 stated: — The debtor of an obligation to give a sum of pesos fulfills his obligation by delivering the nominal amount on the due date. — Monetary indexing, indexing by prices, variation of costs or debt repowering is not admitted, for any cause. But then came the amendment of law 25.561, which declared a public emergency and modified the Convertibility Law, repealing the prohibition on indexing (repowering) debts and the law that established it. This allowed the indexing of debts, prices and tariffs to become possible again, and from 2024, some judicial rulings have declared the unconstitutionality of article 7 of law 23.928 (modified by 25.561) to allow the updating of credits for inflation. This is what Nizza Davidson company claims in its commercial lawsuit against Edesur, which the Superior Court of Justice of the City of Buenos Aires must rule on shortly. Precedents in favor of indexing In Córdoba, the justice system of that province sought alternatives to index and compensate for the negative effects of inflation that erode the debtor's obligations. In this sense, in a recent ruling from October, the Civil Chamber of the Superior Court of Justice of Córdova revoked the declaration of unconstitutionality of the indexing prohibition issued by the intervening Chamber, understanding that the matter should be resolved according to the doctrine set by the Supreme Court of Justice of the Nation in the Massolo case. The Massolo case, which came from the time of the end of convertibility in 2001, had a highly cited ruling from the Supreme Court that ended up ratifying the validity of the law and the impossibility of introducing automatic updates for inflation in contracts, with the caveat that judges can analyze the convenience of certain compensatory mechanisms to avoid negative results due to inflation, as long as it is not automatic indexing. In Córdoba, the magistrates of the provincial superior court used this jurisprudence to resolve the case of a client of an insurance company who demanded payment of the value assigned according to the contract, plus compensatory and moratory interest, costs, and the update of monetary depreciation. For the court, it was necessary to recognize the update to prevent the interest from resulting negative in the face of the rise in the cost of living, and it ended up condemning the insurance company to pay the debt with the update resulting from the indices published by the Central Bank, plus an 8% interest from the mora until payment. For the Córdoba lawyer, Gustavo Martínez Urrutibehety, "...the historical course of recent years has confirmed the premonition about the inevitable inflationary process.
