BANKING AND FINANCE | The Supreme Court on a loan in order to refund a debt position (the so-called mutuo solutorio)

On 5 March 2025 the Italian Supreme Court (Corte di Cassazione) issued its decision No. 5841 concerning, inter alia, the validity of a loan issued by a lender in order to repay a previous debt position of the borrower toward the lender itself (the so-called mutuo solutorio). The topic was widely discussed in case law until the issuance of order No. 18903 on 10 July 2024, by which the Italian Supreme Court ordered the transmission of the acts to its first president, who subsequently assigned the case to the so-called “United Section” of the Court (the most authoritative section of the Court that settles disputes between the other sections). The United Sections with the reported decision declared that the so-called mutuo solutorio is a loan pursuant to Article 1813 of the Italian Civil Code and cannot be considered as neither an extension of the term of the previous loan term nor as a pactum de non petendo. In particular, pursuant to Article 1813 of the Italian Civil Code a loan agreement is considered “executed” once the loan amount is delivered to the borrower. The United Sections also declared that the requirement of the delivery of the loan amount is met whenever the sum is available by the borrower, including the case the relevant amount is disbursed and credited on the borrower’s bank account and even if such amount, being aimed to restore a previous debt position of the borrower toward the lender, is immediately or almost immediately returned to the lender.

Newsletter n. 105- March 2025