Impossibility of reducing the penalty clause established in a final judgment (Legal opinion)

Abstract

This legal opinion analyzes the illegality of a Court of Justice ruling that reduced the value of a penalty clause already established in a final and unappealable judgment. Construtora XYZ, a creditor of the Municipality of ABC, obtained a judgment that, in addition to the principal amount, determined the application of a contractual fine until the effective payment. After this decision became final and the Municipality’s embargoes were rejected, the Auxiliary Center for Pre-Order Conciliation (NACP) of the Court of Justice altered the calculation criteria. The Construction Company then filed a writ of mandamus, but the Court of Justice, acting on its own initiative, reduced the fine, claiming that the matter was a public order issue. The opinion demonstrates that the Court of Justice’s decision violates res judicata, which prevents the re-discussion of the penalty clause, even if it is a public order matter.