A mistaken payment to a creditor does not prevent recovery of unduly paid amounts

In August 2024, attorneys and advocates of a Law Firm successfully concluded a nearly five-year court dispute through a settlement. The case concerned claims related to unjust enrichment (undue payment).

The case originated from a notification received by the Law Firm’s Client in 2017, informing them that their business partner had assigned (transferred) a receivable that the defendant had against the Client to a third party. This meant that the Client was supposed to make the payment not to the original creditor (assignor) but to the new owner of the receivable (assignee).

However, due to an employee’s mistake, the payment was made not to the rightful assignee but to the original creditor, who had already transferred their receivable. As a result, the assignee – who had not received the due amount – filed a lawsuit against the Client, obtained a favourable court ruling, and subsequently enforced payment.

This led to the Client paying the same debt twice.

Upon realizing the mistaken payment had been made to a party no longer entitled to receive it, the Client sought legal assistance to recover the undue payment.

The Law Firm filed a lawsuit on behalf of the Client based on Article 405 of the Civil Code in conjunction with Article 410, citing unjust enrichment and undue performance. To minimize costs, the lawsuit was filed via an electronic order-for-payment procedure.

Initially, the case seemed straightforward. The Client obtained a payment order in the electronic procedure, which was later provided with an enforcement clause, allowing the Client to initiate enforcement proceedings. These proceedings successfully resulted in full recovery of the claim, including the principal amount, interest, and legal costs.

Despite the completion of the enforcement process, the case took an unexpected turn.

Due to objections raised by the defendant, the court determined that the payment order had not been properly served to the defendant. This ruling allowed the defendant to file an objection and required the case to be reconsidered in standard court proceedings. The litigation continued, with the defendant disputing the existence of the assignment agreement and arguing that the mistakenly deposited funds were rightfully theirs.

Thanks to the dedication of the Law Firm’s lawyers, the parties ultimately reached a favourable settlement that definitively resolved the dispute. The settlement effectively validated the previous financial transactions, ensuring that the Client was fully reimbursed for the mistakenly transferred funds.