Clifford Chance
L'évaluation des accessoires (Taux et point de départ des intérêts dans I'arbitrage)
12 November 2013
It happens, in international arbitration, that the sums awarded on an ancillary basis, such as interest, will sometimes exceed the principal sum. The question of interest is becoming increasingly important in today's arbitration world. While it is generally admitted that arbitral tribunals have a discretionary power to award interest, it is unclear what methods should be used when it comes to determining the rate of interest or its start date, or whether the interest awarded should or not be compounded. An overview of arbitral jurisprudence shows that there are various responses to these issues, leading to a state of unpredictability deplored by some authors.
There are at least four ways that can be used to determine the rate of interest in international arbitration.
Tribunals apply
(i) the rate specified in the contract,
(ii) the rate of the lex contractus or the lex fori,
(iii) a so-called "reasonable" rate, determined by the arbitrator on a case-by-case basis, and finally
(iv) the market rate of the currency of payment.
As regards the interest start date, or dies a quo, it will largely depend on whether the interest to be awarded shall run on a sum of money (a debt) or on compensatory damages. In the first scenario, interest will run either
(i) as from the date on which payment was due or
(ii) the date of the summons to pay.
In the second scenario, interest will run as from the date on which the compensatory damages turn into a liquidated sum, i.e., the date of the award. However, some tribunals have also retained the date of the occurrence of the harm as the dies a quo, especially in expropriation claims.
Finally, one last factor to be taken into account when awarding interest is the question of whether interest should run on a simple or compound basis. Here again, solutions adopted by arbitral tribunals differ. Tribunals ruling on commercial matters are still rather reluctant to award compound interest, while investment tribunals seem to award it more often.
The author encourages arbitration practitioners – both lawyers and arbitrators – not to ignore the question of interest and always deal with it during the arbitral proceeding itself, so as to avoid difficulties that may arise if the question is dealt with after the award was rendered, before national courts.
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L'évaluation des accessoires (Taux et point de départ des intérêts dans I'arbitrage)
