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Stockholm Arbitration Report (SAR)

Preview Page SAR 2001 - 1

In international arbitration, it is usual for the claimant to request that, in addition to its claim for damages, it be awarded interest from the date of the breach of contract (assuming a contract action) or the date of commencement of arbitration or of an award until payment of the award in full. It is also usual for the arbitral tribunal to direct the losing party to pay such interest at an appropriate rate, which may be simple interest or interest compounded monthly or on some other basis.

However, what happens in a case where:

1) a claimant claims post-award, as well as pre-award, interest from the arbitral tribunal,

2) the tribunal, while awarding the claimant damages, including pre-award interest, omits to award post-award interest, and

3) thereafter, the respondent refuses to pay the award voluntarily resulting, in theory at least, in a substantial post-award interest claim against the respondent?

May the claimant still claim post-award interest and, if so, from whom? From the same arbitral tribunal or from a new one? From a state court and, if so, which one? These were the questions presented recently in relation to an international arbitration proceeding in Jordan which had been brought by Banque Arabe et Internationale d’Investissement, a French bank.