The Law Applicable to the Award of Interest: A Roadmap Though the Maze - WAMR 2011 Vol. 5, No. 1
Angeline Welsh, International Arbitration Group, Allen & Overy LLP, London.
Originally from World Arbitration And Mediation Review (WAMR)
THE LAW APPLICABLE TO THE AWARD OF
INTEREST: A ROADMAP THROUGH THE MAZE
All too often arbitration practitioners pay insufficient
attention to the law applicable to their requests for interest.
Typically submissions on interest are found at the end of a
pleading, nestled between the damages and summary of the relief
claimed sections. The lack of attention paid to the requests for
interest can be a mistake for two reasons. First, it is not
uncommon for awards of interest to be a significant element of
the financial aspect of an arbitral award and, as we will see,
various factors can influence the amount of interest awarded.
Second, getting the right source of law for interest awards is not
straightforward. This article attempts to provide a roadmap
through the maze to minimize the risk of a challenge to an arbitral
award of interest.
II. THE STANDARDS
The time, rate and basis (together referred to in this article as
“Standards”) play an important role in the calculation of interest.
However, as will be discussed below, these Standards will differ
greatly depending on the applicable law and, as a consequence,
the law can have a huge impact on the sums recoverable. Despite
this, it is important to understand these Standards in order to
understand the impact of their changes. I therefore look to each
Arbitration proceedings often take years and causes of action
can arise significantly before proceedings are even commenced.
The period of time in which interest will run differs. In some