Can pre- and post-award interest be included on the principal claim and costs incurred?
International Arbitration (3rd edition)
The tribunal can award damages, pre-award and post-award interest. Compound interest may not be awarded. As part of the final award, the tribunal can also order specific performance.
In France, parties can, as a general matter, use whatever legal fee structures they deem appropriate (such as flat fees or an hourly rate). However, French lawyers cannot be paid solely on a contingency fee basis. Success fees are permitted but can be paid only in addition to a fixed or hourly fee arrangement. It has, however, been recognized that, in the context of international arbitration, such arrangements with lawyers whose home bar rules allow for them is not contrary to international public policy in France. (Paris Court of Appeal, 10 July 1992, 1992 Rev Arb 609).
There are no specific provisions under French law for the arbitrators’ fees. They are usually fixed in agreement with the arbitrators or by the arbitral institution.
There are also no specific rules on the manner in which the tribunal should calculate costs and fees, which typically include the fees and expenses of the arbitrators and the parties’ reasonable legal and other costs, such as travel expenses for hearings. Costs and fees can also include the administrative expenses of the arbitral institution and/or the fees and expenses of any experts appointed by the tribunal.
Moreover, there are no specific provisions regulating the allocation of costs between or among the parties (in particular, the unsuccessful party is not under a legal obligation to pay the successful party’s costs and fees). Subject to any agreement of the parties, the arbitral tribunal has wide discretion to determine the allocation of costs between or among the parties.
The arbitral tribunal may include pre- and post-award interest on the principal claim as it sees fit and deems appropriate, under the terms of the agreement that the parties are part of and under which the dispute arose.
The topic of interest rates is subject to the substantive law, as set in Section 1802 and following of the Civil Code and can be awarded upon request of the parties. Interests on costs cannot be awarded. Interests start running from the first day after the day of default until the claim is fully repaid. The general default interest rate in the Czech Republic is 8% plus the amount of the two-week repo set by the Czech National Bank.
The parties are entitled to recover pre- and post-award interest, subject to their express request. Interest to the costs incurred is not admissible.
The issue of interest on a principal claim and costs is a matter of applicable substantive law.
Under Serbian law, it is possible to claim both pre and post award interest.
When it comes to costs of proceedings, Serbian law does not contain any specific provisions on interest on costs, but as a general principle (which is widely applied in court proceedings), claim on costs becomes due at the time the award becomes enforceable.
On the other hand, in case the arbitral tribunal order the payment of pre-award interest on costs this kind of award could be recognized and enforced in Serbia.
Yes. In practice the parties would usually claim interest based on the principle from the date of breach of the contract or default to the date of actual payment. If the parties do not specify the interest rate applicable to their agreement, reference may be made by the arbitral tribunal to the same period interest rate of People’s Bank of China.
Under Article 253 of the Civil Procedure Law, If a person fails to perform his obligations to pay within the time limit specified in a judgment, ruling or other legal document, he shall pay twice the amount of interest on the debt for the period during which the performance is deferred.
a. Interests on the claim can be awarded from the day that the arbitral tribunal received the statement of claim.
With regards to interest on costs Danish arbitral tribunals often refer to section 8a of the Danish Interest act, according to which interests on costs are incurred 14 days after the decision on costs has been made.
The question of interest is governed by substantive law. If Polish law is applicable to the merits of dispute, on a specific request of the claimant, the amount of the principle claim is awarded together with interests (usually both pre- and post- award). Interest on costs are rarely awarded.
The payment of interest on principal claims and costs is governed by the applicable substantive law to the matter in dispute (art. 187 para 1 PILA). If Swiss law is the applicable substantive law to the matter, pre- and post-award interest can be included on both, the principal claim and the costs incurred.
In general, interest is awarded in most UAE-based arbitration proceedings, commonly as post-award, unless specific contractual provisions allow for pre-award interest.
Pre-award interest may be claimed pursuant to Article 88 of the UAE CPC which provides for a commercial obligation (essentially, the monetary debt) being a sum of money which was known at the time that the obligation arose.
The above provision stipulates that in such an instance, if the debtor delayed its payment, it shall be bound to pay to the creditor as compensation for delay, interest up to 12% per annum, unless the parties have agreed otherwise.
The creditor does not have to prove actual loss incurred in order for it to claim interest and this is stipulated in Article 89 of the aforementioned law.
Unless otherwise agreed by the parties, the 1996 Act allows the tribunal to award simple or compound interest:
(a) Pre-award interest: from such dates as it considers just to do so on the whole or part of any amount awarded by the tribunal, in respect of any period up to the date of the award (s.49(3)(a)).
(a) Post-award interest: from the date of the award (or any later date) until payment, at such rates that it considers just to do so on any outstanding amount of any award. The award of interest can be made on any award as to costs (s.49(4)).
As the KSA applies the rules and principles of Shariah, pre- and post-award interest cannot be incurred since interests are in violation of Shariah.
The FAA does not address interest. Absent an agreement between the parties, the courts will assess statutory interest pursuant to 28 U.S.C. § 1961. Arbitrators do not have the power to award post-judgment interest absent an agreement between the parties. Tricon Energy Ltd v Vinmar Int’l, Ltd, 718 F 3d 448, 457 (5th Cir 2013).
Austrian arbitration law does not contain any explicit provisions on whether the parties are entitled to recover interest. In most cases, this will be considered as dependent on the law applicable to the merits of the dispute.
The ACA does not limit the power of the arbitrator to order interest. Interest can be awarded based on the parties’ agreements in this regard, at a rate agreed by the parties or proved before the arbitral tribunal. The arbitrator would, however, be duty-bound to award interest based on evidence presented to the tribunal and upon such legal indices as may be fair and just in the circumstances. In practice, interest is usually guided by the Nigeria Inter Bank Official Rate (NIBOR), plus any reasonable amount depending on the peculiarities of the case.
Yes, pre- and post-award interest can be included on the principal claim.
Neither the ICA nor DAA addresses this issue, and it is considered an issue of governing substantive law.
Under the Arbitration Act 2010, the parties may agree on the arbitral tribunal’s powers regarding the award of interest and unless otherwise agreed, an arbitral tribunal may award simple or compound interest from the dates and at the rates and with rests that it considers fair and reasonable on any outstanding amount of any award including the award of interest and any award of costs.
Issues regarding pre-award interest arise in most cases where damages are awarded. Typically tribunals assess damages as of a date in the past, and interest is applied to this amount up to the date of the award. Whether pre-award interest is due, will depend on the agreement of the parties, or on the applicable law. The general rule is that interest follows the principal.
Tribunals often award post-award interest in addition to the amount specified in the award. Post-award interest is added until the award is actually paid. The starting point for post-award interest is normally 14 days after receipt of the award. Post-award interest is often applied at the same rate as late payments. This reflects the view that a higher interest rate will generally discourage late payment.
Interest may be granted and awarded by the arbitral tribunal if and to the extend the respective substantive law provides for entitlement for interests. German law stipulates that interest may be added to a payment claim from the date of commencement of the arbitration (lis pendens). In addition, pre-arbitration interest may be awarded if the party had been in breach of contract or default.
Interest accrues and is thus payable up to the date of payment. No distinction is made between a pre-award period and post-award period.
Pre-award interest can be included in the arbitral award (if they were included in the claim and up to the extent permitted by substantive law). Post-award interest are statutory default interest if the amounts determined by the arbitral award are not paid at maturity. The matter of post-award interest is determined by enforcement regulations (an arbitral award is enforceable under the same conditions as a final court judgment).
The Rules of International Commercial Arbitration of the CAM Santiago contain only one provision regarding interests, according to which “the arbitration award may order the payment of simple or compound interest, including interest prior or subsequent to the award”. Parties shall make such payment after the parties have fulfilled the arbitral award (Article 33(7)).
Parties are also entitled under Chilean law to agree on an interest rate in the contract binding them. Nevertheless, such interest cannot exceed the 50% of the legal interest rate. If parties do not specify the interest rate applicable to their agreement, current interest rate shall apply.