Default interest / Swiss law, Articles 104 and 106 Code of Obligations / Payment due by contract in US dollars to a non Swiss company / Interest rate equal to the US Federal Reserve bank discount rate: application of Article 106 C.O. /Starting point of interest, Article 102 C.O., date at which debtor was put on notice.

'Concerning the rate of interest, if it is true that according to art. 104 § 1 C.O., the rate of interest for default intérêts moratoires is 5%, Claimant can nevertheless claim a higher rate of interest pursuant to § 3 of said article.

In fact, according to E. Bucher: Schweizerisches Obligationenrecht, Allgemeiner Teil, 2nd edition, 1988, p. 362 No. 129, is decisive the normal interest rate prevailing at the place of payment applicable to credits expressed in the currency due, in the present case, U.S. dollars.

To grant to Claimant an interest rate higher than 5%, the Arbitral Tribunal can also rely on article 106 C.O., according to which damages in excess of this rate can be claimed by the creditor.

Article ... of the consultancy agreement provides for payment of the commission in U.S. dollars. This fact, together with the fact that Claimant is not a Swiss company, permits the Arbitral Tribunal, pursuant to art. 106 C.O., to find that the commission amount would not have been converted from U.S. dollars into Swiss Francs, and, therefore, that interest earned on a dollar deposit equivalent to the commission amount would have generated interest at a higher rate than the 5% per annum allowed by art. 104 al. 1 C.O.

Thus, this higher interest rate can represent additional damages pursuant to art. 106 C.O.

Based on the foregoing, the Arbitral Tribunal will take into consideration a default interest rate equal to the US Federal Reserve Bank Discount Rate for each payment period concerned. Defendant would be in agreement with the application of an interest rate computed on that basis, having itself submitted these interest rates for consideration to the Arbitral Tribunal concerning the foregoing question...

Regarding the dates of maturity of the debt of Defendant, the Arbitral Tribunal cannot follow the submissions of Claimant. First of all, according to art . ... of the consultancy agreement, 50% of the commission was payable to Claimant upon receipt of the advance payment and the remaining 50% were payable "on pro rata as the progress payments are received by Defendant". The mobilization payment did not thus trigger the payment of any consulting fee. Therefore, for the purpose of the calculation of interest, the mobilization payment must be treated in the same way as the progress payments, this issue being in any case a moot one for the reasons explained below.

According to art. 102 § 1 C.O., when an obligation is due, the creditor may put the debtor in default by demanding performance. Paragraph 2 of the same article stipulates that such notice is not necessary where a certain date has been agreed upon for the performance of the obligation.

True, article ... of the consultancy agreement stipulates when the debt of Defendant is payable, but does not specify a fixed date for performance. Therefore, in order to be entitled to obtain interest for default, Claimant must have put Defendant on notice, in conformity with art. 102 § 1 C.O.

Regarding the first half of the commission due upon the client's first advance payment, the Arbitral Tribunal shall consider that the telexes addressed by Claimant to Defendant on ... January 1981 and ... satisfy the conditions of art. 102 § 1 C.O.; therefore, interest for default for this part of the commission, is due since ... January, 1981.

For the calculation of the said interest, the Arbitral Tribunal shall also take into account the two payments made by Defendant, each amounting to ... US dollars.

Regarding the second half of the commission, the file does not show that a similar notice had been given until the date of the registered letter sent by ... to Defendant, i.e. ... December, 1984.

In fact, through the telexes sent by Claimant previous to this date, as well as through the meetings which took place between the representatives of the parties from 1981 until 1984, Claimant insisted on obtaining full payment of the part of the commission due upon the receipt by Defendant of the advance payment, but did not make any formal request regarding the second half of the commission until the registered letter of... December, 1984.

For this reason, the Arbitral Tribunal is, therefore, of the opinion that interest on the second half of the commission shall begin to accrue as of ... December, 1984.

The U. S. Federal Reserve Bank Discount Rates for each payment period concerned relevant to the calculation of interest pursuant to art. 104 § 3 C.O., or as damages following art. 106 C.O., considered in section 10.1 above, are as follows ...'