Damages for the delay in payment / Libyan law; Article 229 of the Libyan Civil Code / Rates of interest in civil and commercial matters / Higher contractual rate permissible with limitations / Conditions of payment.

'Whereas Claimant requests the tribunal to condemn Defendant to pay ... for compensation of the financial costs incurred because of the late payment, and later incomplete payment, of the monthly statements and of the variation of the price of bitumen.

As Article ... of the contract provides that at the end of each month, the engineer together with the contractor shall prepare temporary statements of the works and the value of these works which shall be approved by the company and must be paid in the next 45 days after submission [and as it specifies that] the company shall not be responsible for delay in payment caused by reason of omission or error in the said statements.

As Claimant claims that it had to bear major delays in the payment of the monthly statement varying from ... in January 1980 to ... in August 1983 which forced it to transfer borrowed funds at high cost in order to pursue the execution of the works.

As Claimant also claims the financial costs borne for the delay of payment of the increase of the price of bitumen due by virtue of article ... of the contract.

Whereas Defendant answers that for the delays in payment of the monthly situations due account must be taken of reasons of delay due to: improper presentation of certificates, Claimant's refusal to renew the letter of guarantee and the application of the rule inadimplenti non est adimplendum.

As, concerning the payment of the increase of the price of bitumen, it states that the increase can not be paid earlier than the final account.

Whereas article 229 of the Libyan Civil Code provides that when the object of an obligation is the payment of a sum of money of which the amount is known at the time when the claim is made, the debtor shall be bound, in case of delay of payment, to pay to the creditor, as damages for the delay, interest at the rate of four percent in civil matters and five percent in commercial matters.

As therefore, only interests may be awarded to Claimant as damages for the delay in the payment of the amounts contractually due.

As the Libyan Civil Code does not prevent the parties to provide for a higher rate of interest, yet limiting such contractual interest at a rate of 10%.

As the parties have not indicated in the contract their will to provide for a higher interest or an internally accepted interest or any other form of compensation.

As the request for compensation of the financial costs due for late payments must thus be limited to the Libyan legal interest.'