Powers of the Arbitral Tribunal to make an award in respect of interest, yes / English law as lex fori / Section 19 A of the 1950 Arbitration Act / Law applicable to the determination on interest / Liability determined by the proper law of the contract / Amount, period and rate of interest determined by English law / Discretion of Arbitral Tribunal to determine the period and rate under English law, yes / Lack of power of the Arbitral Tribunal under English law as the lex fori to make an award on interest for any period after the date of the Final Award.

'In considering its powers to make an award in respect of interest, the Tribunal has first looked at English law, as the lex fori. Section 19A of the Arbitration Act 1950 states as follows:

"(1) Unless a contrary intention is expressed therein, every arbitration agreement shall, where such a provision is applicable to the reference, be deemed to contain a provision that the arbitrator or umpire may, if he thinks fit, award simple interest at such rate as he thinks fit

(a) on any sum which is the subject of the reference but which is paid before the award, for such period ending not later than the date of the payment as he thinks fit, and

(b) on any sum which he awards for such period ending not later than the date of the award as he thinks fit.

(2) The power to award interest conferred on an arbitrator or umpire by subsection (1) above is without prejudice to any other power of an arbitrator or umpire to award interest."

Accordingly, the Tribunal is satisfied as to its power to award interest up to the date of the Final Award. The Tribunal has also examined the English conflict of laws rules to determine which law it should apply when making its determination in respect of interest. Based on the English case Miliangos v. George Frank (Textiles) Limited (No. 2) (1977) QB 489 at 497 the Tribunal holds that the question of liability to pay interest is to be determined by the proper law of the contract under which the obligation arises (i.e., New York law); and that the amount of such interest (i.e., the period and the rate) is to be determined by English law. See also Dicey & Morris, The Conflict of Laws, 11th edition pp. 13321335.

The Tribunal is satisfied that New York law provides for liability to pay interest in respect of an unpaid sum due. Under English law (see the Arbitration Act 1950, Section 19A quoted above) the Tribunal has discretion to determine the period and the rate.

The Tribunal accordingly determines that interest shall be paid from the date upon which payment became due at a commercial rate. The parties contemplated that the money due would be transferred from First Defendant's bank account to Claimant by ... March 1986. We therefore award interest from that date up to the date of this Final Award.

Libor commercial rates from ... March 1986 to ... January 1989 are set out in Mr. X's affidavit. Using these rates from ... March 1986, interest on US$ ... amounts to US$ ... The Tribunal awards this sum and, in the absence of further evidence as to the current rates, awards in addition interest on the sum of US$ ... at the rate of 9% from ... January 1989 until the date of this Final Award.

The Tribunal has no power under English law, as the lex fori, to make an award in respect of interest for any period after the date of the Final Award. The position is governed by Section 20 of the Arbitration Act 1950 which states:

"A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest as from the date of the award and at the same rate as a judgment debt."'