Default interest / Yugoslav law, Article 277 of the Law on Obligations / Date of commencement of interest: on every day the debtor should have but has not delivered the goods / Determination of rate of interest after the issuance of the award

'According to paragraph 1 of article 277 of the Yugoslav Law on Obligations, interest is due to the creditor on the amount of damages, as of the date at which the debtor begins to default. Defendant did not default by refusing to deliver at the agreed price, nor by Claimant's conclusion of a purchaseinreplacement contract, nor on the date at which payment was due to the new supplier. Defendant's default begins on every day at which he should have delivered but did not deliver. According to the sales contract, the 80,000 metric tons of steel under the option should have been delivered in five part shipments of more or less equal quantity between January and May 1988. Defendant was therefore in default for one fifth of the amount on February 1, March 1, April 1, May 1 and June 1, 1988. For the sake of mathematics, interest can be calculated as though Defendant defaulted on a total delivery, which would have been due on the date of the third shipment, i.e. on April 1, 1988.

As mentioned before, the interest rate amounted and amounts to 6.25 to 8.25%. No prediction can be made, on how the interest rate will develop. Since there is a time delay between issuing the Arbitral Award and voluntary or enforced performance, the Arbitral Award must also fix an interest rate for the future, i.e. until the voluntary or enforced performance of the award. With a view to the mean value of the development so far, an interest rate of 7.25% is appropriate.

Since compound interest was not claimed, Arbitrator need not elaborate on the issue.'