• Source of authority for granting interest

• Applicable period

• Rate of interest

Claimant, a French supplier, has alleged that Defendant, a US distributor, owes it outstanding payments for deliveries made pursuant to the distribution agreement between them. The sole arbitrator decides that the substantive law of New Jersey - the place of residence of the distributor - is the proper law applicable to the dispute. He finds that Defendant has an obligation to pay for the goods delivered to it according to the distribution agreement and New Jersey law. Claimant requests that the award be made in French francs, although the claim was denominated in US dollars. The arbitrator awards US dollars, as Claimant's invoices were in that currency.

'Under New Jersey law, an aggrieved seller may also recover incidental damages resulting from the buyer's breach. Section 2-710 New Jersey Uniform Commercial Code (N.J.S.A. 12A:2-710). [Claimant]'s incidental damages included interest on the amounts [Defendant] should have paid but failed to pay. As there is no rate of interest for late payments set out in the Agreement, I will apply the legal rate under New Jersey law. Therefore the rate of pre-judgment interest shall be equal to the historical interest rates determined pursuant to Rule 4:42-11(a) (ii) and (b) of the New Jersey Court Rules ("NJCR") for the calendar years during which [Defendant] was in breach of its payment obligations. Thus, the following simple rates of interest per annum will apply: 7.5% for 1992, 5.5% for 1993, 3.5% for 1994, 3.5% for 1995, and 5.5% for 1996. Such legal interest shall be paid for the period from (and including) August 4, 1992 (i.e., the last due date of the three open invoices) until (but excluding) the date of this final award. The Claimant is further entitled to post-judgment simple interest, currently at the rate of 5.5% per annum, on the sum of the principal amount awarded plus pre-judgment interest and costs pursuant to NJCR Rule 4:42-11(a) from the date of this final award until payment.'