• Source of authority for granting interest

• Rate of interest

The dispute concerns the performance of an agreement relating to the transfer of technology and supply of products between Claimant, an Italian company, as supplier and Defendant, a Canadian company, as purchaser. According to the agreement, the applicable substantive law was 'the laws of the Province of Quebec and the laws of Canada applicable therein'. The law applicable to the procedure was specified in the Terms of Reference as Articles 1492ff of the French New Code of Civil Procedure. Claimant asks for interest to be added to the sums allegedly due to it, at the rate of 10% from the 'actual date of service' of the request for arbitration. Defendant claims back monies paid for defective products, with interest.

'137. In its Memorial . . . [Claimant] prayed for interest starting from 17 January 1994 (which it considers to be the date of [Defendant]'s notice of the Request for Arbitration) until payment at "the prevailing commercial rate" of 10% "but it is submitted that a different rate, as applied in commercial cases by the Courts of the Province of Quebec, would also be suitable".

138. [Claimant] has produced no evidence to support its contention that 10% is "the prevailing commercial rate". Nor does it demonstrate the relevance of rates applied in commercial cases by the courts of Quebec. The Arbitral Tribunal is mindful of the fact that the Agreement is governed by the laws of Quebec, but does not believe that an award rendered in US dollars in proceedings conducted in Paris should apply the legal rate of interest that obtains in the courts whose law happens to be the lex contractus.

139. The Arbitral Tribunal agrees with another ICC arbitral tribunal, also sitting in Paris, in Case No. 6219, whose award, excerpted in The ICC International Court of Arbitration Bulletin Vol. 3, No. 1 (May 1992) at page 22, after reviewing practice and commentary concluded with respect to interest on overdue payments: "The Arbitrator is not obliged to refer to the legal rate of any national legal system, whether that of the law of the contract or the lex fori of the place of arbitration."

140. The Arbitral Tribunal will nevertheless apply the French legal interest as being the rate most consonant with the legitimate expectations of the parties in selecting Paris as the seat of arbitration. Our decision in this respect might have been different if we had found ourselves in a high-inflation venue where the legal rate of interest was hopelessly inapposite to a debt expressed in US dollars, but that is not the case: French legal interest for 1994 was 8.40%, and for 1995 it is 5.82%.

141. The tribunal in Case No. 6219 also stated that the French legal rate "must naturally be applied to the amounts awarded from the date when the Award is rendered to the date of effective payment". Id. at 22. (Emphasis added.) We do not need to express a view as to the inevitability of this result, because for the reasons set down in para. 140 we consider that in any event the French legal rate should continue to apply until full payment of the Award.

142. Since instalments under Article 3.5(d) of the Agreement totalling . . . had fallen due prior to the Request for Arbitration, interest may have been recoverable from the relevant due dates. But [Claimant] asked only for interest from 17 January 1994, and the Arbitral Tribunal cannot grant more than its prayer. Furthermore, the Arbitral Tribunal notes that under Article 3.5(d) of the Agreement the final instalment of . . . was not due until the end of February 1994. Interest on this portion of the amount awarded in respect of unpaid royalties shall therefore only be awarded as from 28 February 1994.

143. [Claimant]'s Prayer (C) is thus granted although at a different rate . . .'