• Applicable period

• Rate of interest

Claimant, an Irish company, purchased a product from Defendant, a Dutch company, pursuant to a sales agreement, and then resold the product to company X. Company X claimed that there was a discrepancy between the product it had ordered and that delivered. Claimant in turn made a claim against Defendant. The sole arbitrator finds that Defendant breached the agreement it had made with Claimant by delivering material that failed to meet the contractual specifications. He awards Claimant damages for loss of profit, loss on resale of the product and for costs and expenses, with interest for various periods, as explained below. The final award was preceded by a partial award establishing, amongst other things, that the parties had provided in their agreement that their contractual relationship would be governed by English law.

'The matter of interest is to be established according to English law. Section 19 A of the Arbitration Act 1950 provides that, unless a contrary intention is expressed therein, every arbitration agreement shall be deemed to contain a provision that the arbitrator may, if he thinks fit, award simple interest at such rate as he thinks fit on any sum which he awards, for such period ending not later than the date of the award. Thus the rate of interest is a matter within the discretion of the arbitrator. The discretion ought not to be exercised with the objective of penalising the losing party, but only for the purpose of compensating the claimant for not having had the benefit of the money between the date when it ought to have been paid and the date of the award (Mustill and Boyd, Commercial Arbitration, second edition, p. 392). Taking into account these comments, the different currencies involved in the dispute and the prevailing interest rates during the relevant periods, the Arbitrator holds that interest shall be paid by [Defendant] at 6% per annum.

(i) On the amount of DEM . . ., relating to the loss of profit, the interest shall be calculated from March 17, 1993, i.e. the date when the purchase price to be paid by [company X] was due according to [Claimant]'s invoice no. . . . to [company X] of November 27, 1992;

(ii) On the amount of DEM . . ., relating to the loss on the resale, the interest shall be calculated from March 17, 1993, i.e. the date when the purchase price to be paid by [company X] was due according to [Claimant]'s invoice no. . . . to [company X] of November 27, 1992;

(iii) On the amount of USD . . . relating to expenses as to indemnification to [company X], from June 9, 1994, i.e. the date the indemnification payment was made by [Claimant] to [company X] according to a debit advice from [bank];

(iv) On the amount of DEM . . . and USD . . . for costs and expenses, from September 22, 1994, i.e. the date that the Request for Arbitration was submitted to the ICC Court;

through the date of this Award.

The Award shall also carry interest after the date of this Award. According to English law the arbitrator cannot fix the rate of interest on an arbitration award; for the time after the date of the Award, interest on the total sum awarded is charged at the rate which by statutory instrument is applicable to a judgement debt.'