- Damages — Conflict of laws — Recognition and enforcement — Interest
This chapter examines the interest rates applied to international arbitral awards. In the context of an arbitral award, an interest rate means the rate at which interest accrues on the amounts granted in the award. The chapter then describes the traditional approaches to determining interest rate in international arbitration and proposes a possible uniform approach to determining interest rates. The proposed approach comprises a three-step solution, which is further discussed in the chapter that follows. First, any agreement on the rate of interest should be respected. Second, absent agreement, the claimant should be able to prove the loss it incurred because it was denied the use of the money in question by way of damages. Third, if the claimant does not prove its actual loss, it should be granted interest at a commonly used commercial rate, augmented appropriately, for the relevant currency at the place of payment.