Published: August 2017
| Jurisdictions: International United States New York |
Topics: Arbitrators and Arbitral Tribunals Arbitral Awards Interest and Costs |
Description:
Interest on damages awarded by an arbitral tribunal can be a significant component of a prevailing party’s total recovery in international commercial arbitration. Uncertainty exists, however, with respect to the criteria that international arbitrators should apply in determining pre-award and post-award interest. One question that arises in domestic and international arbitrations governed by New York substantive law and seated in New York is whether the prejudgment interest provisions contained in Sections 5001, 5002 and 5004 of the New York Civil Practice Law and Rules (“N.Y.C.P.L.R.” or “C.P.L.R.”) apply to the determination of pre-award or post-award interest. The answer to the question whether arbitrators are obligated to (or should) apply New York’s nine percent statutory prejudgment interest rate can have a substantial economic impact on the parties in an arbitration.
Part I of this report sets forth an executive summary.
Part II provides a discussion of the standards applicable to interest determinations in international commercial arbitrations, with a focus on arbitrations that are both governed by New York substantive law and seated in New York.
Appendix A sets forth summaries of pre-award and post-award interest determinations of arbitral tribunals in approximately 45 international commercial arbitrations governed by New York substantive law.
Appendix B sets forth summaries of New York federal and state court decisions reviewing arbitral awards of interest in post-award proceedings brought under Chapter 1 of the Federal Arbitration Act, 9 U.S.C. §§ 1–16; the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, enacted as Chapter 2 of the Federal Arbitration Act, 9 U.S.C. §§ 201–208 (the “New York Convention”); or New York State’s arbitration statute, C.P.L.R. Article 75.