- Arbitral Award
- ICC International Court of Arbitration
INTERNATIONAL SALES CONTRACT - GOVERNED BY CISG – RATE OF INTEREST – NOT DETERMINED BY CISG – REFERENCE TO ART. 7.4.9 UNIDROIT PRINCIPLES
FIRST CRITERION AVERAGE PRIME RATE FOR CURRENCY OF PAYMENT AT PLACE OF PAYMENT (ART. 7.4.9(2) FIRST SENTENCE UNIDROIT PRINCIPLES) – IF NO SUCH RATE EXISTS RECOURSE TO AVERAGE PRIME RATE FOR CURRENCY OF PAYMENT IN STATE OF CURRENCY OF PAYMENT (ART. 7.4.9(2) FIRST SENTENCE UNIDROIT PRINCIPLES)
In a case concerning an international sales contract governed by CISG the question as to the applicable rate of interest for the payment of damages arose. Since the Convention does not determine which is the rate to be applied, the Arbitral Tribunal without further explanation referred to Art. 7.4.9(2), first sentence, of the UNIDROIT Principles, according to which the rate of interest shall be the average bank short-term lending rate to prime borrowers prevailing for the currency of payment at the place for payment, or where no such rate exists at that place, the same rate in the State of the currency of payment. In the case at hand the currency of payment was US dollars and the place for payment was situated in Sweden. Following the guideline of the the first alternative of Art. 7.4.9(2) of the UNIDROIT Principles, the Arbitral Tribunal first tried to ascertain the prime rate for US dollar credits in Sweden as the place for payment. Yet since the Swedish banks informed the Tribunal that no such rates existed in Sweden, the Arbitral Tribunal applied the prime rate applicable to US dollar credits issued in the United States as provided for by the second alternative of Art. 7.4.9(2).
Notice by K.P. BERGER, The lex mercatoria doctrine and the Unidroit Principles of International Commercial Contracts, in 28 Law and Policy in International Business, (1997), p. 943 et seq., at p. 98}}