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Document-ID: 956000
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(a) If the parties have not agreed otherwise, the debtor, who does not pay a sum of money when it falls due has to pay to the creditor interest on that sum from the time when payment was due.
(b) The rate of interest is to be determined on the basis of the average bank short-term lending rate to commercial borrowers prevailing for the currency of payment at the place of payment.
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Karrer, Pierre, Transnational Law of Interest in International Arbitration, in: Gaillard (ed.), Transnational Rules in International Commercial Arbitration (ICC Publ Nr. 480,4), Paris 1993, at 223 et seq. Lew, Julian D.M., Interest on Money Awards in International Arbitration, in: Making Commercial Law, Essays in Honour of Roy Goode, Oxford 1997, at 543 et seq. Schönle, Herbert, Intérêts Moratoires, Intérêts Compensatoires et Dommages-Intérêts de Retard en Arbitrage International, in: Festschrift Pierre Lalive, Basel, Frankfurt a.M. 1993, at 649 et seq. Treitel, G.H., Remedies for Breach of Contract, in: David/ von Mehren (eds.), International Encyclopedia of Comparative Law, Bd. VII, Tübingen 1976, at 121 et seq. van Houtte, Hans, Les Principes UNIDROIT et lArbitrage Commercial International, in: ICC (ed.), The UNIDROIT Principles for International Commercial Contracts - A New Lex Mercatoria?, Paris 1995, at 181 et seq. Schlechtriem, Peter (ed.), English Commentary on the UN Convention on the International Sale of Goods (CISG), Comment on Art. 78 by Hans Hermann Eberstein and Klaus Bacher, Oxford 1998 Ali, Osama Mohamed, Making sense of Islamic banking, IFLR, June 1992, at 30 et seq. Asam, Herbert, UN-Kaufrechtsübereinkommen im deutsch-italienischen Rechtsverkehr, RIW 1989, at 942 et seq. Berger, Klaus Peter, Der Zinsanspruch im internationalen Wirtschaftsrecht, 61 RabelsZ 1997, at 313 et seq. Cerina, Paolo, Interest as Damages in International Commercial Arbitration, Am.Rev.Int'l Arb. 1993, at 255 et seq. Ferrari, Franco, Das Verhältnis zwischen den Unidroit-Grundsätzen und den allgemeinen Grundsätzen internationaler Einheitsprivatrechtskonventionen, JZ 1998, at 9 et seq. Gotanda, John Y., Awarding Interest in International Arbitration, 90 AJIL 1996, at 40 et seq. Gotanda, John Yukio, Supplemental damages in private international law: the awarding of interest, attorneys' fees and costs, punitive damages and damages in foreign currency examined in the comparative and international context, The Hague / Boston 1998 Gotanda, John Yukio, Damages in Private International Law, 326 (2007) Recueil des cours 83 Hobe, Stephan, Enteignung zu Zwecken des Umweltschutzes, Iprax 02, 249 Magnus, Ulrich, Die allgemeinen Grundsätze im UN-Kaufrecht, 59 RabelsZ 1995, at 469 et seq. Neumayer, Karl H., Offene Fragen zur Anwendung des Abkommens der Vereinten Nationen über den internationalen Warenkauf, RIW 1994, at 99 et seq. Ortscheidt, Jérôme, La réparation du dommage dans l'arbitrage commercial international, Paris 2001. Reinhart, Gert, Fälligkeitszinsen und UN-Kaufrecht, 11 IPRax 1991, at 376 et seq. Ripert, Georges, Les Règles du Droit Civil Applicables aux Rapports Internationaux (Contribution à l'Etude des Principes Généraux du Droit Visés au Statut de la Cour Permanente de Justice Internationale), 44 Rec.Cours 1933-II, at 569 et seq. Smit, Hans, Substance and Procedure in International Arbitration: The Development of a New Legal Order, 65 Tul.L.Rev. 1991, at 1309 et seq. Wetter, J.Gillis, Interest as an Element of Damages in the Arbitral Process, 5 IFLR, Dec. 1986, at 20 et seq. Fouchard Gaillard Goldman on International Commercial Arbitration (edited by Emmanuel Gaillard and John Savage) The Hague 1999 Bishop, R. Doak, International Arbitration of Petroleum Disputes: The Development of a Lex Petrolea, YCA 1998, at 1131 et seq. Secomb, A Uniform, Three-Step Approach to Interest Rates in International Arbitration, in: Kröll et al. (eds.), International Arbitration and International Commercial Law: Synergy, Convergence and Evolution - Liber Amicorum Eric Bergsten, pp. 431 et seq. Arnaldez, Jean-Jacques, note to ICC Award No. 6653, Clunet 1993, at 1047 et seq. Hascher, Dominique, note to ICC Award No. 7197, Clunet 1993, at 1037 et seq. Hascher, Dominique, note to ICC Award No. 7331, Clunet 1995, at 1006 et seq. Hascher, Dominique, note to ICC Award No. 8128, Clunet 1996, at 1028 et seq. suggest references The TransLex-Team is thankful for any contribution.
close X ICC Award No. 1930, YCA 2001, at 181 et seq. ICC Award No. 3226, Clunet 1980, at 959 et seq. ICC Award No. 5835, 10 ICC Bull. No. 2, 1999, at 33 et seq. ICC Award No. 6219, Clunet 1990, at 1047 et seq. ICC Award No. 6527 of 1991, YCA 1993, at 44 et seq. ICC Award No. 6653, Clunet 1993, at 1040 et seq. ICC Award No. 6962 of 1992, YCA 1994, at 184 et seq. ICC Award No. 7197, Clunet 1993, at 1028 et seq. ICC Award No. 7331, Clunet 1995, at 1001 et seq. ICC Award No. 7575, Clunet 2010, at 1378 et seq. ICC Award No. 8128, Clunet 1996, at 1024 et seq. ICC Award No. 8769, 10 ICC Bull. No. 2, 1999, at 75 et seq. ICC Award No. 8874, ICC Bull. 10/No. 2 (1999), at 82 et seq. ICC Award No. 8908, ICC Bull. 10/No. 2 (1999), at 83 et seq. ICC Award No. 9333, 10 ICC Bull. No. 2, 1999, at 102 et seq. ICC Final Award No. 11849, YCA 2006, at 148 et seq. ICC Award No. 12745, YCA 2010, at 40 et seq. Iran-US Claims Tribunal, Sylvania Technical Systems, Inc. v. Iran, 8 IRAN-U.S. C.T.R., at 298 et seq. Iran-US Claims Tribunal, McCollough & Company, Inc. v. Ministry Of Post, Telegraph and Telephone, 11 IRAN-U.S. C.T.R., at 3 et seq. Iran-US Claims Tribunal, Starrett Housing Corp. v. Iran, 16 IRAN-U.S. C.T.R., at 112 et seq. ICSID Award, American Manufacturing & Trading, Inc. (USA/Zaire) v. Republic of Zaire, YCA 1997, at 60, 79 et seq. ICSID Award, Asian Agricultural Products Ltd. v. The Republic of Sri Lanka, YCA 1991, at 106 et seq. ICSID Award, Maritime International Nominees Establishment (MINE) v. The Republic of Guinea, YCA 1989, at 82 et seq. ICSID Award, Southern Pacific Properties (Middle East) Ltd. v. Arab Republic of Egypt, YCA 1994, at 51 et seq. (also published in: ICSID Rev.-FILJ 1993, at 328 et seq.; ICSID Rep. 1995, at 189 et seq.; ILM 1993, at 933 et seq.; Clunet 1994, at 121 et seq.) CMS Gas Transmission Company v. The Argentine Republic, ICSID Case No. ARB/01/8, at: http://ita.law.uvic.ca/documents/cms.pdf, at p. 7 et seq. Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft in Österreich, SCH-4318 of June 15, 1994, RIW 1995, at 590 et seq. Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft in Österreich, SCH-4366 of June 15, 1994, RIW 1995, at 590 et seq. Permanent Court of Arbitration, Case No. 95, of Januray 11, 1912 concerning Russian-Turkish War Claims, Digest of the Decisions of the Permanent Court of Arbitration CRCICA Case No. 310/2002 (ad hoc), in: Alam-Eldin, Mophi-Eldin Ismail, Contruction Arbitral Awards rendered under the Auspices of CRCICA (2010), at 5 et seq. Dr. Reineccius; First Eagle SoGen Funds, Inc.; Mathieu and La Societe de Concours Hippique de la Chatre v. Bank for International Settlements in: Mealey's: International Arbitration Report, Vol. 18 #10 (10/03), at p. B-1. Permanent Court of Arbitration, Norway v. United States of America (Norwegian shipowner‘s claims), Permanent court of arbitration, www.pca-cpa.org Ad Hoc-Award of July 23, 1981, YCA 1983, at 89, 94 et seq. Banque Arabe et Internationale D'Investissement (BAII) et al. v. The Inter-Arab Investment Guarantee Corporation (IAIGC), 11 Mealey's Int'l Arb. Rep., April 1996, at 1 et seq. Ad Hoc-Award of October 27, 1883, Owners of M/S Parthenia (Mssrs. Houlder Bros and Co.) v. The Executors of the Late Ralph Firbank Alabama Claims Arbitration 1872, in John Bassett Moore (ed.), History and Digest of the International Arbitrations to which the United States has been a Party, 1898 France v. Venezuela: Award of the President of the Swiss Confederation in the Case of Fabiani (30th Dec. 1896), in: Moore, John Bassett, History and Digest of the International Arbitrations to which the United States has been a Party, Washington 1898, Vol. V, at p. 4878 Arbitration Award of July 7, 1998, Mr. Franz Sedelmayer vs. The Russian Federation Norway v. United States of America (Norwegian Shipowner‘s Claims), Permanent Court of Arbitration, available at http://www.pca-cpa.org/upload/files/Norwegian%20Shipowners%20award%20only.pdf . suggest references The TransLex-Team is thankful for any contribution.
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Please cite as: "Commentary to Trans-Lex Principle No. VII.6 - Duty to pay interest, http://www.trans-lex.org/956000"
1 A claim for interest on a sum of money can be qualified either as a damage claim, because the creditor has to borrow the money he does not receive from his debtor elsewhere and has to pay interest for this money, which constitutes his damage. Alternatively, a claim for interest can be characterized as a claim for restitution because the debtor, while withholding the money and investing it, is unjustifiably enriched because it would have been the right of the creditor to invest the sum or use it for other purposes. From a functional perspective, the first approach is to be preferred because in business life, there is a general presumption that businesses work with bank credit for money they do not have or have not yet received.
2 Consequently, interest for sums in arrears are awarded by international arbitral tribunals to compensate for the damage resulting from the fact that the creditor is deprived for a certain period of time of the use of and disposition over the sums to which he is entitled.
3 The interest rate must be reasonable and must be fixed taking into account all relevant circumstances, in particular all relevant contractual stipulations, the nature of the facts which have caused the damage, the interest rates in force on the markets for the relevant currency and the inflation rate of that currency.
4 In light of this Principle, the parties' agreement not to allow for a claim for interest must be clear and unequivocal.