Document-Id: 948760, Please cite as: "https://www.trans-lex.org/948760"
Title
VII.3.3 - Currency in which to assess damages
Content
No. VII.3.3 - Currency in which to assess damages
Damages are to be assessed either in the currency in which the monetary obligation that was breached was expressed or in the currency in which the harm was suffered, whichever is more appropriate.
Commentary
1 Currency issues are a corollary of the cross-border nature of transnational business transactions. The law of damages must take account of these issues.
2 The Principle gives courts or arbitral tribunal a choice. They may award damages in the currency in which the monetary (payment) obligation was expressed for whose breach the damages are awarded. They may also decide to award damages in a currency other than the contract currency if the aggrieved party has incurred expenses or has suffered other harm in that other currency.
3 In either scenario, a court or tribunal may want to make a special upward adjustment of compensation in order to take account for a severe depreciation of the currency in which damages are awarded. A severe currency depreciation may also be a factor for the court's or tribunal's choice between the currencies mentioned in this Principle. In extreme cases of depreciation of both currencies, the court or tribunal may resort to other measures, such as awarding damages in a third currency or delaying the conversion date.
2 The Principle gives courts or arbitral tribunal a choice. They may award damages in the currency in which the monetary (payment) obligation was expressed for whose breach the damages are awarded. They may also decide to award damages in a currency other than the contract currency if the aggrieved party has incurred expenses or has suffered other harm in that other currency.
3 In either scenario, a court or tribunal may want to make a special upward adjustment of compensation in order to take account for a severe depreciation of the currency in which damages are awarded. A severe currency depreciation may also be a factor for the court's or tribunal's choice between the currencies mentioned in this Principle. In extreme cases of depreciation of both currencies, the court or tribunal may resort to other measures, such as awarding damages in a third currency or delaying the conversion date.
References
Arbitral Awards
Ad Hoc-Award of October 27, 1989 and June 30, 1990, Antoine Biloune (Syria) and Marine Drive Complex Ltd. (Ghana) v. Ghana Investment Centre and the Government of Ghana, YCA 1994, at 11 et seq.Affaire relative à la concession des phares de l’Empire ottoman (Grèce, France), 24/27 July 1956, in: RECUEIL DES SENTENCES ARBITRAL, VOLUME XII pp. 165-269Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Republic of Argentina, ICSID Case No. ARB/97/3ICSID Award of December 16, 2002, Marvin Feldman v. Mexico, ICSID Case No. ARB(AF)/99/1ICSID 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.)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.International Legislation
Fontaine, Marcel, OHADA Uniform Act On Contract Law Preliminary DraftPrinciples / Restatements
UNIDROIT Principles of International Commercial Contracts 2016