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Stockholm Arbitration Report (SAR)

Preview Page SAR 1999- 2 

FINAL ARBITRAL AWARD RENDERED IN 1998 IN CASE 36/1998

Observations by Gerald Aksen

Procedure: (1) No oral hearing held.

Subject-matters:

(2) Interest rate on overdue payment; New York law and force majeure; Starting point for calculating interest on over due amount.

(3) Moratorium decreed by the Central Bank of Russia. (4) Reduction of attorneys fees.

Findings: (1) No oral hearing required when the parties agree to dispense with it.

(2) The Tribunal does not replace the contractual interest [LIBOR plus 10%] with an interest rate corresponding to six month LIBOR plus 5% merely because a default interest at that rate would not have required a licence from the Central Bank. No force majeure under New York law. The contractual interest provision applies to the entire outstanding debt from the date when this debt has become immediately due and owing as a result of Respondent’s default on payment of any instalment according to the payment schedule.

(3) The moratorium decreed by the Central Bank of Russia does not excuse the debtor where payment was overdue at the time when the moratorium was introduced.

(4) The winning party’s costs that are not directly related to the preparation for the arbitration are not allowed.