SCC Case 36/1998 - Chapter 9 - SCC Arbitral Awards - 1999-2003

About the Editors:
Sigvard Jarvin has been involved in more than 215 international arbitrations under the arbitration rules of the ICC, the Stockholm Arbitration Institute, the Dutch Arbitration Institute, the American Arbitration Association, LCIA, UNCITRAL, the Cairo Regional Centre, and other arbitration organizations. He was general counsel to the ICC International Court of Arbitration, Paris (1982-1987) and member of the Court (1988-1995). He also chaired the ICC working party revising the ICC/CMI Maritime Arbitration Rules (1997-1998).

Mr. Jarvin was the rapporteur at the 1990 and 1998 ICCA Congresses and was chairman of the foreign section of the Swedish Bar from 1999 to 2000, and he is also a member of the board of the Institute of Arbitration Law at Stockholm University and a member of the ICC Commission on Arbitration and the International Arbitration Club, London. He is cited yearly as one of the best arbitration lawyers in France in Chambers Global — The World’s Leading Lawyers , published by Chambers & Partners.

Annette Magnusson, is a Professional Support Lawyer at the firm of Mannheimer Swartling, Stockholm. She was formerly Assistant Secretary General and legal counsel for the Arbitration Institute of the Stockholm Chamber of Commerce.

Observation Commentary by:

Gerald Aksen, Retired Partner, Thelen Reid & Priest LLP, New York, Immediate Past Vice Chairman, ICC International Court of Arbitration, Former Vice President, London Court of International Arbitration, Former General Counsel and Member, Board of Directors, American Arbitration Association.

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Description:

Originally from SCC Arbitral Awards 1999-2003

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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 overdue 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 installment 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; the amount of the winning party’s attorney’s fees was held unreasonable and was reduced.

Table of Contents:

IX. SCC case 36/1998

Subject-matters:

(1) No oral hearing held.

(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.

Observations by Gerald Aksen