Interest on costs and damages in arbitration


Produced in partnership with Stephenson Harwood
Practice notes

Interest on costs and damages in arbitration


Produced in partnership with Stephenson Harwood

Practice notes
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This Practice Note considers the law and practice of awarding interest on Damages and Costs in international Commercial arbitration proceedings, including under the law of England and Wales and the Arbitration Act 1996 (AA 1996). Reference is also made to comparative guidance from investment treaty arbitration proceedings.

To compare the position on this issue in jurisdictions around the world, see our International Comparator Tool.

Which law determines the award of interest in arbitration proceedings?

The question of whether to award interest and, if so, at what rate is a matter for the arbitral tribunal which first has to determine the basis on which interest is to be awarded. The tribunal will consider:

  1. •

    any agreement between the parties (either in the original arbitration agreement, the underlying contract or subsequently)

  2. •

    the provisions of any relevant arbitral rules or legislation (such as a provision for statutory interest)

  3. •

    the relevant applicable law

In practice, the tribunal will apply any express agreement by the parties. If there is no agreement regarding interest, the tribunal's powers to award

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Costs definition
What does Costs mean?

Money ordered to be paid by one party to another in respect of the costs incurred in the course of litigation, in bringing or defending a claim.

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