Foreign Currency: Claims, Judgments and Damages
At first consideration the concept of a set-off between opposing claims is a straightforward one and would seem to be simple to implement. In reality, however, the topic raises numerous difficulties and uncertainties.1 Among the questions that may arise are: Does set-off simply create a procedural bar to enforcement of the whole or part of a claim, or is it substantive in nature? If substantive, does it act to reduce or extinguish one party’s claim as soon as a cross-claim is founded, or only at the time of judgment? If the latter, how is set-off achieved where judgments on claim and cross-claim are given at different times? What difference is there between set-off involving liquidated and unliquidated claims or cross-claims? Does set-off have a bearing on the period for which interest may be awarded? What is the difference, if any, between reducing a claim by set-off and reducing it by a defence? What happens if set-off is available in a particular case in more than one form? All these questions can arise where claims are entirely in sterling. Where a claim or cross-claim calls for assessment in one or more foreign currencies whose exchange rates may fluctuate, and which may attract interest at different rates and for different periods, the potential additional complications make set-off a complex task. In this chapter we seek to identify the solutions to set-off questions that have so far evolved in relation to foreign currencies, examining them critically where necessary; and we also suggest possible answers to questions that may arise in the future.