Foreign Currency: Claims, Judgments and Damages
The underlying justification for awarding interest on a claim for debt or damages is that a successful claimant has been kept out of his money while the defendant has had the use of it.1 For a successful commercial claimant, there is a presumption that he has borrowed the amount awarded to him, so he will normally recover interest at a commercial borrowing rate; whereas interest awarded to a non-commercial claimant will generally reflect deposit rates.2 In English law the principles governing the allowance of interest and the period for which interest is awarded in a particular case (as distinct from the rate to be allowed) are generally the same for sterling and foreign currency claims.3 Sums awarded in a foreign currency will normally attract interest at a rate appropriate to that currency.4 In some circumstances compound interest may be awarded. The court has power to curtail the period for which pre-judgment interest is awarded. The rate of post-judgment interest on a foreign currency award will generally be in accordance with the same principles governing the rate of pre-judgment interest, adjusted for variation over time, rather than (as with sterling awards) at the statutory rate applying to judgments. All these matters are considered in more detail below. Many of the cases considered in this chapter do not involve foreign currency claims, but the same underlying principles apply whether the claim is expressed in sterling or a foreign currency.