Shakespeare 2

During the last few years, as will be well known to readers of this journal, English courts devised a way of isolating foreign claimants from the then poor performance of sterling by awarding them, in appropriate cases, judgment in another currency. Between 1975 and 1978 this device was approved by the House of Lords for claims for debts, for damages for tort and for damages for breach of contract.3 Thus the gradual erosion of the international value of the pound was neutralised for foreign claimants, for whom English law was re-established as an effective forum. This development encouraged many foreign shipowners to return to English law for the settlement of their disputes.4

Previously, the problems for foreign claimants had become noticeable with the devaluation of sterling in 1967 and with the loss of its distinctive position in the international money markets. The solutions arose from commercial pressure and from the initiative of London arbitrators in making awards in an appropriate foreign currency when that seemed to them to be justified on the facts.5 However, because the new procedures are not yet fully worked out there are still areas of uncertainty. In the context of inflation, and the present frequent and substantial fluctuations in the rates of exchange between currencies, it is important both to reduce these uncertainties and to ensure that the machinery for resolving claims is efficient. Otherwise, compensation will often be illusory.6