“Why have we in England insisted on judgment in sterling and nothing else? It is, I think, because of our faith in sterling. It was a stable currency which had no equal. Things are different now. Sterling floats in the wind. It changes like a weathercock with every gust that blows. So do other currencies. This change compels us to think again about our rules.”1 Since the entry of the United Kingdom into the EEC, insularity in the law has become unfashionable and the new more outward approach of the courts is reflected in many areas of the law. But perhaps nowhere is this change more clearly seen than in the attitude of the English courts towards the award of judgment in a foreign currency. Formerly, an English court could award judgment in sterling only2 and for the purposes of litigation in England any claim expressed in a foreign currency had, therefore, to be converted into sterling. So far as claims in debt are concerned, this was confirmed by the House of Lords in 1960 in In Re United Railways of Havana and Regla Warehouses Ltd 3. However, recent decisions of the courts have substantially altered the old law in certain circumstances. This article sets out to explore those circumstances and to show how rapidly the law has developed since the phenomenon of floating currencies first precipitated the issue before the courts.

One of the most fascinating aspects of the problem has been the interplay between the practice of commercial arbitrators in the City of London in making their awards and the practice of the courts in awarding judgment. In The Kozara 4, the question before the Court of Appeal was whether an arbitration award in United States dollars could be enforced with the leave of the court “in the same manner as a judgment or order to the same effect” under s. 26 of the Arbitration Act 1950. The arbitration concerned a dispute over unpaid hire which arose under a time charter on the New York Produce Exchange form entered into between Jugoslav owners and Panamanian charterers. All payments under the charter were expressed to be in U.S. dollars. The only connection with England was that the standard arbitration clause had been altered to provide for London arbitration. The arbitrators made an award in favour of the owners in U.S. dollars but the charterers failed to comply with the award which the owners then sought leave to enforce under s. 26 of the Arbitration Act. The Court of Appeal began by upholding the practice of English arbitrators to make an award in foreign currency. Lord Denning, M.R., said that: