What about interest?
Arbitrators have power to award simple or compound interest on sums that they award, and they customarily do so. Most LMAA arbitrators now generally award interest on a compound basis, with three-monthly rests. The rates are related to the currency of the award. For example, a successful party who is gets an award in US Dollars and who is based in or substantially operates in the United States may expect to be awarded interest at a rate related to the US Prime Rate for the relevant period. In the more common case of a party trading in US Dollars, but based outside the United States, the rate is more likely to be related to the US Dollar LIBOR 3-monthly rates. LMAA arbitrators maintain tables of these and of Sterling base lending rates for the past several years. For other currencies parties will normally be invited to provide evidence of the appropriate rates.
As a general rule interest will normally be awarded from the date when loss or damage was suffered by the successful party, or in the case of a balance of accounts from about 6 weeks after the conclusion of the relevant contract. But particular circumstances or contractual provisions may lead to quite different results.
What costs are recoverable in a London maritime arbitration?
The general rule, as embodied in s.61(2) of the Arbitration Act 1996 is that costs follow the event. This normally means that the losing party pays the costs, including the costs of the tribunal and those of the successful party. Not infrequently, however, a tribunal will order a party that has been successful overall to bear some part of the costs, for example because it lost on a part of the case which involved a lot of time and work, and thus expense, even though at the end of the day it was successful in the arbitration.
When a party is awarded its costs these rarely provide a full indemnity. As a very rough guide what is actually recovered may be in the region of 70% to 80% of what the party actually has to pay its lawyers or representatives. This is because some work that is done is not considered to be reasonable when viewed objectively as between the parties, and therefore it is not appropriate that the losing party should have to pay for it.
In a settlement it is for parties to agree on how costs are to be dealt with, including the tribunal’s charges; but whatever they agree between themselves cannot affect their liability to the tribunal, which is joint and several.