Interest - Court ordering award to claimant in US dollars - Judgments Act 1838

Standard Chartered Bank v Ceylon Petroleum Corporation: QBD (Comm) (Mr Justice Hamblen): 1 August 2011

Pursuant to a substantive judgment delivered by the court in July 2011 (see[2011] All ER (D) 113 (Jul)), the court delivered a further judgment on the level of post-judgment interest payable to SCB.

The issues were: (i) whether the post-judgment interest payable to SCB of $166,476,281 ordered to be paid was to be calculated by reference to: (a) the rate under the Judgments Act 1838; (b) the US prime rate; or (c) the contractual rate (see [7] of the judgment for the relevant term); and (ii) whether the 1838 act rate of interest payable on SCB’s costs should be postponed or apply from the date of the order. Consideration was given to section 44 of the Administration of Justice Act 1970.

The court ruled: (1) On the true construction of the contract, it was not to be construed as an agreement that SCB would not be entitled to interest under the 1838 act. The inclusion of an English jurisdiction clause was not sufficient reason for the court to refuse to exercise its statutory discretion. If it was, it would exclude the discretion under section 44 of the 1970 Act in many cases.

The discretion was there to enable the court to award interest at a rate appropriate to the currency in question. In the circumstances, it was appropriate for the court to exercise its discretion so as to award interest at a rate suitable for the currency of the judgment. Consequently, the appropriate rate would be the US prime rate (see [13], [21]-[23] of the judgment).

(2) It was established law that the court should not routinely make an order postponing the date for liability under the 1838 act and it was necessary to justify a departure from the usual rate (see [27] of the judgment).

In the circumstances, in respect of the payment on account which had been ordered, interest would accrue at the 1838 act rate. In respect of the disputed balance, in the exercise of the court’s discretion, a limited postponement of the application of that higher rate was justified and a four month postponement would be ordered (see [29] of the judgment).

Robin Dicker QC and Jonathan Goldring (instructed by Linklaters) for the SCB; Ali Malek QC, Clive Freedman and James MacDonald (instructed by Gibson & Co) for the CPC.