Privy Council in National Housing Trust: Curial law /law of the seat of arbitration determines power to award interest

The Privy Council does not all that often (well, that is actually relative: 47 times already in 2015; that’s not a bad working load for a supreme court) rear its judiciary head. In National Housing Trust it did viz the powers of an arbitrator in respect of an aborted joint-venture in Jamaica. (For particulars of the case, see here). The case concerns the jurisdiction to make, and legitimacy of a supplementary award by an arbitrator, of compound interest.

Arbitration leads to a myriad of applicable law to be decided: one has to ascertain

lex arbitri (the law of the arbitration agreement: ie the law applicable to parties’ agreement to make recourse to arbitration);

the curial law or the ‘law of the seat’ (the procedural law which will guide the arbitration proceedings; despite the latin curia not commonly referred to as lex curia);

and the ‘proper law’, the law that governs the actual contract (lex contractus), of which the arbitration agreement forms a part.

In National Housing Trust, the Privy Council held that first and foremost, the issue of compound interest (indeed the powers of the arbitrator as a whole) is subject to agreement between the parties. Failing such agreement, it is the law of the seat of arbitration which determines the arbitrator’s powers.

Many ADR clauses are boilerplate and last-minute. National Housing Trust once again shows that adding such midnight clauses without much consideration, may come back to haunt parties.

Geert.

 

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