Currency in arbitration
Produced in partnership with Stephenson Harwood
Currency in arbitration

The following Arbitration practice note produced in partnership with Stephenson Harwood provides comprehensive and up to date legal information covering:

  • Currency in arbitration
  • Importance of currency
  • English authorities on currency issues in international arbitration
  • Institutional arbitration rules

One consequence of the international nature of arbitration is the variety of currencies with which parties and tribunals have to deal, often in the same proceedings, where claims may be made (and are often awarded) in a multitude of currencies.

Importance of currency

Determining the currency in which the award will be made may be one of the first issues a tribunal may have to face, and sometimes one of the most difficult (usually as a result of currency fluctuations), that can mean the difference between an award worth a relative pittance or a relative fortune.

The problem is regularly exacerbated by the long periods that elapse between the loss being suffered, the proceedings commenced and the award (if any) made in favour of the injured party. When currencies fluctuate, the result could be an unexpected penalty or an unforeseen windfall. And whichever way the currency in question moves, one party is going to win and the other is going to suffer.

Note also that not all currencies are freely usable or convertible and this also can cause problems.

English authorities on currency issues in international arbitration

Section 48(4) of the Arbitration Act 1996 (AA 1996) provides that the ‘tribunal may order the payment of a sum of money, in any currency’.

In Lesotho Highlands Development Authority v Impregilo SpA (the only House of Lords case on this issue), the tribunal

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