Legal system applicable to default interest in international commercial arbitration: harmonization proposals

Abstract

The purpose of this study is to analyze the determination of the law applicable to late payment interest on the final amounts that the arbitrators award within the framework of an international commercial arbitration. An exhaustive study of the possibilities offered by the traditional conflict of laws method is carried out, as it is widely used, despite the greater flexibility that arbitrators have with respect to determining the applicable law in an arbitration compared to judges. International commercial arbitration and investment arbitration awards as well as national judicial decisions are reviewed to propose practical solutions to assist arbitrators in their determination regarding their jurisdiction to award interest, the accrual period, and the applicable interest rate.