Tetley (2002) introduction to conflict of laws 5
Date of Conversion for Purpose of Enforcement (see general national laws above)
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Date of Conversion for Purpose of Enforcement (see general national laws above)Where a debtor must purchase the foreign currency in order to pay the judgment debt voluntarily, the conversion date will, of course, be the date on which the foreign currency is so purchased. Where however a debtor refuses or neglects to comply voluntarily with the judgment there is a problem as to the date of conversion: United Kingdom – before Milangos it was widely held that the conversion date could be either the date of the breach of the contract or the date of the tort (“breach date rule”). The exchange rate when judgments are ordered in foreign currency is now understood to be the calculated where enforcement is necessary on the date of payment – meaning the date on which the enforcing court authorizes payment in terms of sterling. Note: judgments cannot be enforced unless they are converted into pounds sterling. Canada – common law courts have generally ordered the conversion as of the date payment should have been made or the date the loss was incurred (i.e. the breach date). United States – The place of breach would usually determine the exchange date (breach date rule). A judgment rendered in foreign currency must be satisfied either in that currency or in the US$ equivalent. France – Great liberty has been given in France as to the date of conversion. Recognition of Foreign Judgments Rendered in a Foreign Currency Quebec – CCQ Art. 3161 – “Where a foreign decision orders a debtor to pay a sum of money expressed in foreign currency, a Quebec authority converts the sum into Canadian currency at the rate of exchange prevailing on the date the decision became enforceable at the place where it was rendered.” US – requires judgment enforcing a foreign money judgment expressed in foreign currency permit the foreign judgment to be satififed either in that currency or in US dollars at the option of the debtor. InterestCivil Law, Common Law & AdmiraltyCivil Law – Interest in the civil law is awarded as part of the perte de gain to which claimants in contract and in delict are entitled. In the civil law, interest is payable as of right where the debtor has delayed in performing his obligation to pay a sum of money (French CC Art. 1153 – no proof of loss required). CCQ – 3161 on foreign currency 10(1)(c) of Rome Convention – assessment of damages is included in articles 3 and 6-12…only reads with contract…damages with closest and most real connection Common Law – Common law jurisdictions have been more restrictive as to interest. UK – awarding of interest discretionary, not as of right (President of India v. La Pintada, 1985). Canada – despite the general common law reluctance, interest would be payable “in all cases in which it has been usual for a jury to allow it.” (Judicature Act, 1837). This did not normally mean pre-judgment interest (Bradley v. Bailey, 1922) Admiralty – Following the civil law tradition, interest has been an integral part of damages in Admiralty (The Northumbrica, 1869). Confirmed that this is part of the right to damages once judgment is handed down. Pre-judgment Interest Tetley – Another indefensible rule of practice refused pre-judgment interest, although admiralty has long permitted it as an integral part of damages. It should be awarded except in exceptional circumstances, because the creditor has been deprived of the use of his money. (Davie Shipbuilding Limited v. The Queen, 1984) US courts have in general ruled that pre-judgment interest should be awarded to provide full restitution. Rate of InterestPre-judgment Interest Canada: Jurisprudence is to the effect that the rate of interest is established by the court at its own discretion. Federal Court has held that rate prescribed in Interest Act (5%) should apply. USA: Left to discretion of judge or jury. General principles it that the rate should be “measured by interest on short-term, risk-free obligations,” so as to provide the plaintiff with the same income which the damages awarded would have earned (reasonable person?). Normally granted from the date of the loss. Tetley – should be awarded as an integral part of damages… Post-judgment Interest On US maritime tort claims is governed by a US state and accrues from the date of the judgment at a “rate equal to the coupon issue yield equivalent of the average accepted auction price for the last auction of 52 week US Treasury Bills settled immediately prior to the date of the judgment.” A federal statutory rule. Tetley – should be awarded at the average prime bank rate of the currency of the loss for the period since the date of judgment. Conflict of Laws & InterestCommon Law: the right to interest has traditionally been regarded as subject to the proper law of the contract, whether for recovery for contractual debt or for breach. The rate of interest, as opposed to the right to claim it has been held to be governed by the proper law of the contract as regards the contract debt itself. See article 10(1)(c) Rome Convention, 1980). In tort some courts have held this subject to the law dealing with substantive tort issues, but double actionability may make this dependent on right to interest under both laws of the act and of the forum. The rate of interest has also been held to be governed by the proper law of the contract – for breach, the law of the forum has been applied because interest rate is a measure of damages and procedural. The position on tort remains unclear. Civil Law: Damages (including interest) for breach of contract is assessed in accordance with the proper law of the contract. For delict, lex loci delicti commissi is determinative of damages and interest. Rome Convention, 1980 – law of K governs consequences of breach…see above. US – both right to recover pre-judgment interest and the rate of such interest are substantive matters, subject to the proper law. Post-judgment interest is held to be procedural and of the forum. Tetley’s Conclusion on p.759. 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