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To be cited as: CISG-AC Opinion No. 14, Interest under Article78 CISG, Rapporteur: Professor Doctor Yeşim M. Atamer, Istanbul Bilgi University, Turkey. Adopted unanimously by the CISG Advisory Council following its 18th meeting, in Beijing, China on 21 and 22 October 2013
Reproduction of this opinion is authorized
INGEBORG SCHWENZER, Chair
YESIM M. ATAMER, ERIC BERGSTEN, JOACHIM BONELL, MICHAEL BRIDGE, ALEJANDRO GARRO, ROY GOODE, JOHN GOTANDA, HAN SHIYUAN, SERGEI LEBEDEV, PILAR PERALES VISCASILLAS, JAN RAMBERG, HIROO SONO, CLAUDE WITZ, Members
SIEG EISELEN, Secretary
Article 78 CISG
If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74.
1. All aspects of interest are governed by the Convention and the general principles on which the Convention is based.
2. Two different approaches to the award of interest must be distinguished: Whereas Article 84 has a restitutionary character and reflects the idea of disgorgement, Article 78 follows similar principles to damages and aims at compensation.
3. Interest starts to accrue under Article 78 from the moment any sum is in arrears. For example, a sum is in arrears when:
a. payment of the purchase price ought to have been made;
b. liability in damages arises on the occurrence of loss;
c. payment of a claim for reimbursement ought to have been made.
4. Any monetary obligation, liquidated or unliquidated, can bear interest.
5. Parallel to Article 59 no further requirement, such as request or demand for payment or putting in default, or any compliance with formalities, is needed for interest to start accruing.
6. Interest ceases to accrue when the obligation to pay is extinguished.
7. The obligation to pay interest under Article 78 remains notwithstanding an exemption from paying damages under Article 79. However, interest does not accrue when and in so far as the failure to pay the monetary obligation was caused by the act or omission of the creditor or when the debtor has exercised its right to suspend performance.
8. The rate of interest may be determined by the agreement of the parties.
9. In the absence of such agreement, the applicable rate of interest is the rate which the court at the creditor’s place of business would grant in a similar contract of sale not governed by the CISG.
10. Compound interest may be payable if the parties have agreed to its payment, or if the court at the creditor’s place of business would allow compound interest in a similar contract of sale not governed by the CISG.
11. Interest shall be paid in the same currency and at the same place, complying also with the same payment formalities, as the principal sum.
12. Any loss suffered by the creditor not recoverable as interest under Article 78 may be recovered as damages in accordance with Article 74.
OPINION [BLACK LETTER TEXT]
“Treaties are not just dry parchments. They are instruments for providing stability to their parties and to fulfill the purposes which they embody. They can therefore change over time, must adapt to new situations, evolve according to the social needs of the international community and can, sometimes, fall into obsolescence.”
1.1 Whenever the purchase price or any other monetary obligation is not paid on time the creditor will encounter losses simply due to the fact of not being able to use this money. Article 78 CISG acknowledges the right of the creditor to claim interest in such cases and to even request compensation of any further loss according to Article 74 CISG. However, Article 78 leaves one major issue unresolved, that is the percentage rate of interest. Given that there is an ongoing debate in jurisprudence and doctrine regarding the applicable interest rate this Opinion aims at proposing an acceptable solution based on the general principles of the Convention (Art 7). In this endeavor the Advisory Council is led by the above statement of Georg Nolte and favors to read the Convention in a manner so as to adapt it according to the needs of the international community for legal certainty.
1.2 Article 78 is the only provision in Part III/Chapter V/Section III of the Convention and follows immediately the provisions regarding damages in Section II. This placement, and the reference to the general norm on damages (Article 74) in Article 78 indicate that interest and damages claims are at least based on parallel value judgments and are both mainly aimed at compensating a loss. Another corresponding feature of these provisions is the abstract calculation method: both, Article 76 as well as Article 78 calculate the payable amount by the obligor independent of the actual loss of the obligee.
1.3 Even though a specific interest rate is not provided for in Article 78 the major aim of an interest claim to compensate the loss of the creditor, the general principle of full compensation anchored in Article 74 and the abstract calculation method provided in Article 76 offer enough reference points to determine the applicable rate based on the CISG.
II. Drafting History
2.1 The predecessor of the CISG, the Uniform Law on the International Sale of Goods (ULIS, 1964), provided in Article 83 that a buyer, who was delayed in paying the purchase price, had to pay interest ‘on such sum as is in arrears at a rate equal to the official discount rate in the country where [the seller] has his place of business […] plus 1%’. When the first ‘Working Group on the International Sale of Goods’ was set up in 1969 by the United Nations Commission on International Trade Law ("UNCITRAL") with the mandate of reviewing the ULIS, it proposed in its "Draft Convention on the International Sale of Goods” of 1976 to maintain Article 83 to a great extent and to only add following sentence: ‘but his entitlement is not to be lower than the rate applied to unsecured short-term commercial credits in the country where the seller has his place of business.’
2.2 But due to irreconcilable divergences among the national delegations the interest question provoked far more difficulties than was probably expected. Whereas some countries were challenging a right to interest in general, others were critical about the rate proposed. The discussions led to the result that the two following Draft Conventions of 1977 and 1978 excluded a general provision regarding the duty to pay interest in case of default. Both Draft Conventions only provided for a rule similar to Article 84 CISG, which obliges the seller to pay interest on the purchase price whenever it is under the duty to refund the price after avoidance of the contract.
2.3 During the Diplomatic Conference in Vienna in 1980 the issue was raised once again. Three different alternatives to define the rate of interest were proposed and discussed extensively, but a consensus could not be reached. Ultimately, the Drafters acknowledged the principle of a right to claim interest on any monetary obligation that is due, but did not expressly define the rate of interest or the modalities of payment.
III. Interpretation of Article 78
1. General remarks
a. Urgent need for a uniform interpretation of Article 78
3.1 Looking at the drafting history of Article 78 CISG one might be inclined to interpret the provision such that, other than establishing the right to request interest, it deliberately leaves all details to the national law applicable “by virtue of the rules of private international law” (Art. 7(2), 2nd part of sentence). Yet an overview of case law regarding Article 78 proves that there are plenty of other interpretations applied. A study of 274 decisions shows drastically varying solutions, especially regarding the relevant rate of interest. Whereas some national courts regularly employ the interest rate defined by the law applicable according to the private international rules of the forum; others choose to fill in the gap of Article 78 by applying the interest rate at the creditor or debtor’s place of business, or the Libor/Euribor rate, or the rate defined in Article 7.4.9 Unidroit PICC . The interpretation of decisions regarding Article 78 of arbitral tribunals is more problematic still given that they often do not even explain which law or principle the applied interest rate is deduced from. Also issues such as when interest starts accruing or if compound interest can be awarded are debated topics. This very fragmented picture calls for a uniform interpretation of Article 78. This is especially so given the lack of uniformity might induce the parties to base their claims on the law most profitable for them regarding the interest rate. This Advisory Council Opinion is primarily driven by the need to provide a solution that would be generally acceptable in CISG doctrine and case law.
b. Basic assumptions of this Opinion
3.2 CISG literature today is almost unanimous in the conclusion that recourse to any national law, which must be defined according to private international law (PIL) rules, is an ultima ratio solution for gap filling under the Convention and should be avoided as far as possible. Deducing general principles from the CISG is always the first priority (Art. 7(2), 1st part of sentence) given that the success of uniform law lies in its independence from national law applicable through PIL provisions. In order to foster uniformity this Opinion prefers to seek general principles of the CISG to assist in concretizing the details of an interest claim. This view is encouraged by the fact that the Drafters of the Convention, although unable to devise an answer to most problems relating to interest claims, still chose not to list the interest issue under Article 4, that is, among the topics expressly excluded from the CISG. This decision can be interpreted as a delegation of this issue to future adjudicators. To arrest the development of the CISG in the late 1970’s cannot have been the purpose of the drafters.
3.3 In order to ascertain which general principles guide interpretation of Article 78, the purpose served by an interest claim must first be defined. The major reason why interest is awarded is to compensate presumed losses incurred by the creditor due to its inability to use the money. By way of interest payment the creditor is placed in the same pecuniary position it would have been in had the payment of the sum been done on time, that is, paid on the due date. The interest claim presupposes that the creditor would have reinvested the money. Therefore the debtor must compensate the creditor for the time value of the money. A second justification for an interest claim is to prevent unjust enrichment. Any person, who keeps another’s money for longer than it is legally being entitled will benefit from the legal fruits (fructus civiles) of this money in an unjust way. Under such circumstances the interest claim serves to transfer the wealth to the person to whom it belongs. Either way, granting an interest claim has also a deterrent effect. The knowledge of a potential interest claim creates an incentive to pay money back or to solve litigations quicker.
3.4 When analyzing Article 78 it can be observed that this interest claim is not based on the idea of disgorgement or unjust enrichment. The creditor is not claiming the profit on a sum, which the debtor has used in good faith for some time without knowing that it will have to return the money. In fact, this is the principle on which Article 84 is based. There, in the event of avoidance, the original contractual relationship is transformed into a restitutionary relationship. This means that the buyer is obliged to return the goods to the seller and the seller to refund the price paid by the buyer. In addition, the seller must pay interest on the price from the date the price was paid, and the buyer must account for all benefits it has derived from the goods from the time of delivery. But since both of them made use respectively of the money and the goods in a period during which they were not under the duty to restitute them, the calculation of benefit and interest is only focused on the question what the restituting parties have earned or might have earned. The reference point is the debtor and not the creditor.
3.5 However, Article 78 does not parallel the idea of disgorgement that is reflected in Article 84. The reference point of Article 78 is the opposite; the loss of the creditor is the focal point. The provision is concerned with compensating losses of the creditor and putting the creditor in the same position as if timely payment had been made. The resemblance of this interest claim to a damages claim is obvious. The positioning of the provision in the Convention (after Section II on damages and before Section IV on exemption from paying damages), and also the wording of the article, which underlines that the claimant may always request additional damages according to Article 74 if interest does not suffice for compensation, support the view that the connection to damages is at the foreground. In fact, if Article 78 were based on the concept of providing compensation for benefits unjustifiably received, there would have been no need to separately introduce the duty to pay interest when refunding the price in Article 84.
3.6 Given that Article 78 is not concerned with restitution but with compensation, this Opinion considers it appropriate that questions regarding interest claims be resolved by utilizing the full compensation principle of Article 74, which declares that damages consist “of a sum equal to the loss”. This principle reflects the idea that the aggrieved party is entitled to claim compensation for all losses it has suffered and gains of which it was deprived as a result of the breach. Article 74 aims at placing the injured party in the same pecuniary position it would have been in had the contract been properly performed. This means for the application of Article 78 that the moment in time the creditor first encounters a monetary loss, and the time value of the money for the creditor, are the main features in determining the exact amount of loss.
3.7 The time value of the sum due has to be determined in an abstract way parallel to Article 76. This provision stipulates that in case of breach of contract there is no need to conclude a substitute transaction in order to calculate the loss of the obligee as long as the goods have a current price. The obligee can right away ask for the difference in the market price at the time the contact was avoided and the contractual price. This value difference is irrefutably presumed to be the loss of the obligee. Parallel to this idea it can be assumed that the interest claim in Article 78 gives the creditor the right to the time value of the money. Other than Article 76 however Article 78 does not mention the place which determines the ‘current price’, in our case the ‘current time value of money’. But given that the loss of the obligee is at the forefront the time value at the place of business of the obligee (creditor) seems to be the most plausible choice. This will be further elaborated on below under paras 3.35-3.44.
3.8 Article 78 CISG, like the other provisions in Part II and III of the CISG, is a substantive law provision. The Drafters of the Convention have followed the Civil Law approach and classified interest claims as matter of substantive law. Interest will in principle accrue from the moment payment is in arrears up to the moment payment has been finally effected. Given that actual payment will almost always happen after the award is rendered, a recalculation will be needed during the enforcement procedure. In most of the Civil Law countries enforcement officers will make this calculation on the basis of the interest rate fixed in the award. However, several countries and especially Common Law countries work with post-judgment interest statutes. That means that the pre-judgment interest runs only until an award is given, and from that moment onwards the post-judgment interest rate fixed in the relevant statute finds application until the debt is paid in full. Obviously these provisions are part of the procedural rules of these particular countries, and also apply to enforcement of a foreign award. It must be submitted that application of these domestic rules cannot be superseded by the CISG given that the CISG no longer governs enforcement proceedings. Therefore, if the enforcement rules of a country opt for the application of the pre-judgment interest rate until actual payment, then the CISG interest rate provision will also continue to have effect until that moment. However, if the enforcement rules opt for a post-judgment interest rate, then the CISG interest rate provision will only have effect until the award is rendered.
2. Prerequisites of being in arrears according to Article 78 CISG
a. Non-payment of purchase price or any other sum
3.9 The wording of the CISG is very clear in that “any” sum in arrears triggers the accrual of interest. This means that the reason why the sum became due is in general of no importance. It needs only to be an obligation which commits the debtor to pay a monetary amount to the creditor. Whether or not this sum is the purchase price, expenses incurred by the seller e.g. under Article 85, or damages that must be paid to the buyer because of non-conforming delivery makes no difference. Contractually agreed sums like penalties, which are not paid on time also fall under the scope of this provision.
3.10 Interpretation of the term “sum” in a way that includes any unliquidated claim like damages is to be preferred. Despite the fact that the breaching party will not know the exact sum to be paid as damages, interest will start to accrue from the moment of loss. The debtor can only impede this result by paying an amount, which it thinks is close to the loss incurred by the creditor. The risk of paying too much or too little is on the debtor. Today the prevailing view in CISG literature and case law accepts that any damages claim, the amount of which is still to be defined by a court or arbitral tribunal, is subject to Article 78 without any exception. In fact, the legislative history does not reveal any argument against this interpretation. Given that the loss of the creditor arises regardless of the fact that the amount is not yet precisely ascertained, and the non-performing party enjoys the benefit of the sum it did not pay, it makes sense to accept that even unliquidated sums can accumulate interest.
3.11 As already pointed out in para 3.4 supra, interest on a “sum” that must be paid back is sometimes governed by Article 84 instead of Article 78. Therefore, the sphere of application of Article 78 and 84 must be ascertained according to the underlying value judgment. Whenever disgorgement of accrued benefits is in the foreground, Article 84 applies. That means in case of partial or total avoidance or price reduction, which can be viewed as a partial avoidance, the amount must be refunded with interest defined according to Article 84. This interest starts accruing from the moment of payment of the original amount to the party now required to disgorge. However, from the moment of declaration of avoidance or price reduction, the payable sum becomes due, which means that from this very moment onwards, the applicable interest rate will succumb to Article 78. If the sum is not refunded immediately the debtor is in arrears and interest in accordance with Article 78 applies.
b. Non-payment at maturity date
3.12 Interest starts accumulating from the moment the original sum is due but not paid. Different payment methods and, in particular, cashless payment methods may be used in international trade. In case of fund transfer via credit institute, the debtor has performed in a timely manner only if the transfer to the financial institution of the creditor becomes effective on the due date at the latest. It does not suffice that the payment order was given timely to the financial institution of the debtor. However, in case payment is made by way of payment order directed to a paying agent, like a cheque or letter of credit, it is sufficient that the order arrives at the creditor’s place of business on the due date. If these instruments are subsequently not honored, interest will start accruing retrospectively from maturity, as the debtor will be considered in arrears from that moment onwards.
bb. Maturity date
3.13 Ascertaining the exact date of maturity for every type of sum is crucial, given that interest will start accumulating from that moment onwards. In general, granting of an additional period for payment according to Article 47 or Article 63 does not change the maturity date. If the debtor wants to extinguish the obligation, it must pay the amount due and also the interest accrued on this amount during the additional period given. However, the parties are obviously free to postpone the time of payment by subsequent agreement. In such case interest will start accruing on the new payment date if the debtor does not fulfill its obligation.
aaa. Purchase price
3.14 The purchase price matures at the moment defined either by the contract or by the CISG. If there is no special stipulation in the contract, the due date must be ascertained according to Article 58. This provision establishes concurrent performance as the rule. Therefore the payment duty must be fulfilled, at the latest, when the seller places either the goods or the documents controlling their disposition at the buyer’s disposal.
3.15 If the buyer declares before the due date that it will not perform (anticipatory breach) the starting point for the accrual of interest must be defined according to the remedy sought. In case the seller does not make use of its right to avoid the contract, but insists on payment of the purchase price (for example, because delivery already took place), interest still starts to accumulate from the due date onwards. Even if it is obvious that the buyer does not want to pay, the seller will not encounter any losses due to nonpayment until the due date. However, if the seller prefers to avoid the contract, it may claim damages and interest from the date when the loss occurred, that is, before due date.
3.16 This Opinion shares the view that unliquidated sums can also accrue interest. Therefore the moment a damages claim starts to bear interest is crucial. Whereas there are some decisions which prefer to set the date of maturity for unliquidated sums as the date proceedings began, or when the debtor was informed of the claim, the preferable view is that they mature at the moment the loss occurred. Given that the reason for granting an interest claim is to compensate a party for its inability to use the money, the moment of loss ought to be the decisive moment in time. Loss begins at the moment the deprivation occurs. This moment may coincide with the moment of breach of contract but may also arise at a later date. If, for example, a party has delivered non-conforming goods, which harmed the property of the buyer, loss will arise at the moment of the harm, and the claim for interest will arise at the same moment. But if the buyer had to pay a penalty to a third party due to breach of the seller, interest will start accruing from the moment payment was made to the third party. Parallel to this, the party avoiding the contract will have a right to interest either from the moment an actual cover transaction was effected and the price paid according to Article 75 or from the moment of avoidance if the abstract calculation method is applied (Art. 76). In case an anticipatory breach triggers avoidance of contract, loss will occur before due date. When, for example, the conduct of the seller shows clearly that it will commit a fundamental breach of contract, the buyer may avoid the contract and enter a replacement contract within a reasonable time and in a reasonable manner. In such case interest starts accruing from this moment onwards.
ccc. Other sums
3.17 Expenses which the creditor has expended that must be later compensated by the debtor are another type of sums in arrears. Typically these are encountered by the buyer due to the seller’s exercise of its right to cure (Articles 34, 37 or 48), or the additional costs of payment the buyer had to bear due to change of place of business of the seller (Art. 57), or storage costs arising under Article 86 where the seller has delivered non-conforming goods which the buyer was obliged to preserve. In all these instances the obligation to compensate the losses of the creditor arises at the moment of actual expenditure by the creditor. From that moment onwards interest also starts to accumulate.
3.18 Other than expenses, any payment duty imposed upon the debtor in the contract may also give rise to an interest claim if it is not fulfilled on time. For example, any contractual penalty not paid upon maturity will also start to accumulate interest from the time it matures.
c. No other requirement for claiming interest
3.19 Article 78 stresses that the amount payable must be “in arrears” in order for interest to start accumulating. Maturity is the only requirement mentioned in the provision. Even though different jurisdictions have different prerequisites for default by the debtor, the CISG abstains from introducing any of these. In particular, no notice of default is needed. Article 59 clearly states that the buyer must pay the price “without the need for any request or compliance with any formality on the part of the seller”. This is also the rule for any other sum that is due. From the moment the monetary claim arises and matures interest will start accumulating. The creditor does not need to give a notice or remind the debtor of the delay. In fact, the tendency to renounce the need for admonition is evident in regard to business transactions in recent soft law instruments as well as law reform projects. Article 7.4.9 PICC, Article 9:508 PECL, Article 166 (1) CESL and Article 3 (1) EU Late Payment Directive follow this trend. The only exception to this could be where a contractual stipulation introduces special requirements before interest can begin to accrue.
3.20 The creditor does not need to prove the actual loss in order to be awarded interest. For any interest claim it is irrefutably presumed that the creditor has encountered a loss due to the lost opportunity to use the money. The principle of Article 74 that damages consists of ‘a sum equal to the loss’ is lifted for interest claims as the creditor may be awarded interest despite not incurring any actual loss. The compensation is a lump sum one where the creditor need not prove the actual damage incurred. In fact, this is exactly the idea embedded in an abstract loss calculation according to Art. 76. There too the obligee needs not to prove its actual loss but just the market price of the goods and its difference to the contractual price.
3.21 Third, liability for interest is strict liability, as it is for any other non-performance liability under the CISG. Nonetheless, except for when additional losses are claimed for interest under Article 74, the possibility of exemption in Article 79 does not apply to sums due but not paid on time. Whether or not the debtor intentionally kept the money or did everything to overcome an event impeding payment makes no difference. Further, although the creditor may be barred from claiming damages under Article 79, it may still seek interest on, for example, the purchase price not paid when due.
* The CISG-AC started as a private initiative supported by the Institute of International Commercial Law at Pace University School of Law and the Centre for Commercial Law Studies, Queen Mary, University of London. The International Sales Convention Advisory Council (CISG-AC) is in place to support understanding of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the promotion and assistance in the uniform interpretation of the CISG.
At its formative meeting in Paris in June 2001, Prof. Peter Schlechtriem of Freiburg University, Germany, was elected Chair of the CISG-AC for a three-year term. Dr. Loukas A. Mistelis of the Centre for Commercial Law Studies, Queen Mary, University of London, was elected Secretary. The founding members of the CISG-AC were Prof. Emeritus Eric E. Bergsten, Pace University School of Law; Prof. Michael Joachim Bonell, University of Rome La Sapienza; Prof. E. Allan Farnsworth, Columbia University School of Law; Prof. Alejandro M. Garro, Columbia University School of Law; Prof. Sir Roy M. Goode, Oxford, Prof. Sergei N. Lebedev, Maritime Arbitration Commission of the Chamber of Commerce and Industry of the Russian Federation; Prof. Jan Ramberg, University of Stockholm, Faculty of Law; Prof. Peter Schlechtriem, Freiburg University; Prof. Hiroo Sono, Faculty of Law, Hokkaido University; Prof. Claude Witz, Universität des Saarlandes and Strasbourg University. Members of the Council are elected by the Council.
At subsequent meetings, the CISG-AC elected as additional members Prof. Pilar Perales Viscasillas, Universidad Carlos III, Madrid; Professor Ingeborg Schwenzer, University of Basel; Prof. John Y. Gotanda, Villanova University; Prof. Michael G. Bridge, London School of Economics; Prof. Han Shiyuan, Tsinghua University and Prof Yesim M. Atamer, Istanbul Bilgi University, Turkey. Prof. Jan Ramberg served for a three-year term as the second Chair of the CISG-AC. At its 11th meeting in Wuhan, People’s Republic of China, Prof. Eric E. Bergsten of Pace University School of Law was elected Chair of the CISG-AC and Prof. Sieg Eiselen of the Department of Private Law of the University of South Africa was elected Secretary. At its 14th meeting in Belgrade, Serbia, Prof. Ingeborg Schwenzer of the University of Basel was elected Chair of the CISG-AC.
1. Georg Nolte, Rep. of the Int’l Law Comm’n, 60th Sess., May 5–June 6, July 7–Aug. 8, 2008, U.N. Doc. A/63/10 (here reproduced from Arato, Subsequent Practice and Evolutive Interpretation: Techniques of Treaty Interpretation over Time and Their Diverse Consequences, 9 The Law and Practice of International Courts and Tribunals (2010), pp. 443–494, at 444.
2. This was already the principle under Roman law: minus solvit, qui tardius solvit = he that delays to pay what is due, pays less than is due, Digest, 50,16,12,1 (Ulpian), cf. Gelzer, Verzugs-, Schadens- und Bereicherungszins, 2010, para 19.
3. If not indicated otherwise all article references are relating to the CISG.
4. Cf. for details on the drafting history of Article 78 CISG Kizer, Minding the Gap: determining Interest Rates Under the UN Convention for the International Sale of Goods, 65 U. Chi. L. Rev. 1279 (1988), 1285-1286; Mazzotta, CISG Article 78: Endless disagreement among commentators, much less among the courts, 2004 (here cited from: http://www.cisg.law.pace.edu/cisg/biblio/mazzotta78.html - intro) para III.
5. Cf. case study attached to this Opinion. Cf. for other case studies Liu, Recovery of Interest, Nordic Journal of Commercial Law of the University of Turku, 2003 (here cited from http://cisgw3.law.pace.edu/cisg/biblio/liu.html) and Behr, The Sales Convention in Europe: From Problems in Drafting to Problems in Practice, 17 Journal of Law and Commerce (1998) 263-299 (here cited from http://cisgw3.law.pace.edu/cisg/biblio/behr.html).
6. International Institute for the Unification of Private Law (Unidroit), Unidroit Principles of International Commercial Contracts 2010 (PICC).
7. Cf. on the discretion of Arbitral Tribunals in determining the applicable interest rate Gotanda, Awarding Interest in International Arbitration, 90 Am. J. Int'l L. 1996, pp. 40-63, at p. 50 et seq.
8. Cf. e.g. Schwenzer/Hachem in: Schlechtriem/Schwenzer (eds.) Commentary on the UN Convention on the International Sale of Goods (CISG), 3rd ed., 2010, Art. 7 para 42; Honnold/Flechtner, Uniform Law for International Sales under the 1980 United Nations Convention, 4th ed., 2009, para 102; Magnus in: Staudingers Kommentar zum Bürgerlichen Gesetzbuch, 2013, Art. 7, Rn. 58; Brunner, UN-Kaufrecht – CISG, 2004, Art. 7 para 6; Huber/Mullis, The CISG, 2007, p. 34.
9. Parallel Djordjevic in: Kröll/Mistelis/Perales Viscasillas (eds.) UN Convention on Contracts for the International Sale of Goods (CISG), 2011, Art. 4 para 45. Cf. for a rejected proposal of the United Kingdom to introduce a provision in Part I, chapter I that “this Convention does not affect any right of the seller or buyer to recover interest on money” the Official Records of the UN Conference on Contracts for the International Sale of Goods, 10 March-11 April 1980, published in 1991, p. 137-138.
10. Kizer (fn. 4) p. 1295. Cf. regarding dynamic (evolutive) treaty interpretation Arato (fn. 1) p. 465 et seq.; Gardiner, Treaty Interpretation, reprint 2011, p. 253 et seq.
11. Cf. in detail Gotanda, A Study of Interest, Villanova University School of Law Public Law and Legal Theory Working Paper No. 2007-10, p. 4; Schwenzer/Hachem/Kee, Global Sales and Contract Law, 2012, para 46.12-16.
12. Cf. in detail CISG-AC Opinion No. 9, Consequences of Avoidance of the Contract, Rapporteur: Professor Michael Bridge, London School of Economics, London, United Kingdom, para 3.7.
13. Cf. also Corterier, Interest in Uniform Application – How to Solve the UN Sales Law's Interest Rate Problem Under Article 78 CISG and Article 84 CISG, Review of the Convention on Contracts for the International Sale of Goods (2002-2003)  1-18, para II bb (here cited from http://www.cisg.law.pace.edu/cisg/biblio/corterier1.html).
14. China International Economic and Trade Arbitration Commission [CIETAC], 20.07. 2005, CISG-online 1708.
15. Cf. also Honnold/Flechtner (fn. 8) para 421.
16. Schwenzer/Hachem/Kee (fn.11) para 46.06.
17.Cf. for this view infra fn. 58.
18. Parallel view Serbian Chamber of Commerce Arbitration, 19.10.2009, CISG-online 2265.
19. Cf. CISG-AC Opinion No. 6, Calculation of Damages under CISG Article 74. Rapporteur: Professor John Y. Gotanda, Villanova University School of Law, Villanova, Pennsylvania, USA. Article 7.4.2 Unidroit PICC and Article 9:502 PECL (Principles of European Contract Law) work with the same principle.
20. Kröll/Mistelis/Perales Viscasillas/Gotanda (fn. 9) Art. 78 para 1; Staudinger/Magnus (fn. 8) Art. 78 para 1.
21. Cf. on this provision Atamer, Die abstrakte Schadensberechnung und ihr Verhältnis zum Anspruch auf den entgangenen Gewinn am Beispiel von Artikel 74 und 76 CISG, in: Liber Amicorum Ulrich Magnus, Mankowski/Wurmnest (eds,.), 2014, pp. 154-160.
22. Schwenzer/Hachem/Kee (fn.11) para 46.20.
23. Gelzer (fn. 4) para 412.
24. Cf. in detail Gotanda, Conflict of Interest: Article 78 CISG and Post-Judgment Interest Statutes, in: Büchler/Müller-Chen (eds.), Private Law, National-Global-Comparative, Festschrift für Ingeborg Schwenzer, 2011, pp. 597-607, at p. 604 et seq.
25. UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, 2012 edition, Art. 78 para 2 (here cited from http://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf).
26. Bacher in: Schlechtriem/Schwenzer (eds.) Kommentar zum Einheitlichen UN-Kaufrecht, 5th ed., 2008, Art. 78 para 10 et seq.; Kröll/Mistelis/Perales Viscasillas/Gotanda (fn. 9) Art. 78 para 9; Thiele, Interest on Damages and Rate of Interest Under Article 78 of the U.N. Convention on Contracts for the International Sale of Goods, 2 Vindobona Journal of International Commercial Law and Arbitration (1998), para III/6 (here cited from http://www.cisg.law.pace.edu/cisg/biblio/thiele.html); Staudinger/Magnus (fn. 8) Art. 78 para 8; Gelzer (fn.2) para 173; Brunner (fn. 8) Art. 78 para 3; Huber in: Münchener Kommentar zum Bürgerlichen Gesetzbuch, 6. Aufl. 2012, Art. 78 para 4; Ferrari, in: Ferrari/Kieninger/Mankowski u.a. (eds.), Internationales Vertragsrecht, 2007, Art. 78 para 4.
27. Landgericht Landshut (Germany), 05.04.1995, CISG-online 193 (“According to the prevailing opinion, Article 78 CISG also applies to claims for damages”); Kantonsgericht Zug (Switzerland), 21.10.1999, CISG-online 491; U.S. District Court, N.D. of New York (USA), 07.09.1994, CISG-online 113. However cf. also CIETAC (China), 15.09.2005, CISG-online 1714.
28. Thiele (fn.26) para III/4.
29. Art.7.4.10 Unidroit PICC 2010 expressly accepts that interest on damages for non-monetary obligations can accrue from the moment of breach. The Official Commentary (p. 281) sees this solution even as “the best suited to international trade where it is not the practice for businesspersons to leave their money idle”.
30. But cf. Shanghai New Pudong District People's Court (China), 23.09.2005, CISG-online 1612, where the Court neglected Art. 58 CISG even though it decided that the contract was missing an agreement on the time of payment. The contract was concluded FOB Tianjin and the goods were delivered at Tianjin Port on 21 July 2004. Therefore the purchase price should also have been due on the 21st of July. Instead the Court ruled that: “As to the [Seller]'s claim for interest, because the parties did not reach an agreement on the time of payment in the offer and acceptance, the interest should be calculated from the time when the [Seller] first urged the [Buyer] to make the payment, i.e., 6 September 2004.”
31. The policy choice of the EU Late Payment Directive is different: where the date or period for payment is not fixed in the contract, the creditor is entitled to interest for late payment upon the expiry of a 30-day period which will start in principle following the date of receipt by the debtor of the invoice or an equivalent request for payment (Art. 3(3)(b)(i), Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on Combating Late Payment in Commercial Transactions, OJ 23.02.2011, L48/1). This rule is certainly not applicable to any claim based on the CISG. Cf. in detail Perales Viscasillas, Late Payment Directive 2000/35 and the CISG, 19 Pace International Law Review 2007, pp 125-142, at p. 135.
32. Cf. infra para 3.16.
33. Cf. supra para 3.10.
34. I.C.C. International Court of Arbitration (No. 8786), 01.01.1997, CISG-online 749 (“Defendant has, for the first time, submitted claims against Claimant with a defined amount in its Rejoinder dated..., i.e,, when it substantiated its Answer and Counterclaim. Therefore, Claimant has only known about the exact amount claimed by Defendant at this date. Consequently Defendant may not claim interest on the principal amount prior to [date of Rejoinder”); Audiencia Provincial de Cuenca (Spain), 31.01.2005, CISG-online 1241 (“As the Supreme Court's decision of 14 July 2003 (RJ 2003, 4635) states, the principle of ‘in illiquidis non fit mora’ refers to the situation of the claim of money debts in which, as the claimed amount is unliquidated, its liquidation ought to be done through the proceedings. Therefore, mora solvendi [delinquency of the obligor in complying with its obligations] cannot be appreciated, for the effects of the claim of legal interest”). See also Landgericht Zwickau (Germany), 19.03.1999, CISG-online 519; CIETAC (China), 31.12.1999, CISG-online 1805.
35. Cf. literature cited in fn. 26 and Piltz, Internationales Kaufrecht, 2. Aufl. 2008, para 5-372; Brunner (fn. 8) Art. 78 para 4; Landgericht Landshut (Germany), 05.04.1995, CISG-online 193 (“The claim comes into existence with the occurrence of the loss. On 25 January 1994, the asserted loss had already occurred”); Handelsgericht des Kantons Zürich (Switzerland), 05.02.1997, CISG-online 327 (“The interest on the damage claim is to be paid starting on its maturity date. It becomes due with its emergence. Decisive is the time that the [Buyer] could have realized the lost profit. As the [Buyer] does not substantiate when the profit could have been made, the demand for interest is to be denied”); I.C.C. International Court of Arbitration (No. 9187), 01.06.1999, CISG-online 705 (“interest calculated from the date of occurrence of the damage”); Kantonsgericht Zug (Switzerland), 27.11.2008, CISG-online 2024; Tribunal Cantonal du Valais (Switzerland), 28.01.2009, CISG-online 2025; Serbian Chamber of Commerce Arbitration, 19.10.2009, CISG-online 2265.
36. In that regard the terminology of Article 7.4.10 Unidroit PICC is confusing since the provision sets the “time of non-performance” as the moment interest starts accruing but in the Official Comment it rephrases this as the “date of the occurrence of the harm”.
37. I.C.C. International Court of Arbitration (No. 8740), 01.10.1996, CISG-online 1294 (“This difference was to be set off against the main claim, with interest running from the date the cover purchase was made, 30 January 1995”); Hof van Beroep, Antwerpen (Belgium), 24.04.2006, CISG-online 1258 (“It is accepted that, if there is a resale in the sense of article 75 CISG, the interest runs from the payment of the resale”).
38. Oberlandesgericht Hamburg (Germany), 25.01.2008, CISG-online 1681 (“The claim for interest became mature concurrently with maturity of the claim for the contractual penalty. The claim for the contractual penalty came into existence when the inventory for ice cream production was not installed in a ready-for-use condition at the time stipulated in the contract (mid-April 1995)”).
39. Cf. in detail Jones/Schlechtriem, Breach of Contract, Chapter 15, International Encyclopedia of Comparative Law, 1999, para 66 et seq.; Gotanda (fn. 7) at p. 42 et seq.
40. Gelzer (fn. 2) para 98; Staudinger/Magnus (fn. 8) Art. 78 para 5; Kantonsgericht Zug (Switzerland), 12.12.2002, CISG-online 720; Cour d'appel de Grenoble (France), 29.03.1995, CISG-online 156; Landgericht Flensburg (Germany), 24.03.1999, CISG-online 719; Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce, 27.05.2004, CISG-online 2079. Cf. also UNCITRAL Digest (fn. 25), Art. 78 para 4.
41. Cf. e.g. Schlechtriem/Schwenzer/Mohs (Fn. 8) Art. 59 para 2; Staudinger/Magnus (Fn. 8) Art. 59 para 4.
42. For comparative information see Gelzer (fn. 2) p. 74 et seq. and 119 et seq.
43. Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (CESL), Brussels, 11.10.2011, COM(2011) 635 final. Cf. on this Remien, Zinsen wegen Zahlungsverzug im Vorschlag eines Gemeinsamen Europäischen Kaufrechts (GEKR/CESL) und die Pluralität von dessen Quellen, in: Liber Amicorum Lando, Bonell et al. (eds.), 2012, pp. 335 et seq.
44. See supra fn. 31.
45. Piltz (fn.35) para 5-487.
46. Liu, Recovery of Interest, Nordic Journal of Commercial Law of the University of Turku (2003), para 3.2 (Pace); Mazzotta (fn. 4) para IV.
47. I.C.C. International Court of Arbitration (No. 7585), 1.1.1992, CISG-online 105; Oberlandesgericht Koblenz (Germany), 17.09.1993, CISG-online 91.
48. Kröll/Mistelis/Perales Viscasillas/Atamer (fn. 9), Art. 79 para 1. Cf. Oberlandesgericht Düsseldorf (Germany), 24.04.1997, CISG-online 385; Amtsgericht Willisau (Switzerland), 12.03.2004, CISG-online 961.
49. Cf. Kröll/Mistelis/Perales Viscasillas/Atamer (fn. 48) Art. 79 para 42; Schwenzer/Hachem/Kee (fn. 11) para 46.68; Staudinger/Magnus (fn. 8) Art. 78 para 11; Piltz (fn.35) para 5-486; Liu (fn. 46) para 3.3.
50. In that regard the Arbitral Award of the Hungarian Chamber of Commerce and Industry Arbitration, 10.12.1996, CISG-online 774, which rejects a claim for interest for the period of the UN embargo on Yugoslavia impeding payment of the sales price, does not convince. According to the Tribunal interest on the outstanding amount could only accrue after the UN sanctions were suspended, which is clearly contradicting Article 78.