Disputes Quick Read – 12 / 34 观点
We recently updated you on Dodika Limited & Others v United Luck Group Holdings Limited  EWHC 2101 (Comm) – a decision where we obtained summary judgment for the release of USD 50 million of the sale proceeds for the selling shareholders in Outfit7, creators of the Talking Tom digital games.
One of the issues that needed to be decided after the Dodika judgment was what interest rate should apply to the USD 50 million that had been held in escrow. Let's take a closer look at how this issue was ultimately resolved and its potential impact on future cases.
The parties agreed that interest should be awarded from the date on which the funds should have been released from the escrow account (1 July 2019), but did not agree on the applicable interest rate. It was a choice between US Prime Rate (which we argued) and the Bank of England base rate plus 1% (which the defendants argued); the difference was around USD 2 million.
Following a consequentials hearing on 9 September 2020, the court awarded interest at the US Prime rate and reiterated that this is the conventional rate to be applied to an award in US Dollars.
As highlighted in the Dodika interest judgment ( EWHC 2535 (Comm)), if you have an award in USD, you should consider the following points when arguing the applicable interest rate:
This judgment is a helpful restatement of the law on interest applicable to US dollar awards. Given the comparatively high US Prime rate – the applicable rate for the period in this case ranged from 5.5% to 3.25% – compared to Bank of England base rate, the difference in the amount of interest you'll receive can be significant.
If you'd like to discuss the issues raised in this article in greater detail, please contact Laurence Lieberman in our Disputes and Investigations team.
作者 James Bryden
作者 Stuart Broom
The Future of Litigation