The appeal concerned an arbitrator's jurisdiction to award compound interest of JUSD 214,512,232 to YPSA on a principal award of JUSD 24,325,000.
In a welcome judgment, the Privy Council held that arbitrators have no general discretion to award compound interest. Without an express provision in the contract, or a proven claim for interest as damages, the arbitrator's power was limited to being able to proceed, by analogy with the court's limited statutory power, to award simple interest on sums awarded.
The case serves to clarify the law on an arbitrator's power to award compound interest in Jamaica where interest can swiftly exceed any principal sums awarded.
Nick Storrs, senior associate at Signature Litigation commented: "This is another important case for Jamaica on the issue of compound interest, which has been causing serious issues to be litigated in the banking and business sectors."
Graham Huntley and Nick Storrs of Signature Litigation LLP and Julianne Mais-Cox and John Vassell QC of Dunn Cox instructed Stuart Ritchie QC and Alexander Robson of Littleton Chambers to appear on behalf of the National Housing Trust.
This news item was also covered in The Barrister here, and the Jamaica Gleaner here.