Title: Dealing with LIBOR Cessation in International Arbitration : Some Suggestions10
Author(s): Badrinath Srinivasan (View Profile)
Journal: Indian Review of International Arbitration
Source: www.iriarb.com
Abstract:
The London Inter-Bank Offered Rate (LIBOR) was one of the most important and widely used interest rate indices in the world. At one point in time, trillions worth contracts world-over were indexed to LIBOR and it was commonly used in high value commercial transactions. Owing to several attempts at manipulation of LIBOR, it ceased to be published in the usual manner in the last few years. However, several long-term agreements and investment treaties referred to LIBOR as the applicable rate. This paper explores how international arbitral tribunals and courts in other jurisdictions have dealt with the cessation of LIBOR. This paper also suggests the way to structure pleadings to address this issue as an award on interest contributes to a substantial portion of an award on damages.
The larger purpose of this paper is to present an overview of how LIBOR cessation has been dealt with by adjudicatory forums, so that this may be of use to courts/ arbitral tribunals, counsels and parties in India and elsewhere on how to deal with the cessation of LIBOR where the concerned contracts/treaties index the interest rate to LIBOR.
Keywords: LIBOR, London Interbank Offered Rate, Interest Rate, Interest Rate Index, Damages, Secured Overnight Financial Rate, SOFR, US Prime Rate.
Cite this as: Badrinath Srinivasan, “Dealing with LIBOR Cessation in International Arbitration: Some suggestions” 4 IRIArb (2024).
*The views expressed are of author(s) only.
