Farstad Supply AS v Enviroco Ltd [2011] ScotCS CSOH_153 (14 September 2011)

Farstad Supply AS v Enviroco Ltd [2011] ScotCS CSOH_153 (14 September 2011)

The judicial rate of interest should be applied from 31 December 2002 to 4 December 2008 (8% per annum), and thereafter a reduced rate of 4% per annum until the date of interlocutor, reflecting the mismatch between judicial and market rates post-2008. Post-decree interest remains at the judicial rate.

Citation
[2011] ScotCS CSOH_153
Parties
Pursuer: Farstad Supply AS; Defender: Enviroco Limited
Jurisdiction
Scotland
Judgment Date
14 September 2011
Procedural Posture
Commercial Damages Action / Post Settlement, Determination of Interest Rate
Outcome
Interest awarded on damages at differentiated rates; case put out by order for discussion of draft interlocutor.
Legal Topics
Interest on Damages, Judicial Rate of Interest, Compensatory Principle, Statutory Discretion
Commercial Law Damages Interest Interest on Damages Judicial Rate of Interest Compensatory Principle Statutory Discretion

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Parties

Farstad Supply AS

Pursuer

Enviroco Limited

Defender

Procedural Posture

Commercial Damages Action / Post Settlement, Determination of Interest Rate

Legal Issues

  1. 1 What is the appropriate rate of pre-decree interest under section 1 of the Interest on Damages (Scotland) Act 1958 as amended?
  2. 2 Should the judicial rate of interest be applied or adjusted to reflect market rates?

Ratio Decidendi

The judicial rate of interest should be applied from 31 December 2002 to 4 December 2008 (8% per annum), and thereafter a reduced rate of 4% per annum until the date of interlocutor, reflecting the mismatch between judicial and market rates post-2008. Post-decree interest remains at the judicial rate.

Court Disposition

Interest awarded on damages at differentiated rates; case put out by order for discussion of draft interlocutor.

Orders

  • Enviroco to pay Farstad £1,750,000 in damages.
  • Interest at 8% per annum from 31 December 2002 to 4 December 2008.