CL-2020-000117 - [2025] EWHC 1620 (Comm)

The issue that I have to resolve concerns from what date and at what rate interest should run on the judgment entered against Mr Serwin in relation to the Optimus Phase. The claimant’s case is that interest should be assessed in accordance with Swedish law; that on that basis interest accrued from the date when the damage was sustained and that the rate that should be applied is that fixed applying Swedish law (Central Bank of Sweden reference rate + 8%). I accept each of those submissions for the following reasons.

It is not in dispute that Swedish law is the lex causae in respect of the Optimus Phase claim. The general issue that arises is whether as a matter of English conflicts law interest issues are to be determined applying the lex causae or the lex fori, which is English law. In my judgement interest issues are to be determined applying the lex causae – see Nicholls & another v. Mapfre España Cia de Seguros y Reaseguros SA [2024] EWCA Civ 718; [2025] 1 WLR 660. This authority makes clear that the question depends on whether interest is to be regarded as a matter of substantive or procedural law applying the autonomous meaning given to those concepts for the purpose of Regulation (EC) 864/2007 (“Rome II”). Rome II continues to be part of English law, it having been retained following the UK’s exit from the EU. The test is a case specific one that involves ascertaining whether interest is so intertwined with the assessment of damages as to be in substance part of the nature and assessment of the damages or remedy claimed. Applying this approach the Court of Appeal decided in that case that interest was a matter of substance to be determined in accordance with the laws of Spain, but, in any event, even if interest was a matter of procedure and thus fell to be assessed applying statutory discretion under s. 35A of the Senior Courts Act 1981, interest should be assessed at the equivalent to the Spanish rate because a relevant factor to be taken into account included the relevant provisions of the lex causae relating to the recovery of interest and where as a matter of that law, interest was integral to the assessment of damages recoverable, that was a sufficient basis for assessing interest as being equivalent to that which would have been recoverable applying the applicable lex causae.

The key point that is relevant for present purposes concerns what is provided for by section 4, para. 5 of the Swedish Interest Act. This is so because the damages that have become payable in this case arise from an intentional criminal act according to the laws of Sweden. Section 4, paragraph 3 provides that “… interest on any debt for damages which are payable as a consequence of an intentional criminal act and which shall not be paid in the form of an annuity, shall accrue from the day on which the damage was sustained.” This takes effect by way of exception to the general rule of Swedish law that interest starts to accrue from thirty days following the date on which the creditor demands compensation. In all cases the applicable rate is that referred to earlier.

In my judgment the interest that in Swedish law is payable on damages that have become payable as a result of an intentional criminal act are intrinsically linked with the assessment of what a claimant is entitled to recover in such circumstances. The rate and period when interest starts to accrue are not penal because (a) the rate is unaffected by whether the damages are the result of an intentional criminal act and (b) the period from which interest accrues does not start to run earlier than the date on which damage is sustained. Although the rate is generous when compared to what is usually awarded as a matter of discretion in commercial cases under s. 35A of the Senior Courts Act 1981 (typically BoE Base rate + between 1 and 3%) it is mitigated by the fact that interest is simple not compounded and more particularly is a rational means of ensuring that the victims of intentional criminal acts are not left bearing any significant part of the loss caused to them. Different legal systems respond in different ways but all tend to be focussed on this critical point. Thus in this jurisdiction compound interest may be awarded where there has been an intentional breach of trust and different causation rules apply to claims formulated in deceit. Viewed in this way and taking account of each of the points made above, I am satisfied that Swedish rules on interest are intertwined with Sweden’s laws relating to the assessment of damages and for that reason interest in this case should be assessed on the basis sought by the clamant. Even if that was not correct I would have exercised my discretion under s. 35A of the Senior Courts Act 1981 by awarding interest at the rate and for the period claimed by the claimant applying the reasoning referred to Nicholls & another v. Mapfre España Cia de Seguros y Reaseguros SA (ibid).