The discontinuation of LIBOR in 2022 may pose a risk to arbitration proceedings. Preparation is key to a smooth transition.
..LIBOR, which is widely used in financial transactions and is embedded in many commercial contracts, will no longer be published starting on 1 January 2022.
..Under most arbitral rules, tribunals have the authority to decide what interest rate to apply to awards, and many apply LIBOR even if the underlying contract does not contain an express reference to the interest rate.
..Parties should prepare for the discontinuation of LIBOR in order to diminish potential risks to their arbitration proceedings and awards.
Please see full Alert below for more information.