NY Court Limits Interest on Silent Arbitration Awards
A NY ruling excludes statutory interest on arbitration awards without specific terms.
Why it matters: Failing to specify interest terms in arbitration awards can lead to financial disadvantages, as statutory rates won’t apply automatically.
- Justice Masley issued the ruling on March 20, 2026.
- The $3,547,800 award included only 6% interest, totaling $3,911,094.
- Without specific terms, NY's 9% interest rate does not apply.
- Interest starts from award date post-confirmation filing.
Justice Andrea Masley of the New York County Commercial Division has set a precedent with her ruling on the application of interest in arbitration awards. On March 20, 2026, in the case of Grayco Alternative Partners II, LP v. 5 Stone Green Capital LLC, she determined that the lack of explicit terms in an arbitration award excludes the applicability of New York’s statutory interest rate.
The case involved an arbitration award of $3,547,800 with 6% interest compounded annually from July 31, 2019, resulting in a total of $3,911,094. However, the award did not state New York's statutory pre-judgment interest of 9% per annum per CPLR § 5004. Judge Masley clarified that this statutory interest rate does not apply unless the award specifically includes it.
The decision further clarified that statutory interest begins accruing at 9% from the day after the arbitrators' decision until the court confirms the award, influencing how swiftly parties must act to avoid financial discrepancies. Practitioners should clearly define interest terms in agreements to secure statutory benefits and expedite confirmation processes post-arbitration.
The full decision can be accessed on Justia, and further analysis is available on LexBlog, providing a deeper understanding of the implications for arbitration proceedings.
By the numbers:
- 6% — Interest rate specified in the award resulting in $3,911,094.
- 9% — New York's statutory interest rate that does not apply automatically.