Setting off mutual liabilities in different currencies: what happens to interest?

28/05/25

Following judgments on liability and quantum, Mr Justice Sweeting has today handed down a judgment dealing with the issue of interest in Wagner v Bright Station Ventures Management Limited [2025] EWHC 1301 (KB). The case concerned claims and counterclaims arising out intra-group debts. In short, the Claimant claimed that he had loaned monies to – and incurred expenses on behalf of – the Defendant, and sought recovery. The Defendant contended that the Claimant had caused it to incur liabilities and make payments contrary to its interests, such that the Claimant breached his duties as director of the Defendant. This gave rise to liability [2024] EWHC 1612 (KB) and quantum [2025] EWHC 669 (KB) judgments to the effect that the Claimant was a sterling judgment creditor of the Defendant; and the Defendant was a USD judgment creditor of the Claimant. Netting off the respective liabilities, a balance was due to the Defendant.  

The Claimant had contended that the proper approach was to net off all sums from the date of the last relevant payment (of which recovery could be made) and at that point convert all sums to sterling and run interest at Bank of England Base Rate plus one per cent from that point until judgment. The Defendant contended that this failed to give effect to the reality of debt position. Interest should accrue on the sterling judgment debt at base rate plus one percent until judgment; and on the USD judgment debt at Prime Rate per Lonestar Communications Corp v Kayee [2023] EWHC732 (Comm) at [14], until judgment. The Defendant did not seek an uplift on Prime Rate. For practicality, the conversion should then be done at the date of judgment to crystallise a sterling liability to which Judgment Rate interest will then apply until payment.  

The Judge agreed with the Defendant’s approach (at [11]). It reflected a conventional approach to interest awards, albeit in the (not every day but not unusual) situation of judgment debts going both ways in different currencies. The application of such principles in the context of mutual debt liabilities in differing currencies provides welcome confirmation and clarity of the common sense position.

The judgment is available here.