Judgments in Foreign Currencies

In Miliangos v George Frank (Textiles) Limited [1976] AC 443, a Swiss supplier of textiles delivered goods to Miliangos, trader located in England. Miliangos did not pay for the goods and was subsequently sued by the supplier in England. On appeal to the House of Lords, the question arose as to whether English courts were bound by established authority that they were only empowered to order judgment in pounds sterling. The circumstances were that the exchange rate between the pound and Swiss Franc had deteriorated dramatically since the contract was formed, by approximately 40%.

The House of Lords departed from established authority and ordered that damages be paid in Swiss Francs. In reaching its decision, the court consider the surrounding circumstances and come to a solution that best suits the case at hand, with a view to ensuring that the claimant is properly compensated for its losses suffered. From a jurisprudential perspective, English courts are restricted to enforcing judgments in pounds sterling, and therefore an award of damages in a foreign currency will be converted to sterling, which will then be applied in enforcement proceedings.

The party wishing to be awarded damages in a foreign currency must show the court why the default rule of awarding damages in pounds sterling should be left to one side in making the order in a foreign currency. A persuasive factor for the court may be that as the losses were suffered in a foreign jurisdiction, the award of damages should reflect that fact and be awarded in the applicable currency.