It is not uncommon for arbitrators to award interest to a prevailing party. A dilemma arises, however, when the rate awarded by the arbitration panel conflicts with the federal post-judgment rate set forth in 28 U.S.C. §1961. For instance, suppose the arbitration award provides for a high rate of interest “including any interest due on a judgment entered as a result of this award.” If the prevailing party moves under the Federal Arbitration Act (FAA), 9 U.S.C. §1, to confirm the award, and the award is ultimately entered as a judgment, what is the rate of interest from the time of entry until satisfaction—the lower statutory rate or the higher rate awarded by the arbitration panel? As discussed in this article, federal case law provides guidance.

Section 1961

The statute, 28 U.S.C. §1961, states, in relevant part:

(a) Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.1

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