On December 17, 2024, the First Department issued a decision in Telefonica S.A. v. Millicom Intl. Cellular S.A., 2024 NY Slip Op. 06318, holding that statutory interest must be based on the damages actually awarded, explaining:
Supreme Court should not have awarded prejudgment interest on the full contract price from the closing date until the date of the replacement transaction. CPLR 5001 governs prejudgment interest in contract cases, providing that prejudgment interest shall be recovered upon a sum awarded because of a breach of performance of a contract. The purpose of CPLR 5001 is to put a plaintiff in the same position as it would have been had the defendant paid the plaintiff the full damages award on the day of the breach, but only gives the court authority to award prejudgment interest on the sum awarded — that is, the damages award — regardless of whether the court finds another outcome to be fair and reasonable. Supreme Court’s order violated this principle.
Telefonica does not explain how CPLR 5001’s requirement of calculating interest upon the sum awarded could allow for measuring interest based on a figure other than the actual damages. Instead, Telefonica contends that the lost investment income that it should have received at closing may be included as a component of the damages. This argument is not persuasive, however, as it conflates a straightforward interest calculation with the entirely different concept of consequential damages, which Telefonica did not specifically request in the complaint and did not pursue in discovery. CPLR 5001 is not a shortcut to consequential damages, which must be proven with reasonable certainty based on known reliable factors.
(Internal quotations and citations omitted).