Issues Arising from Party Insolvency during the course of Ongoing Arbitral Proceedings: International Perspectives

Regardless of the provisions on cross-border insolvency in place at the seat of arbitration, the suspension of a pending arbitration is not necessarily a guarantee in all jurisdictions. This can undermine the impact of cross-border insolvency provisions nationally and internationally. This chapter examines the majority of jurisdictions that allow for the stay of arbitral proceedings comparatively against the minority of jurisdictions that do not. In these latter jurisdictions, the commencement of insolvency proceedings invalidates an arbitration agreement regardless of whether or not an arbitration is pending. This chapter examines how this can operate against the main principles of insolvency law, as well as the effectiveness of insolvency principles.