Legal guides

EDITOR’S NOTE

Comparative guide on the impact of insolvency on international arbitration (2022)

The Covid-19 pandemic, climate change, political upheaval and uncertainties, resulting international supply chain interruptions and price effects, as well as other factors have recently changed the economic landscape and continue to interfere with international commercial transactions to a great extent. The resulting economic risks not only have the potential to threaten the survival of many businesses, but also make international commercial relationships more vulnerable to conflicts. As the insolvency risks and the likelihood of legal disputes increase, it is important to be aware of the possible impact which the insolvency of a party may have on looming, ongoing or completed arbitration proceedings, which represent a preferred tool for the resolution of international commercial conflicts.

Determining the impact of the insolvency of a party on a legal dispute may be particularly difficult in an international arbitration context. Often times, the parties of international arbitration proceedings originate from different countries, while the seat of arbitration may be located in a third country, and the arbitral award may have to be enforced even in another country. This creates a complex interplay between local insolvency regimes and international arbitration rules, and involves the risk that an arbitral award may be annulled or unenforceable due to a failure to abide to domestic insolvency law.

This Comparative Guide seeks to provide an overview of some of the jurisdictions represented in The Law Firm Network and the way in which they address the interplay between insolvency and arbitration. The Comparative Guide intends to cover all stages of an arbitration process in light of the insolvency of a party, namely whether an arbitration may be initiated in the first place, whether and with which restrictions an ongoing arbitration may proceed, and whether and under what conditions an arbitral award may be enforced against the insolvent party. In this way, while the Comparative Guide does not give legal advice to readers, it offers tools for the early assessment of the possible effects of insolvency on arbitration, and facilitates to find the right contact persons within the The Law Firm Network for an in-depth evaluation.

Roland Kläger, PARTNER AT HAVER & MAILÄNDER RECHTSANWÄLTE PARTNERSCHAFT MBB (GERMANY)

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