Published 13 May 2020
Commercial flows in a growing globalized scenario have been the dominant trend in contemporary world economics. Within this increasingly digital and dynamic arena, corporations have searched for the most adequate means to settle their disputes. In this context, arbitration has become like one of the most widespread Alternative Dispute Resolution (ADR) methods, due to the flexibility, individuality and specialization that it provides in contrast of the rigid procedural guidelines prevailing on ordinary courts.
However, the new and unexpected challenge that COVID-19 poses to commercial relations at a global scale is expected to definitely struggle corporate world, and in some cases, lead to bankruptcy for those corporations that are not able to return to their normal activity once current national quarantines are over. The key in this post-COVID-19 scenario is determining how non-complied financial obligations with commercial counterparts are going to be settled.
Italy and Spain are good examples on how uncertain economic future would be once current sanitary emergency measures are lifted. And in both countries, both arbitration and insolvency proceeding are destined to interrelate.
The purpose of this paper is to expose the current situation of arbitration and bankruptcy, as well as its interrelation and interpretative doubts in both countries. Main key points in present paper will be the effects of the arbitration clause once insolvency has been declared, the validity of existing arbitration clause under one-party’s bankruptcy, and the implications on pending arbitration proceedings and definitive arbitrations awards’ validity.
This paper is part of a series of papers on the "Overlap between Bankruptcy / Insolvency Proceedings and Arbitrations ...". More information here www.transnational-dispute-management.com/news.asp?key=1812