Published 30 March 2021
With reference to a recent dispute, the authors discuss the overlap between insolvency proceedings and arbitration and the potential for abuse and inconsistent results. They outline the two domains’ competing policy objectives and discuss conflicting national approaches before assessing compatibility in a transnational context. In doing so, they refer to a recent dispute between a Russian buyer and a Swiss seller, which included international arbitration seated in Sweden and subsequent litigation before Swedish and Russian courts all while bankruptcy was pending in Russia. They use this dispute and other decisions as a framework in which to assess the competing policies and the potential for abuse and inconsistent results. After a brief discussion of the impact of enforcement, the authors conclude that whilst the potential for inconsistent results theoretically exists, there is a uniform approach in practice. Further, safeguards exist to limit the abuse of insolvency law during arbitral proceedings.
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