The relationship between arbitration and insolvency in a cross border context is fraught with difficulties which can blight transnational insolvency practice. This article is concerned with the judicial constructs applied (in the EU, civil law and common law traditions) to resolve the conflict between a pending arbitration in one country and forthcoming insolvency proceedings in another. Should the arbitration be allowed to continue and what law should be used to determine the issue? In the EU, it might be said that the question is largely determined by the EU Insolvency Regulation. A comparative law and teleological discussion would highlight the different imperatives adopted in the different judicial approaches to the problem.
The debate has sometimes been reduced to a pro or anti arbitration dispute. This article is less concerned with that direct confrontation. Instead, it is interested in the debate about the public interest which is claimed to be maintained when arbitration is allowed or disallowed to proceed in the light of impending insolvency. It thus draws on case examples from different jurisdictions to examine the perceived judicial role to protect the public interest by controlling arbitrations in this context.
