A Tale Of Two Proceedings: Arbitration And Insolvency

Introduction

The COVID-19 pandemic has forced businesses to adapt to a new world order. Businesses are trying to survive the COVID 19-caused disruption in the economy by radically changing their operations, while the sword of Damocles hangs over their heads; the risk of going bankrupt, as well as dealing with an insolvent counterparty.

International arbitration often collides with public policies of states. While arbitral tribunals insist on defending parties' freedom and intent to resolve their disputes at arbitration, states have a tendency to refrain from opting out of their territorial sovereignty and public policies. This tale of two proceedings is one that we might hear even more frequently as the COVID-19 pandemic triggers force majeure clauses and events of default more than ever.