Arbitration and insolvency Edited by RichardBamforth and KushalGandhi (eds) (1st edition) (2024, Elgar, Cheltenham) xxxi+236 pp., £145, <scp>ISBN</scp> 978‐1‐80088‐738‐1

Arbitration and Insolvency, edited by Richard Bamforth and Kushal Gandhi, is a timely and critical addition to the literature on international arbitration and insolvency law. Published by Edward Elgar Publishing in 2024, the book is part of the esteemed Elgar Arbitration Law and Practice series and brings together insights from a mix of academics and (mainly) professionals. Its primary focus is on the interplay between arbitration and insolvency under English law, while also referencing other jurisdictions. English law is traditionally seen as a pro-arbitration jurisdiction. This is because English courts generally uphold arbitration agreements in insolvency disputes. In Salford Estates v Altomart [2014] EWCA Civ 1575, the Court of Appeal emphasized the policy of the Arbitration Act 1996, discouraging parties from bypassing arbitration agreements through insolvency remedies. Courts only disregard arbitration agreements in exceptional circumstances, maintaining a high bar for exceptions. The importance of this book lies in its exploration of the complex and often contentious relationship between arbitration and insolvency. As businesses become increasingly globalized, the likelihood of cross-border disputes involving insolvent parties rises, necessitating a clear understanding of how arbitration and insolvency proceedings can coexist. Arbitration offers a final and binding resolution avenue that is typically faster and more flexible than traditional court litigation, making it an attractive option for resolving disputes. However, when one of the parties becomes insolvent, the parallel judicial insolvency proceedings can complicate and potentially derail the arbitration process. This book aims to elucidate these complexities and propose ways to reconcile the two frameworks, benefiting all stakeholders involved. The book comprehensively covers several critical issues, including whether insolvency is a procedural or substantive matter for arbitration purposes, the impact of insolvency on arbitration agreements, theories on arbitrability when insolvency occurs, challenges arising during arbitration when a party files for insolvency, and the effect of insolvency on the enforceability of arbitral awards. The Introduction, penned by editors Richard Bamforth and Kushal Gandhi, delves into the fundamental debate: can insolvency and international arbitration be reconciled? Arbitration is inherently a private dispute resolution forum chosen by the parties involved, with adjudicators who may not necessarily be from the legal field. Despite this, arbitration is no less rigorous than judicial mechanisms, being independent, impartial and more conciliatory by applying common sense alongside the law. The crux of the issue arises when a party to arbitration files for insolvency, leading to parallel proceedings that are not inherently designed to communicate or coordinate with each other. This lack of coordination has resulted in inconsistent outcomes across different jurisdictions, posing a significant challenge to the integration of arbitration and insolvency proceedings. Chapter 2 provides an in-depth discussion on whether the impact of insolvency on arbitration is substantial (affecting the validity of the arbitration agreement), procedural (affecting the continuation of arbitration), or merits-related (affecting the dispute's subject matter). The chapter warns against a “reverse approach,” where arguments are shaped by desired outcomes rather than objective analysis. It highlights that insolvency impacts arbitration more significantly within the same jurisdiction and discusses seminal cases like Vivendi v Elektrim [2007] EWHC 571 (Comm), illustrating the lack of coordination between national courts. The chapter also suggests adaptations in arbitral practice due to insolvency, such as trustee participation and changes to confidentiality standards. It concludes that while arbitration and insolvency are not inherently incompatible, a lack of common approaches persists and recommends referring to the International Bar Association Toolkit on Insolvency and Arbitration for guidance. Chapter 3 addresses the principle of creditor equality in insolvency and its impact on the debtor's rights, including the right to initiate arbitration. It references the “conflict of near polar extremes” between insolvency and arbitration (Re United States Lines Inc., 197 F.3D 631, 2nd Cir. 1999). The chapter outlines general principles, such as the continued effectiveness of agreements entered into before insolvency, the need for court permission to continue arbitration and the potential challenges to arbitral awards due to insolvency. It provides a clear outline of how arbitration agreements are affected when a debtor files for administration, including scenarios where court permission is required to proceed with arbitration. Chapter 4 discusses which disputes are amenable to arbitration, distinguishing between those excluded from arbitration agreements and those restricted by public policy. English law's objective approach to interpreting arbitration agreements is explored, highlighting the assumption that parties prefer arbitration as a comprehensive dispute resolution method (as seen in Fiona Trust v Privalov [2007] UKHL 40). The chapter critiques the expansive interpretation of arbitration clauses in English law, warning against extending arbitration to insolvency claims that were not contemplated by the parties. It also addresses privacy and confidentiality issues in arbitration, which may conflict with the interests of creditors in insolvency. The chapter concludes with an analysis of English court approaches to arbitrability, emphasizing the conditions under which disputes may be deemed arbitrable. Overall, the book challenges the notion that arbitration and insolvency have entirely differing objectives. In restructuring procedures, both aim to avoid lengthy legal disputes and preserve value in a financially distressed company. The book also questions the statement that “arbitration does not cater for, or have any interest in, the interests of third parties” (page 4), arguing that arbitration and insolvency can both work to preserve company value. The possibility of challenging arbitration awards for bias or procedural irregularity and appealing on points of law under English law, further demonstrates arbitration's potential alignment with insolvency proceedings. Arbitration and Insolvency is a highly recommended resource for insolvency and arbitration professionals. It offers valuable insights for scholars of arbitration, dispute resolution, company and insolvency law, corporate law, and litigation. The book clarifies the generous approach to arbitration agreements by English courts and provides practical guidance for navigating the complex intersection of arbitration and insolvency. Its critical analysis and comprehensive coverage make it a crucial resource in the field.

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