Capturing the Benefits of Arbitration for Cross Border Insolvency Disputes

Abstract

Several experts in the insolvency field have suggested that international arbitration might play an important role in cross-border insolvency proceedings. This chapter explores several ways in which international arbitration can be used to bring efficiency and consistency to cross-border insolvency proceedings. It demonstrates alternative dispute resolution that is gaining traction in international insolvency law. Arbitration is probably not a viable alternative for every type of cross-border insolvency dispute. Instead, proponents for the use of arbitration in bankruptcy proceedings have identified several types of disputes where arbitration could potentially be useful: claims allowance disputes; intercompany/affiliate disputes; allocation of enterprise value; debt restructurings of multinational enterprises; disputes about violations of bankruptcy orders; and disputes involving complex financial instruments. The chapter discusses arbitration procedures that contemplate a consensual arbitration process which would bind only those parties that have agreed to arbitrate the dispute. Keywords: affiliate disputes; international arbitration; international insolvency law