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Arbitration first or insolvency?

An important decision on the “boundary issue” between arbitration and insolvency came out this week. One that has troubled me in the past. 

Question: Can you wind up a company for a debt due under a contract containing an arbitration agreement or do you have to go through arbitration first? Up until now, you had to get an arbitral award first, regardless of whether the debt was disputed.

But now, unless the debt is disputed on genuine and substantial grounds, you can press ahead with applying for a winder. So said the Privy Council today.

Although the case concerned an appeal from the BVI, it is specifically binding on the UK courts, overturning the Court of Appeal’s decision in Salford Estates.

Delighted that I was there at the Supreme Court when Lord Briggs on behalf of the Board of the Judicial Committee of the Privy Council gave the judgment. Thanks again for the opportunity Stevens & Bolton LLP

If you look closely you can see me on the live stream…


arbitration, insolvency, dispute resolution