NEWSLETTER-2020-metin

228 NEWSLETTER 2020 When dealing with arbitrability, two main questions come to mind: (i) Whether the subject matter of the dispute is arbitrable; and (ii) Whether the insolvent party has the capacity to arbitrate, or whether the trustee/administrator is bound by the arbitration agreement. In order to answer the first question, it would be useful to turn to the fundamental legal framework of international arbitration. Article II (1) of the New York Convention on the Recognition and Enforcement of ForeignArbitral Awards (“NewYork Convention”) refers to arbitra- tion agreements as “ concerning a subject matter capable of settlement by arbitration. ” Which subject matters are capable to be resolved at ar- bitration differ from one jurisdiction to another. It would be fair to say insolvency related matters are considered as non-arbitrable in most of the jurisdictions. From a common law perspective, for example, in the United States of America (“US”), the US bankruptcy courts generally apply “the core matter test” when dealing with disputes subject to both the US Bankruptcy Code and the Federal Arbitration Act. To reconcile the competing interests of these two pieces of legislation, the courts generally discuss whether the dispute involves a “core matter” arising exclusively under the US Bankruptcy Code 2 . If the US bankruptcy courts find the issue at hand as “non-core,” then they typically con- sider the subject of the dispute to be arbitrable. From a civil law stand point, for instance according to French law, public policy related mat- ters cannot be settled through arbitration. Since the suspension of indi- vidual legal actions, once insolvency proceedings have been initiated, or the observance of equality among the creditors is part of French public policy, these policy concerns would also hinder the freedom of the parties to submit their insolvency related claims to arbitration. Article II (3) of the New York Convention provides that national courts should refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative, or incapable of being performed. That brings us to our second question of whether the insol- vent party has the capacity to arbitrate or, if not, whether the trustee/ administrator is bound by the arbitration agreement. 2 Goins, Adrianne; Heverin, Kevin; Peet, Jessica; Louise Woods: When insol- vency and arbitration interact, Global Arbitration Review, 2020.