NEWSLETTER-2020-metin

230 NEWSLETTER 2020 have their own concerns about the validity of arbitration agreements, party autonomy, and territoriality of insolvency proceedings. The fol- lowing are examples showing each perspective. The Austrian Supreme Court held that all pending proceedings in which the debtor is the claimant or the respondent, are automatically stayed upon the commencement of bankruptcy proceedings, which also applies to the arbitral proceeding 5 . The English courts offer a more moderate approach. Under Eng- lish law, when a company enters into administration, no legal process, including arbitration, may be continued against the company or the property of the company, except with the consent of the court or the administrator. National courts have reasonable arguments for insisting that in- solvency related matters be a part of their public order. These proceed- ings aim to distribute the assets of the insolvent as all of the creditors can participate in one common collective proceeding, and an ongoing arbitration would violate the rights of those mainly unsecured creditors to intervene in the arbitral proceedings. The amount of the insolvent’s estate will be decreased by the arbitral awards which would damage the entire process. One of the milestone cases - which would be helpful to understand the arbitral tribunals’ open-to-interpretation approach - took place in a dispute between Vivendi Universal SA, French conglomerate and Elektrim SA, a Polish company. The parties commenced two separate arbitration proceedings, one under the rules of International Chamber of Commerce (“ICC”) and the other under the rules of London Court of International Arbitration (“LCIA”). Elektrim filed for bankruptcy in Poland while the arbitration proceedings were pending. Elektrim ar- gued that the arbitration proceedings should end because their right to dispose of and manage the assets were revoked due to the insolvency proceedings and, hence, the arbitral tribunals lacked jurisdiction. The arbitral tribunals decided to tackle the question of whether they have jurisdiction on the disputes under the principle of competence-compe- 5 Riedl, Katharina: Austrian Supreme Court: Pending arbitration stayed due to insolvency proceedings, Global Arbitration Review, 2016.