Conflict And Integration Of Procedure Between Commercial Arbitration And Bankruptcy

One of the most intriguing aspects of modern commercial law and practice is the intersection between the Bankruptcy Code and the Arbitration Act. This crossroad brings two diametrically different concepts into a head-on collision, i.e., some holds that dispute that arises under the Bankruptcy Code can not subject to arbitration due to its public policy, while some offers the strongest defense of the theory that arbitration shall be applied to the dispute arising from bankruptcy. Given the dynamic nature of bankruptcy proceedings generally, the resolution of a motion to compel arbitration can have a major impact on the overall bankruptcy. This article explores four key issues that can arise in the context of bankruptcy and arbitration.The First Part"Bankruptcy and Public Policy"mainly explains that how dispute arising from insolvency breaks the barriers relevant to public policy and is gradually incorporated into the arbitrable subject matters. Traditionally, dispute involved bankruptcy can not be referred to arbitration since such dispute is related to public policy. However, public policy has made a weaker impact on arbitrable subject matters, and the claims and liabilities between debtor and creditor in the insolvency proceedings shall be able to submit to arbitration.The Second Part"The Comparative Study of Arbitrablity of Dispute Arising from Insolvency under the Objective Criteria"aims to discuss the objective criteria of the arbitrability of the dispute involved bankruptcy. As a general rule of thumb, when an arbitration clause impacts a core matter, bankruptcy courts have discretion to deny a motion to compel arbitration. Whereas the legislation and practice of United States, Europe and other countries in the modern world show that in the insolvency proceedings, the bankruptcy courts usually compel arbitration. This part is the keystone of the article.The Third Part"Subjective Criteria– the Analysis of Bankruptcy Trustee's Capacity to Participate in the Arbitration"primarily researches on the bankruptcy trustee's capacity, namely, whether bankruptcy trustee has the rights to enforce the arbitration agreement that was executed by debtor prior to the insolvency proceedings and enter into a new arbitration agreement during the insolvency proceedings.The Fourth Part"The Conflict and its Coordination of Commencement of Insolvency Proceedings and Arbitration"basically probes into the conflict and its relief of commencement of insolvency proceedings and arbitration, including the automatic stay and its relief of the insolvency and arbitration both took place in a domestic nation, as well as the coordination of the insolvency and arbitration took place in different countries.