The impact of arbitration clauses on corporate insolvency litigation is still being worked out in the offshore world. In the insolvency sphere there is a tension between, on the one hand, the bilateral resolution of private disputes for which arbitration clauses have been crafted and, on the other hand, the statutory insolvency regime, according to which proceedings to wind up a company are a class action brought in the public interest for the purpose of realising and distributing the assets of a company for the benefits of its creditors.
What is to be done when insolvency litigation throws up a dispute that is also the subject of an arbitration clause? The arbitration clause is a binding contractual term under which the dispute is to be resolved under the bilateral private regime.
Must the requirement to arbitrate yield when the dispute also engages the public interest and arises in the context of the class action? The Court of Appeal of England and Wales (Salford Estates (No 2) Ltd v Altomart Ltd  EWCA Civ 1408) held in late 2014 that the answer to this question is a qualified ‘no’ – unless there are exceptional circumstances the dispute must be resolved by arbitration.