In the landmark 2014 decision of Salford Estates (No. 2) Limited v Altomart Limited, the English Court of Appeal held that where a debt arises under a contract containing an arbitration agreement, a winding up petition brought on that debt ought to be dismissed in favour of arbitration so long as the debtor merely does not admit that the debt is owed. The Court of Appeal added that this position could only be displaced by “wholly exceptional” circumstances.
The ramifications of the decision on insolvency proceedings were significant and ever since, the interface between arbitration and insolvency has continued to demand attention from common law Courts worldwide.
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This article was originally published in INSOL World Q2 2021.
