In Europe each year there are an estimated 200,000 corporate insolvencies. More than half of the companies set up do not survive their first five years of trading and more than 1.7 million jobs are lost every year as a result. One in five of those companies will have international operations that cross national borders.

The European Union (EU) has sought to introduce an element of harmonization across its Member States, to facilitate the effective operation of cross-border insolvencies.

The question of which law is applicable to the insolvency of a party in an international commercial arbitration is a topical issue, particularly in the current financial crisis.Whether it be a desire to initiate arbitration; an arbitration that is already underway or where an award is to be enforced, the situation may arise where one party is, or will be, declared insolvent.